ASR Nederland N.V. (a.s.r.) is the Dutch insurance company and ranks among the top two insurers in the Netherlands. a.s.r. offers a wide range of financial products for consumers, self-employed persons and companies covering non-life, life, income protection and health insurance, group and individual pensions and mortgages. In addition, a.s.r. is active as an asset manager for third parties.
a.s.r. is listed on Euronext Amsterdam. Until 19 March 2023 a.s.r. was included in the MidKap index and as of 20 March 2023 a.s.r is included in the AEX index. At year-end, a.s.r. has a total of 4,313 internal FTE\u2019s (2021: 4,155).
a.s.r. is a public limited company under Dutch law having its registered office located at Archimedeslaan 10, 3584 BA in Utrecht, the Netherlands. Country of incorporation is the Netherlands. a.s.r. has chosen the Netherlands as \u2018country of origin\u2019 (land van herkomst) for the issued share capital and corporate bonds which are listed on Euronext Amsterdam and Euronext Dublin (Ticker: ASRNL).
a.s.r. is registered under number 30070695 in the register of the Chamber of Commerce.
The consolidated financial statements are presented in euros (\u20ac), being the functional currency of a.s.r. and all of its group entities. All amounts quoted in these financial statements are in euros and rounded to the nearest million, unless otherwise indicated. Calculations are made using unrounded figures. As a result rounding differences can occur.
These statements have been prepared on a going concern basis.
The financial statements for 2022 were authorised for issue by the Executive Board (EB) and approved by the Supervisory Board (SB) on 21 March 2023. The financial statements for 2022 will be presented to the Annual General Meeting (AGM) of Shareholders for adoption on 31 May 2023.
The consolidated financial statements of a.s.r. have been prepared in accordance with IFRS \u2013 including the International Accounting Standards (IAS) and Interpretations \u2013 as adopted by the EU (EU-IFRS), and with the financial reporting requirements included in Title 9, Book 2 of the Dutch Civil Code, where applicable. a.s.r.'s\u00a0 interpretation of the EU-IFRS is included in the a.s.r. accounting manual. The accounting policies included in chapter 6.3 are a summary of the relevant accounting policies of the a.s.r. accounting manual.\u00a0
Pursuant to the options offered by Section 362, Book 2 of the Dutch Civil Code, a.s.r. has prepared its company financial statements in accordance with the same principles as those used for the consolidated financial statements.
The current presentation differs from last year\u2019s presentation in some aspects. Where applicable, in accordance with IFRS, comparative figures have been included in the new presentation format, including related disclosures, to ensure comparability. These changes in presentation have no impact on net result nor equity.
In 2022, no changes in EU endorsed published IFRS Standards and Interpretations with a significant impact are relevant to a.s.r.
The following new standards, amendments to existing standards and interpretations, relevant to a.s.r. and published prior to 1 January 2023 and effective for accounting periods beginning on or after 1 January 2023, were not early adopted by a.s.r.:
IFRS 17: Insurance Contracts (2023);
IFRS 9: Financial Instruments (2023).
IFRS 17 Insurance Contracts revised was issued by the IASB in June 2020 and endorsed by the EU to replace IFRS 4 Insurance Contracts. In December 2021, the IASB issued a limited scope amendment to IFRS 17 related to the classification overlay which has been endorsed by the EU. This approach addresses possible accounting mismatches between financial assets and insurance contract liabilities in the comparative information presented on initial application when IFRS 9 and IFRS 17 become effective at the same time. IFRS 17 and IFRS 9 will be effective from 1 January 2023 and the transition date will be 1 January 2022.
IFRS 17 is expected to increase comparability between insurers by requiring all insurance contracts to be accounted for in a consistent manner. Insurance obligations will be accounted for using current fulfilment value every reporting period with current assumptions and discount rates, \u2013 instead of using the highest value of either the tariff rates (\u2018tariefgrondslagen\u2019) or Solvency II value (as used for the Liability adequacy test) which is currently the a.s.r. accounting policy (see accounting policies J and K). Shadow accounting and provisions for the realised gains and losses on financial assets allocated to insurance contracts have been a significant driver in ensuring that the insurance contract liabilities remain adequate compared to Solvency II valuation of insurance contracts. Shadow accounting and provisions for realised gains and losses will be discontinued under IFRS 17.
This standard represents the most significant change to European insurance accounting requirements in decennia and will have a significant impact on the information presented in the financial statements (the primary statements as well as the disclosures). The standard introduces three models for the measurement of the insurance contracts.
The general model (GM) for the life insurance contracts (including funerals and pension contracts) and income insurance contracts in the Non-life segment and the long-term reinsurance contracts within the life segment.
The variable fee approach (VFA) for contracts with a direct participating feature such as the unit linked type insurance contracts and defined contribution pension type contracts.
The premium allocation approach (PAA) which is a simplified version of the GM and is mainly opted to be used for short-term duration contracts consisting of property and casualty (P&C) and health insurance contracts. PAA is also used for most reinsurance contracts based on the short-term nature of these contracts.
The GM measures insurance liabilities by taking the fulfilment cash flows, being the present value of future cash flows (PVFCF) including a risk adjustment to account for future uncertainty of non-financial risks, and a contractual service margin (CSM). The CSM represents the unearned profits of insurance contracts and will change the recognition of revenue in each reporting period for insurance companies.
The VFA model is required for contracts with direct participating features and although it contains the same basic components as the GM (PVFCF, RA and CSM), the way in which the investments interact and specifically the manner in which the fair value movements of the related assets and returns are recognised differ from the GM, whereby the outcome under VFA provides a better matching in the balance sheet and income statement for these contracts. In applying IFRS 17 for both the GM and VFA, directly attributable acquisition costs are accounted for as part of the insurance liability.
The PAA has similar mechanics as the current IFRS approach and therefore only limited impact on main result drivers and only limited judgmental areas for the underwriting result.
Under current a.s.r.\u2019s accounting policy, revenue for insurance contracts is recognised when premiums are earned or received. Under IFRS 17, the insurance contract revenue depicts the insurance coverage and other services provided arising from the group of insurance contracts at an amount that reflects the consideration to which a.s.r. expects to be entitled in exchange for those insurance contract services. Revenue includes the release of the CSM and RA in profit or loss over the coverage period and excludes the non-distinct investment component when applicable. Insurance service result is a new income statement line item which is effectively a net result on non-financial risks of all insurance contracts. Current economic and non-economic (e.g. actuarial) assumptions are used in remeasuring the fulfilment value at each reporting period. Changes in non-economic assumptions related to future services are absorbed in the CSM, while under IFRS 4 these changes did not have an impact as they were measured based on tariff rates at inception, taking into account shadow accounting and provisions for the realised gains and losses on financial assets allocated to insurance contracts.
The following aspects are important to a.s.r.\u2019s implementation (IFRS 17):
a.s.r. has opted to recognise all insurance finance income or expenses for the reporting period in profit or loss (P&L). a.s.r. also opted to disaggregate the change in the RA for non-financial risk between the insurance service result and insurance finance income or expenses in the income statement.
Given the nature of the service provided to policyholders with GM (Insurance services) and VFA (investment type service) the CSM is released for a group of contracts in line with the services provided and is expected to be generally on a straight-line basis over the expected remaining duration (taking into account contract terms and lapse assumptions) on an individual insurance contract basis.
Although the PAA methodology does not have a CSM, the insurance service revenue will also be generally recognised on a straight-line basis over the insurance contracts duration generally similar to the current accounting treatment.
The incorporation of a RA is a significant change from IFRS 4 but similar to Solvency II risk margin methodology and is recognised in both the liability for remaining coverage (LRC) and the liability for incurred claims (LIC). The RA uses amongst others a 6% Cost of Capital methodology and takes into account diversification in line with Non-Life pricing policy.
Discount rates to discount the expected future fulfilment cash flows are determined using a liquid risk free curve to which an illiquidity premium is added. The risk-free curve is based on the swap rate and includes a credit-risk adjustment and a first smoothing point of 20 years. The illiquidity premium is derived from a.s.r.\u2019s own asset portfolio.
Contracts are grouped together if, at inception, these are in the same portfolio and managed together, (generally based on the Solvency II homogeneous risk groups and disaggregated when needed based on the IFRS 17 assumptions), same level of profitability and recognised within the same annual reporting period (\u2018annual cohorts\u2019) a.s.r. will not make use of the carve-out for annual cohorts on the IFRS 17 standard as endorsed by the EU.
The cashflows included in the contract boundaries are aligned with Solvency II except for initial recognition regarding non-onerous contracts.
a.s.r. will keep using the operating result, adjusted for the different aspects under IFRS 17, as a main KPI performance measure. For insurance contracts in the Non-Life segment the (net) combined ratio will remain the main KPI and will be defined as the sum of insurance service expenses divided by insurance contract revenue.
IFRS 17 must be implemented retrospectively with amendment of comparative figures. However, other approaches are used on transition when the full retrospective approach (FRA) is impracticable. On transition a.s.r. will primarily use the FRA for funeral, P&C and health insurance contracts. The Fair Value Approach (FVA) will be used for most individual life, pension and individual income insurance contracts. The modified retrospective approach (MRA) will be applied for the group income insurance contracts. In the fair value transition approach, the contractual service margin is determined by reference to the fair value of insurance liabilities in a manner consistent with the fair value as determined in the acquisitions over the last number of years. The fair value is based on the compensation for fulfilling the insurance obligations and includes a market based compensation for transferring the risk.
IFRS 9 is effective from 1 January 2018 and EU endorsed. a.s.r. applies the temporary exemption from applying IFRS 9 for predominant insurance entities as permitted by the amendments to IFRS 4. The IFRS 4 amendments postpone the implementation of IFRS 9 until the effective date of the new insurance contracts standard IFRS 17. Due to this exemption, there is currently no impact of IFRS 9 on the consolidated financial statements of a.s.r. but it may have a significant impact on shareholders\u2019 equity, net result and/or other comprehensive income and on the consolidated financial statements of a.s.r. in 2023.
IFRS 9 replaces most of the current IAS 39 Financial Instruments: Recognition and Measurement, and includes requirements for classification and measurement of financial assets and liabilities, impairment of financial assets and hedge accounting.
a.s.r. bases the classification and measurement of financial assets under IFRS 9 on its business model. a.s.r. determined its business model as \u201cother\u201d as a.s.r. manages assets and liabilities on a fair value basis and uses that information to assess the performance and to make decisions. This is also in line with Solvency II. This business model results primarily in a valuation of assets designated at fair value through profit or loss. In many instances, the classification and measurement under IFRS 9 will be similar to IAS 39, although certain differences will arise. The classification and measurement of financial liabilities remains unchanged. The classification and measurement is based on the interaction between IFRS 17 insurance contract accounting and IFRS 9 accounting for financial assets and liabilities, taking into account decisions and guidance prepared in the IFRS 17 and IFRS 9 implementation project.
The following aspects are important to a.s.r.\u2019s implementation (IFRS 9):
Classification and measurement. a.s.r. intends to align the accounting for financial assets under IFRS 9 as much as possible to the accounting for insurance. As a result to avoid accounting mismatches in the income statement, investments backing the insurance contracts will be valued at fair value through profit or loss (excluding equities). These financial instruments consist primarily of government and corporate bonds, loans and mortgages.
In line with Solvency II reporting a.s.r. will account for debt instruments at their \u201cdirty\u201d fair value, thus including any related accrued interest.
Equities will generally be measured at fair value through other comprehensive income (FVOCI). Any gains and losses will not be recycled to the income statement, thereby reducing volatility in the income statement under IFRS 9.
a.s.r. will use the classification overlay approach whereby the 2022 comparative figures will be adjusted retrospectively as though IFRS 9 was implemented on 1 January 2022.
a.s.r. currently does not apply hedge accounting and will not apply hedge accounting under IFRS 9 to its insurance activities.
Although the accounting for the post-employment benefits related to pensions (IAS 19) is unchanged, as a result of the FVTP&L classification of the investments an accounting mismatch arises in the income statement. This is due to the actuarial gain and losses related to the DBO being recognised in OCI (i.e. discount rate, indexation and mortality) while the fair value movements on the investments are recognised in the income statement (FVTP&L). This mismatch will be addressed through the revised operating result.
a.s.r. applies FVTP&L and FVOCI non-recycling to most of the financial instruments. Therefore the changes with respect to the expected credit loss model are limited to the impact on the other receivables in the Distribution & Services and Asset Management segments.
In 2022, the programme IFRS 17 and IFRS 9 entered its final implementation phase. Systems and models were brought into production or are being further improved or reviewed. The opening balance sheet and comparative figures 2022 have been prepared and analysed and included in the audit process. a.s.r. expects all systems, processes, models and the control environment to be implemented before the end of 2023.
The presented condensed opening balance sheet and related disclosures in these consolidated financial statements 2022 are provisional. Since implementation has not been finalised some uncertainties have been identified. Due to the complexity of IFRS 17 and the lack of experience with this new standard this will influence the control environment. Management has taken mitigating measures like the hiring of expertise and resources, performing more thorough analysis. The main areas where finalisation of the implementation is work in progress are the business lines Income and Pensions. The IFRS 17 model validation in the Life segment is also still work in progress. As a result, there is an inherent uncertainty related to the figures presented in the condensed opening balance sheet as at 1 January 2022.
a.s.r. has as part of its opening balance sheet assessed the estimated impact that the initial application of IFRS 17 and IFRS 9 will have on its consolidated financial statements. Based on assessments undertaken to date, the total adjustment (after tax) to the balance of a.s.r.\u2019s total equity is estimated to decrease by \u20ac\u00a00.1 billion at 1 January 2022 and is presented in the condensed balance sheet on the next page. The balance sheet per 31 December 2022 and the income statement for 2022, are still being reviewed by a.s.r. and therefore not finalised for publication.
| (in \u20ac\u00a0billions) | 31 December 2021 | Reclassification | Revaluation | Restated 1 January 2022 |
|---|---|---|---|---|
| Investments | 33.5 | 14.7 | 1.4 | 49.6 |
| Investments on behalf of policyholders | 11.6 | -11.6 | - | - |
| Investments related to direct participating contracts | - | 11.6 | 0.0 | 11.6 |
| Investments related to investment contracts | 2.0 | 0.0 | 0.0 | 2.0 |
| Loans and receivables | 15.3 | -15.3 | - | - |
| Derivatives | 6.2 | 0.2 | 0.0 | 6.4 |
| Reinsurance contracts | 0.4 | -0.4 | - | - |
| Reinsurance contract assets | - | 0.5 | 0.0 | 0.5 |
| Remaining assets (not specified above) | 6.1 | -0.1 | -0.1 | 5.9 |
| Total assets | 75.0 | -0.4 | 1.4 | 76.0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total equity | 7.4 | 0.0 | -0.2 | 7.2 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Subordinated liabilities | 1.0 | 0.0 | -0.0 | 1.0 |
| Liabilities arising from insurance contracts | 37.8 | -37.8 | - | - |
| Liabilities arising from insurance contracts on behalf of policyholders | 14.6 | -14.6 | - | - |
| Insurance contract liabilities | - | 40.4 | 1.8 | 42.2 |
| Liabilities arising from direct participating insurance contracts | - | 12.1 | -0.2 | 11.9 |
| Liabilities arising from investment contracts | 2.0 | 0.0 | 0.0 | 2.0 |
| Employee benefits | 4.0 | - | 0.0 | 4.0 |
| Derivatives | 0.8 | 0.1 | 0.0 | 0.8 |
| Remaining liabilities (not specified above) | 7.6 | -0.7 | -0.1 | 6.8 |
| Total liabilities | 67.7 | -0.4 | 1.6 | 68.8 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total equity and liabilities | 75.0 | -0.4 | 1.4 | 76.0 |
The condensed opening balance sheet is provisional with regard to the insurance contracts and presented in euro billions. The opening balance sheet will be finalised with the publication of the interim financial statements 2023.
The CSM included in the insurance contract liabilities and liabilities arising from direct participating insurance contracts is expected to be in the range between \u20ac\u00a01.7 billion and \u20ac\u00a02.3 billion.
For measuring the insurance contracts a.s.r. has used the best information and knowledge currently available and put internal controls in place to ensure reliable figures. However given the complexity of IFRS 17, the recent transition, increasing experience or changes based on market consensus prior to publication of the interim financial statements 2023, certain assumptions and calculations might improve resulting in an amended opening balance sheet. Any changes or adjustments may have an impact on the measurement of the insurance contracts (including CSM) and total equity.
The accounting policy choices made when implementing IFRS 17 and IFRS 9 aim to reduce the net volatility as presented in the income statement and to avoid accounting mismatches where possible. However, volatility in the shareholders\u2019 equity and net result is still expected to increase significantly compared to reporting under IFRS 4. As a result, a.s.r. will be steering primarily on a revised operating result, as an alternative performance measure, which is expected to be less volatile than the IFRS result.
The preparation of the financial statements requires a.s.r. to make estimates, assumptions and judgements in applying accounting policies that have an effect on the reported amounts in the financial statements. These relate primarily to the following:
The fair value and impairments of unlisted financial instruments (see accounting policy B and E);
The estimated useful life, residual value and fair value of property, plant and equipment, investment property, and intangible assets (see accounting policy C, D and U);
The measurement of liabilities arising from insurance contracts (see accounting policy J);
Actuarial assumptions used for measuring employee benefit obligations (see chapter 6.5.17);
When forming provisions, the required estimate of existing obligations arising from past events;
The recoverable amount of impaired assets (see accounting policy B, E and H);
The fair value used to determine the net asset value in acquisitions.
The estimates and assumptions are based on management\u2019s best knowledge of current facts, actions and events. The actual outcomes may ultimately differ from the results reported earlier on the basis of estimates and assumptions.
A detailed explanation of the estimates and assumptions are given in the relevant notes to the consolidated financial statements.
As mentioned in paragraph 6.3.4 (accounting policy J) a.s.r. applies shadow accounting. In 2022, triggered by increasing interest rates, a.s.r. enhanced the application of shadow accounting by adding the sequencing of applying shadow accounting, resulting in shadow accounting adjustments related to instruments with a revaluation reserve amount below cost that are made to the level that the Liability Adequacy Test (LAT) will not get triggered (i.e. shows a positive margin). This mirrors the existing unrealised gains treatment, whilst ensuring the adequacy of the insurance liabilities. Further details are disclosed in paragraph 6.5.15.
The fair value is the price that a.s.r. would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants on the transaction date or reporting date in the principal market for the asset or liability, or in the most advantageous market for the asset or liability and assuming the highest and best use for non-financial assets. Where possible, a.s.r. determines the fair value of assets and liabilities on the basis of quoted prices in an active market. In the absence of an active market for a financial instrument, the fair value is determined using valuation techniques. Although valuation techniques are based on observable market data where possible, results are affected by the assumptions used, such as discount rates and estimates of future cash flows. In the unlikely event that the fair value of a financial instrument cannot be measured, it is carried at cost.
The following three hierarchical levels are used to determine the fair value of financial instruments and non-financial instruments when accounting for assets and liabilities at fair value and disclosing the comparative fair value of assets and liabilities:
Level 1 includes assets and liabilities whose value is determined by quoted (unadjusted) prices in the primary active market for identical assets or liabilities.
A financial instrument is quoted in an active market if:
Quoted prices are readily and regularly available (from an exchange, dealer, broker, sector organisation, third party pricing service, or a regulatory body); and
These prices represent actual and regularly occurring transactions on an arm\u2019s length basis.
Financial instruments in this category primarily consist of bonds and equities listed in active markets. Cash and cash equivalents and reverse repurchase agreements are also included as level 1.
Determining fair value on the basis of Level 2 involves the use of valuation techniques that use inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is derived from prices of identical or similar assets and liabilities). These observable inputs are obtained from a broker or third party pricing service and include:
Quoted prices in active markets for similar (not identical) assets or liabilities;
Quoted prices for identical or similar assets or liabilities in inactive markets;
Input variables other than quoted prices observable for the asset or liability. These include interest rates and yield curves observable at commonly quoted intervals, volatility, loss ratio, credit risks and default percentages.
This category primarily includes:
Financial instruments: unlisted fixed-interest preference shares and interest rate contracts;
Financial instruments: loans and receivables (excluding mortgage loans and reverse repurchase agreements)1;
Other financial assets and liabilities1.
This category includes unlisted fixed-interest preference shares and interest rate contracts. The valuation techniques for financial instruments use present value calculations and in the case of derivatives, include forward pricing and swap models. The observable market data contains yield curves based on company ratings and characteristics of the unlisted fixed-interest preference shares.
The fair value of the loans and receivables is based on the discounted cash flow method. It is obtained by calculating the present value based on expected future cash flows and assuming an interest rate curve used in the market that includes an additional spread based on the risk profile of the counterparty.
For other financial assets and liabilities where the fair value is disclosed these fair values are based on observable market inputs, primarily being the price paid to acquire the asset or received to assume the liability on initial recognition, assuming that the transactions have taken place on an arm\u2019s length basis. Valuation techniques using present value calculations are applied using current interest rates where the payment terms are longer than one year.
The fair value of the level 3 assets and liabilities are determined in whole or in part using a valuation technique based on assumptions that are not supported by prices from observable current market transactions in the same instrument and for which any significant inputs are not based on available observable market data. The financial assets and liabilities in this category are assessed individually.
Valuation techniques are used to the extent that observable inputs are not available. The basic principle of fair value measurement is still to determine a fair, arm\u2019s length price. Unobservable inputs therefore reflect management\u2019s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). These inputs are generally based on the available observable data (adjusted for factors that contribute towards the value of the asset) and own source information.
This category primarily includes:
Financial instruments: private equity investments (or private equity partners) and equity funds third parties directly investing in real estate;
Financial instruments: loans and receivables \u2013 mortgage loans, and mortgage equity funds;
Investment property, real estate equity funds associates, rural property contracts, buildings for own use and plant (e.g. wind farms);
Financial instruments: asset-backed securities.
The main non-observable market input for private equity investments and equity funds third parties directly investing in real estate is the net asset value of the investment as published by the private equity company (or partner) and real estate equity funds respectively.
The fair value of the mortgage loan portfolio is based on the discounted cash flow method. It is obtained by calculating the present value based on expected future cash flows and assuming an interest rate curve used in the market that includes an additional spread based on the risk profile of the counterparty. The valuation method used to determine the fair value of the mortgage loan portfolio bases the spread on the interest rate curve for discounting the mortgage portfolio cash flows on consumer rates and includes assumptions for originating cost, proposal risk, and the options related to early redemption and moving.
The method of determining the fair value of the mortgage equity funds is similar to that of mortgage loans, however it excludes assumptions for originating cost and is determined within the funds structure.
The following categories of investment properties, buildings for own use and plant is recognised and methods of calculating fair value are distinguished:
Residential \u2013 based on reference transaction and discounted cash flow method;
Retail \u2013 based on reference transaction and income capitalisation method;
Rural \u2013 based on reference transaction and discounted cash flow method;
Offices \u2013 based on reference transaction and discounted cash flow method (including buildings for own use);
Other investment property \u2013 based on reference transaction and discounted cash flow method;
Property under development \u2013 based on both discounted cash flow and income capitalisation method;
Plant - based on reference transaction and discounted cash flow method.
The following valuation methods are available for the calculation of fair value by the external professional appraisers for investment property, including real estate equity funds associates, rural property contracts, buildings for own use and plant:
Independent professional appraisers use transactions in comparable properties and plant as a reference for determining the fair value of the property and plant. The reference transactions of comparable objects are generally based on observable data consisting of the land register \u2018Kadaster\u2019 and the rural land price monitor as published by the Dutch government \u2018grondprijsmonitor\u2019 in an active property market and in some instances accompanied by own use information.
The external professional appraisers valuate the property or plant using the reference transaction in combination with the following valuation methods to ensure the appropriate valuation of the property:
Discounted cash flow method;
Income capitalisation method (property only).
Under the discounted cash flow method, fair value is estimated using assumptions regarding the benefits and liabilities of ownership over the asset\u2019s life including an exit or terminal value. This method involves the projection of a series of cash flows on the investment property or plant dependent on the duration of the lease contracts.
A market-derived discount rate is applied to these projected cash flow series in order to establish the present value of the cash flows associated with the asset. The exit yield is normally determined separately, and differs from the discount rate.
The duration of the cash flows and the specific timing of inflows and outflows are determined by events such as rent reviews, lease renewal and related re-letting, redevelopment, or refurbishment. The appropriate duration is typically driven by market behaviour, which depends on the class of investment property. Periodic cash flow is typically estimated as gross rental income less vacancy (apart from the rural category), non-recoverable expenses, collection losses, lease incentives, maintenance costs, agent and commission costs and other operating and management expenses. The series of periodic net operating income, along with an estimate of the terminal value anticipated at the end of the projection period, is then discounted.
For the categories residential, offices and other in applying the discounted cash flow method, the significant inputs are the discount rate and market rental value. These inputs are verified with the following market observable data (that are adjusted to reflect the state and condition, location, development potential etc. of the specific property):
Market rent per square meter for renewals and their respective re-letting rates;
Reviewed rent per square meter;
Investment transactions of comparable objects;
10 Year Dutch Government Bond Yield (%) as published by the DNB.
When applying the discounted cash flow method for rural valuations, the significant inputs are the discount rate and market lease values. These inputs are verified with the following market observable data (that are adjusted to reflect the state and condition, location, development potential etc. of the specific property):
Market value per acre per region in accordance with the \u2018rural land price monitor\u2019;
10 Year Dutch Government Bond Yield (%) as published by the DNB.
When applying the discounted cash flow method for plant, the significant inputs are the discount rate and energy prices.
Under the income capitalisation method, a property\u2019s fair value is estimated based on the normalised net operating income generated by the property, which is divided by the capitalisation rate (the investor\u2019s rate of return). The difference between gross and net rental income includes the same expense categories as those for the discounted cash flow method with the exception that certain expenses are not measured over time, but included on the basis of a time weighted average, such as the average lease up costs. Under the income capitalisation method, rents above or below the market rent are capitalised separately.
The significant inputs for retail valuations are the reversionary yield and the market or reviewed rental value. These inputs are generally verified with the following observable data (that are adjusted to reflect the state and condition, location, development potential etc. of the specific property):
Market rent per square meter for renewals;
Reviewed rent per square meter (based on the rent reviews performed in accordance with Section 303, Book 7 of the Dutch Civil Code).
The fair value of investment properties and buildings for own use, are appraised annually. Valuations are conducted by independent professional appraisers who hold recognised and relevant professional qualifications and have recent experience in the location and category of the property being valued. Market value property valuations were prepared in accordance with the Royal Institution of Chartered Surveyors Valuation Standards, 7th Edition (the \u2018Red Book\u2019). a.s.r. provides adequate information to the professional appraisers, in order to conduct a comprehensive valuation. The professional appraisers are changed or rotated at least once every three years.
The fair value of the asset-backed securities is based on quotes published by an independent data vendor.
The hierarchical level per individual instrument, or group of instruments, is reassessed at every reporting period. If the instrument, or group of instruments, no longer complies with the criteria of the level in question, it is transferred to the hierarchical level that does meet the criteria. A transfer can for instance occur when the market becomes less liquid or when quoted market prices for the instrument are no longer available.
Intangible assets are carried at cost, less any accumulated amortisation and impairment losses. The residual value and the estimated useful life of intangible assets are assessed on each balance sheet date and adjusted where applicable.
Acquisitions by a.s.r. are accounted for using the acquisition method. Goodwill represents the excess of the cost of an acquisition over the fair value of a.s.r.\u2019s share of the net identifiable assets and liabilities and contingent liabilities of the acquired company at acquisition date. If there is no excess (purchase gain), the carrying amount is directly recognised through the income statement. At the acquisition date, goodwill is allocated to the cash-generating units (CGUs) that are expected to benefit from the business combination.
Goodwill has an indefinite useful life and is not amortised. a.s.r. performs an impairment test annually, or more frequently if events or circumstances warrant so, to ascertain whether goodwill has been subject to impairment. As part of this, the carrying amount of the cash-generating unit to which the goodwill has been allocated is compared with its recoverable amount. The recoverable amount is the higher of a CGU\u2019s fair value less costs to sell and value in use. The carrying value is determined as the net asset value including goodwill. The methodologies applied to arrive at the best estimate of the recoverable amount involves two steps.
In the first step of the impairment test, the best estimate of the recoverable amount of the CGU to which goodwill is allocated is determined separately based on Price to Earnings or Price to EBITDA ratios (fair value less cost to sell model). The ratio used per CGU depends on the characteristics of the entity in question. The main assumptions in this valuation are the multiples for the aforementioned ratios. These are developed internally but are either derived from or corroborated against market information that is related to observable transactions in the market for comparable businesses.
If the outcome of the first step indicates that the difference between the recoverable amount and the carrying value may not be sufficient to support the amount of goodwill allocated to the CGU, step two is performed. In step two an additional analysis is performed in order to determine a recoverable amount in a manner that better addresses the specific characteristics of the relevant CGU.
The additional analysis is based on internal value-in-use models, wherein managements assumptions in relation to cash flow projections for budget periods up to and including five years are used and, if deemed justified, expanded to a longer period given the nature of the insurance activities. Other assumptions, such as the (pre-tax) discount rate and the steady state growth rate, are determined on the advice of an independent external party and are based on a Capital Asset Pricing Model. This methodology is based on a risk-free rate plus a risk premium. Operating assumptions are best estimate assumptions and based on historical data where available. Economic assumptions are based on observable market data and projections of future trends.
If the recoverable amount is lower than its carrying amount, the difference is directly charged to the income statement as an impairment loss.
In the event of impairment, a.s.r. first reduces the carrying amount of the goodwill allocated to the CGU. After that, the carrying amount of the other assets included in the unit is reduced pro rata to the carrying amount of all the assets in the unit.
The Value of Business Acquired (VOBA) represents the difference between the fair value and the carrying amount of insurance portfolios that have been acquired, either directly from another insurer or through the acquisition of a subsidiary. VOBA is recognised as an intangible asset with a finite useful life and amortised over the term of the current insurance contracts at acquisition date, in conjunction with the corresponding obligations. With regard to VOBA, allowance is made for the outcome of the annual compulsory LAT for insurance contracts (see accounting policy J). Amortisation charges related to VOBA are included in net claims and benefits. The negative VOBA is amortised based on the weighted average term of the acquired insurance contracts at acquisition date. Negative VOBA, or an additional provision, is recognised and presented under the Liabilities arising from insurance contracts.
Should VOBA\u2019s carrying amount exceed the difference between the carrying amount of the liabilities arising from insurance contracts and the liabilities identified as part of the LAT and no other adjustment is made to the liabilities as a result of the LAT outcomes, VOBA is impaired to a level where the values are equal. This is charged to the income statement as an impairment loss.
Investment property is property held to earn rent or for capital appreciation or both. Property interests held under operating leases are classified and accounted for as investment property. In some cases, a.s.r. is the owner-occupier of investment properties. If owner-occupied properties cannot be sold separately, they are treated as investment property only if a.s.r. holds an insignificant portion for use in the supply of services or for administrative purposes. Property held for own uses (owner-occupied) is recognised within property, plant and equipment.
Investment property is primarily recognised using the fair value model. After initial recognition, a.s.r. remeasures all of its investment property (see accounting policy B) whereby any gain or loss arising from a change in the fair value of the specific investment property is recognised in the income statement under fair value gains and losses.
Residential property is generally let for an indefinite period. Other investment property is let for defined periods under leases that cannot be terminated early. Some contracts contain renewal options. Rentals are accounted for as investment income in the period to which they relate.
If there is a change in the designation of property, it can lead to:
Reclassification from property, plant and equipment to investment property: at the end of the period of owner-occupation or at inception of an operating lease with a third party; or
Reclassification from investment property to property, plant and equipment: at the commencement of owner-occupation or at the start of developments initiated with a view to selling the property to a third party.
The following categories of investment property are recognised by a.s.r. based primarily on the techniques used in determining the fair value of the investment property:
Retail;
Residential;
Rural;
Offices;
Other (consisting primarily of parking);
Investment property under development.
Property under development for future use as investment property is recognised as investment property. The valuation of investment property takes (expected) vacancies into account.
Borrowing costs directly attributable to the acquisition or development of an asset are capitalised and are part of the cost of that asset. Borrowing costs are capitalised when the following conditions are met:
Expenditures for the asset and borrowing costs are incurred; and
Activities are undertaken that are necessary to prepare an asset for its intended use.
Borrowing costs are no longer capitalised when the asset is ready for use or sale. If the development of assets is interrupted for a longer period, capitalisation of borrowing costs is suspended. If the construction is completed in stages and each part of an asset can be used separately, the borrowing costs for each part that reaches completion are no longer capitalised.
Based on the amended IFRS 4, effective as of 1 January 2018, a.s.r. meets the criteria of a predominant insurer as of 31 December 2015 as the percentage of the total carrying amount of its liabilities connected with insurance related activities to the total carrying amount of all its liabilities exceeded 90% at that date. The liabilities connected with insurance, that are not liabilities directly arising from contracts within the scope of IFRS 4, have a carrying amount of \u20ac\u00a03.3 billion and primarily relate to the derivative liabilities and due to banks as included in the Non-life and Life segments and the subordinated liabilities.
As a result a.s.r. decided to apply the temporary exemption from applying IFRS 9 by deferral until IFRS 17 (new accounting standard for insurance contracts) is implemented. The implementation of amended IFRS 4 had no significant impact on the consolidated financial statements of a.s.r. The additional disclosure requirements are presented in the chapters on Risk management and Other notes.
When a.s.r. becomes party to a financial asset contract, the related assets are classified into one of the following categories:
Financial assets at fair value through profit or loss;
Loans and receivables (see accounting policy H); or
Financial assets available for sale.
The classification of the financial assets is determined at initial recognition. The classification depends on the purpose for which the investments were acquired. For detailed information on the fair value of the financial assets please see accounting policy B.
Financial assets at fair value through profit or loss include:
Derivatives that do not qualify for hedge accounting (see accounting policy B and I);
Financial assets, designated by a.s.r. as carried at fair value through profit or loss. This option is available whenever:
It eliminates or significantly reduces a measurement inconsistency that would otherwise arise from measuring assets or liabilities on different bases (accounting mismatch);
a.s.r. manages a group of financial instruments (assets, liabilities or both) on the basis of fair value in accordance with a documented risk management or investment strategy; or
The financial assets contain one or more embedded derivatives and a.s.r. does not separate the derivative from the host contract; and
Associates for which a.s.r. uses the fair value option under IAS 28.
Financial assets at fair value through profit or loss are stated at fair value. At initial recognition, transaction costs are recognised in the income statement. Realised and unrealised gains and losses in the fair value are also recognised in the income statement.
Financial assets available for sale are financial assets that are not accounted for as financial assets at fair value through profit or loss, or as loans and receivables. On initial recognition, financial assets available for sale are measured at fair value (including transaction costs). They are subsequently measured at fair value, including any unrealised fair value changes in equity and impairments, taking into account any deferred tax liabilities. Financial assets available for sale include equities (ordinary and preference shares), bonds, other fixed-income securities, unit trusts, variable-income securities and interests in investment pools.
At the end of each reporting period, a.s.r. assesses whether there is any objective evidence that a financial asset or a group of financial assets may be impaired. Financial assets at fair value through profit or loss are not subject to impairment testing, because the fair value of these assets reflects any impairment losses.
In the case of equity investments available for sale, a significant or prolonged decline in the fair value of the security below its cost is objective evidence of impairment. a.s.r. considers as a significant or prolonged decline to have occurred if the fair value:
Has fallen 25% or more below cost; or
Has fallen below cost for an uninterrupted period of twelve months or longer.
Fixed-income financial assets available for sale are tested for impairment if objective evidence exists that the counterparty will default. Objective evidence includes: bankruptcy, financial reorganisation or delinquency in payments for more than 30 days. The assessment may also involve circumstances requiring a more detailed estimate, such as in the event of an equity deficit, recurring financial difficulties, downgrading of the credit rating or other creditors reverting to legal action. This assessment is made at each reporting date by the Level of Concern Committee, where the portfolio managers and analysts assign a level of concern from \u2018Nil\u2019 to \u2018Three\u2019 to each of the fixed-income assets. A level of concern \u2018Nil\u2019 means that there is no reason for concern, while a level of concern \u2018Three\u2019 indicates that the situation is critical and that an impairment is highly recommended. The final decision to recognise an impairment loss on a financial asset or to reverse a prior impairment loss is taken in the Impairment and Valuation Committee, chaired by the director ASR Vermogensbeheer N.V.
Impairment losses are recognised directly in the income statement and represent the difference between amortised cost and the fair value at the balance sheet date, net of any previously recognised impairments.
If, at a later stage, the fair value of the financial assets available for sale should increase and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through the income statement. Impairment losses on equities available for sale are not reversed, and any increases in fair value are recorded in equity.
Investments made for the account and risk of policyholders mainly concern unit-linked insurance contracts and group contracts with segregated pools. These investments are carried at fair value. Any realised and unrealised value changes of the investments are recognised in the income statement as gains or losses on investments on behalf of policyholders. Where applicable the investments are consolidated in the financial statements and the breakdown is included in the related disclosure.
Investments related to investment contracts comprise investments made for the account and risk of policyholders. These investments are carried at fair value. Any realised and unrealised value changes of the investments are recognised in the income statement as gains or losses on investments related to investment contracts. Where applicable the investments are consolidated in the financial statements and the breakdown is included in the related disclosure.
Loans and receivables are measured at fair value plus transaction costs on initial recognition. They are subsequently measured at amortised cost based on the effective interest rate method, less impairment losses if deemed necessary.
Receivables from customers are primarily comprised of business loans and mortgage loans.
Receivables from credit institutions concern business loans, deposits and the savings portion of savings mortgages concluded by a.s.r.
Trade and other receivables are receivables arising from a.s.r.\u2019s normal business operations.
At each balance sheet date, a.s.r. assesses whether objective evidence of impairment exists of the loans and receivables.
An individually assessed asset is considered impaired if objective evidence exists that a.s.r. is unable to collect all the amounts due by the counterparty in accordance with the contractual terms and conditions. The amount of the impairment loss is equal to the difference between the asset\u2019s carrying amount and its recoverable amount. The recoverable amount equals the present value of estimated future cash flows, including amounts realised from guarantees and securities provided, discounted at the financial asset\u2019s original effective interest rate.
Loans and receivables that are not individually significant are grouped on the basis of similar credit risk characteristics.
Impairment based on the collective approach is determined by applying risk models for similar financial assets, taking account of historical information and regularly updated parameters for default.
Incurred but not reported (IBNR) losses are also taken into account. IBNR is estimated by reference to historical loss patterns. The current economic climate is reflected, and account is taken of potentially higher credit risk-based on an analysis of the economic situation.
Impairment losses are charged to the income statement. If, at a later stage, the impairment losses should decrease and the decrease can be related objectively to an event occurring after the impairment was recognised, the decrease in the impairment loss is recognised in the income statement.
Derivatives are primarily used by a.s.r. for hedging interest rate and exchange rate risks, for hedging future transactions and the exposure to market risks. Derivatives are mandatorily measured at fair value through profit or loss. a.s.r. does not apply hedge accounting.
This includes liabilities arising from insurance contracts issued by a.s.r. that transfer significant insurance risks, and in some cases also financial risk (FR), from the policyholder to a.s.r.
These liabilities comprise a provision for claims, a provision for current risks, and a provision for unearned premiums. The provision for claims is based on estimates of claims payable. Claims payable relate to unpaid claims and claims handling costs, as well as claims IBNR.
The estimates are based on individual assessments of the reported claims, on past experiences and estimates of trends (expert judgement) in claims behaviour, (national) social factors and economic factors and relevant court decisions. In the process of determining the liabilities, allowance is made for amounts recoverable from third parties and expected subrogation reimbursements.
Loss obligations in respect of occupational disability are discounted. The recognised provisions are sufficient to cover the cost of claims and claims handling fees. a.s.r. discounts obligations for losses only for claims with determinable and fixed payment terms.
Additional provisions are generally recognised for realised gains or losses on financial assets allocated to insurance contracts if and to the extent that the current interest rate is lower than the interest rate that was used in the pricing principles at inception of the insurance contract.
The provision for current risks is based on the estimate of future claims taking into account future premiums.
The provision for unearned premiums is equal to gross unearned premium income less commissions paid. The provision is determined on a time proportional basis.
Future obligations in respect of policy benefits for life insurance contracts are calculated based on a net premium method (the present value of future obligations less the present value of future net premiums) using the same principles as for calculating the premium at inception of the insurance contract. A provision for future administrative expenses is recognised for contracts whose future premium payment period is shorter than the future maturity of the insurance policy, or for which no more premiums are paid. A provision is recognised for part of longevity risk associated with life insurance contracts (e.g. group life and annuity contracts), a.s.r. manages the longevity risk exposure in combination with the mortality risk exposure. No addition to the provision for longevity risk is recognised if the outcome of the LAT (see \u2018IFRS LAT Life\u2019 later in this chapter) indicates that the total amount of the provision is adequate.
Additional provisions are generally recognised for realised gains or losses on financial assets allocated to:
Insurance contracts with participation features;
Non-participating insurance contracts if and to the extent that the current interest rate is lower than the interest rate that was used in the pricing principles at inception of the insurance contract.
These financial assets include fixed-income financial assets available for sale, specific financial assets designated at fair value through profit or loss, and specific derivatives (i.e. swaptions, interest rate swaps and inflation rate swaps). The realised gains or losses are amortised based on the remaining maturity period of the disposed financial assets. The realised gains or losses and the amortisation thereof are included in net insurance claims and benefits.
Participating contracts include additional obligations relating to contractual dividends or profit sharing and are stated net of capitalised interest rate rebates. These interest rate rebates are amortised in accordance with actuarial principles to the extent that the expected surplus interest is realised.
Reinsurance liabilities, with a.s.r. qualifying as the reinsurer and with significant insurance risk being transferred to a.s.r., are accounted for in the same way as regular directly written insurance contracts. They are included under liabilities arising from insurance contracts.
Obligations to insurers where a.s.r. qualifies as the reinsurer, and with no significant insurance risk being transferred to a.s.r., are recognised as debts to policyholders.
Under DPF life insurance contracts, policyholders are assigned, in addition to their entitlement to a guaranteed element, an entitlement to potentially significant additional benefits whose amount or timing is contractually at the discretion of a.s.r. These additional benefits are based on the performance of a specified pool of investment contracts, specific investments held by a.s.r. or on the issuer\u2019s operational result.
Expected entitlements to discretionary benefits are recorded in equity. Once a decision has been taken for discretionary participation features, any related benefits are recognised as liabilities.
The Group\u2019s insurance accounting policies include the application of shadow accounting which is a specialised accounting treatment commonly utilised in insurance accounting and is permitted under IFRS.
The purpose of shadow accounting is to help reduce potential accounting mismatches which can occur when related assets and liabilities:
Are measured on a different basis; or
Have changes in their measurements recorded in different IFRS performance statements (Income Statement or OCI).
Under shadow accounting, adjustments are made to the insurance liability to reflect the unrealised gains or losses from the financial instruments backing these insurance liabilities. For non-participating contracts, adjustments are made to the insurance liability to reflect the unrealised gains from the financial instruments (including derivatives) backing these insurance liabilities. In addition, shadow accounting is applied to the unrealised fair value losses on derivatives held to the extent that they are allocated to the entity.
The shadow accounting policy is applied to certain types of insurance liabilities:
Insurance contracts with participation features;
Non-participating insurance contracts (including disability insurance contracts) if and to the extent that the IFRS LAT would be triggered. This would be the case when current interest rates are lower than the interest rates that were used in the pricing principles at inception of the insurance contract.
Shadow accounting allows a recognised but unrealised gain or loss on an asset to affect the measurement of its insurance liabilities in the same way that a realised gain or loss does.
Shadow accounting is applied to unrealised value changes in fixed-income financial assets available for sale, specific financial assets designated at fair value through profit or loss, and specific derivatives (i.e. swaptions and interest rate and inflation rate swaps) that are backing the liabilities arising from insurance contracts. The related adjustment to the insurance liability is recognised in OCI if, and only if, the unrealised gains or losses are recognised in other comprehensive income. Unrealised gains and losses on assets at fair value through profit or loss are recognised in the income statement with a corresponding adjustment for shadow accounting in the income statement under \u2018Net insurance claims and benefits\u2019.
No shadow accounting is applied to:
Impairments; and
Revaluations of debt instrument that have been subject to impairment.
In 2022, triggered by increasing interest rates, a.s.r. enhanced the application of shadow accounting, see accounting policy A.
The LAT is performed at each reporting date to assess the adequacy of insurance liabilities. The insurance liabilities for the LAT are calculated in accordance with Solvency II, using the Ultimate Forward Rate (UFR) prevailing at the reporting date.
Where the Property & Casualty (P&C) (motor, fire and liability) and Health liabilities business is concerned, the LAT is performed using statistical analyses. Any identified losses are used as a basis for estimating future claims arising from an insurance contract from the portfolio on the balance sheet date. This is the best estimate. An appropriate risk margin is added. The risk margin is determined for each homogeneous risk group using the Cost of Capital (CoC) method that is also used for Life. With effect from 2016 the Non-life CoC rate of 6% is used for all Non-life business, including Disability. The total of best estimate and risk margin is compared to the technical provision recorded in the balance sheet.
The LAT for the disability portfolio is based on cash flow projections using realistic assumptions comparable to the LAT for the life portfolio (see below).
The total of best estimate and risk margin for Non-life segment as a whole, is compared to the technical provision recorded in the balance sheet. If there is a deficiency, the Non-life insurance liabilities are increased to adequate levels through a charge to the income statement.
The LAT is performed at each reporting date to assess the adequacy of insurance liabilities. The insurance liabilities for the LAT are calculated in accordance with Solvency II, using the UFR prevailing at the reporting date.
Liabilities are adequate if the technical provision recognised in a.s.r.\u2019s balance sheet for the Life segment as a whole at least equals the best estimate of the life insurance liabilities including an appropriate risk margin. If there is a deficiency in the life insurance liabilities, those liabilities are increased to adequate levels through a charge to the income statement.
Also unrecognised gains and losses from relevant assets that are not carried at fair value in the balance sheet are taken into account to the extent these assets are allocated to cover the insurance liabilities. The various elements of the LAT are further discussed below.
The best estimate of an insurance contract is the net present value of the projected cash flows of benefits and expenses, less the net present value of premiums. These cash flows are estimated using realistic, \u2018best estimate\u2019, assumptions in relation to mortality, longevity, lapse rate, expense and inflation. The best estimate assumptions regarding mortality and longevity include recent trend assumptions for life expectancy in the Netherlands, as provided by the Dutch Koninklijk Actuarieel Genootschap (Actuarial Association). The best estimate includes the intrinsic value and the time value of financial options and guarantees (TVOG) and is calculated using stochastic techniques.
Where applicable, the participating features of the insurance contracts, such as profit sharing, are taken into account in the future cash flows. The cash flows are discounted using the Euro swap curve including a credit risk adjustment (CRA), with UFR and volatility adjustment (VA).
In unit-linked contracts, the best estimate equals the fund value of the contract less the net present value of future margins on mortality and expense. Where unit-linked contracts with a guaranteed minimum benefit on expiration are concerned, the best estimate is increased by a TVOG.
The risk margin is determined for each homogeneous risk group using the CoC method. For life a CoC rate of 6% (2021: 6%) is used. a.s.r. uses the latest standard Solvency II model, to quantify the risks. The risks that are incorporated in the risk margin are: insurances risks, counterparty default risk related to reinsurance and operational risk. A projection of expected future risks is made and all these risks are projected into the future. The total risk for every future year is determined based on correlations between the risks described in the Solvency II standard model. The projected total risk for every year is multiplied by a cost of capital charge and discounted at the balance sheet date.
Options embedded in insurance contracts are not stated separately. They are treated in the same way as the host contract. These options are recognised in the adequacy test, taking into consideration both the intrinsic and the time value.
Liabilities arising from insurance contracts for the account and risk of policyholders mainly concern unit-linked contracts.
An investment unit is a share in an investment fund that a.s.r. acquires on behalf of the policyholders using net premiums paid by the policyholders. The gain upon maturity of the contract is equal to the current value of the investment units of the fund in question. The current value of an investment unit (unit value) reflects the fair value of the financial assets held by a.s.r.\u2019s investment funds divided by the number of units.
The fair value of the financial liabilities is obtained by multiplying the number of units attributed to each contract holder at the end of the reporting period by the unit value on the same date. Allowance is also made for liabilities arising from technical insurance risks (death, occupational disability).
Some unit-linked contracts include guaranteed benefits at maturity. To cover these guarantees, an additional obligation is recognised in the balance sheet that depends on the current fund value and the level of the guarantee. Actuarial assumptions about future fund developments and mortality are taken into account in the determination this obligation.
Liabilities arising from insurance contracts on behalf of policyholders also include obligations in connection with savings pools and group pension contracts, with policyholders bearing the investment risk. These liabilities also include a provision for compensation of possible high cost of the unit linked insurance contracts, as agreed in 2008 with the consumer organisations. The additional compensation related to the unit linked insurance contracts for the past has been included in the insurance liability and is therefore included in the investment portfolio. In addition, there is still a provision for compensation for claimants and compassionate and supportive policy \u2018flankerend beleid\u2019.
For the LAT relating to the liabilities arising from insurance contracts on behalf of policyholders see accounting policy J.
Investment contracts comprise investment contracts on behalf of policyholders that bear no insurance risk and for which the actual return on investments allocated to the contract is passed on to the policyholder. Investment contract liabilities are recognised when the contract is entered into and is derecognised when the contact expires, is discharged, cancelled or substantially modified.
a.s.r. has with effect 2021, defined contribution (DC) plans for all its employees, including employees that are employed by entities that operate in the Distribution and Service segment. For these DC plans, a.s.r. pays contributions to privately administered pension insurance plans with ASR Levensverzekering N.V. (hereafter a.s.r. life) on a contractual basis. a.s.r. life recognises these contracts as insurance contracts. They are accounted for in accordance with liabilities arising from insurance contracts (accounting policy J).
a.s.r. has no further payment obligations to the employees once the contributions have been paid. The contributions are recognised as operating expenses in the income statement during the period the services are rendered. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.
In addition, a number of defined benefit (DB) plans for own employees exist, which ended at the end of 2020, and were left non-contributory. The defined benefit obligation continues to exist. The plans are schemes under which employees are awarded pension benefits upon retirement, usually dependent on one or more factors, such as years of service and compensation. The defined benefit obligation is calculated at each reporting date by independent actuaries.
The liability in respect of DB plans is the present value of the defined benefit obligation at the balance sheet date, less the fair value of the plan assets where the pension plans are insured by third parties.
a.s.r. life administers most of the post-employment benefit plans and holds the investments that are intended to cover the employee benefit obligation. These investments do not qualify as plan assets in the consolidated financial statements under IFRS.
Pension obligations are calculated using the projected unit credit method. Inherent to this method is the application of actuarial assumptions for discount rates, future salary increases and bonuses, mortality rates and consumer price indices. The assumptions are updated and checked at each reporting date, based on available market data. The assumptions and reports were reviewed by Risk Management.
Actuarial assumptions may differ from actual results due to changes in market conditions, economic trends, mortality trends and other assumptions. Any change in these assumptions can have a significant impact on the defined benefit obligation and future pension costs.
Changes in the expected actuarial assumptions and differences with the actual actuarial outcomes are recognised in the actuarial gains and losses included in other comprehensive income (component of total equity).
When employee benefit plans are modified and when no further obligations exist, a gain or loss, resulting from the changes are recognised directly in the income statement. Consistent with the calculation of a gain or loss on a plan amendment, a.s.r. will use updated actuarial assumptions to determine the current service cost and net interest for the remainder of the annual reporting period upon the time of such amendment. The effect of the asset ceiling, if applicable, is disregarded when calculating the gain or loss on any settlement of the plan.
The financing cost related to employee benefits is recognised in interest expense. The current service costs are included in operating expenses.
Plans that offer benefits for long-service (leave), but do not qualify as a post-employment benefit plan, such as jubilee benefits, are measured at present value using the projected unit credit method and changes are recognised directly in the income statement.
a.s.r. offers post-employment benefit plans, such as arrangement for mortgage loans at a discount (fixed amount, reference date December 2017). The entitlement to these benefits is usually conditional on the employee remaining in service up to retirement age and the completion of a minimum service period. The expected costs of these benefits are accrued over the period of employment using an accounting methodology that is similar to that for DB plans.
A liability is formed for the vacation days which have not been taken at year-end.
Acquisitions are accounted for according to the acquisition method, with the cost of the acquisitions being allocated to the fair value of the acquired identifiable assets, liabilities and contingent liabilities. Goodwill, being the difference between the cost of the acquisition and a.s.r.\u2019s interest in the fair value of the acquired identifiable assets, liabilities and contingent liabilities on the acquisition date, is capitalised as an intangible asset. Any gain as a result of a purchase is recognised directly in the statement of profit or loss. Any change, in the fair value of acquired assets and liabilities at the acquisition date, determined within one year after acquisition, is recognised as an adjustment charged to goodwill in case of a preliminary valuation. Adjustments that occur after a period of one year are recognised in the income statement.
Adjustments to the purchase price that are contingent on future events, and to the extent that these are not already included in the purchase price, are included in the purchase price of the acquisition at the time the adjustment is likely and can be measured reliably.
Where applicable in the notes to the financial statements the acquisitions are recognised in the changes in the composition of the group.
The consolidated financial statements include the financial statements of a.s.r. and its subsidiaries. Subsidiaries are those entities (which may include deemed separate entities, the so-called silos and investments on behalf of policyholders) over which a.s.r. has control. Control exists when a.s.r. is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. This is the case if more than half of the voting rights may be exercised or if a.s.r. has control in any other manner. Subsidiaries are fully consolidated from the date on which control is acquired by a.s.r. and are deconsolidated when control ceases to exist.
A subsidiary\u2019s assets, liabilities and contingent liabilities are measured at fair value on the acquisition date and are subsequently accounted for in accordance with a.s.r.\u2019s accounting policies, which are consistent with IFRS.
Non-controlling interests are initially stated at their proportionate share in the fair value of the net assets on the acquisition date and are subsequently adjusted for the non-controlling interest in changes in the subsidiary\u2019s equity.
Intragroup balances and transactions between consolidated group companies are eliminated. Gains and losses on transactions between a.s.r. and associates and joint ventures are eliminated to the extent of a.s.r.\u2019s interest in these entities.
Insurance contracts are defined as contracts under which a.s.r. accepts significant insurance risk from policyholders by agreeing to compensate policyholders if a specified uncertain future event adversely affects the policyholder. These contracts are considered insurance contracts throughout the remaining term to maturity, irrespective of when the insured event occurs. In addition, these contracts can also transfer FR.
a.s.r. offers non-life insurance contracts and life insurance contracts.
Non-life insurance contracts are contracts that provide cover that is not related to the life or death of insured persons. These insurance contracts are classified into the following categories: Disability, Health, P&C (motor, fire and liability) and Other.
Life insurance contracts (in cash) include savings-linked mortgages, annuities, term insurance policies, savings contracts and funeral insurance contracts. In addition to non-participating life insurance contracts, the insurance portfolio also includes:
Individual and group participating contracts;
Individual contracts with DPF (see accounting policy J);
Group contracts with segregated pools with return on investment guarantees.
Claims from these life insurance contracts are directly linked to the underlying investments. The investment risk and return are borne fully for policyholders (see accounting policy K). Life insurance contracts for the account and risk of policyholders generally consist of contracts where premiums, after deduction of costs and risk premium, are invested in unit-linked funds. For some individual contracts, a.s.r. guarantees returns on unit-linked investment funds. In addition, group contracts with segregated pools are classified as life insurance contracts on behalf of policyholders.
At organisational level, a.s.r.\u2019s operations have been divided into five operating segments. The main segments are the Non-life and Life segment that include all insurance activities. The non-insurance activities are presented as three separate segments being the Asset Management, Distribution and Services and Holding and Other segment. There is a clear difference between the risk and return profiles of these five segments.
Intersegment transactions or transfers are conducted at arm\u2019s length conditions. For detailed information per segment, see chapter 6.4.
All purchases and sales of financial instruments, which have to be settled in accordance with standard market conventions, are recognised at the transaction date, which is the date on which a.s.r. becomes party to the contractual stipulations of the instrument. Any purchases and sales other than those requiring delivery within the time frame established by regulations or market conventions are accounted for as forward transactions until the time of settlement. See accounting policy I.
a.s.r. participates in securities lending transactions, whereby collateral is received in the form of securities or cash. Cash received as collateral is recognised in the balance sheet and a corresponding liability is recognised as liabilities arising from securities lending in \u2018Due to banks\u2019. Securities lent remain on the balance sheet. Securities received as collateral are not recognised in the balance sheet.
The statement of cash flows classifies cash flows by operating activities, investing activities and financing activities. Cash flows denominated in foreign currencies are converted at the exchange rates applicable on the transaction date.
Cash flows from operating activities are reported using the indirect method. Cash flows from operating activities include result before tax, adjustments for gains and losses that did not result in income and payments in the same financial year, adjustments for movements in provisions, and accrued and deferred items.
The statement of cash flows recognises interest received and paid, and dividends received within cash flows from operating activities. Cash flows from purchasing and selling investments and investment property are included in cash flows from operating activities on a net basis. Dividends paid are recognised within cash flows from financing activities.
Property held for own use and plant, comprise of land, office buildings, wind farms and solar parks, are measured at fair value (revaluation model) based on annual valuations. The valuation are conducted by external independent valuators with adequate professional expertise and experience in the specific location and categories of properties or plant.
They are subsequently measured at fair value, including any unrealised fair value changes in equity, taking into account any deferred tax liabilities. For the method of determining the fair value reference is made to accounting policy B for investment property and plant.
Increase in the fair value exceeding the cost price is added to the revaluation reserve in shareholders\u2019 equity, less deferred taxes. Decreases in the fair value that offset previous increases of the same asset, are charged against the revaluation reserve. The revaluation reserve cannot be negative. All other decreases in fair value are accounted for in the income statement. Increases that reverse a revaluation decrease on the same asset previously recognised in net result are recognised in the income statement.
Buildings, wind farms and solar parks are depreciated using the straight-line method based on expected useful life, taking into account their fair value amount, the residual value from the time when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The useful life of buildings is assessed annually for every individual component (component approach).
| Components | Useful life (expressed in years) |
|---|---|
| Land | n.a. |
| Shell | 50 |
| Outer layer | 30 |
| Wind turbines | 25 |
| Solar panels | 25 |
| Systems | 20 |
| Fittings and fixtures | 15 |
Repair and maintenance costs are charged to the income statement in the period in which they are incurred. Expenses incurred after the acquisition of an asset are capitalised if it is probable that the future economic benefits will flow to a.s.r. and the cost of the asset can be measured reliably.
Upon the sale of a property or plant, the part of the revaluation reserve related to the sold property or plant, within equity, is transferred to \u2018other reserves\u2019 and is not reclassified to the income statement. Therefore annually a transfer is also made from the revaluation reserve related to \u2018other reserves\u2019 in line with the depreciation recognised in the income statement for the revalued portion.
Equipment is recognised at cost, less accumulated depreciation and/or any accumulated impairment losses. Cost corresponds with the cash paid or the fair value of the consideration given to acquire the asset.
Equipment is depreciated over its useful life, which is determined individually (usually between three and five years). Repair and maintenance costs are charged to the income statement in the period in which they are incurred. Expenses incurred after the acquisition of an asset are capitalised if it is probable that the future economic benefits will flow to a.s.r. and the cost of the asset can be measured reliably.
Accounting for borrowing costs attributable to the construction of property, plant and equipment is the same as accounting for borrowing costs attributable to investment property. For details, see accounting policy D.
Right-of-use assets are recognised for lease contracts for which a.s.r. is the lessee. For more information reference is made to accounting policy BB.
Associates are entities over which a.s.r. has significant influence on operating and financial contracts, without having control. Generally, associates are accounted for using the equity method from the date at which a.s.r. acquires significant influence until the date at which such influence ceases. This means that associates are initially recognised at cost, including any goodwill paid. This value is subsequently adjusted to take account of a.s.r.\u2019s share of the associate\u2019s comprehensive income. Comprehensive income is adjusted in accordance with the accounting principles used by a.s.r.
Losses are accounted for until the carrying amount of the investment has reached zero. Further provisions are recognised only to the extent that a.s.r. has incurred legal or constructive obligations concerning these associates.
If objective evidence of impairment exists, associates are tested for impairment and, if necessary, written down.
When the application of the equity method produces information that is not relevant to the investors, a.s.r. may use the exemption of IAS 28 to measure the investments in those associates at fair value through profit or loss in accordance with IAS 39. a.s.r. applies fair value measurement for investments in real estate equity funds and mortgage equity funds, over which a.s.r. has significant influence.
Joint ventures are contractual arrangements whereby a.s.r. and one or more parties undertake an economic activity that is subject to joint control. Joint control exists only when the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control.
These interests are accounted for using the equity method as applied to associates. The interests are recognised in the financial statements from the date on which a.s.r. first obtains joint control until the date that this joint control ceases.
If objective evidence of impairment exists, joint ventures are tested for impairment and, if necessary an impairment is recognised in the income statement.
a.s.r. has a limited number of non-material joint operations. These are recognised in relation to a.s.r.\u2019s interest in the joint operation\u2019s individual balance sheet and income statement items.
Contracts that transfer a significant insurance risk from a.s.r. to third parties are accounted for as reinsurance contracts, and are classified as outgoing reinsurance.
The amounts that can be collected from reinsurers are estimated using a method that is in line with the reinsurance contract and the method for determining liabilities arising from reinsurance contracts.
Assets arising from reinsurance contracts are recognised under reinsurance contracts, except for current receivables from reinsurers, which are included under loans and receivables.
At each reporting date, a.s.r. assesses whether objective evidence of impairment exists. If a reinsurance asset is impaired, its carrying amount is reduced to its recoverable amount.
Other assets include accrued investment and interest income, property developments, tax assets and accrued assets.
Property developments consist of property under development commissioned by third parties. Development property is measured at cost including any incremental costs (if a.s.r. expects to recover those costs), directly related costs to the contract (i.e. labour, materials, allocation of directly related costs, payments to subcontractors) and construction period interest, less any invoiced instalments and impairments.
Revenue on property development is primarily accounted for at the moment the property is sold. This is a performance obligation satisfied at a point in time. The point in time is the moment a customer obtains control of the promised asset.
Property developments which are sold can have guarantees (such as rent guarantees or construction guarantees), which may give rise to a separate performance obligation.
Cash and cash equivalents include cash in hand, deposits held at call with banks, cash collateral and other short-term highly liquid investments that are not subject to a significant risk of changes in value. Cash and cash equivalents are measured at fair value through profit or loss.
The share capital disclosed in the balance sheet consists of issued and fully paid-up ordinary shares. The share premium reserve comprises additional paid-in capital in excess of the par value of the shares.
This reserve consists of:
Unrealised gains and losses from assets available for sale net of tax and taking account of adjustments due to shadow accounting (see accounting policy J);
The share of unrealised gains and losses of associates and joint ventures held by a.s.r. (see accounting policy V);
Unrealised change in value of property for own use (see accounting policy U);
Reserve for discretionary participation features (see accounting policy J);
Reserve for exchange rate differences arising from assets available for sale.
Actuarial gains and losses result from the post-employment benefit pension plans (see accounting policy M).
Retained earnings also include other reserves.
This item represents the par value of the other equity instruments. Costs directly attributable to the equity issue and the tax impact thereof are recognised in retained earnings.
Treasury shares are a.s.r.\u2019s own ordinary shares that have been issued and subsequently reacquired by a.s.r. Treasury shares are deducted from equity, regardless of the objective of the transaction. No gain or loss is recognised in the income statement on the purchase, sale, issue or cancellation of the instruments. If sold, the difference between the carrying amount and the proceeds is reflected in retained earnings. The consideration paid or received is recognised directly in shareholders\u2019 equity. All treasury shares are eliminated in the calculation of earnings per share and dividend per ordinary share.
Treasury shares are either required as part of the share buy-back programme, or acquired and resold as part of the employee share purchase plan, see chapter 6.7.6.
The non-controlling interest relates to the equity in a consolidated subsidiary not attributable, directly or indirectly, to a.s.r. (see accounting policy O).
Dividends on ordinary shares are recognised as a liability and recognised in equity when they are approved by a.s.r.\u2019s shareholders. Interim dividends are recognised in equity when they are paid.
Dividends for the year that are approved after the reporting date are treated as an event after the reporting date.
Discretionary interest on other equity instruments is recognised in equity upon payment. The related income tax on these equity instruments is recognised in the income statement.
Financing includes borrowings, due to customers, due to banks, subordinated liabilities and other financial liabilities. On initial recognition, debt instruments and other loans are stated at fair value, net of transaction costs incurred. Subsequent valuation is at amortised cost. Any difference between the proceeds and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method. Lease liabilities are included under borrowings and measured in accordance with accounting policy BB.
A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for a consideration. For contracts that contain a lease component and one or more additional lease or non-lease components a.s.r. applies the practical expedient not to separate non-lease components from lease components.
At the commencement date of the lease, a.s.r. recognises a right-of-use asset and a lease liability. The right-of-use asset comprises the amount of the lease liability at initial measurement. The lease liability is measured at the present value of the lease payments that are not paid at the commencement date. For vehicles, the lease payments are discounted using the interest rate implicit in the lease. For other leases a.s.r.\u2019s incremental borrowing rate is used.
Subsequently, the right-of-use asset is valued at cost less any cumulated depreciation and any accumulated impairment losses and adjusted for any remeasurement of the lease liability. The lease liability is increased with interest accrued and reduced for lease payments made. When applicable the lease liability is remeasured for changes in future payments resulting from a change in index or lease term.
The right-of-use assets are presented under property, plant and equipment. The lease liabilities are presented under borrowings.
Non-life insurance premiums are accounted for in the period in which they are earned. As indicated in accounting policy J, invoiced but not yet earned premiums are included under liabilities arising from insurance contracts.
Life insurance premiums relating to life insurance contracts are recognised as income when received from policyholders. Liabilities arising from insurance contracts are recognised based on estimated future benefits and expenses, and charged to the income statement. These expenses are recorded within \u2018insurance claims and benefits\u2019. Therefore, in accordance with the matching principle, the profits are realised over the estimated term of the contracts.
Investment income primarily comprises interest income, dividends on equities and rentals from investment property.
Interest income for all interest-bearing instruments is recognised using the effective interest method, including all transaction costs incurred and share premium / discount. When a receivable is impaired, its carrying amount is reduced to the recoverable amount, i.e. estimated future cash flows discounted at the original effective interest rate of the instrument.
Dividend income is recognised in the income statement when a right to receive payment is established.
Rental income from investment property is allocated to the period to which they relate.
Realised gains and losses include proceeds from the disposal of financial assets available for sale, associates and joint ventures and loans and receivables.
With respect to financial assets available for sale, realised gains or losses comprise:
The proceeds from the sale or disposal of an asset or liability less the amortised cost of the asset or liability sold;
Impairments previously recognised (except for equity instruments).
Any unrealised gains and losses previously recorded in equity (the difference between the carrying amount and amortised cost) are recognised in the income statement.
Fair value gains and losses include realised and unrealised changes in the value of financial assets at fair value through profit or loss, derivatives and investment property held at fair value. With respect to derivatives, this is based on the fair value excluding accrued interest (clean fair value).
Investments on behalf of policyholders are measured at fair value through profit or loss. Any changes in value are recognised in result on investments on behalf of policyholders. This also includes interest income and dividends received on investments on behalf of policyholders.
Investments related to investment contracts are measured at fair value through profit or loss. Any changes in value are recognised in result on investments related to investment contracts. This also includes interest income and dividends received.
Determining the revenue to be recognised from fee and commission income relating to contracts with customers is based on a 5-step model:
Step 1 \u2013 Identifying the contract
Step 2 \u2013 Identify the performance obligation
Step 3 \u2013 Determining the transaction price
Step 4 \u2013 Allocating the transaction price to performance obligations
Step 5 \u2013 Recognising revenue when the performance obligation is satisfied.
A contract with a customer generally explicitly states the goods or services that a.s.r. promises to transfer to a customer. The transaction price is the amount of consideration to which a.s.r. expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties. a.s.r. allocates the transaction price to each performance obligation in an amount that depicts the amount of consideration to which a.s.r. expects to be entitled in exchange for transferring the promised goods or services to the customer.
a.s.r. satisfies its performance obligation by transferring control of a good or service over time and as a result recognises revenue over time. a.s.r. determined that the output method is the best method in measuring progress of the related services because the selected measure reflects best the services for which control has transferred to the customer. a.s.r. recognises revenue on the basis of the time elapsed relative to the total term of performing the service.
Fee and commission income relates mainly to asset management, Distribution and services, investment contracts and reinsurance fees. These items are recognised as income in the period in which the services are performed. The asset management fees are periodically charged to the fund (or individual) customer for which the services were performed. The reinsurance and distribution and services fees are invoiced regularly with normal commercial payment terms.
This item includes changes in liabilities arising from insurance contracts (see accounting policy J) and the related benefits. Expenses associated with contracts on behalf of policyholders relate to changes in liabilities arising from insurance contracts on behalf of policyholders, including the benefits charged to the liabilities.
This item relates to expenses associated with a.s.r.\u2019s operations that are directly attributable to the reporting period, such as marketing costs, ICT expenses, consulting fees, business accommodation expenses, cost of temporary employees, and depreciation charges. Personnel expenses are mainly comprised of salaries, social security contributions and pension costs.
This mainly relates to commissions paid. Commission paid to acquire insurance contracts are charged to the income statement, generally within one year.
An asset is impaired when its carrying amount exceeds its recoverable amount. Impairment losses are recognised in the income statement as soon as they are identified. For details, see the relevant items of chapter 6.3.4 as mentioned earlier.
Income tax is based on result before tax, after any adjustments for previous periods and changes in deferred tax assets and liabilities using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Income tax is recognised in the period in which the income was earned.
Deferred taxes in respect of revalued assets and liabilities, whose value adjustments were directly credited or charged to equity, are taken to equity and, upon realisation, included in the income statement together with the value adjustments.
In accordance with the Solvency II regulations (2009/138/EG art. 75 - 86), Solvency II figures are based on fair value.
Fair value measurement is based on the same fair value hierarchy described in the IFRS accounting policies (see accounting policy B).
Most important adjustments in the balance sheet, compared to IFRS, are the valuation of the (savings-linked) mortgage loans-portfolio and the liabilities arising from insurance contracts (including the risk margin). Basis of Solvency II Eligible own funds (EOF) is the excess of assets over liabilities, adjusted with some specific EOF-items (subordinated liabilities which classify as EOF under Solvency II and foreseeable dividend). The Solvency Capital Requirement (SCR) of a.s.r. is based on the standard model, including the calculation of the Loss Absorbing Capacity of Deferred Tax (LAC DT). The LAC DT methodology is reviewed and properly documented. Usage of the models is agreed upon with DNB.
The Solvency II ratio externally reported by a.s.r. is excluding financial institutions.
The a.s.r. group comprises a number of operating and holding companies.
The operations of a.s.r. have been divided into five operating segments. The main segments are the Non-life and Life segment in which all insurance activities are presented. The other activities are presented as three separate segments being Asset Management, Distribution and Services and Holding and Other.
Insurance entities are entities that accept the transfer of insurance risks from policyholders. The Non-life segment consists of non-life insurance entities and their subsidiaries. These non-life insurance entities offer Non-life insurance contracts such as disability insurance and property and casualty insurance. The Life segment comprises the life insurance entity and its subsidiaries. This life insurance entity offers financial products such as life insurance contracts and life insurance contracts on behalf of policyholders. The Life segment also includes ASR Premiepensioeninstelling N.V. (a.s.r. PPI, previously known as Brand New Day Premiepensioeninstelling N.V.), which offers investment contracts to policyholders that bear no insurance risk and for which the actual return on investments allocated to the contract is passed on to the policyholder. The Non-life and Life segments have different levels of profitability and growth opportunities, as well as a different outlook and risk profile. See chapter 6.7.9 for a list of principal group companies and associates in the relevant segments.
The other activities consist of:
The Asset Management segment involves all activities related to asset management including investment property management. These activities include amongst others ASR Vermogensbeheer N.V., ASR Financieringen B.V., ASR Real Estate B.V. and ASR Hypotheken B.V.;
The Distribution and Services segment includes the activities related to distribution of insurance contracts and include amongst other Poliservice B.V. (Poliservice), Van Kampen Groep Holding B.V. (VKG), Van Kampen Geld B.V., Dutch ID B.V., Corins B.V., SuperGarant Verzekeringen B.V. (and ZZP Nederland Verzekeringen B.V. and Bedrijfsartsengroep B.V.), and ASR Vitaliteit & Preventieve Diensten B.V. (Vitality); and
The segment Holding and Other consists primarily of the holding activities of a.s.r. (including the group related activities), other holding and intermediate holding companies, the real estate development business (ASR Vastgoed Projecten B.V.), ASR Vooruit B.V., the investment firm that performs activities related to private investing for customers, and the activities of ASR Deelnemingen N.V.
The eliminations applied in the reconciliation of the segment information to the consolidated balance sheet and the consolidated income statement are separately presented in chapter 6.4.2 and 6.4.3.
The a.s.r. segment reporting shows the financial performance of each segment. The purpose is to allocate all items in the balance sheet and income statement to the segments that hold full management responsibility for them.
Segment information has been prepared in accordance with the accounting principles used for the preparation of a.s.r.\u2019s consolidated financial statements (see chapter 6.3). Goodwill and other intangibles are presented in the related CGU\u2019s segment. Intersegment transactions are conducted at arm\u2019s length conditions. In general, cost related to centralised services are allocated to the segments based on the utilisation of these services.
The segments are assessed on their operating result as defined in chapter 6.10.
| As at 31 December 2022 | Non-life | Life | Asset Management | Distribution and Services | Holding and Other | Eliminations | Total |
|---|---|---|---|---|---|---|---|
| Intangible assets | 78 | 116 | 41 | 183 | - | - | 418 |
| Property, plant and equipment | - | 637 | - | 13 | 238 | -209 | 679 |
| Investment property | 49 | 616 | - | - | - | - | 664 |
| Associates and joint ventures at equity method | - | 3 | - | 9 | 66 | - | 79 |
| Investments | 6,077 | 17,459 | - | - | 5,295 | -3,193 | 25,640 |
| Investments on behalf of policyholders | - | 9,912 | - | - | - | - | 9,912 |
| Investments related to investment contracts | - | 2,000 | - | - | - | - | 2,000 |
| Loans and receivables | 2,394 | 14,938 | 19 | 50 | 132 | -361 | 17,171 |
| Derivatives | 185 | 5,240 | - | - | 3 | - | 5,428 |
| Deferred tax assets | - | 283 | - | - | - | -164 | 119 |
| Reinsurance contracts | 212 | 145 | - | - | - | - | 357 |
| Other assets | 140 | 646 | 29 | 15 | - | -2 | 828 |
| Cash and cash equivalents | 262 | 1,720 | 85 | 46 | 132 | - | 2,245 |
| Total assets | 9,397 | 53,715 | 174 | 317 | 5,865 | -3,929 | 65,539 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Equity attributable to holders of equity instruments | 1,698 | 4,663 | 150 | 46 | 360 | -192 | 6,726 |
| Non-controlling interests | 4 | 22 | - | - | 1 | - | 27 |
| Total equity | 1,702 | 4,685 | 150 | 46 | 361 | -192 | 6,753 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Subordinated liabilities | 71 | - | - | - | 1,980 | -71 | 1,980 |
| Liabilities arising from insurance contracts | 7,027 | 25,184 | - | - | - | -2,579 | 29,633 |
| Liabilities arising from insurance contracts on behalf of policyholders | - | 13,007 | - | - | - | - | 13,007 |
| Liabilities arising from investment contracts | - | 2,000 | - | - | - | - | 2,000 |
| Employee benefits | - | - | - | - | 2,742 | - | 2,742 |
| Provisions | 1 | 13 | - | - | 4 | - | 18 |
| Borrowings | - | 199 | - | 199 | 307 | -491 | 214 |
| Derivatives | 315 | 5,208 | - | - | - | - | 5,523 |
| Deferred tax liabilities | 82 | - | 6 | 9 | 134 | -231 | - |
| Due to customers | 108 | 679 | - | 21 | - | -338 | 471 |
| Due to banks | 21 | 2,163 | - | - | 78 | - | 2,262 |
| Other liabilities | 70 | 576 | 18 | 41 | 260 | -28 | 938 |
| Total liabilities | 7,695 | 49,030 | 24 | 271 | 5,504 | -3,737 | 58,787 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total equity and liabilities | 9,397 | 53,715 | 174 | 317 | 5,865 | -3,929 | 65,539 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Additions to | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Intangible assets | - | 1 | 6 | 18 | - | - | 25 |
| Property and equipment | - | 169 | - | 5 | 5 | - | 179 |
| Total additions | - | 170 | 6 | 22 | 5 | - | 204 |
| As at 31 December 2021 | Non-life | Life | Asset Management | Distribution and Services | Holding and Other | Eliminations | Total |
|---|---|---|---|---|---|---|---|
| Intangible assets | 96 | 125 | 35 | 172 | - | - | 428 |
| Property, plant and equipment | - | 512 | - | 12 | 249 | -216 | 556 |
| Investment property | 285 | 1,768 | - | - | - | - | 2,052 |
| Associates and joint ventures at equity method | - | 23 | - | 9 | 69 | - | 102 |
| Investments | 7,578 | 25,398 | - | - | 3,881 | -3,308 | 33,550 |
| Investments on behalf of policyholders | - | 11,574 | - | - | - | - | 11,574 |
| Investments related to investment contracts | - | 1,952 | - | - | - | - | 1,952 |
| Loans and receivables | 1,557 | 13,842 | 18 | 45 | 134 | -336 | 15,259 |
| Derivatives | 124 | 6,088 | - | - | - | - | 6,212 |
| Deferred tax assets | - | 22 | - | - | 58 | -80 | - |
| Reinsurance contracts | 263 | 154 | - | - | - | - | 417 |
| Other assets | 137 | 412 | 24 | -5 | 65 | -2 | 631 |
| Cash and cash equivalents | 109 | 2,005 | 83 | 48 | 62 | - | 2,306 |
| Total assets | 10,150 | 63,874 | 160 | 280 | 4,517 | -3,942 | 75,040 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Equity attributable to holders of equity instruments | 2,420 | 5,876 | 141 | 164 | -1,122 | -112 | 7,366 |
| Non-controlling interests | 3 | 15 | - | - | - | - | 18 |
| Total equity | 2,423 | 5,891 | 141 | 164 | -1,121 | -112 | 7,385 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Subordinated liabilities | 45 | - | - | - | 992 | -45 | 992 |
| Liabilities arising from insurance contracts | 7,051 | 33,621 | - | - | - | -2,874 | 37,797 |
| Liabilities arising from insurance contracts on behalf of policyholders | - | 14,566 | - | - | - | - | 14,566 |
| Liabilities arising from investment contracts | - | 1,952 | - | - | - | - | 1,952 |
| Employee benefits | - | - | - | - | 4,013 | - | 4,013 |
| Provisions | 1 | 14 | - | - | 9 | - | 24 |
| Borrowings | - | 175 | - | 47 | 433 | -463 | 192 |
| Derivatives | 64 | 695 | - | - | 1 | - | 759 |
| Deferred tax liabilities | 174 | - | 5 | 9 | - | -119 | 69 |
| Due to customers | 99 | 746 | - | 24 | - | -296 | 573 |
| Due to banks | 88 | 5,549 | - | - | 105 | - | 5,741 |
| Other liabilities | 206 | 666 | 14 | 36 | 86 | -32 | 976 |
| Total liabilities | 7,727 | 57,983 | 19 | 116 | 5,639 | -3,830 | 67,655 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total equity and liabilities | 10,150 | 63,874 | 160 | 280 | 4,517 | -3,942 | 75,040 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Additions to | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Intangible assets | - | 71 | 28 | 23 | - | - | 122 |
| Property and equipment | - | 370 | - | 3 | 14 | - | 387 |
| Total additions | - | 440 | 28 | 27 | 14 | - | 508 |
| 2022 | Non-life | Life | Asset Management | Distribution and Services | Holding and Other | Eliminations | Total |
|---|---|---|---|---|---|---|---|
| Gross written premiums | 4,276 | 1,952 | - | - | - | -187 | 6,041 |
| Change in provision for unearned premiums | -4 | - | - | - | - | - | -4 |
| Gross insurance premiums | 4,272 | 1,952 | - | - | - | -187 | 6,037 |
| Reinsurance premiums | -113 | -1 | - | - | - | - | -114 |
| Net insurance premiums | 4,159 | 1,951 | - | - | \u00a0 | -187 | 5,923 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Investment income | 195 | 1,523 | - | 1 | 111 | -97 | 1,732 |
| Realised gains and losses | -34 | -335 | - | - | 3 | 78 | -288 |
| Fair value gains and losses | -76 | 154 | - | - | -3 | -38 | 38 |
| Result on investments on behalf of policyholders | - | -1,943 | - | - | - | - | -1,943 |
| Result on investments related to investment contracts | - | -351 | - | - | - | - | -351 |
| Fee and commission income | 24 | 19 | 201 | 122 | - | -118 | 247 |
| Other income | 1 | 127 | - | 1 | 15 | - | 144 |
| Share of result of associates and joint ventures | - | - | - | 1 | -3 | - | -3 |
| Total income | 4,269 | 1,145 | 201 | 124 | 123 | -362 | 5,500 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Insurance claims and benefits | -3,290 | 180 | - | - | - | 126 | -2,984 |
| Insurance claims and benefits recovered from reinsurers | 63 | 1 | - | - | - | - | 64 |
| Net insurance claims and benefits | -3,227 | 181 | - | - | \u00a0 | 126 | -2,919 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Changes in liabilities arising from investment contracts | - | 351 | - | - | - | - | 351 |
| Operating expenses | -286 | -182 | -115 | -102 | -146 | 52 | -779 |
| Restructuring provision expenses | -3 | 1 | - | - | -1 | - | -4 |
| Commission expenses | -602 | -20 | -29 | - | - | 62 | -589 |
| Impairments | -36 | -76 | - | - | 17 | - | -95 |
| Interest expense | -24 | -337 | - | -2 | -62 | -21 | -447 |
| Other expenses | -4 | -40 | -18 | -5 | -34 | 12 | -90 |
| Total expenses | -955 | -303 | -163 | -110 | -226 | 104 | -1,652 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Result before tax | 87 | 1,023 | 38 | 15 | -103 | -131 | 929 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Income tax (expense) / gain | -14 | -245 | -10 | -4 | 34 | 34 | -204 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Net result | 73 | 779 | 28 | 11 | -68 | -97 | 725 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Attributable to: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-controlling interests | - | 1 | - | - | -9 | - | -8 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| - Shareholders of the parent | 73 | 778 | 28 | 10 | -107 | -97 | 685 |
| - Holders of other equity instruments | - | - | - | - | 48 | - | 48 |
| Result attributable to holders of equity instruments | 73 | 778 | 28 | 10 | -59 | -97 | 733 |
| 2022 | Non-life | Life | Asset Management | Distribution and Services | Holding and Other | Eliminations | Total |
|---|---|---|---|---|---|---|---|
| Result before tax | 87 | 1,023 | 38 | 15 | -103 | -131 | 929 |
| minus: investment related | -127 | 187 | - | - | 18 | -1 | 78 |
| minus: incidentals | -112 | 68 | -1 | -11 | - | -132 | -188 |
| Operating result | 325 | 768 | 39 | 25 | -120 | 2 | 1,039 |
In 2022, incidentals are mainly related to strengthening of Non-life provisions due to the 10% increase of the legal minimum wage as of 1 January 2023 (\u20ac\u00a0-91 million for the 8% extra increase on top of the 2% normally provisioned), results of the employee benefit pension scheme, amortisations of VOBA on the acquisitions of Loyalis and Veherex (see chapter 6.5.1), M&A costs related to the business combination of a.s.r. and Aegon Nederland N.V., project costs for the implementation of IFRS 17 and IFRS 9 and start-up costs for innovations.
For more information see chapter 6.10.
| 2022 | \u00a0 | Non-life | Life | Asset Management | Distribution and Services | Holding and Other | Eliminations | Total |
|---|---|---|---|---|---|---|---|---|
| Associates and joint ventures | Impairment | - | - | - | - | -1 | - | -1 |
| \u00a0 | Reversal | - | - | - | - | - | - | - |
| Investments | Impairment | -35 | -98 | - | - | - | - | -133 |
| \u00a0 | Reversal | - | 23 | - | - | - | - | 23 |
| Loans and receivables | Impairment | -8 | -2 | - | - | - | - | -10 |
| \u00a0 | Reversal | 6 | 2 | - | - | 19 | - | 27 |
| Total impairments | Impairment | -43 | -101 | - | - | -1 | - | -145 |
| \u00a0 | Reversal | 7 | 24 | - | - | 19 | - | 50 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | Total | -36 | -76 | - | - | 17 | - | -95 |
| 2021 | Non-life | Life | Asset Management | Distribution and Services | Holding and Other | Eliminations | Total |
|---|---|---|---|---|---|---|---|
| Gross written premiums | 4,124 | 1,893 | - | - | - | -157 | 5,859 |
| Change in provision for unearned premiums | 16 | - | - | - | - | - | 16 |
| Gross insurance premiums | 4,140 | 1,893 | - | - | - | -157 | 5,875 |
| Reinsurance premiums | -98 | -1 | - | - | - | - | -99 |
| Net insurance premiums | 4,042 | 1,892 | - | - | - | -157 | 5,777 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Investment income | 142 | 1,422 | - | - | 10 | -4 | 1,571 |
| Realised gains and losses | 45 | 422 | - | - | 34 | -11 | 490 |
| Fair value gains and losses | 16 | 94 | - | - | -2 | 2 | 110 |
| Result on investments on behalf of policyholders | - | 1,636 | - | - | - | - | 1,636 |
| Result on investments related to investment contracts | - | 185 | - | - | - | - | 185 |
| Fee and commission income | 23 | 12 | 161 | 117 | - | -110 | 204 |
| Other income | 1 | 23 | - | 2 | 32 | -2 | 56 |
| Share of result of associates and joint ventures | - | 1 | - | 1 | 7 | - | 9 |
| Total income | 4,269 | 5,688 | 161 | 119 | 81 | -283 | 10,036 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Insurance claims and benefits | -3,079 | -3,986 | - | - | - | 219 | -6,846 |
| Insurance claims and benefits recovered from reinsurers | 23 | 7 | - | - | - | - | 29 |
| Net insurance claims and benefits | -3,056 | -3,980 | - | - | - | 219 | -6,817 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Changes in liabilities arising from investment contracts | - | -185 | - | - | - | - | -185 |
| Operating expenses | -269 | -173 | -102 | -94 | -137 | 51 | -725 |
| Restructuring provision expenses | -3 | -1 | - | - | - | - | -4 |
| Commission expenses | -564 | -19 | - | - | - | 57 | -526 |
| Impairments | -1 | -13 | - | -9 | - | - | -22 |
| Interest expense | -15 | -293 | -1 | -1 | -9 | -43 | -362 |
| Other expenses | -4 | -43 | -23 | -6 | -126 | 16 | -186 |
| Total expenses | -856 | -727 | -125 | -110 | -272 | 80 | -2,010 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Result before tax | 357 | 981 | 36 | 10 | -191 | 16 | 1,209 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Income tax (expense) / gain | -88 | -230 | -9 | -5 | 65 | -3 | -270 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Net result | 269 | 751 | 27 | 5 | -126 | 13 | 939 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Attributable to: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-controlling interests | - | 1 | - | - | -4 | - | -3 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| - Shareholders of the parent | 269 | 750 | 27 | 5 | -170 | 13 | 894 |
| - Holders of other equity instruments | - | - | - | - | 48 | - | 48 |
| Result attributable to holders of equity instruments | 269 | 750 | 27 | 5 | -122 | 13 | 942 |
| 2021 | Non-life | Life | Asset Management | Distribution and Services | Holding and Other | Eliminations | Total |
|---|---|---|---|---|---|---|---|
| Result before tax | 357 | 981 | 36 | 10 | -191 | 16 | 1,209 |
| minus: investment related | 57 | 217 | - | - | 32 | -3 | 303 |
| minus: incidentals | -22 | 11 | - | -18 | -93 | 18 | -104 |
| Operating result | 322 | 754 | 36 | 28 | -131 | 1 | 1,009 |
In 2021, incidentals are mainly related to results of the employee benefit pension scheme, amortisations of VOBA on the acquisitions of Loyalis and Veherex (see chapter 6.5.1), project costs for the implementation of IFRS 17 and IFRS 9 and start-up costs for innovations.
Starting from 2022, the inflation linked value changes are classified as non-operating result. The comparative 2021 figures for the operating result of Non-life and Life have been adjusted accordingly for respectively \u20ac\u00a0-3 million and \u20ac\u00a0-9 million.
| 2021 | \u00a0 | Non-life | Life | Asset Management | Distribution and Services | Holding and Other | Eliminations | Total |
|---|---|---|---|---|---|---|---|---|
| Intangible assets | Impairment | - | - | - | -9 | - | - | -9 |
| \u00a0 | Reversal | - | - | - | - | - | - | - |
| Investments | Impairment | -3 | -12 | - | - | - | - | -16 |
| \u00a0 | Reversal | 3 | - | - | - | - | - | 3 |
| Loans and receivables | Impairment | -13 | -2 | - | - | - | - | -15 |
| \u00a0 | Reversal | 12 | 2 | - | - | - | - | 14 |
| Total impairments | Impairment | -16 | -15 | - | -9 | - | - | -40 |
| \u00a0 | Reversal | 15 | 2 | - | - | - | - | 17 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | Total | -1 | -13 | - | -9 | - | - | -22 |
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Claims ratio | 74.0% | 73.7% |
| Commission ratio | 13.9% | 13.3% |
| Expense ratio | 6.7% | 6.5% |
| \u00a0 | \u00a0 | \u00a0 |
| Combined ratio | 94.6% | 93.6% |
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Property & Casualty (P&C) | 93.9% | 91.9% |
| Disability | 89.3% | 91.6% |
| P&C and Disability | 91.7% | 91.8% |
| Health | 100.8% | 96.2% |
The COR increased to 94.6% (2021: 93.6%) due to the increased COR's of the Health and P&C product lines as outlined below. The non-life business mix shifted, with growth in Disability and P&C and contraction in Health. This resulted in an increase in the commission ratio and expense ratio.
In P&C, the COR amounted to 93.9% (2021: 91.9%). Despite the increase of 2%-points, the combined ratio and underlying business performance remained strong. 2021 was impacted positively by COVID-19 restrictions, partly offset by the July floods and reserve strengthening. This year, weather related calamities (the \u2018triple storm\u2019 in February) and large claims had a higher impact than last year, and the level of claims rose due to increased traffic intensity as lockdown measures were lifted.
In Disability, the COR amounted to 89.3% (2021: 91.6%). The COR improved by 2.3%-point mainly due to improved underwriting results in Individual Disability and Sickness leave. The impact of the 8% extra increase of the minimum wage to a total of 10% was excluded from the COR. The COR including this impact amounted to 95.6%. (+6.2%-points).
The COR of Health deteriorated by 4.6%-points to 100.8%. In 2021, Health benefited from government support related to COVID-19 and an extraordinary inflow of customers. This year, a net outflow in combination with unfavorable claims experience, resulted in an increase of the COR. In addition, due to a large inflow in customers (to be insured in 2023), acquisition costs were taken into account in 2022, leading to an impact of 0.8%-points on the COR.
The claims, commission and expense ratio can be calculated based on the following information:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Net insurance premiums Non-life | 4,159 | 4,042 |
| \u00a0 | \u00a0 | \u00a0 |
| Net insurance claims and benefits | -3,227 | -3,056 |
| \u00a0 | \u00a0 | \u00a0 |
| Adjustments: | \u00a0 | \u00a0 |
| - Interest accrual on provisions (Disability) | 72 | 74 |
| - Compensation capital gains (Disability) | -11 | -6 |
| - Prudence margin (Health) | -5 | 8 |
| - Incidental | 91 | 0 |
| Total adjustments | 147 | 75 |
| \u00a0 | \u00a0 | \u00a0 |
| Net insurance claims and benefits (after adjustments) | -3,080 | -2,981 |
| \u00a0 | \u00a0 | \u00a0 |
| Fee and commission income | 24 | 23 |
| Commission expenses | -602 | -564 |
| Commission expenses - Investment related | 1 | 3 |
| Commission | -577 | -538 |
| \u00a0 | \u00a0 | \u00a0 |
| Operating expenses | -286 | -269 |
| Corrections made for investment charges | 8 | 6 |
| Operational expenses (after adjustments) | -278 | -263 |
The adjustment for incidental items in the table above refers to the strengthening of Disability provisions related to the 10% increase of the legal minimum wage as of 1 January 2023.
See accounting policy N.
In 2022, ASR Infrastructure Renewables B.V. completed the acquisitions of the assets and liabilities of wind farm Jaap Rodenburg, wind farm Nieuwe Hemweg, wind farm Strekdammen and solar park Pesse for a total consideration of \u20ac\u00a050 million.
With these acquisitions, a.s.r. strengthens its contribution to the energy transition and sustainable living environment. a.s.r. fully included the results and the balance sheet positions in the a.s.r. consolidated financial statements from the acquisition dates.
| \u00a0 | Acquisition date balance sheet based on fair value |
|---|---|
| Property, plant and equipment | 154 |
| Current assets | 2 |
| Total assets | 156 |
| \u00a0 | \u00a0 |
| Non current liabilities | 91 |
| Current liabilities | 16 |
| Total liabilities | 106 |
| \u00a0 | \u00a0 |
| Net assets and liabilities | 50 |
No cash and cash equivalents were acquired.
The a.s.r. Solvency II ratio is not significantly impacted as a result of the acquisition.
In October 2022, a.s.r. announced the intended business combination between a.s.r. and Aegon Nederland N.V. by acquiring the shares of Aegon Nederland N.V. for a total consideration of \u20ac\u00a04.9 billion. The consideration will be paid out in newly issued ordinary shares to Aegon N.V. (29.99% interest in a.s.r. post-transaction) and a cash consideration of \u20ac\u00a02.5 billion which was funded through existing surplus capital, by offering 13.805.720 new ordinary shares (see chapter 6.5.13.1) and the issuance of a Tier 2 subordinated liability of \u20ac\u00a01.0 billion in November 2022 (see chapter 6.5.14). The cash component was reduced by \u20ac\u00a00.3 billion compensating for the additional 5.9 million shares to be issued to Aegon N.V. following an adjustment mechanism in relation to the issuance of the accelerated bookbuild offering shares.
At 17 January 2023, shareholders approved the business combination of a.s.r. and Aegon Nederland N.V. The transaction is further subject to approval of the Dutch Central Bank, the European Central Bank and the Dutch Authority for Consumers and Markets. a.s.r. and Aegon N.V. are working closely together to comply with the conditions for the completion of the transaction.
The acquisition of Aegon Nederland N.V. is expected to be completed in the second half of 2023 and has not been recognised in the 2022 financial statements.
ASR Real Estate B.V. acquired the assets and liabilities of a consultancy company as of 1 May 2022. In addition, VKG acquired a distribution and services company as of 1 July 2022.
On 1 April 2021, a.s.r. acquired the remaining 50% of outstanding shares of Brand New Day Premiepensioeninstelling N.V. (Brand New Day IORP). a.s.r. established the final acquisition balance sheet of Brand New Day IORP in 2021. On 29 March 2022, Brand New Day IORP changed its name to ASR Premiepensioeninstelling N.V. (a.s.r. PPI).
On 23 December 2021, ASR Infrastructure Renewables B.V. acquired the assets and liabilities of Vattenfall Windpark Wieringermeer Ext B.V. (wind farm Wieringermeer).
In 2021, Van Kampen Group Holding B.V. acquired an entity in the Distribution and Services segment and established the final acquisition balance sheet in 2022.
See accounting policy C.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Goodwill | 234 | 224 |
| Value of business acquired (VOBA) | 96 | 119 |
| Other intangible assets | 89 | 86 |
| Total intangible assets | 418 | 428 |
| \u00a0 | 2022 | \u00a0 | \u00a0 | \u00a0 | 2021 |
|---|---|---|---|---|---|
| \u00a0 | Goodwill | VOBA | Other intangible assets | Total 2022 | Total 2021 |
| Cost price | 234 | 532 | 143 | 909 | 1,011 |
| Accumulated amortisation and impairments | - | -437 | -54 | -491 | -582 |
| At 31 December | 234 | 96 | 89 | 418 | 428 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| At 1 January | 224 | 119 | 86 | 428 | 345 |
| Acquisition | - | - | 11 | 11 | 1 |
| Amortisation and impairments | - | -23 | -11 | -34 | -41 |
| Transfer | - | - | -1 | -2 | - |
| Changes in composition of the group | 10 | - | 4 | 15 | 124 |
| At 31 December | 234 | 96 | 89 | 418 | 428 |
For the purpose of impairment testing, goodwill is allocated to the CGU's of the relevant operating segment.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Non-life | 13 | 13 |
| Life | 43 | 43 |
| Asset Management | 35 | 35 |
| Distribution and Services | 142 | 132 |
| Total Goodwill | 234 | 224 |
Goodwill has an indefinite useful life and is not amortised. a.s.r. performs an impairment test annually, or more frequently if events or circumstances warrant so, to ascertain whether goodwill has been subject to impairment.
The results of the annual goodwill impairment test are as follows:
The result of the goodwill impairment test, using updated multiples and discount rates, shows an excess recoverable value over the book value. As a result, a second step was not necessary and there is no significant exposure of goodwill impairment for sensitivities in the underlying assumptions. No goodwill impairment was recognised.
The outcome of the goodwill impairment test step 1, using updated price to book trading multiples of various international peers and discount rates, shows a slight excess book value over the recoverable value. It was therefore decided to perform a step 2 impairment test using a dividend discount model. The main assumptions used in this internal value-in-use model are:
The future cash flows are based on the specific portfolio characteristics and expected market developments for the life insurance market in which the CGU operates.
To reflect the long-term character of the life insurance business, the expected decrease of the SCR and own funds projections are used to extrapolate cash flow projections up to 100 years.
The lower limit solvency target is used to calculate future dividends, which are discounted with a 9.24% discount rate (cost of equity).
The second step of the impairment test showed an excess recoverable amount over the book value of the CGU and subsequently no goodwill impairment was recognised.
The result of the goodwill impairment test, using the multiples methodology, shows an excess recoverable value over the book value. As a result, a second step was not necessary and there is no significant exposure of goodwill impairment for sensitivities in the underlying assumptions. No goodwill impairment was recognised.
The goodwill impairment test was conducted at the CGU\u2019s within the segment Distribution and Services segment. The outcomes of the goodwill tests on step 1 showed that the differences between the recoverable amounts and the carrying values is sufficient to support the amounts of goodwill allocated to the CGU\u2019s.
In light of the goodwill impairment last year it was decided to perform a step 2 impairment test in order to determine a recoverable amount in a manner that better addresses the specific characteristics of this CGU. The CGU\u2019s operating activities concern those of a distribution partner and service provider. In step 2, future cash flows are based on expected market developments and past experience and on the long-term characteristics of the markets in which the CGU operates. The main assumptions used in this internal value-in-use model are:
Annual organic future growth of portfolio without impact of potential acquisitions;
Growth rate used to extrapolate cash flow projections beyond the most recent forecast projections leading to a terminal value of 0.5%;
Discount rate (post-tax) 6.9% (2021: 5.1%).
The second step of the impairment test showed an excess recoverable amount over the book value of the CGU and subsequently no goodwill impairment was recognised.
VOBA mainly relates to the acquisition of Amersfoortse Stad Rotterdam (\u20ac\u00a048 million), the acquisition of Loyalis (\u20ac\u00a042 million) and the acquisition of Veherex (\u20ac\u00a06 million).
The other intangible assets mainly relate to Real estate, Loyalis, a.s.r. PPI and D&S Holding and concern trade names, distribution relationships and customer relationships. The other intangible assets are amortised on a straight-line basis over their useful life, which is determined individually (between 5 and 20 years). The amortisation charges on other intangible assets are recorded in the operating expenses, see chapter 6.6.8.
See accounting policies U and BB.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Land and buildings for own use | 115 | 145 |
| Plant | 480 | 332 |
| Equipment | 24 | 25 |
| Property, plant and equipment owned | 618 | 502 |
| \u00a0 | \u00a0 | \u00a0 |
| Vehicles | 8 | 10 |
| Land | 46 | 37 |
| Other | 7 | 7 |
| Right-of-use assets | 61 | 54 |
| \u00a0 | \u00a0 | \u00a0 |
| Total property, plant and equipment | 679 | 556 |
| \u00a0 | Land and buildings held for own use | Plant | Equipment | Right-of-use assets | Total 2022 | Total 2021 |
|---|---|---|---|---|---|---|
| At 1 January | 145 | 332 | 25 | 54 | 556 | 198 |
| Additions | - | 157 | 6 | 16 | 179 | 386 |
| Transfer to Investment property | -18 | - | - | - | -18 | - |
| Depreciation | -5 | -18 | -6 | -8 | -37 | -19 |
| Revaluations through profit or loss | - | -5 | - | - | -5 | - |
| Revaluations through equity | -8 | 21 | - | - | 13 | -7 |
| Other changes | - | -7 | - | -1 | -9 | -2 |
| Changes in the composition of the group | - | - | - | - | - | 1 |
| At 31 December | 115 | 480 | 24 | 61 | 679 | 556 |
| Gross carrying amount as at 31 December | 222 | 498 | 58 | 81 | 859 | 705 |
| Accumulated depreciation as at 31 December | -108 | -18 | -34 | -20 | -180 | -149 |
| Net carrying value as at 31 December | 115 | 480 | 24 | 61 | 679 | 556 |
| Revaluation surplus | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| At 1 January | 38 | - | - | - | 38 | 45 |
| Revaluation in the year | -8 | 21 | - | - | 13 | -7 |
| At 31 December | 30 | 21 | - | - | 50 | 38 |
Additions mainly relate to the acquisition of wind farms Jaap Rodenburg, Nieuwe Hemweg and Strekdammen and solar park Pesse as part of the strategy to invest more in renewable energy, see chapter 6.4.5.
Depreciation of land and buildings held for own use, equipment and right-of-use assets is recorded in the operating expenses, see chapter 6.6.8. Depreciation of plant is recorded in the other expenses, see chapter 6.6.11.
The fair values of land and buildings for own use and plant are based on external valuations and is disclosed in chapter 6.7.1.3.
Property, plant and equipment consists mainly of assets expected to have a useful life of more than one year after the balance sheet date.
See accounting policy D.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 2,052 | 1,973 |
| \u00a0 | \u00a0 | \u00a0 |
| Changes in value of investments, realised/unrealised gains and losses: | \u00a0 | \u00a0 |
| - Fair value gains and losses | 122 | 91 |
| \u00a0 | \u00a0 | \u00a0 |
| Purchases | 59 | 53 |
| Issues | 3 | 1 |
| Disposals | -159 | -63 |
| \u00a0 | \u00a0 | \u00a0 |
| Transferred from property and equipment | 18 | - |
| Transfer between investment property and investments | - | -2 |
| Transfer of real estate equity funds to investments | -1,431 | - |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | 664 | 2,052 |
Investment property is leased to third parties and is diversified over the rural, residential, offices and retail sectors and over property under development in the Netherlands. The significant inputs are the net initial yield and market rental value, see chapter 6.7.1.
Purchases in 2022 mainly relates to acquisitions of rural property (\u20ac\u00a030 million) and offices (\u20ac\u00a029 million). Disposals relates to the disposal of rural property (\u20ac\u00a055 million) and the sale of shares in ASR Dutch Farmland Fund (ASR DFLF) to third parties (\u20ac\u00a0103 million). As a result a.s.r. lost control of ASR DFLF. The transfer of real estate equity funds (\u20ac\u00a01,431 million) to investments relates to the transfer of ASR DFLF to investments, see chapter 6.5.5.2.
Rental income is recognised as investment income, see chapter 6.6.2. In 2022, rentals amounted to \u20ac\u00a058 million (2021: \u20ac\u00a064 million). The rental income decreased due to the transfer of real estate equity funds to investments.
Direct operating expenses arising from investment property amounted to \u20ac\u00a09 million (2021: \u20ac\u00a010 million). Given the overall low vacancy rate, virtually all direct operating expenses relate to investment property generating rental income. Direct operating expenses of investment property are classified as other expenses, see chapter 6.6.11 .
Investment property consists mainly of assets expected to be recovered after more than one year after the balance sheet date.
See accounting policy V.
| \u00a0 | Interest | 31 December 2022 | 31 December 2021 |
|---|---|---|---|
| At equity method | \u00a0 | \u00a0 | \u00a0 |
| Associates and joint ventures | ranging between 10 % and 50 % | 79 | 102 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| At fair value through profit or loss | \u00a0 | \u00a0 | \u00a0 |
| Real estate equity funds | ranging between 30 % and 95 % | 3,557 | 1,817 |
| Mortgage equity funds | ranging between 5 % and 20 % | 684 | 781 |
| Other equity funds | ranging between 1 % and 10 % | 66 | - |
The real estate equity funds increased mainly due to the addition of ASR DFLF. During 2022, a.s.r. lost control of ASR DFLF as a result of the entry of third party participants in ASR DFLF.
The real estate equity funds consists of the ASR Dutch Mobility Office Fund (ASR DMOF), ASR Dutch Prime Retail Fund (ASR DPRF), ASR Dutch Core Residential Fund (ASR DCRF) and ASR DFLF. The mortgage equity funds consists of the ASR Mortgage Fund (ASR MF). The other equity funds consists of two equity funds from a.s.r. PPI. The interests in these funds are classified and presented as an investment at fair value through profit or loss. For more information, see chapter 6.5.5 and 6.7.1.
Investments in associates and joint ventures generally have a duration of more than one year after the balance sheet date.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 102 | 101 |
| Acquisitions | - | 6 |
| Disposal | - | -13 |
| Share of profit/(loss) | -3 | 9 |
| Impairments | -1 | - |
| Dividend | -21 | -2 |
| Other changes | 2 | - |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | 79 | 102 |
Some participating interests in which a.s.r. has an interest of less than 20% qualify as associates, because a.s.r. has significant influence as a result of contractual agreements. a.s.r. also has interests of 50% or more in associates at fair value through profit or loss. a.s.r. has no control over these entities as the ability to direct the relevant activities is limited by contractual agreements and therefore does not consolidate these entities.
The information disclosed in the tables below is based on the most recent financial information available from the associates and joint ventures. This is primarily based on the investee\u2019s financial statements and their accounting policies. If these policies differ from a.s.r.'s accounting policies, carrying amounts in a.s.r.\u2019s consolidated financial statements have been changed to be in line with a.s.r.\u2019s policies.
| \u00a0 | 31 December 2022 | 31 December 2021 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| \u00a0 | Associates and joint ventures at equity method | Real estate equity funds | Mortgage equity funds | Other equity funds | Total | Associates and joint ventures at equity method | Real estate equity funds | Mortgage equity funds | Other equity funds | Total |
| Total assets | 318 | 6,021 | 7,885 | 4,124 | 18,348 | 376 | 4,019 | 8,168 | - | 12,563 |
| Total liabilities | 161 | 295 | 113 | - | 568 | 163 | 264 | 100 | - | 527 |
| Total income | 194 | 211 | -1,679 | -668 | -1,942 | 197 | 171 | 240 | - | 607 |
| Result | -8 | 241 | -1,714 | -670 | -2,151 | 20 | 266 | 208 | - | 494 |
| Total comprehensive income | -8 | 241 | -1,714 | -670 | -2,150 | 20 | 266 | 208 | - | 494 |
The increase in assets and liabilities of the real estate equity funds relates mainly to the addition of ASR DFLF.
The total assets of the real estate equity funds consist primarily of investment property, \u20ac\u00a05,777 million (2021: \u20ac\u00a03,766 million). The total assets of the mortgage equity funds consist primarily of mortgages, \u20ac\u00a07,708 million (2021: \u20ac\u00a07,991 million) and \u20ac\u00a04,101 million of the total assets of the other equity funds consists of equities.
The interest in the real estate equity funds are as follows:
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| ASR DPRF | 625 | 625 |
| ASR DCRF | 1,066 | 1,079 |
| ASR DMOF | 138 | 113 |
| ASR DFLF | 1,728 | - |
| \u00a0 | \u00a0 | \u00a0 |
| Total | 3,557 | 1,817 |
See accounting policy E.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Available for sale | 20,900 | 30,333 |
| At fair value through profit or loss | 4,740 | 3,216 |
| \u00a0 | 25,640 | 33,550 |
For changes in investments available for sale and changes in investments at fair value through profit or loss see chapter 6.5.5.1 and chapter 6.5.5.2 respectively.
| \u00a0 | 31 December 2022 | 31 December 2021 | ||||
|---|---|---|---|---|---|---|
| \u00a0 | Available for sale | Fair value through profit or loss | Total | Available for sale | Fair value through profit or loss | Total |
| Fixed income investments | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Government bonds | 9,227 | - | 9,227 | 14,149 | - | 14,149 |
| Corporate bonds | 7,188 | - | 7,188 | 10,827 | - | 10,827 |
| Asset-backed securities | 416 | - | 416 | 530 | - | 530 |
| Preference shares | 289 | - | 289 | 311 | - | 311 |
| Rural property contracts | - | - | - | - | 215 | 215 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Equities and similar investments | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Equities | 3,471 | 82 | 3,553 | 4,111 | 18 | 4,129 |
| Real estate equity funds | - | 3,974 | 3,974 | - | 2,202 | 2,202 |
| Mortgage equity funds | 303 | 684 | 987 | 398 | 781 | 1,179 |
| Other participating interests | 6 | - | 6 | 7 | - | 7 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total investments | 20,900 | 4,740 | 25,640 | 30,333 | 3,216 | 33,550 |
In 2022, government bonds decreased to \u20ac\u00a09,227 million (2021: \u20ac\u00a014,149 million) mostly due to negative revaluations due to increasing interest rates and the disposal of government bonds. Cash collateral received on derivative instruments was reinvested into government bonds, cash collateral decreased due to increasing interest rates, therefore government bonds were sold. For more information regarding cash collateral received see chapter 6.5.21.
The equities consist primarily of listed equities and investments in investment funds. Equities decreased mainly as a result of negative revaluations.
Real estate equity funds increased mainly due to the addition of ASR DFLF. During 2022, a.s.r. lost control of ASR DFLF when external participants invested in ASR DFLF. The rural property contracts are held by ASR DFLF, and therefore transferred to real estate equity funds.
For the real estate equity funds and mortgage equity funds for which a.s.r. has significant influence, being ASR DMOF, ASR DPRF, ASR DCRF, ASR DFLF and ASR MF, the exemption of IAS 28 was used, thereby measuring the investments at fair value through profit or loss and presenting them as a separate category within the investments at fair value through profit or loss. For a breakdown of the real estate equity funds ASR DMOF, ASR DPRF, ASR DCRF and ASR DFLF and ASR MF see chapter 6.5.4.
All investments at fair value through profit or loss are designated as such by a.s.r. upon initial recognition. For more detailed information about the fair value valuation of the investments, see chapter 6.7.1.
Based on their contractual maturity, an amount of \u20ac\u00a013,868 million (2021: \u20ac\u00a021,400 million) of fixed income investments is expected to be recovered after more than one year after the balance sheet date. For assets without a contractual maturity date, it is expected that they will be recovered after more than one year after the balance sheet date.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 30,333 | 33,774 |
| Purchases | 10,583 | 13,516 |
| Repayments | -2,229 | -6,658 |
| Disposal | -12,614 | -9,805 |
| Realised gains and losses through profit or loss | -222 | 429 |
| Revaluation recognised in equity | -4,918 | -845 |
| (Reversals of) Impairments | -110 | -13 |
| Amortisation | 23 | -110 |
| Exchange rate differences | 54 | 46 |
| Other changes | -1 | - |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | 20,900 | 30,333 |
a.s.r. has bonds amounting to \u20ac\u00a03.237 million (2021: \u20ac\u00a03,524 million) and cash amounting to \u20ac\u00a0600 million (2021: \u20ac\u00a01,000 million) (see chapter 6.5.12) that have been transferred, but do not qualify for derecognition. The majority of these investments are part of a securities lending programme whereby the investments are lent in exchange for a fee with collateral obtained as a security. The collateral furnished as security representing a fair value of \u20ac\u00a04,914 million (2021: \u20ac\u00a05,383 million) consists of mortgage loans and corporate and government bonds. See accounting policy S about securities lending.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | -300 | -354 |
| Increase in impairments through profit or loss | -133 | -16 |
| Reversal of impairments through profit or loss | 23 | 3 |
| Reversal of impairments due to disposal | 43 | 68 |
| Other | -7 | - |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | -374 | -300 |
The increase in impairments through profit or loss is related to impairments on equities and investment funds. The reversal of impairments through profit or loss relates to government bonds. The reversal of impairments due to disposal is mainly related to equities.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 3,216 | 2,825 |
| Purchases | 455 | 336 |
| Disposal | -222 | -64 |
| Revaluation through profit or loss | -167 | 117 |
| Net transfer of real estate equity funds | 1,457 | - |
| Other changes | - | 2 |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | 4,740 | 3,216 |
The net transfer of real estate equity funds relates to ASR DFLF. During 2022, a.s.r. lost control of ASR DFLF as a result of the entry of third party participants in ASR DFLF.
See accounting policy F.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Government bonds | 1,526 | 1,954 |
| Corporate bonds | 1,386 | 1,100 |
| Equities | 6,504 | 7,950 |
| Real estate equity funds | 170 | 249 |
| Mortgage equity funds | 252 | 234 |
| Derivatives | - | 6 |
| Cash and cash equivalents | 9 | 18 |
| Other investments | 66 | 64 |
| \u00a0 | \u00a0 | \u00a0 |
| Total investments on behalf of policyholders at fair value through profit or loss | 9,912 | 11,574 |
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 11,574 | 10,154 |
| Purchases | 1,101 | 1,125 |
| Disposal | -805 | -1,237 |
| Revaluation through profit or loss | -1,946 | 1,629 |
| Other changes | -12 | -98 |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | 9,912 | 11,574 |
Investments on behalf of policyholders are managed on behalf of policyholders on a fair value basis. Although individual instruments may (or may not) have a maturity depending on their nature, this does not impact the liquidity position of a.s.r.
See accounting policy G.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Government bonds | 261 | - |
| Corporate bonds | 149 | - |
| Equities | 1,449 | 1,794 |
| Real estate equity funds | 97 | 119 |
| Cash and cash equivalents | 37 | 39 |
| Other investments | 6 | - |
| Total investments related to investment contracts | 2,000 | 1,952 |
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 1,952 | - |
| Purchases | 2,419 | 355 |
| Disposal | -2,024 | -110 |
| Revaluation through profit or loss | -351 | 175 |
| Changes in the composition of the group | - | 1,524 |
| Other changes | 5 | 9 |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | 2,000 | 1,952 |
The purchases and disposals increased mainly due to the sale of \u20ac\u00a01.878 million of investment funds owed by a.s.r. PPI and managed by BND Vermogensbeheer N.V. and the purchase of \u20ac\u00a01.878 million investment funds owed by a.s.r. PPI and now managed by ASR Vermogensbeheer N.V.
Investments related to investment contracts are managed on behalf of contract holders on a fair value basis. Although individual instruments may (or may not) have a maturity depending on their nature, this does not impact the liquidity position of a.s.r.
See accounting policy H.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Government and public sector | 221 | 223 |
| Mortgage loans | 10,370 | 9,991 |
| Other loans | 1,723 | 1,253 |
| Total due from customers | 12,314 | 11,468 |
| \u00a0 | \u00a0 | \u00a0 |
| Impairments | \u00a0 | \u00a0 |
| Specific credit risks | -7 | -7 |
| Due from customers | 12,307 | 11,461 |
| \u00a0 | \u00a0 | \u00a0 |
| Due from credit institutions - Interest bearing deposits | 36 | 139 |
| Due from credit institutions - Loans and advances | 2,628 | 2,797 |
| Due from credit institutions - Other | 1,632 | 91 |
| Total due from credit institutions | 4,296 | 3,027 |
| \u00a0 | \u00a0 | \u00a0 |
| Impairments | \u00a0 | \u00a0 |
| Specific credit risks | -37 | -56 |
| Due from credit institutions | 4,259 | 2,971 |
| \u00a0 | \u00a0 | \u00a0 |
| Due from policyholders | 133 | 75 |
| Due from intermediaries | 65 | 89 |
| Reinsurance receivables | 63 | 83 |
| Due from Health Insurance Fund | 70 | 148 |
| Other receivables | 301 | 459 |
| Total trade and other receivables | 632 | 853 |
| \u00a0 | \u00a0 | \u00a0 |
| Impairments | \u00a0 | \u00a0 |
| Specific credit risks | -27 | -25 |
| IBNR | - | -1 |
| Trade and other receivables | 605 | 827 |
| \u00a0 | \u00a0 | \u00a0 |
| Total loans and receivables | 17,171 | 15,259 |
The total amount due from credit institutions of \u20ac\u00a04,296 million (2021: \u20ac\u00a03,027 million) mainly increased due to paid cash collateral. Total due from credit institutions consists for \u20ac\u00a02,233 million (2021: \u20ac\u00a02,462 million) of savings-linked mortgage loans.
The claim related to cash collateral paid on derivative instruments, included in total due from credit institutions, amounts to \u20ac\u00a01,632 million (2021: \u20ac\u00a091 million).
Based on their contractual maturity, an amount of \u20ac\u00a015,023 million (2021: \u20ac\u00a014,368 million) of the loans and receivables is expected to be recovered after more than one year after the balance sheet date.
For information regarding the fair value, see chapter 6.7.1.2.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | -89 | -90 |
| Increase in impairment through profit and loss | -10 | -15 |
| Reversal of impairment through profit and loss | 27 | 14 |
| Reversal of impairment due to disposal | 1 | 2 |
| Other | - | 1 |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | -71 | -89 |
See accounting policy I.
Derivatives consist primarily of derivatives used to hedge interest rate movements. Changes in the fair value of derivatives at fair value through profit or loss are recorded in \u2018fair value gains and losses\u2019, see chapter 6.6.4.
a.s.r. trades both cleared and non-cleared derivatives on the basis of standardised contracts and exchanges cash variation margin with its counterparties. The derivatives are valued daily and cash collateral is exchanged to reflect the change in mark-to-market of the derivatives. Because of this periodic margining process, counterparty risk on derivatives is negligible.
In addition to the above variation margin obligations, there is also an initial margin obligation for central cleared derivatives which further reduces the risk of a.s.r. and its counterparties that they cannot fulfil their obligations.
Notional amounts are not recognised as assets or liabilities in the balance sheet, however notional amounts are used in determining the fair value of the derivatives. Notional amounts do not reflect the potential gain or loss on a derivative transaction.
| \u00a0 | 31 December 2022 | 31 December 2021 | ||||
|---|---|---|---|---|---|---|
| \u00a0 | Asset | Liability | Notional amount | Asset | Liability | Notional amount |
| Foreign exchange contracts | 80 | 29 | 2,924 | 25 | 78 | 3,873 |
| Interest rate contracts | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| - Swaps | 4,782 | 5,494 | 72,854 | 5,870 | 678 | 62,006 |
| - Options | 275 | - | 2,781 | 237 | - | 2,867 |
| - Futures | 215 | - | 1,176 | 37 | 3 | 939 |
| Inflation linked swaps | 44 | - | 290 | 14 | - | 235 |
| Equity index contracts | 31 | - | 643 | 28 | - | 802 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total | 5,428 | 5,523 | 80,667 | 6,212 | 759 | 70,723 |
The derivatives do not include the derivatives on behalf of policyholders (2022: nil, 2021: \u20ac\u00a06 million).
Derivatives assets decreased and derivatives liabilities increased primarily as a result of negative revaluations due to increasing interest rates.
In addition to the use of swaps and options a.s.r. manages interest rate risk by using bond forwards, included in futures.
The notional amounts of both receiver and payer swaps are included in the total notional amounts of foreign exchange contracts.
The fair value of interest rate contracts is calculated by first determining the cash flows of the floating leg based on the Euribor-curve corresponding the interest reset period (3 months, 6 months or 12 months) of the swap. Then the net present value of the floating and fixed leg is determined by discounting the cash flows. As part of global industry efforts around benchmark reform, Central Clearing Counterparties (CCPs) have switched the overnight cost of funding collateral and discounting on all cleared EUR-denominated products to euro short-term (\u20acSTR) in July 2020, for USD-denominated derivatives to Secured Overnight Financing Rate in October 2020, and GBP-denominated derivatives to Sterling Overnight Index Average in December 2021. In the second half of 2021, all bilateral derivative agreements have been amended to reference the relevant Alternative Reference Rates.
The fair value of the interest rate contracts using the above valuation method form the basis for the amount of collateral that is exchanged between a.s.r. and its counterparties in accordance with the underlying contracts. For more information see chapter 6.8 on risk management.
Of the derivatives \u20ac\u00a05,237 million assets (2021: \u20ac\u00a06,121 million) and \u20ac\u00a05,485 million liabilities (2021: \u20ac\u00a0658 million) is expected to be recovered respectively settled more than one year after the balance sheet date.
Throughout the world, a transition is taking place from interbank offered rates (IBORs) to alternative benchmarks. In the EU, the transition to alternative interest-rate benchmarks is governed by the Benchmark Regulation (BMR). Pursuant to the BMR, IBOR based contracts need to be amended to reference alternative rates or to be provided with a fallback option.
The transition away from IBORs is mainly affecting a.s.r.\u2019s derivative book, which is measured at fair value through profit or loss. Although most references under these derivatives remain BMR compliant, the Cash Collateral Interest Rate, and consequently discount rates, have required amendments towards Alternative Reference Rates (ARRs).
During 2020 and 2021, all contracts referencing IBORs have been amended to reflect ARRs, with the exception of USD Libor Referenced Interest Rate Swaps, which are expected to remain BMR Compliant until June 2023. A project team has been formed in order to effectively manage the transition from IBORs to ARRs, and mitigating any adverse operational and/or financial impact. As at 31 December 2022, the transition from USD Libor References towards its respective ARRs is still outstanding and is expected to be finished well in advance of its cessation in June 2023. The following table provides details related to a.s.r.\u2019s exposure to USD Libor References at the end of 2022.
| 31 December 2022 | Non-derivative financial assets - carrying value | Non-derivative financial liabilities - carrying value | Derivatives - notional amount |
|---|---|---|---|
| USD LIBOR (3 months) | 28 | - | 258 |
| USD LIBOR (6 months) | 81 | - | - |
| \u00a0 | 109 | - | 258 |
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Deferred tax assets | 119 | - |
| Deferred tax liabilities | - | 69 |
| Net Deferred tax | 119 | -69 |
Deferred taxes are formed for differences between the carrying amount of assets and liabilities and their tax base at the enacted tax rate, taking into account tax-exempt components. The current tax rate is 25.8% (2021: 25.0%). The deferred taxes are calculated with the enacted tax rate for 2023 of 25.8%.
Deferred tax assets and liabilities are expected to be recovered after more than one year after the balance sheet date.
| \u00a0 | 1 January 2022 | Changes recognised in profit or loss | Changes recognised in other comprehensive income | Changes in composition of the group | 31 December 2022 |
|---|---|---|---|---|---|
| Derivatives | -1,332 | 1,525 | - | - | 193 |
| Investments | -861 | -546 | 1,205 | - | -203 |
| Investment property | -400 | 324 | -5 | 5 | -76 |
| Property, plant and equipment | -16 | 1 | 2 | - | -13 |
| Intangible assets | -51 | 8 | - | - | -44 |
| Liabilities arising from insurance contracts | 2,552 | -1,693 | -459 | - | 400 |
| Employee benefits | 171 | 11 | -308 | - | -127 |
| Amounts received in advance | -1 | -1 | - | - | -3 |
| Fiscal reserves | -187 | 105 | - | - | -82 |
| Other | 57 | 17 | - | - | 74 |
| Gross deferred tax | -69 | -251 | 434 | 6 | 119 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Write-down of deferred tax assets | - | - | - | - | - |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Net deferred tax | -69 | -251 | 434 | 6 | 119 |
| \u00a0 | 1 January 2021 | Changes recognised in profit or loss | Changes recognised in other comprehensive income | Changes recognised other | Changes in composition of the group | 31 December 2021 |
|---|---|---|---|---|---|---|
| Derivatives | -1,893 | 561 | - | - | - | -1,332 |
| Investments | -1,031 | -55 | 224 | - | - | -861 |
| Investment property | -352 | -45 | - | -3 | - | -400 |
| Property, plant and equipment | -10 | 1 | 2 | -9 | - | -16 |
| Intangible assets | -48 | 6 | - | - | -9 | -51 |
| Liabilities arising from insurance contracts | 3,414 | -559 | -303 | - | - | 2,552 |
| Employee benefits | 226 | -5 | -51 | - | - | 171 |
| Amounts received in advance | 1 | -2 | - | - | - | -1 |
| Fiscal reserves | -170 | -17 | - | - | - | -187 |
| Other | 39 | 7 | - | 11 | - | 57 |
| Gross deferred tax | 177 | -108 | -128 | -2 | -9 | -69 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Write-down of deferred tax assets | - | - | - | - | - | - |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Net deferred tax | 177 | -108 | -128 | -2 | -9 | -69 |
In 2021, changes recognised other related to the acquisition of wind farm Wieringermeer.
See accounting policy X.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Accrued investment and interest income | 529 | 465 |
| Prepaid costs and other non-financial assets | 148 | 134 |
| Property developments | 30 | 31 |
| Taxes receivable | 120 | - |
| \u00a0 | \u00a0 | \u00a0 |
| Total other assets | 828 | 631 |
Prepaid costs and other non-financial assets includes prepaid commissions for non-life insurance.
An amount of \u20ac\u00a0778 million (2021: \u20ac\u00a0582 million) of other assets is expected to be recovered less than or equal to one year after the balance sheet date.
See accounting policy Y.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Due from banks | 1,645 | 1,306 |
| Due from banks falling due within three months | 600 | 1,000 |
| \u00a0 | \u00a0 | \u00a0 |
| Total cash and cash equivalents | 2,245 | 2,306 |
a.s.r. has cash amounting to \u20ac\u00a0600 million (2021: \u20ac\u00a01,000 million) that has been received as part of a securities lending programme, but does not qualify for derecognition. For more information see chapter 6.5.5.1. All other cash and cash equivalents are freely available.
The cash components include \u20ac\u00a0249 million (2021: \u20ac\u00a01,892 million) related to cash collateral received on derivative instruments and is managed separately from other cash equivalents. The decrease in these cash components was caused by the decrease in value of derivatives, as a result of which collateral was refunded.
The claim related to cash collateral paid on derivative instruments is included in the amount loans and receivables, see chapter 6.5.8. Debt related to cash collateral on derivatives instruments is included in the amount due to banks, see chapter 6.5.21.
Interest expenses on cash collateral is mainly based on \u20acSTR (2021: EONIA/\u20acSTR).
See accounting policy Z.
| \u00a0 | 31 December 2022 | 31 December 2021 | ||
|---|---|---|---|---|
| \u00a0 | Number of Shares (in millions) | Amounts (in \u20ac\u00a0millions) | Number of Shares (in millions) | Amounts (in \u20ac\u00a0millions) |
| Ordinary shares | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| - Authorised capital; par value of \u20ac\u00a00.16 | 325 | 52 | 325 | 52 |
| - Of which unsubscribed | 175 | 28 | 187 | 30 |
| Subscribed and paid-up capital | 150 | 24 | 138 | 22 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Preference shares | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| - Authorised capital; par value of \u20ac\u00a00.16 | 325 | 52 | 325 | 52 |
| - Of which unsubscribed | 325 | 52 | 325 | 52 |
| Subscribed and paid-up capital | - | - | - | - |
The share capital increased as a result of issued share capital to finance the intended business combination of a.s.r. and Aegon Nederland N.V.
The share premium reserve increased by \u20ac\u00a0577 million due to issued share capital to finance the intended business combination of a.s.r. and Aegon Nederland N.V. (\u20ac\u00a0591 million) and the cancellation of 2,036 thousand treasury shares (\u20ac\u00a0-14 million), as approved at the AGM in May 2022, see chapter 6.5.13.5.
| \u00a0 | 31 December 2022 | 31 December 2021 | ||||
|---|---|---|---|---|---|---|
| \u00a0 | Investments available for sale | Revaluation of property in own use | Total | Investments available for sale | Revaluation of property in own use | Total |
| Gross unrealised gains and losses | -1,844 | 50 | -1,794 | 3,074 | 38 | 3,112 |
| Related tax | 526 | -13 | 513 | -679 | -10 | -688 |
| Shadow accounting | 503 | - | 503 | -1,257 | - | -1,257 |
| Tax related to shadow accounting | -130 | - | -130 | 324 | - | 324 |
| Unrealised gains and losses related to segregated investment pools | -19 | - | -19 | -40 | - | -40 |
| Tax related to segregated investment pool | 5 | - | 5 | 10 | - | 10 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total unrealised gains and losses recorded in equity | -959 | 37 | -922 | 1,433 | 28 | 1,461 |
The balance of actuarial gains and losses related to the pension obligation increased by \u20ac\u00a0887 million after tax and \u20ac\u00a01195 million before tax (2021: increased by \u20ac\u00a0198 million after tax and \u20ac\u00a0249 million before tax). The increase is mainly due to an increase in the discount rate (see chapter 6.5.17).
As part of the employee share purchase plan a.s.r. sold 124 thousand shares for an amount of \u20ac\u00a04,06 million. The employee share purchase plan led to a decrease of \u20ac\u00a00.2 million in retained earnings. For more information on the employee share purchase plan, see chapter 6.7.6.
In February 2022, a.s.r. announced the repurchase of ordinary shares as an additional capital distribution. a.s.r. repurchased 1,798 thousand shares under an open market share buyback (SBB) programme for an amount of \u20ac\u00a075 million (average share price \u20ac\u00a041.70).
In the AGM in May 2022 the resolution was adopted to cancel the 2,036 thousand shares which were acquired in 2021. The cancellation was effected in August 2022.
The amount of treasury shares held at year-end of \u20ac\u00a079 million (2021: \u20ac\u00a083 million) represents 1,903 thousand (2021: 2,264 thousand) treasury shares.
| \u00a0 | 2022 | 2021 | Coupon date | First possible redemption date |
|---|---|---|---|---|
| Hybrid Tier 2 instrument 5% fixed interest | 497 | 497 | Annually with effect from 30 September 2015 | 30 September 2024 |
| Restricted Tier 1 instrument 4.625% fixed interest | 507 | 507 | Semi-annually with effect from 19 April 2018 | 19 October 2027 |
| Total other equity instruments | 1,004 | 1,004 | \u00a0 | \u00a0 |
The Tier 1 and Tier 2 instruments bear discretionary interest and have no maturity date, but can be redeemed at the option of a.s.r. on any coupon due date from the above mentioned possible redemption date.
The Tier 1 and Tier 2 instruments have subordination provisions, rank junior to all other liabilities and senior to only shareholders' equity. The conditions of the securities contain certain provisions for optional and required coupon payment deferral and mandatory coupon payment events.
The coupon payments in respect of the Tier 1 and Tier 2 instruments are deductible for tax purposes.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Hybrid Tier 2 instrument 5% fixed interest | 25 | 25 |
| Restricted Tier 1 instrument 4.625% fixed interest | 23 | 23 |
| \u00a0 | \u00a0 | \u00a0 |
| Total distributed amounts | 48 | 48 |
The Tier 1 and Tier 2 instruments are classified as equity as there is no requirement to settle the obligation in cash or another financial asset or to exchange financial assets or financial liabilities under conditions that are potentially unfavourable for a.s.r.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Net result attributable to holders of ordinary shares for calculating the earnings per ordinary share | 685 | 894 |
| Weighted average number of ordinary shares in issue | 137,004,580 | 136,260,472 |
| Basic earnings per ordinary share (in euros) | 5.00 | 6.56 |
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Net result | 685 | 894 |
| - effect of Restricted Tier 1 capital instrument | 17 | 17 |
| Adjusted net result attributable to holders of ordinary shares for calculating the diluted earnings per ordinary share | 702 | 911 |
| Weighted average number of ordinary shares in issue | 137,004,580 | 136,260,472 |
| Weighted average number of ordinary shares resulting from conversion of bonds Restricted Tier 1 | 21,645,022 | 21,645,022 |
| Weighted average number of shares used to calculate the diluted earnings per ordinary share | 158,649,601 | 157,905,493 |
| Diluted earnings per ordinary share (in euros) | 4.42 | 5.77 |
Net result in the table is after tax and non-controlling interests.
For additional information related to net result, see chapter 6.2.2.
See accounting policy AA.
| \u00a0 | Nominal amount | Carrying value 2022 | Carrying value 2021 |
|---|---|---|---|
| Hybrid Tier 2 instrument 5.125% fixed interest | 500 | 499 | 498 |
| Hybrid Tier 2 instrument 3.375% fixed interest | 500 | 495 | 494 |
| Hybrid Tier 2 instrument 7.000% fixed interest | 1,000 | 987 | - |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total subordinated liabilities | 2,000 | 1,980 | 992 |
In 2015, a.s.r. issued \u20ac\u00a0500 million subordinated liabilities in the form of Tier 2 notes, first callable on 29 September 2025, and maturing on 29 September 2045. The coupon is fixed at 5.125% and paid annually on 29 September with a step up at the first call date.
In 2019 a.s.r. issued \u20ac\u00a0500 million subordinated liabilities in the form of Tier 2 notes. The Tier 2 notes have a maturity date of 2049 and are first callable 3 months before the first reset date of 2 May 2029. The coupon is fixed at 3.375% and paid annually on 2 May. After the reset date the interest is calculated based on the 5 Year Mid Swap Rate plus a margin of 4.00 per cent and updated once every five years.
On 22 November 2022 a.s.r. issued \u20ac\u00a01 billion subordinated liabilities to partially finance the intended business combination with Aegon Nederland N.V., see chapter 6.4.5. As of the moment the business combination is completed the subordinated liabilities will qualify as a Tier 2 instrument. These Tier 2 notes have an M&A call clause, which gives a.s.r. the option to redeem the Tier 2 notes early if the acquisition of Aegon Nederland N.V. does not take place within 12 months or will not take place at all. The Tier 2 notes have a maturity date of 2043 and are first callable on 7 December 2033. The coupon is fixed at 7.000% and paid annually on 7 December.
These Tier 2 notes are subordinated and ranking equally without any preference amongst themselves and (a) junior to the claims of all senior creditors of a.s.r., (b) equally with any parity obligations and (c) in priority to claims in respect of (i) any equity securities and (ii) any junior obligations.
The subordinated liabilities are classified as liabilities given the obligation to settle the loans and pay the coupon. The subordinated liabilities issued in 2015 and 2019 are considered Tier 2 own funds for regulatory purposes. The subordinated liabilities issued in 2022 will be considered Tier 2 own funds for regulatory purposes as of the moment the business combination with Aegon Nederland is completed.
See accounting policies J, K, P and W.
| \u00a0 | Gross | Of which reinsurance | ||
|---|---|---|---|---|
| \u00a0 | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 |
| Provision for unearned premiums | 310 | 307 | 4 | 8 |
| Provision for claims (including IBNR) | 6,716 | 6,744 | 208 | 256 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-life insurance contracts | 7,027 | 7,050 | 212 | 263 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Life insurance contracts excluding own pension contracts | 22,606 | 30,747 | 145 | 154 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total liabilities arising from insurance contracts | 29,633 | 37,797 | 357 | 417 |
| \u00a0 | Gross | Of which reinsurance | ||
|---|---|---|---|---|
| \u00a0 | 2022 | 2021 | 2022 | 2021 |
| Provision for unearned premiums | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| At 1 January | 307 | 323 | 8 | 19 |
| Changes in provision for unearned premiums | 4 | -16 | -3 | -11 |
| Provision for unearned premiums as at 31 December | 310 | 307 | 4 | 8 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Provision for claims (including IBNR) | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| At 1 January | 6,744 | 6,522 | 256 | 307 |
| Claims paid | -2,866 | -2,595 | -112 | -73 |
| Changes in provision for claims | 3,276 | 3,064 | 63 | 23 |
| Changes in shadow accounting through equity | -159 | -179 | 0 | 0 |
| Changes in shadow accounting through income | -278 | -67 | 0 | 0 |
| Provision for claims (including IBNR) as at 31 December | 6,716 | 6,744 | 208 | 256 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-life insurance contracts as at 31 December | 7,027 | 7,050 | 212 | 263 |
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Claims reported | 4,229 | 4,516 |
| IBNR | 2,487 | 2,228 |
| \u00a0 | \u00a0 | \u00a0 |
| Total provisions for claims | 6,716 | 6,744 |
| \u00a0 | Gross | Of which reinsurance | ||
|---|---|---|---|---|
| \u00a0 | 2022 | 2021 | 2022 | 2021 |
| At 1 January | 30,748 | 34,614 | 156 | 160 |
| Premiums received / paid | 668 | 696 | 0 | 0 |
| Regular interest added | 566 | 566 | 3 | 3 |
| Realised gains and losses | -303 | 263 | 0 | 0 |
| Amortisation of realised gains | -279 | -313 | 0 | 0 |
| Benefits | -1,475 | -1,622 | -9 | -11 |
| Technical result | -96 | -69 | -3 | 3 |
| Release of cost recovery | -118 | -124 | 0 | 0 |
| Changes in shadow accounting through equity | -1,600 | -1,081 | 0 | 0 |
| Changes in shadow accounting through income | -5,489 | -2,183 | 0 | 0 |
| Other changes | -13 | 0 | 0 | 0 |
| At 31 December | 22,610 | 30,748 | 147 | 156 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest margin participation to be written down | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| At 1 January | -13 | -11 | -2 | -2 |
| Write-down recognised in profit or loss | 2 | 1 | 0 | 0 |
| Other changes | -2 | -3 | 0 | 0 |
| At 31 December | -13 | -13 | -2 | -2 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Provision for discretionary profit sharing, bonusses and discounts | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| At 1 January | 12 | 12 | 0 | 0 |
| Profit sharing, bonuses and discounts granted in the financial year | -2 | 0 | 0 | 0 |
| At 31 December | 10 | 12 | 0 | 0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total life insurance contracts at 31 December | 22,606 | 30,747 | 145 | 154 |
In accordance with a.s.r.\u2019s accounting policy, the LAT is performed and the shadow accounting adjustments related to instruments with a revaluation reserve amount below cost that are made to the level that the LAT will not get triggered (i.e. shows a positive margin). The insurance liabilities are deemed to be adequate following the performance of the LAT taking into account the UFR of 3.45% for 2022 (2021: 3.60%). The changes in shadow accounting through equity in the amount of \u20ac\u00a0-1,600 million include a reversal of shadow accounting related to instruments with a revaluation reserve amount below cost for an amount of \u20ac\u00a01,433 million. See accounting policy A.
In 2022, technical result increased, reflecting a positive impact of further optimisation of the strategic asset mix in the investment portfolio including renewable energy investments. Furthermore, mortality results increased compared to 2021, partly due to excess mortality in some portfolios. Disability result in pensions also improved, partly due to an improved estimation of claims. This was partly offset by a sharp decline in equity markets and considerably higher interest rates, resulting in strengthened provisions for unit linked liabilities with guarantees by \u20ac\u00a039 million.
The table below is a ten-year summary of movements in gross cumulative claims in connection with the Non-life portfolio for the period from 2013 to 2022.
| \u00a0 | Claims year | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 31 December 2022 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | Total |
| At year end | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 1st claim year | 2,109 | 2,020 | 2,067 | 2,256 | 2,275 | 2,383 | 2,453 | 2,652 | 3,065 | 3,356 | \u00a0 |
| 2014 | 2,061 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 2015 | 2,047 | 1,962 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 2016 | 2,043 | 1,965 | 2,026 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 2017 | 2,057 | 1,955 | 2,057 | 2,271 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 2018 | 2,051 | 1,948 | 2,066 | 2,315 | 2,322 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 2019 | 2,037 | 1,938 | 2,055 | 2,299 | 2,382 | 2,375 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 2020 | 2,019 | 1,913 | 2,050 | 2,318 | 2,387 | 2,452 | 2,471 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 2021 | 2,002 | 1,898 | 2,030 | 2,297 | 2,354 | 2,513 | 2,536 | 2,628 | \u00a0 | \u00a0 | \u00a0 |
| 2022 | 2,006 | 1,889 | 2,019 | 2,269 | 2,328 | 2,494 | 2,539 | 2,659 | 3,063 | \u00a0 | \u00a0 |
| Gross claims as at 31 December 2022 | 2,006 | 1,889 | 2,019 | 2,269 | 2,328 | 2,494 | 2,539 | 2,659 | 3,063 | 3,356 | \u00a0 |
| Cumulative gross paid claims | 1,824 | 1,712 | 1,787 | 1,971 | 1,966 | 1,986 | 1,928 | 1,920 | 2,116 | 1,481 | \u00a0 |
| Gross outstanding claims liabilities (including IBNR) | 182 | 178 | 232 | 298 | 362 | 508 | 610 | 739 | 948 | 1,876 | 5,931 |
| Claims liabilities prior years | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 839 |
| Shadow accounting | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | -54 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total claim liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 6,716 |
| \u00a0 | Claims year | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 31 December 2021 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | Total |
| At year end: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 1st claims year | 2,213 | 2,109 | 2,020 | 2,067 | 2,256 | 2,275 | 2,383 | 2,453 | 2,652 | 3,065 | \u00a0 |
| 2013 | 2,121 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 2014 | 2,127 | 2,061 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 2015 | 2,110 | 2,047 | 1,962 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 2016 | 2,111 | 2,043 | 1,965 | 2,026 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 2017 | 2,124 | 2,057 | 1,955 | 2,057 | 2,271 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 2018 | 2,109 | 2,051 | 1,948 | 2,066 | 2,315 | 2,322 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 2019 | 2,091 | 2,037 | 1,938 | 2,055 | 2,299 | 2,382 | 2,375 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 2020 | 2,088 | 2,019 | 1,913 | 2,050 | 2,318 | 2,387 | 2,452 | 2,471 | \u00a0 | \u00a0 | \u00a0 |
| 2021 | 2,098 | 2,002 | 1,898 | 2,030 | 2,297 | 2,354 | 2,513 | 2,536 | 2,628 | \u00a0 | \u00a0 |
| Gross claims as at 31 December 2021 | 2,098 | 2,002 | 1,898 | 2,030 | 2,297 | 2,354 | 2,513 | 2,536 | 2,628 | 3,065 | \u00a0 |
| Cumulative gross paid claims | 1,902 | 1,796 | 1,683 | 1,748 | 1,929 | 1,909 | 1,913 | 1,842 | 1,785 | 1,366 | \u00a0 |
| Gross outstanding claims liabilities (including IBNR) | 196 | 206 | 215 | 281 | 368 | 445 | 601 | 693 | 842 | 1,699 | 5,546 |
| Claims liabilities prior years | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 803 |
| Shadow accounting | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 394 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total claim liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 6,744 |
For the acquired entities gross claims in the claims development table includes claims from the original date of the claim.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 14,566 | 13,137 |
| Premiums received | 1,098 | 1,042 |
| Interest added | 85 | 85 |
| Benefits | -842 | -1,362 |
| Effect of fair value changes related to financial assets | -1,939 | 1,636 |
| Technical result | 31 | 24 |
| Release of cost recovery | -69 | -75 |
| Other changes | 76 | 80 |
| At 31 December | 13,007 | 14,566 |
At year-end 2022, the liabilities included a guarantee provision for a carrying amount of \u20ac\u00a084 million (2021: \u20ac\u00a046 million) and a provision related to unit-linked insurance contracts and pension contracts for a carrying amount of \u20ac\u00a042 million (2021: \u20ac\u00a043 million). These provisions relate to compensation for the cost of these contracts.
An amount of \u20ac\u00a0119 million (2021: \u20ac\u00a089 million) of the liabilities arising from insurance contracts on behalf of policyholders is related to the a.s.r. DC pension plans.
Other changes relates to the transfer of insurance contracts to insurance contracts on behalf of policyholders due to new product features provided.
Liabilities arising from insurance contracts on behalf of policyholders also include liabilities where conversions and switches have occurred in the insurance contract administration. The insurance contract still meets the definition of and continues to be classified as an insurance contract on behalf of policyholders and therefore continues to be included in the insurance contracts on behalf of policyholders administration. However, as a result of the conversion and switches, liabilities arising from insurance contracts on behalf of policyholders amounting to \u20ac\u00a02,999 million (2021: \u20ac\u00a02,919 million) are, in the classification and subsequent presentation, not backed directly with investments on behalf of policyholders. The related investments are included and presented in investments (available for sale) and loans and receivables.
See accounting policy L.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 1,952 | - |
| Gross premiums and deposits | 447 | 279 |
| Withdrawals | -42 | -31 |
| Effect of fair value changes related to financial assets | -351 | 175 |
| Interest credited | - | 10 |
| Changes in the composition of the group | - | 1,524 |
| Other changes | -5 | -4 |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | 2,000 | 1,952 |
See accounting policy M.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Post-employment benefits pensions | 2,722 | 3,990 |
| Post-employment benefits other than pensions | 7 | 9 |
| Post-employment benefit obligation | 2,730 | 3,999 |
| \u00a0 | \u00a0 | \u00a0 |
| Other long-term employee benefits | 12 | 14 |
| \u00a0 | \u00a0 | \u00a0 |
| Total | 2,742 | 4,013 |
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Post-employment benefits pensions | -97 | -80 |
| Post-employment benefits other than pensions | - | - |
| Total | -97 | -80 |
| \u00a0 | \u00a0 | \u00a0 |
| Other long term employee benefits | -1 | - |
| \u00a0 | \u00a0 | \u00a0 |
| Cost of post-employment and other long-term employee benefits | -99 | -80 |
The costs of the post-employment benefits pensions relate to the current DC pension plan of a.s.r., the previous DB plans of a.s.r., plus the DC plans of the other group companies.
An amount of \u20ac\u00a02,609 million (2021: \u20ac\u00a03,880 million) of the employee benefits is expected to be settled more than twelve months after the balance sheet date.
a.s.r. has a number of DC and DB post-employment benefit plans for its employees and former employees. The majority of employees are formally employed by a.s.r. A limited amount of employees are employed by other group companies. The pension plans of other group companies are disclosed in a separate section in this chapter.
a.s.r. life, an insurance company and a group entity, is the insurer of the majority of the post-employment benefit plans, being both the DC plans as well as the DB plans. As this company holds the separated investments that are meant to cover the employee benefit obligation for the DB plans, they do not qualify as plan assets in accordance with IAS 19 and are therefore included in financial assets.
The costs of the post-employment benefits pensions relate to the DC pension plan of a.s.r., the previous DB plans of a.s.r., plus the DC plans of the other group companies. No regular annual premium contributions are paid to the previous DB plans.
The DC plan has two components with defined benefit elements with a marginal impact: survivors' pension and the option to buy a guaranteed income.
In 2022, a.s.r. and the labour unions came to an agreement to add additional funds to the old DB plan for indexation amounting to \u20ac\u00a0240 million, of which \u20ac\u00a0227 million has already been recognised as past service costs in reporting years 2020 and 2021. The additional \u20ac\u00a013 million, also used for profit sharing, impacted the remeasurements for \u20ac\u00a012 million and other expenses for \u20ac\u00a01 million respectively. With the agreement, the current profit sharing in the DB plan will be discontinued as from 31 December 2022.
The recognised expenses for the DC plan in 2022 amounts to \u20ac\u00a054 million (2021: \u20ac\u00a050 million).
All pension build up for existing and new employees as of 1 January 2021 are included in the post-employment DC plans. All employees who commenced service between 1 January 2006 and 31 December 2020 are included in one post-employment DB plan (\u2018Basic plan\u2019). All other employees remain active within the existing plan at the date of first employment. Previous plans for former employees are also still active.
The post-employment DB en DC plans for employees that are employed by a.s.r. are insured by a.s.r. life.
The methods and techniques used to calculate the DB obligations are based on IAS 19 requirements and calculated by an independent actuary.
The benefits under these plans are dependent on factors such as years of service and compensation. Pension obligations are determined using mortality tables, the rate of employee turnover, wage drift and economic assumptions for factors such as inflation, and the discount rate.
As no contributions are paid into the ended DB pension scheme no accrual rate and pensionable salary and minimum franchise is required for this scheme.
The DB pension scheme had a retirement age of 68 years.
The DB scheme was based on average-salary pension; and
Future inflation indexation is conditional.
The other group companies, which are entities operating in the Distribution and Services segment, have DC plans, insured with a.s.r. life. The recognised expenses for these DC plans in 2022 amounts to \u20ac\u00a05 million (2021: \u20ac\u00a05 million).
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Net defined benefit liability at 1 January | 3,990 | 4,228 |
| \u00a0 | \u00a0 | \u00a0 |
| Included in income statement | \u00a0 | \u00a0 |
| Interest cost | 33 | 17 |
| Past service cost | 1 | 93 |
| Other | -1 | - |
| Total | 33 | 111 |
| \u00a0 | \u00a0 | \u00a0 |
| Remeasurement of liabilities included in OCI | \u00a0 | \u00a0 |
| Discount rate change | -1,222 | -325 |
| Other assumptions change | 31 | -12 |
| Experience adjustments | -3 | 88 |
| Total | -1,194 | -249 |
| \u00a0 | \u00a0 | \u00a0 |
| Benefits | -107 | -101 |
| Transfer | - | 2 |
| \u00a0 | \u00a0 | \u00a0 |
| Net defined benefit liability at 31 December | 2,722 | 3,990 |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | \u00a0 | \u00a0 |
| Defined benefit obligation | 2,722 | 3,990 |
| Fair value of plan assets | - | - |
| Net defined benefit liability | 2,722 | 3,990 |
Employees account for 20% (2021: 25%) of the DB obligation, 52% (2021: 41%) of the DB obligation relates to former employees currently receiving pension benefits, 25% (2021: 31%) of the DB obligation relates to deferred pensioners and 3% (2021: 3%) of the DB obligation relates to other members.
The discount rate was 3.67% at 31 December 2022 (31 December 2021: 0.90%), resulting in a \u20ac\u00a01,259 million decrease (2021: \u20ac\u00a0338 million decrease) in the DB obligation.
As per 31 December 2022 the duration of the DB obligation was 14 years (2021: 18 years).
The past service cost of \u20ac\u00a01 million pre-tax (2021: \u20ac\u00a093 million) relates to developments in relation to the ended DB plan of a.s.r.
The change in other assumptions amounts to \u20ac\u00a031 million (2021: \u20ac\u00a0-12 million) primarily due to a change in indexation percentage of former employees.
Experience adjustments are actuarial gains and losses that have arisen due to differences between actuarial assumptions. The following table provides information about experience adjustments with respect to qualifying plan assets and the DB obligation:
| (in \u20ac\u00a0thousands) | 2022 | 2021 |
|---|---|---|
| Experience adjustments to qualifying investments, gain (loss) | - | - |
| As % of qualifying investments as at 31 December | 0.0% | 0.0% |
| Experienced adjustments to defined benefit obligation, loss (gain) | 3,020 | -87,948 |
| As a % of liabilities as at 31 December | -0.1% | 2.2% |
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Discount rate | 3.7% | 0.9% |
| Indexation % employees | n.a. | 2.2% |
| Indexation % former employees | n.a. | 2.2% |
| Mortality (years) | 19.9 | 19.7 |
In the calculation of the DB obligation the:
Discount rate is based on an internal curve for high quality corporate bonds;
Most recent mortality table \u2018AG Prognosetafel 2022\u2019 is used, in combination with a.s.r. specific experience factors for the pension portfolio;
As from 2022 the indexation amount in the DB obligation is no longer derived from the indexation parameter and estimated period of indexation; instead, the fair values of the separate accounts to fund future indexation are added to the DB obligation.
The sensitivity of the above actuarial assumptions to feasible possible changes at the reporting date to one of the relevant actuarial assumptions whilst other assumption remain constant, would have affected the DB obligation by the amounts shown below:
| \u00a0 | Increase | Decrease |
|---|---|---|
| Discount rate (1% movement) | -287 | 360 |
| Future mortality (1 year movement) | -69 | 68 |
The portfolio of global investments (non-qualifying assets) held by a.s.r. life to cover the employee benefit expense of the DB plans can be broken down as follows:
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Equities | 18.0% | 17.9% |
| Fixed-interest securities | 73.2% | 74.4% |
| Real estate | 6.3% | 5.3% |
| Cash | 0.3% | 0.2% |
| Other | 2.1% | 2.2% |
For the non-qualifying assets backing the post-employment benefit plans, a.s.r. has drawn up general guidelines for the asset mix based on criteria such as geographical location and ratings. To ensure the investment guidelines remain in line with the conditions of the post-employment benefit obligations, a.s.r. regularly performs Asset Liability Management studies. Transactions in the non-qualifying assets are done within the guidelines. As the post-employment benefit plans are a liability on group level, the underlying insurance and market risks are in scope of a.s.r.\u2019s risk policies (see chapter 6.8). The overall interest-rate risk of the group is managed using interest-rate swaps and swaptions. a.s.r. life manages the interest rate risk through an overlay interest hedging strategy using swaps and swaptions for the company as a whole (see chapter 6.8.3). The swaps and swaptions are not specifically allocated to the a.s.r. post-employment benefit plans. Therefore the (un)realised gains and losses from swaps and swaptions as a whole are accounted for in liabilities arising from insurance contracts, in accordance with the shadow accounting policy, whereas the impact of changes in interest rates on the provisioning for employee benefits based on IAS19 is part of actuarial gains and losses that are recognised in equity (see chapter 6.5.13.3).
The non-qualifying assets, which are managed by a group company, are not presented as part of the net DB obligation. At year-end 2022, the fair value of these assets amounted to \u20ac\u00a02,424 million (2021: \u20ac\u00a02,651 million) including the separate accounts to fund future inflation indexation amounting to \u20ac\u00a0372 million (2021: \u20ac\u00a0192 million), which partly comprise the agreed additional funds in 2022. As mentioned above, the swaps and swaptions have not been allocated directly to the post-employment benefit obligations; neither are they included as part of the fair value of the non-qualifying assets managed by the group company. As of 1 January 2023, the non-qualifying plan assets also cease to be allocated to the a.s.r. DB plan as all profit sharing has ended and the assets will be included in the general account investments going forward.
As the assets do not qualify as qualifying assets, investment income from these assets has therefore not been included in the above figures but is recognised as investment income separately. Actual investment returns for 2022 amounted to \u20ac\u00a033 million (2021: \u20ac\u00a081 million), which includes the investment income on the separate account to fund future inflation indexation amounting to \u20ac\u00a05 million (2021: \u20ac\u00a014 million). These returns have been recognised in investment income (see chapter 6.6.2).
The separate account to fund future inflation indexation is utilised to fund the future inflation indexation for the employees and former employees included in the a.s.r. post-employment benefit plans. As such this has been included in the assumption used in calculating the DB obligation.
The other post-employment benefits plans consist of personnel arrangements for financial products (such as mortgages and health insurance), which remain in place after retirement.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Defined benefit obligation at 1 january | 9 | 10 |
| \u00a0 | \u00a0 | \u00a0 |
| Included in income statement | \u00a0 | \u00a0 |
| Other | - | - |
| Total | 0 | 0 |
| \u00a0 | \u00a0 | \u00a0 |
| Remeasurement of liabilities included in OCI | \u00a0 | \u00a0 |
| Discount rate change | -1 | - |
| Other assumptions change | - | - |
| Total | -1 | 0 |
| \u00a0 | \u00a0 | \u00a0 |
| Benefits | -1 | -1 |
| \u00a0 | \u00a0 | \u00a0 |
| Defined benefit obligation at 31 December | 7 | 9 |
Experience adjustments are actuarial gains and losses that have arisen due to differences between actuarial assumptions. The following table provides information about experience adjustments with respect to the DB obligation:
| (in \u20ac\u00a0thousands) | 2022 | 2021 |
|---|---|---|
| Experience adjustments to defined benefit obligation, loss (gain) | 1,272 | 385 |
| As a % of liabilities as at 31 December | 17.8% | 4.2% |
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Discount rate | 3.7% | 0.6% |
In accordance with a.s.r.\u2019s policy, discounts on employee mortgages have been fixated in amounts granted on the reference date December 2017.
In the calculation of the DB obligation the:
Discount rate is based on an internal curve for high quality corporate bonds;
Most recent mortality table \u2018AG Prognosetafel 2022\u2019 is used, in combination with a.s.r. specific experience factors for the pension portfolio.
The sensitivity of the above actuarial assumptions to feasible possible changes at the reporting date to one of the relevant actuarial assumptions whilst other assumption remain constant, would have affected the DB obligation by the amounts of \u20ac\u00a01 million increase (2021: \u20ac\u00a01 million increase) or \u20ac\u00a01 million decrease (2021: \u20ac\u00a01 million decrease) as a result of a movement of the discount rate by 1%.
Other long-term employee benefits consist of the employer\u2019s share of liabilities arising from long-term services, such as jubilee benefits.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Net liability as at 1 January | 14 | 15 |
| \u00a0 | \u00a0 | \u00a0 |
| Total expenses | -2 | - |
| Actuarial gains and losses | 1 | - |
| Other | -1 | -1 |
| \u00a0 | \u00a0 | \u00a0 |
| Net liability as at 31 December | 12 | 14 |
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Discount rate | 3.7% | 0.5% |
| Salary increases | 3.4% | 2.2% |
| Expected remaining service years | 8.2 | 8.1 |
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 24 | 24 |
| Additional foreseen amounts | 3 | 11 |
| Reversal of unused amounts | -3 | -4 |
| Usages in course of year | -6 | -14 |
| Acquisitions from third parties | 3 | - |
| Other | -3 | 7 |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | 18 | 24 |
The provisions were created for:
VAT and legal issues;
Dismantling costs wind turbines;
Employee restructuring expenses;
Retention of disability risk instead of insuring it with UWV (Employed Persons Insurance Administration Agency); and
Other expenses.
The provision for VAT and legal issues is based on best estimates available at year-end, making allowance for expert opinions.
The provisions for employee restructuring are based on arrangements agreed in the Collective Bargaining Agreement, restructuring plans, and on decisions made by a.s.r.\u2019s management.
The timing of the outflow of resources related to these provisions is uncertain because of the unpredictability of the outcome and the time required for the settlement of disputes.
An amount of \u20ac\u00a07 million (2021: \u20ac\u00a011 million) of the provisions is expected to be settled within twelve months after the balance sheet date.
See accounting policies AA and BB.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Loans | 152 | 137 |
| Lease liabilities | 62 | 55 |
| \u00a0 | \u00a0 | \u00a0 |
| Total Borrowings | 214 | 192 |
As at year-end, borrowings had the following terms to maturity:
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Maturity - Falling due within 1 year | 20 | 9 |
| Maturity - Falling due between 1 and 5 years | 61 | 58 |
| Maturity - Falling due after 5 years | 134 | 124 |
| \u00a0 | \u00a0 | \u00a0 |
| Maturity Borrowings | 214 | 192 |
Borrowings increased mainly due to the acquisition of wind farm Strekdammen, which was partially financed by a loan of \u20ac\u00a019 million. At year-end 2022, the fair value of borrowings was \u20ac\u00a0214 million (2021: \u20ac\u00a0192 million). For information regarding the fair value, see chapter 6.7.1.2. The average interest rate payable on loans was 1.40% (2021: 0.59%). The average incremental borrowing rate on the lease liabilities was 1.48% (2021: 1.63%).
See accounting policy AA.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Debts to policyholders, agents and intermediaries | 462 | 561 |
| Debt to reinsurers | 8 | 12 |
| \u00a0 | \u00a0 | \u00a0 |
| Total due to customers | 471 | 573 |
For information regarding the fair value, see chapter 6.7.1.2.
An amount of \u20ac\u00a020 million (2021: \u20ac\u00a044 million) of due to customers is expected to be settled more than twelve months after balance sheet date.
See accounting policy AA.
The amounts due to banks decreased from \u20ac\u00a05,741 million to \u20ac\u00a02,262 million primarily as a result of the decrease in liability recognised for cash collateral received under ISDAs (International Swaps and Derivatives Association) and Client Clearing Agreements (CCA) concluded with counterparties (see chapter 6.5.12). There is no significant difference between the carrying amount and the fair value of these liabilities (see chapter 6.7.1.2). The average interest rate for the cash collateral received in 2022 is -0.01% and based on \u20acSTR (2021: -0.48% (EONIA / \u20acSTR)).
\u20ac\u00a0450 million (2021 : nil) of cash on the balance sheet has been borrowed by entering into repurchase agreements. The asset recognised for cash collateral paid on repurchase agreements is presented under loans and receivables. The liability recognised for cash collateral received on repurchase agreements is presented under due to banks. The entire amount due to banks is expected to be settled less than or equal to twelve months after the balance sheet date.
a.s.r.\u2019s unsecured Revolving Credit Facility (RCF) amounts to \u20ac\u00a0400 million (2021: \u20ac\u00a0400 million). The RCF can be used for multiple purposes including investment purposes, balance sheet management and short-term cash flow management. As per the year-end 2022 the RCF is undrawn and fully available.
The entire amount of the due to banks is expected to be settled less than or equal to twelve months after the balance sheet date.
See accounting policy AA.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Financial liabilities | \u00a0 | \u00a0 |
| Accrued Interest | 188 | 93 |
| Trade payables | 12 | 15 |
| \u00a0 | \u00a0 | \u00a0 |
| Non-financial liabilities | \u00a0 | \u00a0 |
| Deferred income | 112 | 110 |
| Short-term employee benefits | 21 | 26 |
| Tax payable | - | 129 |
| Other non-financial liabilities | 605 | 605 |
| \u00a0 | \u00a0 | \u00a0 |
| Total other liabilities | 938 | 976 |
The other non-financial liabilities of \u20ac\u00a0605 million (2021: \u20ac\u00a0605 million) consist, amongst others, of payables, accruals related to investments and construction depots for housing mortgages.
There is no difference between the carrying value of other liabilities and their fair value (see chapter 6.7.1.2).
An amount of \u20ac\u00a020 million (2021: \u20ac\u00a024 million) of the other liabilities is expected to be settled more than one year after the balance sheet date.
See accounting policy CC.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Non-life insurance contracts \u2013 gross earned premiums | 4,270 | 4,138 |
| \u00a0 | \u00a0 | \u00a0 |
| Life insurance contracts retained exposure | 668 | 696 |
| Life insurance contracts on behalf of policyholders | 1,098 | 1,042 |
| Total life insurance contracts | 1,767 | 1,738 |
| \u00a0 | \u00a0 | \u00a0 |
| Total gross insurance premiums | 6,037 | 5,875 |
The table below provides an overview of total gross earned non-life insurance premiums.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Gross premiums written | 4,274 | 4,121 |
| Changes in provisions for unearned premiums | -4 | 16 |
| \u00a0 | \u00a0 | \u00a0 |
| Gross insurance premiums | 4,270 | 4,138 |
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Retained exposure Group | \u00a0 | \u00a0 |
| Non-recurring premiums written | 135 | 129 |
| Periodic premiums written | 104 | 112 |
| Group total | 239 | 242 |
| \u00a0 | \u00a0 | \u00a0 |
| Retained exposure Individual | \u00a0 | \u00a0 |
| Non-recurring premiums written | 18 | 20 |
| Periodic premiums written | 411 | 434 |
| Individual total | 429 | 454 |
| \u00a0 | \u00a0 | \u00a0 |
| Total contracts retained exposure | 668 | 696 |
| \u00a0 | \u00a0 | \u00a0 |
| On behalf of policyholders Group | \u00a0 | \u00a0 |
| Non-recurring premiums written | 214 | 194 |
| Periodic premiums written | 766 | 661 |
| Group total | 980 | 855 |
| \u00a0 | \u00a0 | \u00a0 |
| On behalf of policyholders Individual | \u00a0 | \u00a0 |
| Non-recurring premiums written | 2 | 55 |
| Periodic premiums written | 116 | 133 |
| Individual total | 118 | 187 |
| \u00a0 | \u00a0 | \u00a0 |
| Total contracts on behalf of policyholders | 1,098 | 1,042 |
| \u00a0 | \u00a0 | \u00a0 |
| Total life insurance contracts | 1,767 | 1,738 |
A total amount of \u20ac\u00a0187 million (2021: \u20ac\u00a0157 million) has been eliminated in the consolidation process and is therefore not included in the gross insurance premiums. This relates to the a.s.r. post-employment benefit plans of \u20ac\u00a0174 million (2021: \u20ac\u00a0140 million), investment fees of \u20ac\u00a011 million (2021: \u20ac\u00a015 million) and disability premiums of \u20ac\u00a02 million (2021: \u20ac\u00a02 million).
See accounting policy DD.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Interest income from receivables due from credit institutions | 99 | 110 |
| Interest income from investments | 371 | 331 |
| Interest income from amounts due from customers | 325 | 278 |
| Interest income from derivatives | 660 | 574 |
| Other interest income | 41 | 54 |
| Interest income | 1,497 | 1,347 |
| \u00a0 | \u00a0 | \u00a0 |
| Dividend on equities | 82 | 78 |
| Dividend on real estate equity funds | 71 | 58 |
| Dividend on mortgage equity funds | 22 | 21 |
| Rentals from investment property | 58 | 64 |
| Other investment income | 3 | 3 |
| Dividend and other investment income | 236 | 224 |
| \u00a0 | \u00a0 | \u00a0 |
| Total Investment income | 1,732 | 1,571 |
The effective interest method has been applied to an amount of \u20ac\u00a0789 million (2021: \u20ac\u00a0715 million) of the interest income from financial assets not classified at fair value through profit or loss. Included within interest income is \u20ac\u00a03 million (2021: \u20ac\u00a04 million) of interest received on impaired fixed-income securities.
See accounting policy EE.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Associates and joint ventures at equity method | \u00a0 | \u00a0 |
| - Realised gains | - | 33 |
| \u00a0 | \u00a0 | \u00a0 |
| Investments available for sale | \u00a0 | \u00a0 |
| Fixed-Income securities | \u00a0 | \u00a0 |
| - Realised gains | 173 | 261 |
| - Realised losses | -548 | -10 |
| Equities | \u00a0 | \u00a0 |
| - Realised gains | 223 | 186 |
| - Realised losses | -70 | -9 |
| \u00a0 | \u00a0 | \u00a0 |
| Loans and receivables | \u00a0 | \u00a0 |
| - Realised gains | 5 | 28 |
| - Realised losses | -71 | - |
| \u00a0 | \u00a0 | \u00a0 |
| Total realised gains and losses | -288 | 490 |
The realised result on fixed-income securities is lower due to the sale of government bonds and other debt securities in an increasing interest rate environment. The realised result on loans and receivables are lower due to the sale of mortgages in an increasing interest rate environment.
The disposal of fixed-income securities, including loans and receivables, results in a reversal of impairments of \u20ac\u00a01 million (2021: \u20ac\u00a057 million).
See accounting policy FF.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Realised gains and losses on derivatives | -185 | -46 |
| Unrealised gains and losses on derivatives | -5,554 | -2,358 |
| Gains and losses on investment property and property for own use | 117 | 91 |
| Financial assets at fair value through profit or loss | -106 | 172 |
| Additions to insurance liabilities due to shadow accounting | 5,767 | 2,250 |
| \u00a0 | \u00a0 | \u00a0 |
| Total fair value gains and losses | 38 | 110 |
All changes in fair value presented here are changes to the so-called \u2018clean fair value\u2019. This is the fair value net of accrued interest recognised in interest income and expense.
The unrealised losses on derivatives are due to increasing interest rates, most of these are shadowed and added to insurance liabilities, see chapter 6.5.15.
See accounting policy II.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Asset management for third parties | 102 | 96 |
| Commission on reinsurance | 24 | 23 |
| Other fee and commission income | 122 | 84 |
| \u00a0 | \u00a0 | \u00a0 |
| Total fee and commission income | 247 | 204 |
Other fee and commission income increased mainly due to an increase in fees received from the real estate equity funds and a.s.r. PPI.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Proceeds from sales of property developments | 11 | 32 |
| Revenues generated by wind farms and solar parks | 88 | 4 |
| Other income | 46 | 20 |
| \u00a0 | \u00a0 | \u00a0 |
| Total other income | 144 | 56 |
Revenues generated by wind farms and solar parks increased due to higher energy prices and the acquisitions of wind farms and solar parks in 2021 and 2022, see chapter 6.4.5.
See accounting policy JJ.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Total Non-life and Life | \u00a0 | \u00a0 |
| Insurance claims and benefits | -2,984 | -6,846 |
| Insurance claims and benefits recovered from reinsurers | 64 | 29 |
| \u00a0 | \u00a0 | \u00a0 |
| Net insurance claims and benefits | -2,919 | -6,817 |
| \u00a0 | \u00a0 | \u00a0 |
| Non-life | \u00a0 | \u00a0 |
| Claims paid | -2,866 | -2,595 |
| Changes in provision for outstanding claims | -410 | -469 |
| Amortisation of VOBA | -14 | -14 |
| Insurance claims and benefits | -3,290 | -3,079 |
| \u00a0 | \u00a0 | \u00a0 |
| Insurance claims and benefits recovered from reinsurers | 63 | 23 |
| \u00a0 | \u00a0 | \u00a0 |
| Net insurance claims and benefits, Non-life | -3,227 | -3,056 |
| \u00a0 | \u00a0 | \u00a0 |
| Life | \u00a0 | \u00a0 |
| Claims paid | -2,317 | -2,983 |
| Changes in liabilities arising from insurance contracts | 1,008 | 592 |
| Changes in liabilities arising from insurance contracts on behalf of policyholders | 1,624 | -1,368 |
| Amortisation of VOBA | -9 | -8 |
| Insurance claims and benefits | 306 | -3,768 |
| \u00a0 | \u00a0 | \u00a0 |
| Insurance claims and benefits recovered from reinsurers | 1 | 7 |
| \u00a0 | \u00a0 | \u00a0 |
| Net insurance claims and benefits, Life | 307 | -3,761 |
Non-life insurance claims and benefits increased roughly in line with the growth of premiums earned, excluding exceptional provision strengthening and weather related calamities.
In 2022, disability provisions were strengthened (impact \u20ac\u00a091 million) due to the 10% increase in the legal minimum wage as at 1 January 2023 as a result of the exceptionally high level of inflation. In February 2022, the Netherlands were confronted with severe storms (Dudley, Eunice and Franklin) and heavy rainfalls which caused significant damage. The additional damage claimed was \u20ac\u00a039 million after reinsurance. In July 2021, floods in the southern part of the Netherlands had a \u20ac\u00a020 million impact.
In Non-life there was an ongoing normalisation of claims following the abolishment of the COVID-19 restrictions.
The decrease of life claims paid reflects fewer claims paid from expirations and redemptions.
See accounting policy KK.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Salaries and wages | -316 | -292 |
| Social security contributions | -41 | -37 |
| Employee benefit charges | -61 | -58 |
| Employee discounts | -3 | -3 |
| Other short-term employee benefits | -11 | -6 |
| Total cost of internal staff | -432 | -396 |
| \u00a0 | \u00a0 | \u00a0 |
| Cost of external staff | -98 | -83 |
| Consultancy costs and fees | -111 | -110 |
| Marketing, advertising and public relations expenses | -22 | -20 |
| Technology and system costs | -71 | -63 |
| Amortisation of other intangible assets | -11 | -10 |
| Depreciation of property, plant and equipment | -17 | -19 |
| Other operating expenses | -17 | -24 |
| Total other operating expenses | -347 | -329 |
| \u00a0 | \u00a0 | \u00a0 |
| Total operating expenses | -779 | -725 |
The increase in total operating expenses is primarily a result of various acquisitions (see chapter 6.4.5), organic growth, and a one-off payment to employees originating from the new collective labor agreement.
Other operating expenses include travel and subsistence, telephone and personnel training expenses.
| Segments | 2022 | 2021 |
|---|---|---|
| Non-life | 1,541 | 1,508 |
| Life | 488 | 493 |
| Asset Management | 409 | 373 |
| Distribution and Services | 745 | 706 |
| Holding and Other | 1,130 | 1,075 |
| \u00a0 | \u00a0 | \u00a0 |
| Total workforce in FTE | 4,313 | 4,155 |
The increase of a.s.r.'s total internal work force is mainly the result of organic growth.
Employees related to administrative activities and overhead are allocated to segment Holding and Other.
See accounting policy MM.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Intangible assets | - | -9 |
| Associates and joint ventures | -1 | - |
| Investments available for sale | -110 | -13 |
| Loans and receivables | 17 | -1 |
| \u00a0 | \u00a0 | \u00a0 |
| Total impairments | -95 | -22 |
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Equities | -133 | -16 |
| Reversal of impairments on bonds | 23 | - |
| Reversal of impairments on collateralised debt obligations | - | 3 |
| \u00a0 | \u00a0 | \u00a0 |
| Total changes in impairments of investments available for sale | -110 | -13 |
The impairment on intangible assets in 2021 is related to the partial impairment of goodwill in the Distribution and Services segment (\u20ac\u00a0-9 million).
The increase of impairments on equities available for sale is partly due to a decrease of share prices on the stock market, partly due to revaluations of participations in fixed income and mortgage funds driven by increasing market interest rates.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Interest on employee benefits | -36 | -20 |
| Interest on derivatives | -315 | -253 |
| Interest owed to banks | -36 | -38 |
| Interest on subordinated liabilities | -51 | -44 |
| Interest on borrowings | -3 | -1 |
| Other interest expenses | -6 | -6 |
| \u00a0 | \u00a0 | \u00a0 |
| Total interest expense | -447 | -362 |
Included within interest owed to banks is an amount of \u20ac\u00a024 million (2021: \u20ac\u00a031 million) relating to negative interest paid on cash and cash equivalents.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Costs associated with sale of development property | -33 | -26 |
| Operation expenses of investment property | -9 | -10 |
| Operation expenses of wind and solar farms | -24 | - |
| Other expenses | -23 | -149 |
| \u00a0 | \u00a0 | \u00a0 |
| Total other expenses | -90 | -186 |
The costs associated with sale of development property of \u20ac\u00a033 million (2021: \u20ac\u00a026 million) mainly concerns the cost price of residential property sold.
The decrease of \u20ac\u00a0126 million in other expenses relates for \u20ac\u00a090 million to the reassessment of the past service costs related to the defined benefit obligation in 2021 (2022: nil), see chapter 6.5.17.1, and the change in the provision for irrecoverable claims relating to negative interest surplus on pension portfolio in 2021 of \u20ac\u00a024 million (2022: nil).
See accounting policy NN.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Current taxes for the current period | 39 | -188 |
| Current taxes referring to previous periods | 9 | 26 |
| Total current tax | 47 | -162 |
| \u00a0 | \u00a0 | \u00a0 |
| Deferred taxes arising from current period | -251 | -105 |
| Deferred taxes arising from changes in tax rates | - | -3 |
| Total deferred tax | -251 | -108 |
| \u00a0 | \u00a0 | \u00a0 |
| Income tax (expense) / gain | -204 | -270 |
The expected income tax expense is determined by applying the tax rate in the Netherlands to the result before tax. In 2022, this rate was 25.8% (2021: 25.0%). The enacted tax rate for 2023 will be 25.8%.
The table below shows a reconciliation of the expected income tax expense with the actual income tax expense.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Result before tax | 929 | 1,209 |
| Current tax rates | -25.8% | -25.0% |
| Expected income tax (expense) / gain | -240 | -302 |
| \u00a0 | \u00a0 | \u00a0 |
| Effects of: | \u00a0 | \u00a0 |
| Tax-exempt interest | 3 | 3 |
| Tax on interest on other equity instruments | 12 | 12 |
| Tax-exempt dividends | 5 | 5 |
| Tax-exempt capital gains | 24 | 12 |
| Changes in impairments | -3 | -2 |
| Adjustments for taxes due on previous financial years | - | 5 |
| Other effects | -6 | -3 |
| \u00a0 | \u00a0 | \u00a0 |
| Total Income tax (expense) / gain | -204 | -270 |
The result is almost entirely earned and taxable in the Netherlands.
The effective income tax rate is 22.0% (2021: 22.4%).
See accounting policy B.
| \u00a0 | Fair value based on quoted prices in an active market | Fair value based on observable market data | Fair value not based on observable market data | \u00a0 |
|---|---|---|---|---|
| 31 December 2022 | Level 1 | Level 2 | Level 3 | Total fair value |
| Financial assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Investments available for sale | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Government bonds | 9,002 | 203 | 22 | 9,227 |
| Corporate bonds | 7,067 | 115 | 6 | 7,188 |
| Asset-backed securities | 6 | - | 409 | 416 |
| Preference shares | - | 284 | 5 | 289 |
| Equities | 2,434 | 705 | 333 | 3,471 |
| Mortgage equity funds | - | - | 303 | 303 |
| Other participating interests | 6 | - | - | 6 |
| \u00a0 | 18,515 | 1,308 | 1,077 | 20,900 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Investments at fair value through profit or loss | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Equities | 75 | - | 7 | 82 |
| Real estate equity funds | - | - | 3,974 | 3,974 |
| Mortgage equity funds | - | - | 684 | 684 |
| \u00a0 | 75 | - | 4,665 | 4,740 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Investments on behalf of policyholders | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Government bonds | 1,526 | - | - | 1,526 |
| Corporate bonds | 1,386 | - | - | 1,386 |
| Equities | 6,504 | - | - | 6,504 |
| Real estate equity funds | 170 | - | - | 170 |
| Mortgage equity funds | - | - | 252 | 252 |
| Cash and cash equivalents | 9 | - | - | 9 |
| Other investments | 62 | 4 | - | 66 |
| \u00a0 | 9,657 | 3 | 252 | 9,912 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Investments related to investment contracts | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Government bonds | 261 | - | - | 261 |
| Corporate bonds | 149 | - | - | 149 |
| Equities | 1,449 | - | - | 1,449 |
| Real estate equity funds | 97 | - | - | 97 |
| Cash and cash equivalents | 37 | - | - | 37 |
| Other investments | 6 | - | - | 6 |
| \u00a0 | 2,000 | - | - | 2,000 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Derivatives | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Foreign exchange contracts | - | 80 | - | 80 |
| Interest rate contracts | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| - Swaps | - | 4,782 | - | 4,782 |
| - Options | - | 275 | - | 275 |
| - Futures | 102 | 113 | - | 215 |
| Inflation linked swaps | - | 44 | - | 44 |
| Equity index contracts | 31 | - | - | 31 |
| \u00a0 | 133 | 5,294 | - | 5,428 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cash and cash equivalents | 2,245 | - | - | 2,245 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total financial assets | 32,626 | 6,605 | 5,993 | 45,224 |
| \u00a0 | Fair value based on quoted prices in an active market | Fair value based on observable market data | Fair value not based on observable market data | \u00a0 |
|---|---|---|---|---|
| 31 December 2022 | Level 1 | Level 2 | Level 3 | Total fair value |
| Financial liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Liabilities arising from investment contracts | 2,000 | - | - | 2,000 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Derivatives | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Foreign exchange contracts | - | 29 | - | 29 |
| Interest rate contracts | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| - Swaps | - | 5,494 | - | 5,494 |
| \u00a0 | - | 5,523 | - | 5,523 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total financial liabilities | 2,000 | 5,523 | - | 7,523 |
| \u00a0 | Fair value based on quoted prices in an active market | Fair value based on observable market data | Fair value not based on observable market data | \u00a0 |
|---|---|---|---|---|
| 31 December 2021 | Level 1 | Level 2 | Level 3 | Total fair value |
| Financial assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Investments available for sale | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Government bonds | 13,889 | 260 | - | 14,149 |
| Corporate bonds | 10,762 | 53 | 12 | 10,827 |
| Asset-backed securities | 17 | 5 | 508 | 530 |
| Preference shares | - | 307 | 4 | 311 |
| Equities | 3,110 | 679 | 321 | 4,111 |
| Mortgage equity funds | - | - | 398 | 398 |
| Other participating interests | 7 | - | - | 7 |
| \u00a0 | 27,786 | 1,304 | 1,243 | 30,333 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Investments at fair value through profit or loss | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Equities | 12 | - | 6 | 18 |
| Real estate equity funds | - | - | 2,202 | 2,202 |
| Mortgage equity funds | - | - | 781 | 781 |
| Rural property contracts | - | - | 215 | 215 |
| \u00a0 | 12 | - | 3,205 | 3,216 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Investments on behalf of policyholders | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Government bonds | 1,954 | - | - | 1,954 |
| Corporate bonds | 1,100 | - | - | 1,100 |
| Derivatives | - | 6 | - | 6 |
| Equities | 7,950 | - | - | 7,950 |
| Real estate equity funds | 249 | - | - | 249 |
| Mortgage equity funds | - | - | 234 | 234 |
| Cash and cash equivalents | 18 | - | - | 18 |
| Other investments | 60 | 4 | - | 64 |
| \u00a0 | 11,331 | 9 | 234 | 11,574 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Investments related to investment contracts | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Equities | 1,794 | - | - | 1,794 |
| Real estate equity funds | 119 | - | - | 119 |
| Cash and cash equivalents | 39 | - | - | 39 |
| \u00a0 | 1,952 | - | - | 1,952 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Derivatives | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Foreign exchange contracts | - | 25 | - | 25 |
| Interest rate contracts | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| - Swaps | - | 5,870 | - | 5,870 |
| - Options | - | 237 | - | 237 |
| - Futures | 37 | - | - | 37 |
| Inflation linked swaps | - | 14 | - | 14 |
| Equity index contracts | 28 | - | - | 28 |
| \u00a0 | 65 | 6,147 | - | 6,212 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cash and cash equivalents | 2,306 | - | - | 2,306 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total financial assets | 43,452 | 7,460 | 4,682 | 55,593 |
| \u00a0 | Fair value based on quoted prices in an active market | Fair value based on observable market data | Fair value not based on observable market data | \u00a0 |
|---|---|---|---|---|
| 31 December 2021 | Level 1 | Level 2 | Level 3 | Total fair value |
| Financial liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Liabilities arising from investment contracts | 1,952 | - | - | 1,952 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Derivatives | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Foreign exchange contracts | - | 78 | - | 78 |
| Interest rate contracts | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| - Swaps | - | 678 | - | 678 |
| - Futures | - | 3 | - | 3 |
| \u00a0 | - | 759 | - | 759 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total financial liabilities | 1,952 | 759 | - | 2,711 |
Cash and cash equivalents are classified as level 1 when not subject to restrictions.
| 2022 | To level 1 | To level 2 | To level 3 | Total |
|---|---|---|---|---|
| From: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Level 1: Fair value based on quoted prices in an active market | - | 50 | 35 | 85 |
| Level 2: Fair value based on observable market data | - | - | - | - |
| Level 3: Fair value not based on observable market data | - | - | - | - |
Fixed income funds are adjusted from level 1 to level 2 (\u20ac\u00a050 million) and from level 1 to level 3 (\u20ac\u00a035 million). Those movements are based on decreased observability of the inputs during the period.
| 2021 | To level 1 | To level 2 | To level 3 | Total |
|---|---|---|---|---|
| From: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Level 1: Fair value based on quoted prices in an active market | - | 205 | - | 205 |
| Level 2: Fair value based on observable market data | 171 | - | - | 171 |
| Level 3: Fair value not based on observable market data | 38 | - | - | 38 |
Fixed income funds are adjusted from level 2 to level 1 (\u20ac\u00a0171 million), from level 3 to level 1 (\u20ac\u00a038 million) and from level 1 to level 2 (\u20ac\u00a0205 million). Those movements are based respectively on increased and decreased observability of the inputs during the period.
The following two tables show the movement in financial assets measured at fair value including investment on behalf of policyholders and investment property that are categorised within level 3.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 1,243 | 1,085 |
| \u00a0 | \u00a0 | \u00a0 |
| Changes in value of investments, realised/unrealised gains and losses: | \u00a0 | \u00a0 |
| - Realised gains and losses | -2 | 37 |
| - Recognised in Other comprehensive income (unrealised gains and losses) | -83 | 20 |
| \u00a0 | \u00a0 | \u00a0 |
| Purchases | 129 | 407 |
| Repayments | -53 | -80 |
| Disposal | -206 | -190 |
| Amortisation | - | -1 |
| Impairments | 13 | 1 |
| Reclassification of investments from/to level 3 valuation technique | 35 | -36 |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | 1,077 | 1,243 |
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 3,439 | 2,772 |
| \u00a0 | \u00a0 | \u00a0 |
| Changes in value of investments, realised/unrealised gains and losses: | \u00a0 | \u00a0 |
| - Fair value gains and losses | -216 | 121 |
| \u00a0 | \u00a0 | \u00a0 |
| Purchases | 420 | 565 |
| Disposal | -184 | -21 |
| \u00a0 | \u00a0 | \u00a0 |
| Reclassification of investments from/to level 3 valuation technique | - | -2 |
| Net transfer of real estate equity funds | 1,457 | - |
| Other | - | 2 |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | 4,916 | 3,439 |
| \u00a0 | \u00a0 | \u00a0 |
| Total revaluations of investments, held at end of period, recognised in the income statement | -189 | 122 |
The net transfer of real estate equity funds relates to ASR DFLF. During 2022, a.s.r. lost control of ASR DFLF as a result of the entry of third party participants in ASR DFLF. The net transferred amount consists of \u20ac\u00a01,703 million reclassification of investment property and rural property contracts included in ASR DFLF, minus \u20ac\u00a0246 million rural property contracts already included in financial assets Level 3.
Available for sale investments
The main non-observable market input for the asset-backed securities and mortgage equity funds available for sale are based on quotes published by an independent data vendor. If the quote of the data vendor is not available, values or quotes from other pricing services are obtained, including a check on the validity of the value or quote by an independent third party, to base the fair value on. There is no material difference in the fair value of the asset-backed securities and mortgage equity funds if a quote was used from an alternative data vendor.
The main non-observable market input for the equities, including unlisted equities classified as level 3, is the net asset value as published by the investee. It is estimated that a 10% increase in valuation of these equities would have no significant impact on net result but would increase equity by \u20ac\u00a033 million (2021: \u20ac\u00a032 million), being approximately 0.5% (before tax) (2021: 0.4% (before tax)) of total equity. A decrease would have the opposite effect unless the impairment criteria are met.
Investments at fair value through profit or loss
The method of determining the fair value of the mortgage equity funds is similar to that of mortgage loans, however it excludes assumptions for originating cost and is determined within the funds structure. See chapter 6.7.1.2 for the main non-observable inputs.
The main non-observable market input for the real estate equity funds third parties is the net asset value as published by the investee. An increase or decrease in the net asset value of equities classified as level 3 will have a direct proportional impact on the fair value of the investment.
| 31 December 2022 | Change in theoretical rental value | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| \u00a0 | Fair value | Valuation technique | Gross | Gross theoretical rental value (\u20ac) | Gross | Gross yield (%) | Change in yield | -5% | 0% | 5% |
| Investments at fair value through profit or loss | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Real estate equity funds associates | 3,557 | DCF | \u00a0 | 110,918,322 | \u00a0 | 3.1% | -5% | - | 187 | 374 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 0% | -178 | - | 178 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 5% | -339 | -169 | - |
| Real estate equity funds third parties | 417 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total real estate equity funds | 3,974 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 31 December 2021 | Change in theoretical rental value | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| \u00a0 | Fair value | Valuation technique | Gross | Gross theoretical rental value (\u20ac) | Gross | Gross yield (%) | Change in yield | -5% | 0% | 5% |
| Investments at fair value through profit or loss | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Rural property contracts | 215 | DCF | total | 4,378,039 | mean | 2.0% | -5% | - | 11 | 23 |
| \u00a0 | \u00a0 | \u00a0 | max | 147,419 | max | 3.0% | 0% | -11 | - | 11 |
| \u00a0 | \u00a0 | \u00a0 | min | 466 | min | 0.6% | 5% | -21 | -10 | - |
| Total rural property contracts | 215 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Real estate equity funds associates | 1,817 | DCF | \u00a0 | 76,670,413 | \u00a0 | 4.2% | -5% | - | 96 | 191 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 0% | -91 | - | 91 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 5% | -173 | -87 | - |
| Real estate equity funds third parties | 385 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total real estate equity funds | 2,202 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
The breakdown of the fair values of financial assets and liabilities not measured at fair value, and for which the fair value is disclosed in accordance with the level of fair value hierarchy, as explained in accounting policy B, is as follows:
| \u00a0 | Fair value based on quoted prices in an active market | Fair value based on observable market data | Fair value not based on observable market data | \u00a0 | \u00a0 |
|---|---|---|---|---|---|
| 31 December 2022 | Level 1 | Level 2 | Level 3 | Total fair value | Total carrying value |
| Financial assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Due from customers | - | 1,904 | 9,053 | 10,957 | 12,307 |
| Due from credit institutions | 1,659 | 2,667 | - | 4,327 | 4,259 |
| Trade and other receivables | - | 605 | - | 605 | 605 |
| Total financial assets | 1,659 | 5,176 | 9,053 | 15,889 | 17,171 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Financial liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Subordinated liabilities | - | 1,925 | - | 1,925 | 1,980 |
| Borrowings | - | 152 | 62 | 214 | 214 |
| Due to customers | - | 471 | - | 471 | 471 |
| Due to banks | 2,187 | 75 | - | 2,262 | 2,262 |
| Other financial liabilities | 188 | 12 | - | 200 | 200 |
| Total financial liabilities | 2,375 | 2,634 | 62 | 5,071 | 5,127 |
| \u00a0 | Fair value based on quoted prices in an active market | Fair value based on observable market data | Fair value not based on observable market data | \u00a0 | \u00a0 |
|---|---|---|---|---|---|
| 31 December 2021 | Level 1 | Level 2 | Level 3 | Total fair value | Total carrying value |
| Financial assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Due from customers | - | 1,513 | 10,696 | 12,209 | 11,461 |
| Due from credit institutions | 124 | 3,558 | - | 3,682 | 2,971 |
| Trade and other receivables | - | 827 | - | 827 | 827 |
| Total financial assets | 124 | 5,898 | 10,696 | 16,718 | 15,259 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Financial liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Subordinated liabilities | - | 1,132 | - | 1,132 | 992 |
| Borrowings | - | 137 | 55 | 192 | 192 |
| Due to customers | - | 573 | - | 573 | 573 |
| Due to banks | 5,636 | 105 | - | 5,741 | 5,741 |
| Other financial liabilities | 92 | 16 | - | 108 | 108 |
| Total financial liabilities | 5,728 | 1,963 | 55 | 7,745 | 7,605 |
The amounts due from credit institutions and amounts due to banks that are classified as level 1 primarily comprise of respectively cash collateral paid on derivative instruments and cash collateral received. The accrued interest included in other financial liabilities follows the classification of the underlying assets. Level 2 category financial assets relates primarily to the receivable due from credit institutions for savings-linked mortgage loans amounting to a fair value of \u20ac\u00a02,319 million (2021: \u20ac\u00a03,124 million).
The mortgage loan portfolio is classified as level 3 \u2018not measured on the basis of market observable market data\u2019. Non-observable market inputs are used in the valuation methods, in addition to the observable market inputs. The valuation method used to determine the fair value of the mortgage loan portfolio is based on the spread on the interest rate curve for discounting the mortgage portfolio cash flows on consumer rates and includes assumptions for originating cost, proposal risk, and the options related to early redemption and moving.
The mortgage loan portfolio consists of high quality mortgages with a relatively fixed return, limited impairments and arrears (see chapter 6.5.8). The mortgage loan portfolio consists only of Dutch mortgages with a limited counterparty default risk in line with the strategic investment plan (see chapter 6.8.4).
The breakdown of the investment property, land and buildings for own use and plant in accordance with the fair value hierarchy, as explained in accounting policy B, is as follows:
| \u00a0 | Fair value based on quoted prices in an active market | Fair value based on observable market data | Fair value not based on observable market data | \u00a0 |
|---|---|---|---|---|
| 31 December 2022 | Level 1 | Level 2 | Level 3 | Total fair value |
| Investment property | - | - | 664 | 664 |
| Land and buildings for own use | - | - | 115 | 115 |
| Plant | - | - | 480 | 480 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total | - | - | 1,259 | 1,259 |
| \u00a0 | Fair value based on quoted prices in an active market | Fair value based on observable market data | Fair value not based on observable market data | \u00a0 |
|---|---|---|---|---|
| 31 December 2021 | Level 1 | Level 2 | Level 3 | Total fair value |
| Investment property | - | - | 2,052 | 2,052 |
| Land and buildings for own use | - | - | 145 | 145 |
| Plant | - | - | 332 | 332 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total | - | - | 2,530 | 2,530 |
The property portfolio is classified as level 3 \u2018not measured on the basis of market observable market data\u2019. Non-observable market inputs are used in the valuation methods, in addition to the observable market inputs. The fair value measurement is based on valuations by independent professional appraisers. These valuations have been performed for the entire portfolio of investment property, buildings for own use and plants. Independent professional appraisers use reference transactions of comparable properties, in combination with the DCF and income capitalisation method, to determine the fair value of the property or plant. The reference transactions of comparable objects of the property portfolio are generally based on observable data consisting of the land register \u2018Kadaster\u2019 and the rural land price monitor as published by the Dutch Government \u2018Grondprijsmonitor\u2019 in an active property market.
The significant unobservable and observable inputs to the Level 3 values of plant are the energy prices and the discount rate. An increase (decrease) of the discount rate will lead to a lower (higher) fair value measurement.
The property has a relatively fixed return. The property portfolio is well diversified and consists of residential, retail, offices and rural property, throughout the Netherlands. The retail portfolio focusses on high street locations with relative low vacancy rates. The following table shows a breakdown of the fair value and vacancy rates of the portfolio of investment property.
| \u00a0 | Fair value | Vacancy rate | ||
|---|---|---|---|---|
| \u00a0 | 31 December 2022 | 31 December 2021 | 2022 | 2021 |
| Retail | 159 | 161 | 3.1% | 5.0% |
| Residential | 1 | 1 | - | - |
| Rural | 202 | 1,625 | - | - |
| Offices | 290 | 241 | 8.4% | 8.2% |
| Property under development | - | 12 | - | 100.0% |
| Parking | 13 | 12 | - | - |
| Total | 664 | 2,052 | 3.5% | 2.9% |
In 2022, \u20ac\u00a01,430 million of rural investment property included in ASR DFLF was transferred to investments in real estate equity funds, see chapter 6.5.5.2. During 2022, a.s.r. lost control of ASR DFLF as a result of the entry of third party participants in ASR DFLF.
The movements in investment property and plant measured at fair value (recurring basis) that are categorised within level 3 are presented in chapter 6.5.2 and 6.5.3.
Significant inputs to the Level 3 values of investment property are the net initial yield and market rental value. These inputs are verified with the following market observable data:
Market rent per square meter for renewals and their respective re-letting rates;
Reviewed rent per square meter;
Investment transaction of comparable objects;
The 10 year Dutch Government Bond Yield (%) rate as published by the DNB.
| 31 December 2022 | Change in theoretical rental value | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| \u00a0 | Fair value | Valuation technique | Gross | Gross theoretical rental value (\u20ac) | Gross | Gross yield (%) | Change in yield | -5% | 0% | 5% |
| Investment property - Fair value model | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Retail | 159 | DCF | total | 11,340,229 | mean | 7.1% | -5% | - | 8 | 17 |
| \u00a0 | \u00a0 | \u00a0 | max | 1,641,470 | max | 9.6% | 0% | -8 | - | 8 |
| \u00a0 | \u00a0 | \u00a0 | min | 14,940 | min | 3.7% | 5% | -15 | -8 | - |
| Residential | 1 | DCF | total | 76,600 | mean | 7.9% | -5% | - | - | - |
| \u00a0 | \u00a0 | \u00a0 | max | 76,600 | max | 7.9% | 0% | - | - | - |
| \u00a0 | \u00a0 | \u00a0 | min | 76,600 | min | 7.9% | 5% | - | - | - |
| Rural | 202 | DCF | total | 4,754,747 | mean | 2.4% | -5% | - | 11 | 21 |
| \u00a0 | \u00a0 | \u00a0 | max | 1,776,687 | max | 3.8% | 0% | -10 | - | 10 |
| \u00a0 | \u00a0 | \u00a0 | min | 500 | min | 0.5% | 5% | -19 | -10 | - |
| Offices | 290 | DCF | total | 19,406,800 | mean | 6.7% | -5% | - | 15 | 30 |
| \u00a0 | \u00a0 | \u00a0 | max | 5,280,212 | max | 9.8% | 0% | -14 | - | 14 |
| \u00a0 | \u00a0 | \u00a0 | min | 52,513 | min | 4.4% | 5% | -28 | -14 | - |
| Property under development | - | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Parking | 13 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Land and buildings for own use | 115 | DCF | total | 8,273,071 | mean | 7.5% | -5% | - | 6 | 12 |
| \u00a0 | \u00a0 | \u00a0 | max | 8,273,071 | max | 7.5% | 0% | -5 | - | 5 |
| \u00a0 | \u00a0 | \u00a0 | min | 8,273,071 | min | 7.5% | 5% | -10 | -5 | - |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Plant | 480 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total | 1,259 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 31 December 2021 | Change in theoretical rental value | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| \u00a0 | Fair value | Valuation technique | Gross | Gross theoretical rental value (\u20ac) | Gross | Gross yield (%) | Change in yield | -5% | 0% | 5% |
| Investment property - Fair value model | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Retail | 161 | DCF | total | 11,096,858 | mean | 6.9% | -5% | - | 8 | 17 |
| \u00a0 | \u00a0 | \u00a0 | max | 1,617,540 | max | 12.9% | 0% | -8 | - | 8 |
| \u00a0 | \u00a0 | \u00a0 | min | 41,519 | min | 2.4% | 5% | -15 | -8 | - |
| Residential | 1 | DCF | total | 75,501 | mean | 7.5% | -5% | - | - | - |
| \u00a0 | \u00a0 | \u00a0 | max | 75,501 | max | 7.5% | 0% | - | - | - |
| \u00a0 | \u00a0 | \u00a0 | min | 75,501 | min | 7.5% | 5% | - | - | - |
| Rural | 1,625 | DCF | total | 36,171,938 | mean | 2.2% | -5% | - | 86 | 171 |
| \u00a0 | \u00a0 | \u00a0 | max | 1,865,893 | max | 7.3% | 0% | -81 | - | 81 |
| \u00a0 | \u00a0 | \u00a0 | min | 308 | min | 0.4% | 5% | -155 | -77 | - |
| Offices | 241 | DCF | total | 14,271,731 | mean | 5.9% | -5% | - | 13 | 25 |
| \u00a0 | \u00a0 | \u00a0 | max | 5,015,714 | max | 9.2% | 0% | -12 | - | 12 |
| \u00a0 | \u00a0 | \u00a0 | min | 38,656 | min | 3.4% | 5% | -23 | -11 | - |
| Property under development | 12 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Parking | 12 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Land and buildings for own use | 145 | DCF | total | 9,607,224 | mean | 6.9% | -5% | - | 7 | 15 |
| \u00a0 | \u00a0 | \u00a0 | max | 9,607,224 | max | 6.9% | 0% | -7 | - | 7 |
| \u00a0 | \u00a0 | \u00a0 | min | 9,607,224 | min | 6.9% | 5% | -13 | -7 | - |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Plant | 332 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total | 2,530 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
The following tables include information about rights to offset and the related arrangements. The amounts included consist of all recognised financial instruments that are presented net in the balance sheet under the IFRS-EU offsetting requirements (legal right to offset and intention to settle on a net basis) and amounts presented gross in the balance sheet but subject to enforceable master netting arrangements or similar arrangements.
| \u00a0 | Gross amounts of recognised financial assets | Gross amounts of recognised financial liabilities set off in the statement of financial position | Net amounts of financial assets presented in the statement of financial position | Related amounts not set off in the statement of financial position | Net amount | |
|---|---|---|---|---|---|---|
| Financial assets subject to offsetting, enforceable master netting arrangements and similar agreements | \u00a0 | \u00a0 | \u00a0 | Financial instruments | Cash Collateral received (excluding surplus) | \u00a0 |
| 31 December 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| - Derivatives | 5,389 | - | 5,389 | 3,829 | 1,560 | - |
| Total financial assets | 5,389 | - | 5,389 | 3,829 | 1,560 | - |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 31 December 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| - Derivatives | 6,212 | - | 6,212 | 743 | 5,469 | - |
| Total financial assets | 6,212 | - | 6,212 | 743 | 5,469 | - |
| \u00a0 | Gross amounts of recognised financial liabilities | Gross amounts of recognised financial assets set off in the statement of financial position | Net amounts of financial liabilities presented in the statement of financial position | Related amounts not set off in the statement of financial position | Net amount | |
|---|---|---|---|---|---|---|
| Financial liabilities subject to offsetting, enforceable master netting arrangements and similar agreements | \u00a0 | \u00a0 | \u00a0 | Financial instruments | Cash Collateral pledged (excluding surplus) | \u00a0 |
| 31 December 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| - Derivatives | 5,523 | - | 5,523 | 3,829 | 1,632 | 62 |
| Total financial liabilities | 5,523 | - | 5,523 | 3,829 | 1,632 | 62 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 31 December 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| - Derivatives | 759 | - | 759 | 743 | 16 | - |
| Total financial liabilities | 759 | - | 759 | 743 | 16 | - |
In compliance with the deferral option IFRS 9 under IFRS 4, a.s.r. conducted a solely payments of principal and interest (SPPI) test on the financial assets.
For the purpose of this assessment, principal is defined as the fair value of the financial asset on initial recognition. However, the principal may change over time \u2013 e.g. if there are repayments of principal.
Interest is defined as consideration for the time value of money, for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks (e.g. liquidity risk) and costs (e.g. administrative costs), as well as a profit margin that is consistent with a basic lending arrangement. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are SPPI.
In assessing whether the contractual cash flows are solely payments of principal and interest, a.s.r. considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition.
In making this assessment, a.s.r. considers the following:
Variable interest rates;
Prepayment features;
Term extension features;
Contingent events; and
Terms that limit a.s.r.\u2019s claim to cash flows from specified assets \u2013 e.g. non-recourse asset arrangements.
| Amounts in \u20ac\u00a0millions | Fair value at 31 December 20221 | Carrying amount at 31 December 2022 | Fair value movement 2022 | Fair value at 31 December 20211 | Carrying amount at 31 December 2021 | Fair value movement 2021 |
|---|---|---|---|---|---|---|
| Financial assets with contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Trade and other receivables | 605 | 605 | -222 | 827 | 827 | -3 |
| Other financial assets | 142 | 142 | 18 | 124 | 124 | -24 |
| \u00a0 | 747 | 747 | -204 | 952 | 952 | -26 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Other financial assets2 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Government bonds | 9,227 | 9,227 | -4,922 | 14,149 | 14,149 | -3,241 |
| Corporate bonds | 7,188 | 7,188 | -3,639 | 10,827 | 10,827 | -990 |
| Rural property contracts | - | - | -215 | 215 | 215 | 72 |
| Asset-backed securities | 416 | 416 | -115 | 530 | 530 | 126 |
| Preference shares | 289 | 289 | -22 | 311 | 311 | -5 |
| Derivatives | 5,428 | 5,428 | -784 | 6,212 | 6,212 | -2,956 |
| Equities and other participating interest | 3,560 | 3,560 | -576 | 4,136 | 4,136 | 620 |
| Real estate equity funds | 3,974 | 3,974 | 1,772 | 2,202 | 2,202 | 173 |
| Mortgage equity funds | 987 | 987 | -192 | 1,179 | 1,179 | 196 |
| Other financial assets | 527 | 527 | 63 | 464 | 464 | -50 |
| Investments on behalf of policyholders | 9,912 | 9,912 | -1,662 | 11,574 | 11,574 | 1,420 |
| Investments related to investment contracts | 2,000 | 2,000 | 48 | 1,952 | 1,952 | 1,952 |
| Due from customers | 10,957 | 12,307 | -1,252 | 12,209 | 11,461 | 2,722 |
| Due from credit institutions | 4,327 | 4,259 | 645 | 3,682 | 2,971 | -2,100 |
| Cash and cash equivalents | 2,245 | 2,245 | -61 | 2,306 | 2,306 | -557 |
| \u00a0 | 61,034 | 62,317 | -10,914 | 71,948 | 70,489 | -2,618 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total financial assets | 61,781 | 63,064 | -11,118 | 72,900 | 71,441 | -2,644 |
The fair value movement relates to the revaluations during the year of the financial assets; total movement less the net additions.
| \u00a0 | Gross carrying amount at 31 December 2022 | Gross carrying amount at 31 December 2021 |
|---|---|---|
| Credit risk rating | \u00a0 | \u00a0 |
| AA | 54 | 89 |
| A | 9 | 6 |
| Not rated | 712 | 883 |
| \u00a0 | \u00a0 | \u00a0 |
| Total financial assets with contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest | 775 | 978 |
The credit risk of the assets not rated (trade and other receivables and other financial assets), is considered low. For more detailed information about the credit risks of a.s.r., see chapter 6.8.3 and chapter 6.8.4.
| \u00a0 | Fair value at 31 December 2022 | Gross carrying amount at 31 December 2022 | Fair value at 31 December 2021 | Gross carrying amount at 31 December 2021 |
|---|---|---|---|---|
| Financial assets with contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest: | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Trade and other receivables | 472 | 500 | 585 | 611 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total fair value of financial assets with contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest without low credit risk | 472 | 500 | 585 | 611 |
A related party is a person or entity that has significant influence over another entity, or has the ability to affect the financial and operating policies of the other party. Parties related to a.s.r. include associates, joint ventures, key management personnel, close family members of any person referred to above, entities controlled or significantly influenced by any person referred to above and any other affiliated entity.
The group regularly enters into transactions with related parties during the conduct of its business. These transactions mainly involve loans, deposits and commissions, and are conducted on terms equivalent to those that prevail in arm\u2019s length transactions.
The remuneration of the key personnel is disclosed in chapter 6.7.5.
The table below shows the financial scope of a.s.r.\u2019s related party transactions:
Associates;
Joint ventures.
| \u00a0 | Associates | Joint ventures | Total |
|---|---|---|---|
| 2022 | \u00a0 | \u00a0 | \u00a0 |
| Balance sheet items with related parties as at 31 December | \u00a0 | \u00a0 | \u00a0 |
| Loans and receivables | 37 | 8 | 45 |
| Other liabilities | 176 | - | 176 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Transactions in the income statement for the financial year | \u00a0 | \u00a0 | \u00a0 |
| Fee and commission income | 74 | - | 74 |
| Fee and commission expenses | 1 | - | 1 |
| \u00a0 | Associates | Joint ventures | Total |
|---|---|---|---|
| 2021 | \u00a0 | \u00a0 | \u00a0 |
| Balance sheet items with related parties as at 31 December | \u00a0 | \u00a0 | \u00a0 |
| Loans and receivables | 21 | 12 | 33 |
| Other liabilities | 177 | - | 177 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Transactions in the income statement for the financial year | \u00a0 | \u00a0 | \u00a0 |
| Fee and commission income | 57 | - | 57 |
| Fee and commission expenses | 1 | - | 1 |
No provisions for impairments have been recognised on the loans and receivables for the years 2022 and 2021.
The members of the EB and the Business Executive Committee (BEC) have mortgage loans with a.s.r. amounting to respectively \u20ac\u00a0435 thousand (2021: \u20ac\u00a0495 thousand) and \u20ac\u00a01,099 thousand (2021: \u20ac\u00a0596 thousand). The mortgages have been issued subject to normal employee conditions. The employee conditions include limits and thresholds to the amounts that qualify for a personnel interest-rate discount. For mortgage loans higher than \u20ac\u00a0340 thousand arm\u2019s length conditions apply. The average interest rate on the mortgage loans (for members EB and BEC) is 2.6% (2021: 2.4%). In 2022, the mortgage loans of EB members were settled for an amount of \u20ac\u00a061 thousand (2021: \u20ac\u00a061 thousand) and for BEC members for an amount of \u20ac\u00a013 thousand (2021: \u20ac\u00a079 thousand).
Transactions with key management personnel (EB, BEC members and SB) are transactions with related parties. Additional information on the remuneration of members of the EB and SB is disclosed in the remuneration report; see chapter 5.3.
| Amounts in \u20ac\u00a0thousands | Executive board | BEC members1 | Supervisory board | Total 2022 | Executive board2 | BEC members1 | Supervisory board3 | Total 2021 |
|---|---|---|---|---|---|---|---|---|
| Fixed compensation | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Base salary | 2,388 | 3,080 | 190 | 5,658 | 2,279 | 2,247 | 205 | 4,730 |
| Fees | - | - | 88 | 88 | - | - | 88 | 88 |
| Fringe benefits4 | 55 | 177 | - | 232 | 44 | 128 | - | 172 |
| Variable compensation | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| One-year variable | - | - | - | - | - | - | - | - |
| Multi-year variable | - | - | - | - | - | - | - | - |
| Other | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Extraordinary items | - | - | - | - | - | - | - | - |
| Pension expense5 | 489 | 677 | - | 1,165 | 473 | 486 | - | 959 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total remuneration | 2,932 | 3,933 | 278 | 7,143 | 2,796 | 2,861 | 292 | 5,949 |
In the table above, \u2018Executive Board\u2019 refers to the three members of the EB as at 31 December 2022. The three members of the EB are also members of the BEC. In the table above, \u2018BEC\u2019 refers to the nine (2021: eight) members of the BEC as at 31 December 2022, i.e. those members that are not also member of the EB in the table above.
a.s.r. has an employee share purchase plan (ESPP or \u2018the plan\u2019) in place. a.s.r. employees are thereby given the opportunity to acquire a.s.r. shares at a discount. a.s.r. can suspend or withdraw the plan at any time. There is no option under the plan for either a.s.r. or the employee to settle in cash or other assets. Therefore the plan is an equity-settled share-based payments plan.
The members of the EB are required to participate in the plan by investing a predetermined part of their renumeration in a.s.r. shares. Other employees participate voluntarily.
Under the terms of the plan the granting and vesting is predefined. The grant date of the plan is the moment the employee registers to participate in the plan. The shares vest immediately on the transaction date when cash is received from the employee, unconditionally, subject only to a post-vesting transfer restriction of five years. Otherwise, there are no specific restrictions to the share (i.e. voting power, dividend restrictions).
The employees purchase the shares at a discount of 18.5%. The fair value of the a.s.r. share with a lock-up of five years at the grant date equals the purchased price by the employee. The ESPP has an impact on equity through the adjustment in the treasury shares and retained earnings. See chapter 6.5.13.5 Treasury shares for more information.
The number of shares purchased by employees during the reporting period was 124 thousand for an amount of \u20ac\u00a04.06 million (2021: 126 thousand for an amount of \u20ac\u00a03.77 million).
The group is a respondent in a number of claims, disputes and legal proceedings arising from the normal conduct of business.
Provisions are formed for such occurrences if, in management\u2019s opinion and after consultation with its legal advisors, a.s.r. is likely to have to make payments and the payable amount can be estimated with sufficient reliability. The costs of the compensation scheme for unit-linked insurance contracts have been fully recognised in the financial statements based on management\u2019s best knowledge of current facts, actions, claims, complaints and events. Provisions are recognised in the liabilities arising from insurance contracts (see chapter 6.5.15) and legal provisions (see chapter 6.5.18).
Dutch insurers see an increase in insurance policies complaints / claims based on grounds other than the cost compensation. Current and possible future legal proceedings could have a substantial financial and reputational impact. However it is not possible at this time to make reliable estimates of the number of expected proceedings, possible future precedents and the financial impact of current and possible future proceedings. Currently there are no indications that such a provision would be necessary for a.s.r.
As for other claims and legal proceedings, against a.s.r. known to management (and for which, in accordance with the defined principles, no provision has been formed), management believes, after having sought expert advice, that these claims have no chance of success, or that a.s.r. can successfully mount a defense against them, or that the outcome of the proceedings is unlikely to result in a significant loss for a.s.r.
Since the end of 2006, individual unit-linked life insurance products (beleggingsverzekeringen) have received negative attention in the Dutch media, from the Dutch Parliament, the AFM, consumers and consumer protection organisations. Elements of unit-linked policies are being challenged or may be challenged on multiple legal grounds. The criticism and scrutiny on unit-linked life insurance products led to the introduction of compensation schemes by Dutch insurance companies that have offered unit-linked products. In 2008, a.s.r. reached an outline agreement with two main consumer protection organisations to offer compensation to unit-linked policyholders in case the cost charge and/or risk premium charge exceeds a defined maximum. A full agreement on implementation of the compensation scheme was reached in 2012. The total recognised cumulative financial costs relating to the compensation scheme for Individual life in a.s.r.\u2019s income statement until 2022 was \u20ac\u00a01,026 million. This includes, amongst other things, compensation paid, amortisation of surrender penalties and costs relating to improved product offerings. The remaining provision in the balance sheet at 31 December 2022 is solely available to cover potential additional compensation (schrijnende gevallen) and costs relating to the compensation scheme. On the basis of this agreement, a.s.r. offered consumers additional measures such as alternative products and less costly investment funds. In addition to the compensation scheme, a.s.r. has implemented additional measures (flankerend beleid), including the ten best in class principles as formulated by the Dutch Minister of Finance. On 17 July 2015, the Dutch Ministry of Finance published an Order in Council (Algemene Maatregel van Bestuur), pursuant to which insurance companies can be sanctioned if they do not meet the compulsory targets set for approaching policyholders of unit-linked life insurances and prompting them to review their existing policies.
The agreement with the two consumer protection organisations and additional measures are not binding for policyholders. Consequently, neither the implementation of the compensation schemes nor the additional measures offered by a.s.r. prevent individual policyholders from initiating legal proceedings against a.s.r. and making claims for damages.
a.s.r. is subject to a limited number of legal proceedings initiated by individual unit-linked policyholders, in most cases represented by claims organisations. While to date fewer than 10 cases are pending before Dutch courts and courts of appeal and fewer than 100 cases are pending before the Financial Services Complaints Board (\"FSCB\") (the Dispute Committee as well as the Committee of Appeal of the FSCB), there is no assurance that further proceedings will not be brought against a.s.r. in the future. Future legal proceedings regarding unit-linked life insurance policies might be brought upon a.s.r. by consumers individually, by consumer organisations acting on their behalf or in the form of a collective action. Furthermore, there is an ongoing lobby by consumer protection organisations, such as the Consumentenbond and Stichting Geldbelangen, to continuously gain media attention for unit-linked life insurance policies. These organisations argue, amongst other things, that consumers did not receive sufficient compensation based on the compensation scheme.
a.s.r. is currently subject to three collective actions. The claims are all based on similar grounds and have been rejected by a.s.r. and a.s.r. defends itself in these legal proceedings. The timing and outcome of these collective actions is currently uncertain.
In June 2016, Woekerpolis.nl initiated a collective action, requesting the Midden-Nederland District Court to declare that a.s.r. has sold products in the market which were defective in various respects (e.g. lack of transparency regarding cost charges and other product characteristics, and risks against which the insurer had failed to warn, such as substantial stock depreciations, inability to realise the projected final policy value, unrealistic capital projections due to the difference between geometric and arithmetic returns, and general terms and conditions governing costs which Woekerpolis.nl considered unfair). In its judgement of 6 February 2019, the court rejected all claims regarding transparency of costs and risks. Only with regard to the claim relating to administrative costs (\"administratiekosten\") that are calculated in ABC Spaarplan in case of high premiums, the court decided that this is unlawful. On 16 April 2019 a.s.r. received a notice of appeal from the Vereniging Woekerpolis.nl. Subsequently, the Vereniging Woekerpolis.nl has submitted its statement of appeal at the High Court of Arnhem Leeuwarden on 3 March 2020. The statement of response by a.s.r. has been deferred by the Court of Appeal. Main reason for this deferral lies with the developments regarding the preliminary questions from the High Court of the Hague towards the Supreme Court in the proceedings (Collective Action) between Woekerpolis.nl and another Dutch insurer.
In March 2017, the Consumentenbond also initiated a collective action against a.s.r. based on similar grounds to that initiated by Woekerpolis.nl. In its judgement dated 11 March 2020 the Court dismissed all claims of ConsumentenBond against a.s.r. On 8 June 2020 a.s.r. received a notice of appeal from the Consumentenbond.
In December 2019, claim organisation Wakkerpolis initiated a collective action against a.s.r. Although the claim from Wakkerpolis is largely based on similar grounds as the other two collective actions, it primarily concentrates on the lack of transparency of cost charges. In a decision on 23 November 2022 the Court rejected all claims regarding transparency of costs and risks and concluded that the products sold by a.s.r. cannot be considered as defective. Based on the contractual information provided by a.s.r., the Court is of the opinion that a.s.r. has complied with its information obligations.
The prolonged political, regulatory and public attention focused on unit-linked life insurance policies continues. Elements of unit-linked life insurance policies of a.s.r. are being challenged on multiple legal grounds in current, and may be challenged in future, legal proceedings. There is a risk that one or more of the current and/or future claims and/or allegations will succeed. To date, a number of rulings regarding unit-linked life insurance products in specific cases have been issued by the FSCB and courts (of appeal) in the Netherlands against a.s.r. and other insurers. In these proceedings, different (legal) approaches have been taken to come to a ruling. The outcomes of these rulings are diverse. Because the book of policies of a.s.r. dates back many years, contains of a variety of products with different features and conditions and because of the fact that rulings are diverse, no reliable estimation can be made regarding the timing and the outcome of the current and future legal proceedings brought against a.s.r. and other insurance companies.
The total costs related to compensation for unit-linked insurance contracts as described above, have been fully recognised in the financial statements based on management\u2019s best knowledge of current facts, actions, claims, complaints and events. Provisions are recognised in the liabilities arising from insurance contracts (see chapter 6.5.15). Although the financial consequences of the legal developments could be substantial, a.s.r.\u2019s exposures cannot be reliably estimated or quantified at this point. If one or more of these legal proceedings should succeed, there is a risk a ruling, although legally only binding for the parties that are involved in the procedure, could be applied to or be relevant for other unit-linked life insurance policies sold by a.s.r. Consequently, the financial consequences of any of the current and/or future legal proceedings brought upon a.s.r. can be substantial for a.s.r.\u2019s Life insurance business and may have a material adverse effect on a.s.r.\u2019s financial position, business, reputation, revenues, results of operations, solvency, financial condition and prospects.
Investment obligations for an amount of \u20ac\u00a0102 million (2021: \u20ac\u00a0128 million) have been assumed / issued for investment property.
Investment obligations and guarantees for a total amount of \u20ac\u00a016 million (2021: \u20ac\u00a021 million) have been issued, for real estate development projects and the acquisition of property. Those guarantees were issued by principals for the execution of projects for the benefit of clients.
The Dutch guarantee fund for motorised traffic has a latent claim on all insurers offering legal liability products. In line with the advise of the guarantee fund a.s.r.'s contingent liability is \u20ac\u00a010 million (2021: \u20ac\u00a010 million).
a.s.r. also had irrevocable facilities of \u20ac\u00a0391 million (2021: \u20ac\u00a01,123 million) which mainly relate to mortgage offers issued. a.s.r. had no other guarantees at year-end 2022 (2021: \u20ac\u00a01 million).
The following table sets out the expected future lease payments for investment property and plant, showing the undiscounted lease payments to be received after the reporting date.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| To be received within 1 year | 33 | 59 |
| To be received between 1 and 2 years | 29 | 44 |
| To be received between 2 and 3 years | 25 | 41 |
| To be received between 3 and 4 years | 21 | 38 |
| To be received between 4 and 5 years | 17 | 34 |
| To be received after 5 years | 89 | 396 |
| \u00a0 | \u00a0 | \u00a0 |
| Total undiscounted lease payments | 214 | 613 |
The investments properties, in retail, residential, offices and rural markets are leased to third parties, consisting of various lease terms in a range between shorter than one year and undetermined period with competitive rents mostly indexed to consumer prices. The plants are leased to third parties with lease terms longer than ten years.
The strong decline in future lease payments is related to the reclassification of ASR DFLF to investments, see chapter 6.5.3.
The consideration paid for Veherex by a.s.r. non-life includes a contingent consideration with a remaining fair value of \u20ac\u00a02,8 million to be paid over a remaining period of two years. Of this amount, \u20ac\u00a01,4 million is expected to be paid no later than one year after the balance sheet date, the remaining \u20ac\u00a01,4 million no later than two years after the balance sheet date.
At the Extraordinary General Meeting of Shareholders held at 17 January 2023, a.s.r.\u2019s shareholders approved the acquisition by a.s.r. of the shares of Aegon Nederland and thereby the combination of the two businesses. For more information about the acquisition see chapter 6.4.5.
| Company | Equity interest | Rate of control | Seat | Segment |
|---|---|---|---|---|
| ASR Aanvullende Ziektekostenverzekeringen N.V.1 | 100.00 | 100.00 | Utrecht | Non-life |
| ASR Basis Ziektekostenverzekeringen N.V.1 | 100.00 | 100.00 | Utrecht | Non-life |
| ASR Schadeverzekering N.V.1 | 100.00 | 100.00 | Utrecht | Non-life |
| ASR Wlz-uitvoerder B.V. | 100.00 | 100.00 | Utrecht | Non-life |
| ASR Ziektekostenverzekeringen N.V.2 | 100.00 | 100.00 | Utrecht | Non-life |
| ASR Infrastructure Renewables B.V. | 100.00 | 100.00 | Utrecht | Life |
| ASR Levensverzekering N.V.1 | 100.00 | 100.00 | Utrecht | Life |
| ASR Utrecht Real Estate Investments Netherlands B.V. | 100.00 | 100.00 | Amsterdam | Life |
| ASR Premiepensioeninstelling N.V.3 | 100.00 | 100.00 | Amsterdam | Life |
| ASR Financieringen B.V.2 | 100.00 | 100.00 | Utrecht | Asset Management |
| ASR Hypotheken B.V.2 | 100.00 | 100.00 | Utrecht | Asset Management |
| ASR Real Estate B.V.43 | 100.00 | 100.00 | Utrecht | Asset Management |
| ASR Vermogensbeheer N.V.43 | 100.00 | 100.00 | Utrecht | Asset Management |
| Anac Verzekeringen B.V.5 | 100.00 | 100.00 | Eindhoven | Distribution & Services |
| Anac, All-Finance Nederland Advies-Combinatie B.V.5 | 100.00 | 100.00 | Eindhoven | Distribution & Services |
| ASR Vitaliteit & Preventieve Diensten B.V. | 100.00 | 100.00 | Utrecht | Distribution & Services |
| Assurantiekantoor Lodewijk B.V.5 | 100.00 | 100.00 | Wezep | Distribution & Services |
| Bedrijfsartsengroep Holding B.V. | 100.00 | 100.00 | Heerenveen | Distribution & Services |
| Boval Assuranti\u00ebn B.V.5 | 100.00 | 100.00 | Velserbroek | Distribution & Services |
| Corins B.V.5 | 100.00 | 100.00 | Amsterdam | Distribution & Services |
| Dutch ID B.V. | 100.00 | 100.00 | Velserbroek | Distribution & Services |
| Felison Assuradeuren B.V.5 | 100.00 | 100.00 | Velserbroek | Distribution & Services |
| Van Helvoort Assuradeuren B.V.5 | 100.00 | 100.00 | Gemert | Distribution & Services |
| Van Helvoort Registermakelaars in Assuranti\u00ebn B.V.5 | 100.00 | 100.00 | Gemert | Distribution & Services |
| PoliService B.V.5 | 100.00 | 100.00 | Hardinxveld-Giessendam | Distribution & Services |
| Supergarant Verzekeringen B.V.5 | 100.00 | 100.00 | Leidschendam | Distribution & Services |
| Van Kampen Geld B.V.5 | 100.00 | 100.00 | Hoorn | Distribution & Services |
| Van Kampen Groep Holding B.V.5 | 100.00 | 100.00 | Hoorn | Distribution & Services |
| ZZP Nederland Verzekeringen B.V.5 | 100.00 | 100.00 | Groningen | Distribution & Services |
| D&S Holding B.V.2 | 100.00 | 100.00 | Velserbroek | Distribution & Services |
| D&S Participaties B.V.2 | 100.00 | 100.00 | Velserbroek | Distribution & Services |
| Administratie- en Adviesbureau voor Belegging en Krediet (A.B.K.) B.V.2 | 100.00 | 100.00 | Amersfoort | Holding & Other |
| ASAM N.V.2 | 100.00 | 100.00 | Utrecht | Holding & Other |
| ASR Betalingscentrum B.V.2 | 100.00 | 100.00 | Utrecht | Holding & Other |
| ASR Deelnemingen N.V.2 | 100.00 | 100.00 | Utrecht | Holding & Other |
| ASR Nederland N.V. | 100.00 | 100.00 | Utrecht | Holding & Other |
| ASR Service Maatschappij N.V.2 | 100.00 | 100.00 | Rotterdam | Holding & Other |
| ASR Vastgoed Projecten B.V. | 100.00 | 100.00 | Utrecht | Holding & Other |
| ASR Vooruit B.V.5 | 100.00 | 100.00 | Utrecht | Holding & Other |
| Servicemaatschappij \"De Hoofdpoort\" N.V.2 | 100.00 | 100.00 | Utrecht | Holding & Other |
The principal group companies and associates are located in the Netherlands.
For notes to equity interests in associates and joint ventures, see chapter 6.5.4. The list of equity interests which are required under Sections 379 and 414, Book 2 of the Dutch Civil Code has been filed with the Trade Register of the Chamber of Commerce in Utrecht.
The EB will propose to the AGM to distribute a final dividend of \u20ac\u00a0254 million in dividend on ordinary shares for 2022. Including the interim dividend of \u20ac\u00a0131 million the total dividends to shareholder amounted to \u20ac\u00a0386 million. The remaining result will be transferred to retained earnings in accordance with Article 37 of the Articles of Association of a.s.r.
Risk management (RM) is an integral part of a.s.r.\u2019s day-to-day business operations. a.s.r. applies an integrated approach to managing risks, ensuring that strategic targets are met. Value is created by striking the right balance between risk, return and capital whilst ensuring that obligations to stakeholders are met.
It is of great importance to a.s.r. that risks within all business segments are timely and adequately controlled. In order to do so, a.s.r. implemented a RM framework based on internationally recognised and accepted standards (such as COSO ERM and ISO 31000 RM principles and guidelines). Using this framework, material risks that a.s.r. is, or can be, exposed to, are identified, measured, managed, monitored, reported and evaluated. The RM framework is both applicable to a.s.r. group and the underlying (legal) business entities.
The figure below is the RM framework as applied by a.s.r.
The RM framework consists of risk strategy (including risk appetite), risk governance, systems and data, risk policies and procedures, risk culture, and RM process. The RM framework contributes to achieving the strategic, tactical and operational objectives as set out by a.s.r. The overall effectiveness of the RM framework is evaluated as part of the regular internal review of the system of governance.
Risk strategy is defined to contain at least the following elements:
Strategic, tactical and operational objectives that are pursued;
The risk appetite in pursuit of those strategic, tactical and operational objectives.
a.s.r.\u2019s risk strategy aims to ensure that decisions are made within the boundaries of the risk appetite, as stipulated annually by the EB and the SB (see chapter Risk strategy and risk appetite).
Risk governance can be seen as the way in which risks are managed, through a sound risk governance structure and clear tasks and responsibilities, including risk ownership. a.s.r. employs a risk governance framework that entails the tasks and responsibilities of the RM organisation and the structure of the Risk committees (see chapter Risk governance).
Systems and data support the RM process and provide management information to the risk committees and other relevant bodies. a.s.r. finds it very important to have qualitatively adequate data, models and systems in place, in order to be able to report and steer correct figures and to apply risk-mitigating measures timely. To ensure this, a.s.r. has designed a policy for data quality and model validation in line with Solvency II. Tools, models and systems are implemented to support the RM process by giving guidance to and insights into the key risk indicators, risk tolerance levels, boundaries and actions, and remediation plans to mitigate risks (see chapter Systems and data).
Risk policies and procedures contain at least:
Define the risk categories and the methods to measure the risks;
Outline how each relevant category, risk area and any potential aggregation of risk is managed;
Describe the connection with the overall solvency needs assessment as identified in the ORSA, the regulatory capital requirements and the risk tolerances;
Provide specific risk tolerances and limits within all relevant risk categories in line with the risk appetite statements;
Describe the frequency and content of regular stress tests and the circumstances that would warrant ad-hoc stress tests.
The classification of risks within a.s.r. is performed in line with, but is not limited to, the Solvency II risks. Each risk category consists of one or more policies or procedures that explicates how risks are identified, measured and controlled within a.s.r. (see chapter Risk policies and procedures).
An effective risk culture is one that enables and rewards individuals and groups for taking risks in an informed manner. It is a term describing the values, beliefs, knowledge, attitudes and understanding about risk. All the elements of the RM framework combined make an effective risk culture.
Within a.s.r. risk culture is an important element that emphasises the human side of RM. The EB has a distinguished role in expressing the appropriate norms and values (tone at the top). a.s.r. employs several measures to increase the risk awareness and, in doing so, the risk culture (see chapter Risk culture).
The RM process contains all activities within the RM processes to structurally 1) identify risks; 2) measure risks; 3) manage risks; 4) monitor and report on risks; and 5) evaluate the risk profile and RM framework. At a.s.r., the RM process is used to implement the risk strategy in the steps mentioned. These five steps are applicable to the risks within the company to be managed effectively (see chapter Risk Management process).
a.s.r.\u2019s risk strategy aims to ensure that decisions are made within the boundaries of the risk appetite, as stipulated annually by the EB and the SB.
Risk appetite is defined as the level and type of risk a.s.r. is willing to bear in order to meet its strategic, tactical and operational objectives. The risk appetite is formulated to give direction to the management of the (strategic) risks. The risk appetite contains a number of qualitative and quantitative risk appetite statements and is defined for both financial (FR) and non-financial risks (NFR). The statements highlight the risk preferences and limits of the organisation and are viewed as key elements for the realisation of the strategy. The statements and limits are defined at both group level and at legal entity level and are determined by the a.s.r. risk committee and approved by the SB.
The statements are evaluated yearly to maintain alignment with the strategy. The NFR statements have been strengthened in 2022, but not materially changed. FR statements have not been changed at a.s.r. group level.
| \u00a0 | \u00a0 | \u00a0 |
|---|---|---|
| 1 | ASR Nederland N.V. places long-term value creation at the forefront of its (strategic) operations and ensures that all stakeholders\u2019 interests are met in a balanced and sustainable way. | NFR |
| 2 | ASR Nederland N.V. acts in a sustainable and (socially) responsible manner. | NFR |
| 3 | ASR Nederland N.V. focuses on customer and has effective and controlled (business) processes, whereby the customer data quality is in order. | NFR |
| 4 | ASR Nederland N.V. has reliable financial reports, whereby IFRS and Solvency II data quality is in order. | NFR |
| 5 | ASR Nederland N.V. manages its internal and external outsourcing in a controlled and effective way. | NFR |
| 6 | ASR Nederland N.V. processes information safely (in accordance with availability, confidentiality and integrity requirements) and is cyber threat resilient. | NFR |
| 7 | ASR Nederland N.V. has controlled projects (in terms of timeliness, budget and/ or quality). | NFR |
| 8 | ASR Nederland N.V. and those working for or on behalf of a.s.r. act in accordance with applicable laws and regulations, self-regulation, and ethical and internal standards. a.s.r. meets the legitimate expectations and interests of its stakeholders and puts the customer's interests at the heart of its proposition. a.s.r. therefore provides products and services that are cost-efficient, useful, safe and understandable for customers, distribution partners, society and a.s.r. itself. Acting with integrity protects and strengthens a.s.r.'s reputation. | NFR |
| 9 | ASR Nederland N.V. has a minimum SCR ratio of 120%. | FR |
| 10 | ASR Nederland N.V. remains within the bandwidth of periodically reassessed market risk budgets. | FR |
| 11 | ASR Group (including ASR Nederland N.V., ASR Levensverzekering N.V. and ASR Schadeverzekering N.V.) has at least a single A rating and therefore holds an AA rating in accordance with the S&P Capital Model. | FR |
| 12 | ASR Nederland N.V. assesses the amount of dividend payments against the current and expected future solvency ratio and economic outlook. Dividend payments are in line with the conditions laid down in the capital and dividend policy of ASR Nederland N.V. | FR |
| 13 | ASR Nederland N.V. has a maximum financial leverage ratio of 40%. Financial leverage ratio = Debt / (Debt + Equity). | FR |
| 14 | ASR Nederland N.V. has a maximum double leverage ratio of 135%.Double leverage ratio = Total value of associates / (equity attributable to shareholders + hybrids and subordinated liabilities). | FR |
| 15 | ASR Nederland N.V. has a minimum interest coverage ratio of between 4 and 8. Interest coverage ratio = EBIT operational / interest expense. | FR |
| 16 | a. ASR Nederland N.V. is capable of releasing liquidities worth up to \u20ac\u00a01 billion over a 1-month period following stress. b. ASR Nederland N.V. remains capable of meeting its collateral requirements in the event of an (instant) increase of 3% interest rate. | FR |
| 17 | ASR Nederland N.V. generates a robust and high-quality operational ROE, i.e. pursues an overall ROE > 12% and seeks an ROE > 10% for individual investment decisions, where in exceptional cases an ROE > 8% is accepted. | FR |
| 18 | ASR Nederland N.V. (excl. ASR Ziektekosten) has a maximum combined ratio of 99%. | FR |
| 19 | ASR Nederland N.V. has a total SCR market risk which will be a maximum of 50% of the total risk. | FR |
Risk strategy aims to ensure that management decisions lead to a risk profile that remains within the risk limits. The risk strategy entails all processes to identifying, measuring and managing risks and opportunities. Through a combined top-down and bottom-up Strategic Risk Analysis (SRA) approach, the most important strategic risks are identified. The main strategic risks are translated into \u2018risk priorities\u2019 and \u2018emerging risks\u2019 at group level and are monitored throughout the year. Important changes in risk priorities and emerging risks are reported to the a.s.r. risk committee and the Audit & Risk Committee. Output from the SRA, combined with the risk appetite statements, provides insight into the strategic risk profile of a.s.r. and underlying legal entities. The entire risk profile is monitored in the relevant risk committees.
a.s.r.\u2019s risk governance can be described by:
risk ownership;
the implemented three lines of defence model and associated (clear delimitation of) tasks and responsibilities of key function holders; and
the risk committee structure to ensure adequate decision making.
The EB has the final responsibility for risk exposures and management within the organisation. Part of the responsibilities have been delegated to persons that manage the divisions where the actual risk-taking takes place. Risk owners are accountable for one or more risk exposures that are inextricably linked to the department or product line they are responsible for. Through the risk committee structure, risk owners provide accountability for the risk exposures.
The risk governance structure is based on the \u2018three lines of defence\u2019 model. The \u2018three lines of defence\u2019 model consists of three defence lines with different responsibilities with respect to the ownership of controlling risks. The model below provides insight in the organisation of the three lines of defence within a.s.r.
Within the risk governance, the key functions (compliance, risk, actuarial and audit) are organised in accordance with Solvency II regulation. They play an important role as countervailing power of management in the decision-making process. The four key functions are independently positioned within a.s.r. In all the risk committees one or more key functions participate. None of the functions has voting rights in the committees, in order to remain fully independent as countervailing power. All functions have direct communication lines with the EB and can escalate to the chairman of the Audit & Risk Committee of the SB. Furthermore, the key functions have regular meetings with the supervisors of the Dutch Central Bank (DNB) and / or The Dutch Authority for the Financial Markets (AFM).
GRM is responsible for the execution of the RM function (RMF) and the Actuarial Function (AF). The department is led by the CRO, which is also the RMF holder. GRM consists of the following sub-departments:
Enterprise Risk Management;
Financial Risk Management;
Model Validation.
As of 1 January 2023, Business Risk Management (BRM) will be hierarchically part of GRM. An important goal for this change is to realise a future proof and efficient RM organisation (regarding the organisation, processes and the execution of non financial risk management) taking into account the impact of the intended acquisition of Aegon Nederland. For the implementation a maximum period of 2-3 years is expected.
Enterprise Risk Management (ERM) is responsible for second-line strategic and operational (including IT) RM and the enhancement of the risk awareness for a.s.r. and its subsidiaries. The responsibilities of ERM include the development of risk policies and procedures, the annual review and update of the risk strategy (risk appetite), the coordination of the SRA process leading to the risk priorities and emerging risks and ORSA scenarios and the monitoring of the non-financial risk profile. For the management of operational risks, a.s.r. has a solid Risk-Control framework in place that contributes to its long-term solidity. The quality of the framework is continuously enhanced by the analysis of operational incidents, periodic risk assessments and monitoring by the RMF. ERM actively promotes risk awareness at all levels to contribute to the vision of staying a socially relevant insurer.
Financial Risk Management (FRM) is responsible for the second line financial RM and supports both the AF and RMF. An important task of FRM is to be the countervailing power to the EB and management in managing financial risks for a.s.r. and its subsidiaries. FRM assesses the accuracy and reliability of the market risk, counterparty risk, insurance risk and liquidity risk, risk margin and best estimate liability. As part of the AF, FRM reviews the technical provisions, monitors methodologies, assumptions and models used in these calculations, and assesses the adequacy and quality of data used in the calculations. Furthermore, the AF expresses an opinion on the underwriting policy and determines if risks related to the profitability of new products are sufficiently addressed in the product development process. The AF also expresses an opinion on the adequacy of reinsurance arrangements. Other responsibilities of financial RM are e.g. monitoring Solvency II compliancy (e.g. changes in Solvency II regulation), updating policies on valuation and risk, activities related to the DNB (National Supervisor), assessment of the ORSA (financial parts), assessment of strategic initiatives.
Model Validation (MV) is responsible for performing validation activities or having them carried out in accordance with the drawn up annual model validation plan. MV is responsible for supervising compliance with the model validation policy, discussing and challenging the (draft) validation reports and advising the Model Committee. The MV is a separate sub-department within GRM. The MV is part of the RMF and operates independent of the AF.
Compliance is responsible for the execution of the compliance function. An important task of Compliance is to be the countervailing power to the EB and other management in managing compliance risks for a.s.r. and its subsidiaries. The mission of the compliance function is to enhance and ensure a controlled and sound business operation.
As second line of defence, Compliance encourages the organisation to comply with relevant rules and regulations, ethical standards and the internal standards derived from them (\u2018rules\u2019) by providing advice and formulating policies. Compliance supports the first line in the identification of compliance risks and assesses the effectiveness of RM on which Compliance reports to the relevant risk committees. In doing so, Compliance uses a compliance risk and monitoring framework. In line with RM, Compliance also creates further awareness to comply with the rules and desired ethical behavior. Compliance coordinates interaction with regulators in order to maintain effective and transparent relationships with those authorities.
The Audit department, the third line of defence, provides an independent opinion on governance, risk and management processes, with the goal of supporting the EB and other management of a.s.r. in achieving the corporate objectives. To that end, Audit evaluates the effectiveness of governance, risk and management processes, and provides pragmatic advice that can be implemented to further optimise these processes. In addition, senior management can engage Audit for specific advisory projects.
a.s.r. has established a structure of risk committees with the objective to monitor the risk profile for a.s.r. group, its legal entities and its business lines in order to ensure that it remains within the risk appetite and the underlying risk tolerances and risk limits. When triggers are hit or likely to be hit, risk committees make decisions regarding measures to be taken, being risk-mitigating measures or measures regarding governance, such as the frequency of their meetings. For each of the risk committees a statute is drawn up in which the tasks, composition and responsibilities of the committee are defined.
The Audit & Risk Committee was established by the Supervisory Board to gain support, among other things, in the following matters:
Assessment of the risk appetite proposal and quarterly monitoring of the risk profile;
Assessment of the annual report, including the financial statements of a.s.r.;
The relationship with the independent external auditor, including the assessment of the quality and independence of the independent external auditor and the proposal by the SB to the AGM to appoint the independent external auditor;
The performance of the audit function, compliance function, the AF and the RMF;
Compliance with rules and regulations; and
The financial position.
The Audit & Risk Committee has three members of the SB, one of whom acts as the chairman.
The a.s.r. risk committee monitors a.s.r.\u2019s overall risk profile on a quarterly basis. At least annually, the a.s.r. risk committee determines the risk appetite statements, limits and targets for a.s.r. This relates to the overall a.s.r. risk appetite and the subdivision of risk appetite by financial and non-financial risks. The risk appetite is then submitted to the a.s.r. Audit & Risk Committee, which advises the SB on the approval of the risk appetite. The a.s.r. risk committee also monitors the progress made in managing risks included in the risk priorities and emerging risks of the EB.
All members of the EB participate in the a.s.r. risk committee, which is chaired by the CEO. The involvement of the EB ensures that risk decisions are being addressed at the appropriate level within the organisation. In addition to the EB, the Key Functions (Risk management, Compliance, Internal audit, Actuarial function) are members of the Committee.
The Non-Financial Risk Committee (NFRC) discusses, advises and decides upon non-financial risk policies. The most relevant non-financial risk policies are approved by the a.s.r. risk committee. The NFRC monitors that non-financial risks are managed adequately and monitors that the risk profile stays within the agreed risk limits. If the risk profile exceeds the limits, the NFRC takes mitigating actions. The NFRC reports to the a.s.r. risk committee. The NFRC is chaired by a member of the EB.
The Financial Risk Committee (FRC) discusses, advises and decides upon financial risk policies. The most relevant financial risk policies are approved by the a.s.r. risk committee. The FRC monitors that financial risks are managed adequately and monitors that the risk profile stays within the agreed risk limits. If the risk profile exceeds the limits, the NFR takes mitigating actions. The FRC reports to the a.s.r. risk committee. The Chairman of the FRC is the CFO.
The Capital, Liquidity and Funding Committee (CLFC) is a subcommittee of the FRC. As such, the CLFC prepares and assesses the technical analysis of capital, liquidity and funding positions, rating policy, rating model reporting, and treasury activities. The Chairman of the CLFC is the Director of Group Asset Management.
The model committee (MC) is a subcommittee of the FRC and is responsible for the execution and update of the model validation policy and the approval of validation of existing or newly developed models. The MC receives all required information for the validation of models (e.g. model documentation and validation reports) prepared by Model Validation (MV) that assures the quality of the validation process. The chairman of the MC is the Director of Finance, Risk and Performance Management (FRPM).
The business lines manage and control their risk profile through the Business Risk Committees (BRC). The BRC\u2019s monitor that the risk profile of the business lines stays within the risk appetite, limits and targets, as formulated by the EB. The BRC reports to the FRC and the NFRC. The Chairman of the BRC is the Managing Director of the business line.
In addition to the risk committee structure, the Central Investment Committee (CIC) monitors tactical decisions and the execution of the investment policy. It takes investment decisions within the boundaries of the strategic asset allocation as agreed upon in the FRC. The CIC bears particular responsibility for investment decisions exceeding the mandate of the investment department. The CIC is chaired by the Director of Group Balance Sheet Management (GBSM).
The Product Approval & Review Process Board (PARP Board) is responsible for the final decision-making process around the introduction of new products and adjustments in existing products. The committee evaluates if potential risks in newly developed products are sufficiently addressed. New products need to be developed in such a way that they are cost efficient, reliable, useful and secure for our clients. New products also need to have a strategic fit with a.s.r.\u2019s mission to be a solid and trustful insurer. In addition, the risks of existing products are evaluated, as requested by the PARP as a result of product reviews. The PARP Board is chaired by the managing Director of the business line Health.
GRC tooling is implemented to support the RM process by giving guidance and insight into the key risk indicators, risk tolerance levels, boundaries and actions and remediation plans to mitigate risks. The availability, adequacy and quality of data and IT systems is important in order to ensure that correct figures are reported and risk mitigating measures can be taken in time. It is important to establish under which conditions the management information that is submitted to the risk committees has been prepared and which quality safeguards were applied in the process of creating this information. This allows the risk committees to ascertain whether the information is sufficient to base further decisions upon.
a.s.r. has a Data Governance and Quality policy in place to support the availability of correct management information. This policy is evaluated on an annual basis and revised at least every three years to keep the standards in line with the latest developments on information management. The quality of the information is reviewed based on the following aspects, based on Solvency II:
completeness (including documentation of accuracy of results)
adequacy
reliability
timeliness
Adherence to this policy is ensured by the three lines of defence risk governance model. With a new Central Data Office and a Data Quality Improvement Programme, additional measures are taken to increase maturity in data management practices.
The preparatory body or department checks the assumptions made and the plausibility of the results and ensures coordination with relevant parties. When a preparatory body has established that the information is reliable and complete, it approves and formally submits the document(s) to a risk committee.
The information involved tends to be sensitive. To prevent unauthorised persons from accessing it, it is disseminated using a secure channel or protected files. a.s.r.\u2019s information security policy contains guidelines in this respect.
a.s.r.\u2019s information security policy is based on market standards, like ISO 2700x, COBIT 2019, NIST Cybersecurity framework, SOC2 principles, PCI DSS, COSO, BS 25999, ISO 31000, ITIL. These standards describes best practices for the implementation of information security.
There are technical solutions for accomplishing this, by enforcing a layered approach (defence-in-depth) of technical measures to avoid unauthorised persons to compromise a.s.r. data and systems. In this perspective, one may think of methods of logical access management, intrusion detection techniques, in combination with firewalls are aimed at preventing hackers and other unauthorised persons from accessing information stored on a.s.r. systems.
Nevertheless, confidential information can also have been committed to paper. On top of technical measures a.s.r. implemented physical measures and measures that help create the desired level of awareness of personnel as part of the information security environment. The resilience of these measures is actively tested.
When user defined models (e.g. spreadsheets) are used for supporting the RM framework, the \u2018a.s.r. Standard for End user computing\u2019- in addition to the general information security policy - defines and describes best practices in order to guard the reliability and confidentiality of these tools and models. a.s.r. recognises the importance of sound data quality and information management systems.
The management of IT and data risks of the implemented tools, models and systems (including data) is part of the Operational IT RM.
a.s.r. has established guidelines, including policies that cover all main risk categories (market, counterparty default, liquidity, underwriting, strategic and operational). These policies address the accountabilities and responsibilities regarding management of the different risk types. Furthermore, the methodology for risk measurement is included in the policies. The content of the policies is aligned to create a consistent and complete set. The risk policy landscape is maintained by GRM and Compliance. These departments also monitor the proper implementation of the policies in the business. New risk policies or updates of existing risk policies are approved by the risk committees as mentioned previously. a.s.r. has drawn up an integrated policy calendar which includes all risk related documents. This guarantees that policies are drawn up and reassessed in a timely manner and that tasks and responsibilities are clear.
Risk awareness is a vital component of building a sound risk culture within a.s.r. that emphasises the human aspect in the management of risks. In addition to gaining sufficient knowledge, skills, capabilities and experience in RM, it is essential that an organisation enables objective and transparent risk reporting in order to manage them more effectively.
The EB clearly recognises the importance of RM and is therefore represented in all of the major group level risk committees. Risk Management is involved in the strategic decision-making process, where the company\u2019s risk appetite is always considered. The awareness of risks during decision-making is continually addressed when making business decisions, for example by discussing and reviewing risk scenarios and the positive and / or negative impact of risks before finalising decisions.
It is very important that this risk awareness trickles down to all parts of the organisation, and therefore management actively encourages personnel to be aware of risks during their tasks and projects, in order to avoid risks or mitigate them when required. The execution of risk analyses is embedded in daily business in, for example, projects, product design and outsourcing.
In doing so, a.s.r. aims to create a solid risk culture in which ethical values, desired behaviours and understanding of risk in the entity are fully embedded. Integrity is of the utmost importance at a.s.r.: this is translated into a code of conduct and strict application policies for new and existing personnel, such as taking an oath or solemn affirmation when entering the company, and the \u2018fit and proper\u2019 aspect of the Solvency II regulation, ensuring that a.s.r. is overseen and managed in a professional manner.
Furthermore, a.s.r. believes it is important that a culture is created in which risks can be discussed openly and where risks are not merely perceived to be negative and highlight that risks can also present a.s.r. with opportunities. Risk Management (both centralised and decentralised) and Compliance are positioned as such, that they can communicate and report on risks independently and transparently, which also contributes to creating a proper risk culture.
The RM process typically comprises of five important steps: 1) identifying; 2) measuring; 3) managing; 4) monitoring and reporting; and 5) evaluating1. a.s.r. has defined a procedure for performing risk analyses and standards for specific assessments. The five different steps are explained in this chapter.
Management should endeavour to identify all possible risks that may impact the strategic, tactical and operational objectives of a.s.r., ranging from the larger and / or more significant risks posed on the overall business, down to the smaller risks associated with individual projects or smaller business lines. Risk identification comprises of the process of identifying and describing risk sources, events, and the causes and effects of those events.
After risks have been identified, quantitative or qualitative assessments of these risks take place to estimate the likelihood and impact associated with them. Methods applicable to the assessment of risks are:
Sensitivity analysis
Stress testing
Scenario analysis
Expert judgments (regarding likelihood and impact)
Portfolio analysis
Typically, there are four strategies to managing risk:
Accept: risk acceptance means accepting that a risk might have consequences, without taking any further mitigating measures.
Avoid: risk avoidance is the elimination of activities that cause the risk.
Transfer: risk transference is transferring the impact of the risk to a third party.
Mitigate: risk mitigation involves the mitigation of the risk likelihood and / or impact.
RM strategies are chosen in a way that ensures that a.s.r. remains within the risk appetite tolerance levels and limits.
The risk identification process is not a continuous exercise. Therefore, risk monitoring and reporting are required to capture changes in environments and conditions. This also means that RM strategies could, or perhaps should, be adapted in accordance with risk appetite tolerance levels and limits.
The evaluation step is twofold. On the one hand, evaluation means risk exposures are evaluated against risk appetite tolerance levels and limits, taking (the effectiveness of) existing mitigation measures into account. The outcome of the evaluation could lead to a decision regarding further mitigating measures or changes in RM strategies. On the other hand, the RM framework (including the risk management processes) is evaluated by the RM function, in order to continuously improve the effectiveness of the RM framework as a whole.
a.s.r. is exposed to a variety of risks. There are six main risk categories that a.s.r. recognises, as described below. In addition, a.s.r. recognises sustainability risks arising from environmental, social or governance (ESG) events or conditions. These risks can be financial and non-financial and can be both strategic and operational. This means that all six main risk categories that a.s.r. recognises can be affected by sustainability risks. In chapter 4.9.2 Climate change a.s.r. briefly describes how a.s.r. identifies, measures and manages climate risks and opportunities for its business.
Insurance risk is the risk that premium and / or investment income or outstanding reserves will not be sufficient to cover current or future payment obligations, due to the application of inaccurate technical or other assumptions and principles when developing and pricing products. a.s.r. recognises the following insurance risks:
Life insurance risk
Health insurance risk
Non-life insurance risk
The risk of changes in values caused by market prices or volatility of market prices differing from their expected values. The following types of market risk are distinguished:
Interest rate risk
Equity risk
Property risk
Spread risk
Currency risk
Concentration risk / market concentration risk
Counterparty default risk is the risk of losses due to the unexpected failure to pay or credit rating downgrade of counterparties and debtors. Counterparty default risk exists in respect of the following counterparties:
Reinsurers
Consumers
Intermediaries
Counterparties that offer cash facilities
Counterparties with which derivatives contracts have been concluded
Healthcare providers
Zorginstituut Nederland
Liquidity risk is the risk that a.s.r. is not able to meet its financial obligations to policyholders and other creditors when they become due and payable, at a reasonable cost and in a timely manner.
Operational risk is the risk of losses caused by weak or failing internal procedures, weaknesses in the action taken by personnel, weaknesses in systems or because of external events. The following subcategories of operational risk are used:
Sustainability
Business process
Financial reporting
Outsourcing
Information technology
Project risks
Strategic risk is the risk of a.s.r. or its business lines failing to achieve the objectives due to incorrect decision-making, incorrect implementation and / or an inadequate response to changes in the environment. Such changes may arise in the following areas:
Macro-economic
Climate change and energy transition
Cyber security
Pandemics
Regulation
Biodiversity
Social tensions
Geopolitical instability
Strategic risk may arise due to a mismatch between two or more of the following components: the objectives (resulting from the strategy), the resources used to achieve the objectives, the quality of implementation, the economic climate and / or the market in which a.s.r. and / or its business lines operate.
In addition to the six main categories, a.s.r. recognises sustainability risks arising from environmental, social or governance (ESG) events or conditions. These risks can be financial and non-financial and can be both strategic and operational. This means that all six main risk categories that a.s.r. recognises can be affected by sustainability risks.\u00a0\u00a0
Climate-related risks are divided into physical, transition and reputational risks. Physical risks arise from more frequent and severe climate events. Physical risks can be acute, such as extreme weather events, or chronic when they arise from gradual changes such as water shortages or rising temperatures. Transitions risks result from the process of adjustment towards a climate-neutral society. The failure to appropriately address these adjustments can result in reputational risk.
Physical risks are mainly associated with the Non-life portfolio. With life and health insurance, the impact is mainly in the longer term and not quantified in the ORSA horizon of 5 years. Transition risks apply in particular to investments and financing. The ORSA assesses the overall solvency needs of a.s.r. in the context of the strategic plans making allowance for the current and expected solvency positions, the risk appetite and solvency targets. The scenario analysis for transition risks is performed by considering the proposal from the SAA 2021 also under the three climate scenarios. The dynamically managed market risk budgets are resilient to the climate impact with regard to the development of the SII ratio over the coming 20 years. Physical risks (a major storm and major flood) are assessed in the ORSA combined business scenario\u2019s for the Non-life portfolio.
Overall, climate risks as a result of climate change and the energy transition are incorporated into a.s.r.\u2019s risk appetite and part of the regular risk management processes such as the annual group-wide SRA process. Material climate risks identified in the SRA process, including storms and floods, are incorporated into the scenario analysis of the Own Risk and Solvency Assessment (ORSA) and quantified by the business actuary teams.
The net impact of climate change on the current Solvency II Technical Provisions or SCR estimation is considered to be limited. A qualitative assessment has been performed in 2022 by the Actuarial Function and discussed with the product lines. For the Life and Pension business the impact of climate change on life expectancy is considered to be limited. Increased inflation caused by social or geopolitical factors is adequately valued in the liabilities. The Non-life business is characterised by a short contract boundary, most premiums can therefore yearly be adjusted to the gradually impact of climate change.
The Group Business Actuary performed a portfolio assessment of the impact of sustainability factors (ESG). Bases on the portfolio characteristics and product features the potential adverse effect on the value of liabilities has been assessed.
Based on both the assessments a.s.r. does not consider ESG to have impact on the method or results of current Solvency II Technical Provisions or SCR estimation. The ESG risks are expected to be within the limits of the Solvency II Capital Requirement. In addition an assessment of the impact of sustainability factors to the prudential risks has been started in 2022. This will be finalised in 2023 and embedded in the regular risk management cycle. So far this analysis confirms the limited net impact.
Reference is made to chapter 4.9.2 Climate change for more information how a.s.r. identifies, measures and manages climate risks and opportunities for its business.
Insurance risk is the risk that future insurance claims and benefits cannot be covered by premium and / or investment income, or that insurance liabilities are not sufficient, because future expenses, claims and benefits differ from the assumptions used in determining the best estimate liability. Insurance risk manifests itself in both the Non-life and the Life portfolio. The Non-life portfolio covers the property and casualty, disability and healthcare sectors. The Life portfolio consists of funeral, individual life and pensions business.
Risk-mitigating measures are used to reduce and contain the volatility of results or to decrease the possible negative impact on value as an alternative for the capital requirement. Proper pricing, underwriting, reinsurance, claims management, and diversification are the main risk mitigating actions for insurance risks. By offering a range of different insurance products, with various product benefits and contract lengths, and across Life, Disability and Health and P&C insurance risk, a.s.r. reduces the likelihood that a single risk event will have a material impact on a.s.r.\u2019s financial condition.
The solvency buffer is held by a.s.r. to cover the risk that claims may exceed the available insurance provisions and to ensure its solidity. The solvency position of a.s.r. is determined and continuously monitored in order to assess if a.s.r. meets the regulatory requirements.
a.s.r. measures its risks based on the standard model as prescribed by the Solvency II regime. The Solvency Capital Requirement (SCR) for each insurance risk is determined as the change in own funds caused by a predetermined shock which is calibrated to a 1-in-200-year event. The basis for these calculations are the Solvency II technical provisions which are calculated as the sum of a best estimate and a risk margin.
The insurance risk arising from the insurance portfolios of a.s.r. is as follows:
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Life insurance risk | 1,313 | 1,584 |
| Health insurance risk | 1,243 | 1,213 |
| Non-life insurance risk | 609 | 591 |
| \u00a0 | \u00a0 | \u00a0 |
| Total excluding diversification between insurance risks | 3,166 | 3,388 |
The Life insurance risk decreased as a result of the increase of the interest rates and the development of the insured population. The Health and Non life insurance risk increased as a result of update of the non economic assumptions, acquisition of the VVT contract and the growth of the insured population.
a.s.r. has assessed the impact of various sensitivities on the solvency ratio. The sensitivities as at 31 December 2022 and 2021, expressed as impact on the group solvency ratio (in percentage points) are as follows:
| Effect on: | Available capital | Required capital | Ratio | |||
|---|---|---|---|---|---|---|
| Type of risk (%-points) | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 |
| Expenses +10% | -6 | -5 | -2 | -1 | -8 | -7 |
| Mortality rates, all products -5% | -3 | -4 | -1 | - | -4 | -5 |
| Lapse rates -10% | - | - | -1 | - | - | - |
| Risk | Scenario |
|---|---|
| Expense risk | Measured as the impact of a 10% increase in expense levels. |
| Mortality risk | Measured as the impact of a 5% decrease in all mortality rates. |
| Lapse risk | Measured as the risk of a 10% decrease in lapse rates. |
The table above shows that the SCR sensitivities in 2022 are (almost) similar to the sensitivities of 2021. The impact on the ratio is the opposite if a reversed scenario is taken into account.
In accordance with a.s.r.\u2019s accounting policy, the LAT is performed at the Segment Life level (for the consolidated financial statements of a.s.r.) and at that level the shadow accounting adjustments related to instruments with a revaluation reserve amount below cost that are made to the level that the LAT will not get triggered (i.e. shows a positive margin). Further details are disclosed in paragraph 6.5.15 of the Annual report.
The Life portfolio can be divided into Funeral, Individual life and Pensions. The insurance contracts are sold primarily to retail and wholesale clients through intermediaries.
The products are sold as insurance products in cash or unit-linked contracts. With respect to products in cash, the investment risk is fully borne by the insurer whereas, in the case of unit-linked products, the majority of the investment risk is for the policyholder\u2019s account.
The SCR for Life insurance risks is determined on the level of model points. A model point is a group of policies with equal characteristics and used as a subset of a homogeneous risk group. The model points are sufficiently homogeneous and therefore netting between positive and negative risks is not material.
The following Life insurance risks are involved:
Mortality risk is associated with (re)insurance obligations, such as endowment or term assurance policies, where a payment or payments are made in case of the policyholder\u2019s death during the contract term. The increase in mortality rates is applied to (re)insurance obligations which are contingent on mortality risk. The required capital for this risk is calculated as the change in own funds of a permanent increase of mortality rates by 15% for all ages and each policy.
Longevity risk is associated with (re)insurance obligations where payments are made until the death of the policyholder and where a decrease in mortality rates results in higher technical provisions. The decrease in mortality rates is applied to (re)insurance obligations where payments are contingent on longevity risk. The required capital is calculated as the change in own funds of a permanent decrease of mortality rates by 20%.
Morbidity or disability risk is associated with all types of insurance compensating or reimbursing losses (e.g. loss of income, adverse changes in the best estimate of the liabilities) caused by changes in the morbidity or disability rates. Solvency II prescribes a 35% increase in disability rates for the first year, 25% for subsequent years, combined with a decrease in recovery rates of 20%. However for the Life portfolio, disability and recovery rates are not modelled because of the limited impact and risk. Instead an experience percentage substitutes the role of these rates in the model. The disability-morbidity risk is calculated on policy level by increasing the experience percentage with 25%.
Lapse risk is the risk of losses (or adverse changes in the best estimate of the liabilities) due to an unanticipated (higher or lower) rate of policy lapses, terminations, changes to paid-up status (cessation of premium payment) and surrenders. The effect of the lapse risk is equal to the highest result of a permanent increase in lapse rates of 50%, a permanent decrease in lapse rates of 50% or a mass lapse event (70% of insurance policies in collective pension funds or 40% of the remaining insurance policies). The lapse shocks are only applied to portfolios where this leads to a higher best estimate.
Especially in the case of funeral policies the netting of positive and negative risks within model points can be considerable for policies that can be surrendered (completely ending the policy, with payment of surrender value) in the case of the mass lapse. In most cases, the shock scenario for determining the SCR for mass lapse for funeral policies consists of an immediate shock of 40% with respect to the continuation of premium payment (mass 'pup'-scenario). This is mostly in line with policy conditions. The mass pup treatment in the funeral portfolio for mass lapse risk reduces the netting of positive and negative risks to a level that is not material.
A calculation is made of the effect on own funds of a permanent increase in costs used for determining the best estimate. For investment costs only an increase of 10% applies, since there is no inflation component in the method used to project investment costs in the best estimate liability. Both the internally and externally managed investment costs are involved in this scenario.
Catastrophe risk arises from extreme events which are not captured in the other Life insurance risks, such as pandemics. The capital requirement for this risk is calculated as a 1.5 per mille increase in mortality rates in the first projected year for (re)insurance obligations where the increase in mortality rates leads to an increase in technical provisions.
Within the Individual life portfolio there is a group of policies directly linked to a mortgage loan ('Spaarhypotheken'). In case the mortgage loan is not provided by a.s.r., but by another party, which is the case for most of these policies, the interest that a.s.r. reimburses to the policyholder is claimed from the party that has provided the mortgage loan. This cashflow of interests from the provider of the mortgage loan to a.s.r. represents an asset. The cashflow and value of this asset depends on the cashflow of the linked savings policy. Therefore, the change in this asset value due to mortality or lapse is taken into account when determining the SCR for Life insurance risks.
Until 31 December 2020, a.s.r. offered its employees post-employment defined benefit (DB) plans. As of 1 January 2021 a.s.r. offers its employees a defined contribution (DC) plan. This DC plan has been agreed for the period 1 January 2021 until 31 December 2025. The existing DB plan has ended and will not be renewed. The accrued pensions (until 1 January 2021) will remain guaranteed at a.s.r. life and are not transferred to the DC plan. The plan amendments are recognised directly through profit of loss.
The accrued benefits under the DB plans are insured with a.s.r. life, an insurance company within the group. Though the liability of the DB plans is classified as employee benefits on the balance sheet and determined according to IFRS principles, the required capitals for the Life insurance risks are fully taken into account and based on Solvency II principles. The risk margin at a.s.r. group level equals the sum of risk margins of all underlying OTSOs. No correction is made for the elimination of post-employment benefit plans for a.s.r.\u2019s employees with a.s.r. life.
Accrued employee pensions from the old pension scheme can be indexed for the longer term. For this purpose, a.s.r. established, in agreement with the trade unions, a long-term indexation fund of \u20ac\u00a0240 million. Both the return and the investment risk is entirely for the employees. This agreement concerns old accrued pension rights and is therefore only relevant for employees who joined before 1 January 2021. Also part of the agreement is the termination of the profit-sharing scheme at the end of 2022.
The DC plan is classified as a DC plan according to IAS19 and is not accommodated in a separate entity. a.s.r. bears risks associated with death and disability and concerning the option the employees have of purchasing a guaranteed entitlement directly out of the DC. These risks are limited and will be accounted for according to IAS19.
Within a.s.r. life the longevity risk is dominant and arises from group pension business and individual annuities. The longevity risk is partly offset by mortality risk that arises from the funeral portfolio and individual policies with mortality. The other main risks a.s.r. life is exposed to are expense risk and lapse risk.
The table below summarises the required capital for abovementioned life insurance risks based on the standard model after application of Loss Absorbing Capacity of Technical Provisions (LAC TP). The impact of LAC TP decreased in 2022 to \u20ac\u00a049 million (2021: \u20ac\u00a099 million).
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Mortality risk | 216 | 238 |
| Longevity risk | 784 | 1,166 |
| Disability-morbidity risk | 18 | 3 |
| Lapse risk | 406 | 260 |
| Expense risk | 506 | 612 |
| Revision risk | - | - |
| Catastrophe risk (subtotal) | 139 | 76 |
| Diversification (negative) | -756 | -770 |
| \u00a0 | \u00a0 | \u00a0 |
| Life insurance risk | 1,313 | 1,584 |
The decrease of the required capital in 2022 was mainly the result of the increase of the interest rates.
For the Life portfolio, the provision at year-end (provided figures are without reductions resulting from reinsurance contracts) can be broken down as follows under Solvency II:
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Insurance with profit participation | \u00a0 | \u00a0 |
| Best estimate | 10,573 | 15,216 |
| Risk margin | 589 | 880 |
| \u00a0 | \u00a0 | \u00a0 |
| Technical provision | 11,162 | 16,096 |
| \u00a0 | \u00a0 | \u00a0 |
| Other life insurance | \u00a0 | \u00a0 |
| Best estimate | 12,859 | 17,300 |
| Risk margin | 580 | 916 |
| \u00a0 | \u00a0 | \u00a0 |
| Technical provision | 13,439 | 18,217 |
| \u00a0 | \u00a0 | \u00a0 |
| Index-linked and unit-linked insurance | \u00a0 | \u00a0 |
| Best estimate | 10,173 | 11,846 |
| Risk margin | 62 | 89 |
| \u00a0 | \u00a0 | \u00a0 |
| Technical provision | 10,235 | 11,935 |
| \u00a0 | \u00a0 | \u00a0 |
| Total | \u00a0 | \u00a0 |
| Best estimate | 33,604 | 44,362 |
| Risk margin | 1,231 | 1,886 |
| \u00a0 | \u00a0 | \u00a0 |
| Technical provision | 34,836 | 46,247 |
In 2022 the technical provisions decreased with \u20ac\u00a011,411 million, this was mainly caused by increased interest rates, run-off of the portfolio and the decrease of the unit linked value.
Life insurance risk is mitigated by pricing, underwriting policies and reinsurance.
Pricing is based on profit capacity calculations. A calculation is made of the price required to cover the insurance liabilities, expenses and risks.
Underwriting policies describe the types of risks and the extent of risk a.s.r. is willing to accept. Policyholders may be subjected to medical screening for both Individual life and Funeral insurance.
Reinsurance and other risk-mitigating measures are used to reduce the volatility of results or to decrease the possible negative impact on value as an alternative to the capital requirement. Reinsurance arrangements have been set up to mitigate the effects of catastrophes on earnings.
The level of retention in different reinsurance contracts is aligned with the size and the risk profile of the underlying portfolios. This includes taking account of the cost of reinsurance on the one hand, and the risk that is retained on the other.
In order to optimise its balance sheet risks, a.s.r. entered into a reinsurance agreement with Legal and General Re in 2015. The share of Legal and General Re is on behalf of a specific buy-out portfolio. The total share of the reinsurances for a.s.r. amounts to \u20ac\u00a0125 million per 31 December 2022.
The Health insurance portfolio of a.s.r. is diverse. The portfolio can be divided into two main product types:
SLT Health portfolio (Similar to Life Techniques) Income Protection, which can be divided into:
Individual Disability (Zelfstandigen)
Group Disability (WIA)
NSLT Health portfolio (Not Similar to Life Techniques), which can be divided into:
Income Protection (Sickness, and Individual and Group Accident)
Medical Expenses (Basic and Supplementary)
The insurance contracts are sold primarily to retail and wholesale clients through intermediaries.
The Health insurance portfolio of a.s.r. contains the following insurance risks:
SLT Health risk
This risk is applicable to the SLT Health portfolio. The calculation is scenario-based. The scenarios are similar to the scenarios that are used to calculate the Life insurance risk.
NSLT Health risk
This risk is applicable to the NSLT Health portfolio. The calculation is factor-based. The risk is calculated similarly to the Non-life insurance risk.
Health Catastrophe risk
This risk is applicable to the entire Health portfolio. The calculation is scenario-based.
Mortality risk is associated with (re)insurance obligations where payments are made upon the death of the policyholder and where an increase in mortality rates results in higher technical provisions. The required capital is calculated as the change in own funds of a permanent 15% increase in mortality rates. The increase in mortality rates is applied to portfolios where payments are contingent on mortality risk. The increase in mortality rates leads to an increase of the own funds. Therefore the mortality risk is zero for the Health portfolio.
Longevity risk is associated with (re)insurance obligations where payments are made until the death of the policyholder and where a decrease in mortality rates results in higher technical provisions. The required capital is calculated as the change in own funds of a permanent 20% decrease in mortality rates. The decrease in mortality rates is applied to portfolios where payments are contingent on longevity risk.
Morbidity or disability risk is the main risk to the SLT Health portfolio. The scenario analysis consists of a 35% increase in disability rates for the first year, 25% for subsequent years, combined with a decrease in revalidation rates of 20%.
A calculation is made of the effect of a permanent increase in costs, which is used for determining the best estimate. The scenario analysis contains an increase in the costs of 10% and an increase in the cost inflation of 1 percentage point per year.
The revision risk is the risk that a higher benefit is caused by either inflation or a revision of the disability percentage. Benefits that are sensitive to inflation and / or an increase in the disability percentage will be increased by 4%.
Lapse risk is the risk of losses (or adverse changes in the best estimate of the liabilities) due to an unanticipated (higher or lower) rate of policy lapses, terminations, changes to paid-up status (cessation of premium payment) and surrenders. The effect of the lapse risk is equal to the highest result of a permanent 50% increase in lapse rates, a permanent 50% decrease in lapse rates or a mass lapse event (40% mass lapse). For the SLT Health portfolio, the mass lapse event is dominant.
According to the insurance conditions, a.s.r. non-life has the ability to adjust the premiums and insurance conditions group wise in the future for the disability portfolio. Therefore, the contract boundary of the disability contracts without an individual risk assessment at acceptance is equal to the contract term. For contracts with an individual risk assessment at acceptance, the contract boundary is equal to the end age, because the contracts will be tacitly renewed until the end age is reached, without repeating the risk assessment. These contracts with an individual risk assessment involve the Individual Self-employed and the Individual Employees portfolio\u2019s. For these portfolio\u2019s, a.s.r. non-life applies a future management action (FMA), as noted in article 23 of the Delegated Acts. The trigger, as defined in the FMA, is hit in the Income Protection Disability-Morbidity Risk (article 156 DA) scenario.
For a number of Loyalis products within the group disability portfolio, it is determined annually whether the insured amounts are indexed. For the majority of the portfolio, there is a conditional indexation based on a (discretionary) management decision, based among other things on interest result. In a financially unfavourable year, there is the possibility of not paying out indexation, which is a FMA as noted in article 23 of the Delegated Acts.
The premium risk is the risk that the premium is not adequate for the underwritten risk. The premium risk is calculated over the maximum of the expected earned premium of the next year, and the earned premium of the current year. The reserve risk is the risk that the current reserves are insufficient to cover their run-off over a 12 month time horizon.
The NSLT Premium and reserve risk can be split into the following insurance risks:
Medical Expense
A health catastrophe for the NSLT Health portfolio is an unexpected future event with a duration of one year. The risk is determined ultimo year. The amount of catastrophe risk is apparent from the number of insured and parameters for mass accident scenario and pandemic scenario that have been approved by DNB in consultation with Health Insurers Netherlands. Accident concentration is not applicable for NSLT Health. The catastrophe risk has a projection of one year (T) following from the contract boundary of one year in accordance with the Dutch Health Insurance Act. After year T the risk is \u2018zero\u2019. Catastrophe risk for a.s.r. health supplementary equals zero because these contracts have a maximum compensation for claims.
Income Protection
This component is calculated for policies for which an increase in mortality rates or morbidity rates or disability rates leads to an increase in the best estimate. There are three scenarios, which are calculated for all NSLT Health and portfolios.
The basic and additional health insurance are compulsory insurance contracts for one year without intermediate possibility of termination and therefore lapse risk is negligible for the basic health insurance.
In this scenario, an accident takes place during a major public event. The risk is that 10% of the attendees are killed, 3.5% are permanently disabled, 16.5% are disabled for 12 months and 30% need medical attention.
In this scenario, an accident takes place on site, with the most of our insured at the same location. The risk is that 10% of those present are killed, 3.5% are permanently disabled, 16.5% are disabled for 12 months and 30% need medical attention. In 2020 and 2021, due to COVID-19 most employees of a.s.r. worked at home, therefore the input of this scenario changed. In 2022 due to hybrid working this was roughly comparable.
In this scenario, there is a pandemic, which causes 1% of those affected to be hospitalised and 20% to see a local practitioner. This is the scenario related to the standard model, in which the COVID-19 impact is not reflected.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Health SLT | 964 | 977 |
| Health Non-SLT | 404 | 347 |
| Catastrophe Risk (subtotal) | 83 | 78 |
| Diversification (negative) | -208 | -189 |
| \u00a0 | \u00a0 | \u00a0 |
| Health (Total) | 1,243 | 1,213 |
| \u00a0 | \u00a0 | \u00a0 |
| Mortality risk | - | - |
| Longevity risk | 52 | 50 |
| Disability-morbidity risk | 779 | 781 |
| Expense risk | 135 | 157 |
| Revision risk | 205 | 233 |
| Lapse risk | 270 | 228 |
| Diversification (negative) | -478 | -472 |
| \u00a0 | \u00a0 | \u00a0 |
| Health SLT (subtotal) | 964 | 977 |
| \u00a0 | \u00a0 | \u00a0 |
| Medical expenses insurance and proportional reinsurance | 155 | 129 |
| Income protection insurance and proportional reinsurance | 303 | 264 |
| Diversification (negative) | -55 | -46 |
| \u00a0 | \u00a0 | \u00a0 |
| Health Non-SLT (subtotal) | 404 | 347 |
| \u00a0 | \u00a0 | \u00a0 |
| Mass accident risk | 28 | 28 |
| Accident concentration risk | 66 | 62 |
| Pandemic risk | 41 | 39 |
| Diversification (negative) | -53 | -50 |
| \u00a0 | \u00a0 | \u00a0 |
| Catastrophe risk (subtotal) | 83 | 78 |
The SCR for the Health Non-SLT risk differs from the sum of the amounts reported in the OTSO QRTs. This difference is caused due to a diversification benefit on group level.
For the SLT Health portfolio, the provision at year-end can be broken down as follows under Solvency II.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Best estimate | 3,389 | 4,152 |
| Risk margin | 371 | 481 |
| \u00a0 | \u00a0 | \u00a0 |
| Technical provision | 3,760 | 4,633 |
For the NSLT Health portfolio, the provision at year-end can be broken down as follows under Solvency II.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Best estimate | 526 | 564 |
| Risk margin | 54 | 47 |
| \u00a0 | \u00a0 | \u00a0 |
| Technical provision | 579 | 611 |
Non-life Insurance risk can be broken down into:
Premium and reserve risk
Non-life catastrophe risk
Lapse risk
The premium- and reserve risk is derived at the level of a legal entity based on the standard model. The premium- and reserve risk is the risk that the premium respectively the reserve is not adequate for the underwritten risk. The reserve risk is associated with historical years, and the premium risk is associated with the future year(s). The premium risk is calculated over the maximum of the expected earned premium for the next year and the earned premium for the current year. For the calculation of the premium- and reserve risk, several input data and parameters are necessary, as described in the standard model. The geographical spread, when a (re)insurer underwrites products in different countries, is not relevant for a.s.r. non-life as there is no material exposure outside the Netherlands.
Catastrophe risk is defined as the risk of loss or adverse change in the value of insurance liabilities, resulting from significant uncertainty of pricing and provisioning assumptions related to extreme or exceptional events. The Non-life SCR Catastrophic Risk Module used, consists of natural catastrophe risk (Windstorm and Hail), man-made catastrophe risk (Fire, Motor and Liability) and other Non-life catastrophe risk. The Non-life Catastrophe Risk Module is derived at the level of a legal entity based on the standard model.
The reinsurance program of 2023 has changed due to a hardened reinsurance market, which has the most impact on natural catastrophe risk.
The lapse risk is the loss in basic own funds caused by the discontinuance of 40% of the policies for which discontinuation would result in an increase of technical provisions (without the risk margin). The calculation is based on the type of discontinuance which most negatively affects the basic own funds, which is for Non-life immediately termination of the policy.
Below table summarises the required capital for abovementioned Non-life insurance risks based on the standard model.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Premium and reserve risk | 548 | 552 |
| Lapse risk | 52 | 52 |
| Catastrophe risk | 159 | 107 |
| Diversification (negative) | -149 | -121 |
| \u00a0 | \u00a0 | \u00a0 |
| Non-life insurance risk | 609 | 591 |
| \u00a0 | \u00a0 | \u00a0 |
| Natural catastrophe risk | 132 | 74 |
| Man-made catastrophe risk | 86 | 75 |
| Other non-life catastrophe risk | 20 | 20 |
| Diversification (negative) | -79 | -62 |
| \u00a0 | \u00a0 | \u00a0 |
| Catastrophe risk (subtotal) | 159 | 107 |
For the Non-life portfolio, the provision at year-end can be broken down as follows under Solvency II:
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Best estimate | 1,479 | 1,538 |
| Risk margin | 88 | 97 |
| \u00a0 | \u00a0 | \u00a0 |
| Technical provision | 1,567 | 1,634 |
Health and Non-life insurance risk is managed by monitoring claims frequency, the size of claims, inflation, handling time, benefit and claims handling costs, and biometrical risks (disability, recovery, illness, death). Concentration risk also qualifies as an insurance risk.
In recent years, measures have been taken to improve profitability and reduce risk. Examples are: premium increases, stricter acceptance criteria, shorter claims filing terms and making use of the claims reassessment arrangement between the Dutch Association of insurers and social security institute UWV. Effects are being monitored closely and assessed to be effective.
To mitigate the risk of claims, a.s.r. bases its underwriting policy on claims history and risk models. The policy is applied to each client segment and to each type of activity. In order to limit claims and / or ensure that prices are adjusted correctly, the acceptance policy is continually refined using a number of indicators and statistical analyses. The product lines also use knowledge or expectations with respect to future trends to estimate the frequency, size and inflation of claims. The risk of unexpected major damage claims is contained by policy limits, the concentration of risk management and specific risk transfer contracts (e.g. reinsurance).
The time required for handling and settling claims is an important factor. The settlement of claims that have a long handling time, such as liability claims, can take many years. Analyses are performed regularly and based on a.s.r.\u2019s experience in similar cases, historical trends \u2013 such as the pattern of liabilities \u2013 increases in risk exposure, payment of damages, the scale of current and not yet settled damage claims, court rulings and economic conditions.
Taking estimated future inflation into account, benefit and claims handling costs are managed based on regular reviews and related actions.
Disability risk is controlled by means of regular evaluation of historical claims patterns, expected future developments and price adjustments. Disability risk is mitigated by a.s.r. through underwriting criteria and a proactive reintegration policy. a.s.r. also mitigates its disability risk through suitable reinsurance.
Geographically, the risk exposure of a.s.r. on its health and Non-life portfolio is almost entirely concentrated in the Netherlands. Concentration of insurance risks is particularly prevalent in the fire risk portfolio (i.e. home and content, with storm and flood risk forming the most important factor). Storm and flood risk is managed by means of suitable reinsurance (see also \u2018Reinsurance\u2019).
There is also a concentration of risk in group disability schemes. Group disability contracts are underwritten within the scope of disability cover for employees in the Netherlands (WIA).
When deemed effective in terms of capital relief versus costs incurred, a.s.r. enters into reinsurance agreements to mitigate Non-life insurance risks. Reinsurance can be taken out for each separate claim (per risk), for the accumulation of claims due to natural disasters or to human actions (per event), or for both these risks.
The level of retention in the various reinsurance contracts is aligned with the size and the risk profile of the underlying portfolios, taking into account of the cost of reinsurance on the one hand, and the risk that is retained on the other.
Market risk is the risk of potential losses due to adverse movements in financial market variables. Exposure to market risk is measured by the impact of movements in financial variables such as equity prices, interest rates and property prices. The various types of market risk which are discussed in this chapter, are:
interest rate risk
equity risk
property risk
currency risk
spread risk
concentration risk
Market risk reports are submitted to the FRC at least once a month. Key reports on market risk include the Solvency II and economic capital report, the interest rate risk report and the report on risk budgets related to the strategic asset mix.
A summary of sensitivities to market risks for the regulatory solvency, total equity and profit for the year is presented in the tables below. The first table summarises the required capital for market risks based on the standard model:
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Interest rate | 155 | 550 |
| Equity | 821 | 1,194 |
| Property | 1,068 | 1,125 |
| Currency | 135 | 120 |
| Spread | 876 | 1,118 |
| Concentration | - | - |
| Diversification (negative) | -575 | -692 |
| \u00a0 | \u00a0 | \u00a0 |
| Total | 2,481 | 3,416 |
The main market risks of a.s.r. are equity, property and spread risk. The market risks are within the bandwidth of the risk budgets, which are based on the strategic asset allocation study. Market risk decreased mainly driven by higher interest rates, decreasing equity and spread risk.
The value of investment funds at year-end 2022 was \u20ac\u00a06,823 million (2021: \u20ac\u00a05,307 million). a.s.r. applies the look through approach for investment funds to assess the market risk.
The interest rate risk is the maximum loss of (i) an upward shock or (ii) a downward shock of the yield curve. Per 2022 the upward shock is dominant, whereas per 2021 the downward shock was dominant.
The diversification effect shows the effect of having a well-diversified investment portfolio.
The Solvency II SCR is a Value at Risk-measure. Therefore, Solvency II ratio sensitivities are disclosed as the alternative analysis, instead of IFRS sensitivities, as permitted by IFRS. The sensitivities of the solvency ratio as at 31 December 2022, expressed as the impact on the group solvency ratio (in percentage points) are as presented in the table below. The total impact is split between the impact on the solvency ratio related to movement in the available capital and the required capital. The sensitivities are based on the situation per 31 December 2022.
| Effect on: | Available capital | Required capital | Ratio | |||
|---|---|---|---|---|---|---|
| Scenario (%-point) | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 |
| UFR 3.2% | -4 | -8 | - | -1 | -4 | -9 |
| Interest rate +1% (2022 incl. UFR 3.45% / 2021 incl. UFR 3.6%) | -5 | -7 | -3 | +18 | -8 | +10 |
| Interest rate -1% (2022 incl. UFR 3.45% / 2021 incl. UFR 3.6%) | +1 | +7 | -15 | -13 | -13 | -7 |
| Interest steepening +10 bps | -1 | -3 | - | - | -1 | -3 |
| Volatility Adjustment -10bp | -7 | -9 | -3 | -2 | -11 | -10 |
| Government spread + 50 bps / VA +10 bps (2021: VA: +11 bps) | -3 | -2 | - | - | -3 | -2 |
| Mortgage spread +50 bps | -8 | -7 | - | +1 | -8 | -7 |
| Equity prices -20% | -11 | -11 | +15 | +18 | +3 | +6 |
| Property values -10% | -10 | -9 | +4 | +4 | -6 | -6 |
| Spread +75bps/ VA +18bps (2021: VA +19bps) | +10 | +15 | +1 | +5 | +11 | +20 |
| Inflation +30 bps | -2 | -2 | - | -1 | -2 | -2 |
| Risk | Scenario |
|---|---|
| Interest rate risk - UFR 3.2% | Measured as the impact of a lower UFR. For the valuation of liabilities, the extrapolation to the UFR of 3.2% after the last liquid point of 20 years remained unchanged. The impact on available capital, required capital and ratio relates to a comparison with a solvency ratio measured at a UFR of 3.45% for 2022 (3.6% for 2021). |
| Interest rate risk (incl. UFR 3.45%/3.6%) | Measured as the impact of a parallel 1% upward and downward movement of the interest rates. For the liabilities, the extrapolation to the UFR (3.45% for 2022 and 3.6% for 2021) after the last liquid point of 20 years remained unchanged. |
| Interest steepening | Measured as the impact of a linear steepening of the interest rate curve between 20Y and 30Y of 1 bps to 10 bps. |
| Volatility Adjustment | Measured as the impact of a 10 bps decrease in the Volatility Adjustment. |
| Government spread | Measured as the impact of an increase of spread on Government bonds of 50 bps. At the same it is assumed that the Volatility Adjustment will increase by 10 bps (2021: +11 bps). |
| Mortgage spread | Measured as the impact of a 50 bps increase of spreads on mortgages. |
| Equity risk | Measured as the impact of a 20% downward movement in equity prices. |
| Property risk | Measured as the impact of a 10% downward movement in the market value of real estate. |
| Spread risk (including impact of spread movement on VA) | Measured as the impact of an increase of spread on loans and corporate bonds of 75 bps. At the same time, it is assumed that the Volatility Adjustment will increase by 18 bps (2021: +19bps) based on reference portfolio. |
| Inflation risk | Measured as the impact of a 30 bps parallel increase of the inflation rates (EUSWI-curve). The extrapolation of the UFI remains unchanged. |
Interest rate risk is the risk that the value of assets, liabilities or financial instruments will change due to fluctuations in interest rates. Many insurance products are exposed to interest rate risk; the value of the products is closely related to the applicable interest rate curve. The interest rate risk of insurance products depends on the term to maturity, interest rate guarantees and profit-sharing features. Life insurance contracts are particularly sensitive to interest rate risk. The required capital for interest rate risk is determined by calculating the impact on the available capital due to changes in the yield curve. Both assets and liabilities are taken into account. The interest rate risk is the maximum loss of (i) an upward shock or (ii) a downward shock of the yield curve according to the prescribed methodology. a.s.r. applies a look through approach for investment funds to assess the interest rate risk.
The interest rate risk is calculated by a relative shock up- and downward shock of the risk-free (basis) yield curve.
All adjustments (credit spread, volatility adjustment) on this yield curve are considered constant. The yield curve is extrapolated to the UFR. The yield curve after shock is not extrapolated again to the UFR.
The used shocks vary by maturity and the absolute shocks are higher for shorter maturities (descending: 75% to 20% and ascending: -70% to -20%):
the yield curve up shock contains a minimum shock of 100bps;
the yield curve after the downward shock is limited to zero (no negative interest rates);
the yield curves of all currencies are shocked simultaneously.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| SCR interest rate risk up | -155 | -239 |
| SCR interest rate risk down | -46 | -550 |
| \u00a0 | \u00a0 | \u00a0 |
| SCR interest rate risk | 155 | 550 |
In 2022 the interest rate risk decreased due to the increase in interest rates.
a.s.r. has assessed various scenarios to determine the sensitivity to interest rate risk. The impact on the solvency ratio is calculated by determining the difference in the change in available and required capital.
| Effect on: | Available capital | Required capital | Ratio | |||
|---|---|---|---|---|---|---|
| Scenario (%-point) | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 |
| UFR 3.2% | -4 | -8 | - | -1 | -4 | -9 |
| Interest rate +1% (2022 incl. UFR 3.45% / 2021 incl. UFR 3.6%) | -5 | -7 | -3 | +18 | -8 | +10 |
| Interest rate -1% (2022 incl. UFR 3.45% / 2021 incl. UFR 3.6%) | +1 | +7 | -15 | -13 | -13 | -7 |
| Interest steepening +10 bps | -1 | -3 | - | - | -1 | -3 |
| Volatility Adjustment -10bp | -7 | -9 | -3 | -2 | -11 | -10 |
Interest rate risk is managed by aligning fixed-income investments to the profile of the liabilities. Among other instruments, swaptions and interest rate swaps are used for hedging the specific interest rate risk arising from interest rate guarantees and profitsharing features in life insurance products.
An interest rate risk policy is in place for a.s.r. Group as well as for the registered insurance companies. All interest rate- sensitive balance sheet items are in scope, including the employee benefit obligations of the Group. The interest rate sensitivity of solvency ratio should not exceed the pre-defined limit. In addition, the exposure to interest rate risk or various term buckets is subject to maximum amounts.
The equity risk depends on the total exposure to equities. Both assets and liabilities are taken into account, as well as the put options on equities. In order to maintain a good understanding of the actual equity risk, a.s.r. applies the look-through approach for investment funds to assess the equity risk. The required capital for equity risk is determined by calculating the impact on the available capital due to an immediate drop in share prices. Both assets and liabilities are taken into account. Stocks listed in regulated markets in countries in the EEA or OECD are shocked by 39% together with the symmetric adjustment of the equity capital charge (type I). Stocks in countries that are not members of the EEA or OECD, unlisted equities, alternative investments, or investment funds in which the look-through principle is not possible, are shocked by 49% together with the symmetric adjustment of the equity capital charge (type II). Investments of a strategic nature are shocked by 22%. The equity capital of the renewable investments qualifying as an infrastructure investment (e.g. wind farm Wieringermeer) is shocked by the 30% infrastructure equity charge.
a.s.r. applied the transitional measure for equity risk for shares, which came to an end at 31 December 2022.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| SCR equity risk - required capital | 821 | 1,194 |
In 2022 the equity risk decreased with \u20ac\u00a0373 million, mainly due to lower share prices which leads to a lower SCR equity risk, both driven by a decreased exposure to equities and a lower risk charge as a result of the symmetric adjustment. Furthermore, the SCR equity risk slightly increased due to the run-off of the transitional measure of equity risk.
| Effect on: | Available capital | Required capital | Ratio | |||
|---|---|---|---|---|---|---|
| Scenario (%-point) | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 |
| Equity prices -20% | -11 | -11 | +15 | +18 | +3 | +6 |
The fair value of equities and similar investments at year-end 2022 was \u20ac\u00a02,604 million (2021: \u20ac\u00a03,259 million). The decrease in 2022 was mainly due to the negative returns on the equity markets.
The equities are diversified across the Netherlands (including participating interests), other European countries and the United States. A limited part of the portfolio consists of investments in emerging markets and alternatives. A portfolio of put options with a value of \u20ac\u00a031 million is in place to mitigate the equity risk.
The table below shows the exposure of the equity portfolio to different categories. The total value is including the equities in externally managed funds. The category Other contains the investments of ASR infrastructure Renewables (AIR) in windmill - and solarparks which are in scope of 'Qualifying infrastructure equities other than corporate' (\u20ac\u00a0251 million). In 2022 the investments in renewables increased, however the exposure in 'Qualifying infrastructures equities other than corporate' decreased due to methodology change. In 2022 the net asset value of AIR is in scope of SCR equity risk instead of the underlying investments.
The property risk depends on the total exposure to real estate. In order to maintain a good understanding of the actual property risk, a.s.r. applies the look through approach for investment funds to assess the property risk.
The required capital for property risk is determined by calculating the impact on the available capital due to an immediate drop in property prices by 25%. Both assets and liabilities are taken into account. The product Agrarische Impact Erfpacht (AIE) has effectively a lower charge (average of 6.5%) due to the underlying risk mitigating characteristics of this product.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| SCR property risk - required capital | 1,068 | 1,125 |
a.s.r. applies look through approach for participations which activities are primarily real estate investments.
The SCR real estate risk decreased with \u20ac\u00a057 million in 2022. The real estate exposure decreased due to (i) transactions and improved look through data of property funds and (ii) higher property prices. Futhermore, the average SCR charge of AIE decreased from 10.8% to 6.5%. As a result of these effects, the required capital for property risk decreased with \u20ac\u00a035 million. The increased impact of LAC TP caused a decrease of \u20ac\u00a022 million.
The sensitivity of the solvency ratio to changes in property value is monitored on a monthly basis. Sensitivity of regulatory solvency (Solvency II) to changes in property prices is shown in the following table.
| Effect on: | Available capital | Required capital | Ratio | |||
|---|---|---|---|---|---|---|
| Scenario (%-point) | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 |
| Property values -10% | -10 | -9 | +4 | +4 | -6 | -6 |
The property risk depends on the total exposure to property, which includes both property investments and property held for own use. The fair value of property was \u20ac\u00a05,001 million at year-end 2022 (2021: \u20ac\u00a05,031 million). The decrease in 2022 (approximately \u20ac\u00a030 million) was a result of both transactions (approximately \u20ac\u00a0-50 million) improved look through data of property funds (approximately \u20ac\u00a0-115 million) and increases in property prices (approximately \u20ac\u00a0135 million).
Currency risk measures the impact of losses related to changes in currency exchange rates. The table below provides an overview of all currencies with exposure on liabilities and the currencies with the largest exposures. a.s.r. has currency risk to insurance products in American dollars (USD), Australian dollars (AUD) and Great British Pound (GBP).
In 2021 a.s.r. implemented a new hedge policy for currency risk. For different investment categories a.s.r. has defined a target hedge ratio. The required capital for currency risk is determined by calculating the impact on the available capital due to a change in exchange rates. Both assets and liabilities are taken into account and a look-through approach is applied for investment funds. For each currency the maximum loss due to an upward and a downward shock of 25% is determined except for a small number of currencies where lower shocks are applied (a.o. Danish crown).
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| SCR currency risk - required capital | 135 | 120 |
In 2022 the SCR currency risk has increased with \u20ac\u00a015 million. The main reason for this increase is the reduction of the target hedge ratio for USD credits and Emerging Market Debt.
The exposure to USD has increased due to the reduction of the target hedge ratio for USD credits and Emerging Market Debt.
The total foreign exchange exposure at year-end 2022 was \u20ac\u00a0573 million (2021: \u20ac\u00a0506 million).
Spread risk arises from the sensitivity of the value of assets and liabilities to changes in the level of credit spreads on the relevant risk-free interest rates. a.s.r. has a policy of maintaining a well-diversified high-quality investment grade portfolio while avoiding large risk concentrations. Going forward, the volatility in spreads will continue to have possible short-term effects on the market value of the fixed income portfolio. In the long run, the credit spreads are expected to be realised and to contribute to the growth of the own funds. The required capital for spread risk is determined by calculating the impact on the available capital due to the volatility of credit spreads over the term structure of the risk-free rate.
The required capital for spread risk is equal to the sum of the capital requirements for bonds, structured products and credit derivatives. The capital requirement depends on (i) the market value, (ii) the modified duration and (iii) the credit quality category.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| SCR spread risk - required capital | 876 | 1,118 |
The SCR spread risk decreased in 2022 due to (i) the increased interest rates, which results in lower bond values and (ii) the run off of the bond portfolio, which resulted in lower durations and therefore lower spread risk.
The sensitivity to spread risk is measured as the impact of an increase of spread on loans and corporate bonds of 75 bps. The VA is based on a reference portfolio. An increase of 75 bps of the spreads on loans and corporate bonds within the reference portfolio leads to an increase of the VA with 18 bps in 2022 (2021: 19 bps). The credit spread sensitivity decreased from +20 to +11.
| Effect on: | Available capital | Required capital | Ratio | |||
|---|---|---|---|---|---|---|
| Scenario (%-point) | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 |
| Spread +75bps/(2022: VA +18bps/2021: VA +19bps) | +10 | +15 | +1 | +5 | +11 | +20 |
Spread risk is managed on a portfolio basis within limits and risk budgets established by the relevant risk committees. Where relevant, credit ratings provided by the external rating agencies are used to determine risk budgets and monitor limits. A limited number of fixed-income investments do not have an external rating. These investments are generally assigned an internal rating. Internal ratings are based on methodologies and rating classifications similar to those used by external agencies.
The following tables provide a detailed breakdown of the fixed-income exposure by (i) rating class and (ii) sector. Assets in scope of spread risk are, by definition, not in scope of counterparty default risk. The total exposure of assets in scope of spread risk is \u20ac\u00a020,653 million (2021: \u20ac\u00a028,562 million). The portfolio composition is similar to 2021.
Concentrations of market risk constitute an additional risk to an insurer. Concentration risk is the concentration of exposures to the same counterparty. Other possible concentrations (region, country, etc.) are not in scope. The capital requirement for concentration risk is determined in three steps:
determine the exposure above threshold. The threshold depends on the credit quality of the counterparty;
calculation of the capital requirement for each counterparty, based on a specified factor depending on the credit quality;
aggregation of individual capital requirements for the various counterparties.
According to the spread risk module, bonds and loans guaranteed by a certain government or international organisation are not in scope of concentration risk. Bank deposits can be excluded from concentration risk if they fulfil certain conditions.
a.s.r. continuously monitors exposures in order to avoid concentrations in a single obligor outside of the risk appetite and has an overall limit on the total level of the required capital for market risk concentrations. The calculation of the market risk concentrations applies to the total investment portfolio, where, in line with Solvency II, government bonds are not included.
The required capital for market risk concentrations is nil as per year-end 2022 (2021: nil).
Counterparty default risk reflects possible losses due to unexpected default or deterioration in the credit standing of counterparties and debtors. Counterparty default risk affects several types of assets:
mortgages
savings-linked mortgage loans
derivatives
reinsurance
receivables
cash and deposits
Assets that are in scope of spread risk are, by definition, not in scope of counterparty default risk and vice versa. The Solvency II regime makes a distinction between two types of exposures:
Type 1: These counterparties generally have a rating (reinsurance, derivatives, current account balances, deposits with ceding companies and issued guarantee (letter of credit). The exposures are not diversified.
Type 2: These counterparties are normally unrated (receivables from intermediaries and policyholders, mortgages with private individuals or SMEs). The exposures are generally diversified.
The total capital requirement for counterparty risk is an aggregation of the capital requirement for type 1 exposure and the capital requirement for type 2 exposure by taking 75% correlation.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Type 1 | 103 | 113 |
| Type 2 | 138 | 289 |
| Diversification (negative) | -15 | -21 |
| \u00a0 | \u00a0 | \u00a0 |
| Total | 226 | 381 |
The Counterparty default risk type 1 has decreased due to the decrease in derivatives exposure, which is the results of the change in SCR interest rate risk. The SCR interest rate shock scenario Up is dominant per year-end 2022, while end of 2021 the opposite applied. If an IRS disappears because of a default, this results in a reduction of SCR interest Up. In 2021 the opposite was true, SCR interest Down increased.
The Counterparty default risk type 2 has decreased due to the decreased exposure of the mortgage portfolio. This is driven by the quarterly revaluation of the underlying property and the increase of interest rates. The total counterparty risk has decreased by \u20ac\u00a0155 million.
Mortgages are granted for the account and risk of third parties and for a.s.r.\u2019s own account. The a.s.r. portfolio consists only of Dutch mortgages with a limited counterparty default risk. The fair value of a.s.r.\u2019s mortgage portfolio was \u20ac\u00a09,534 million at year-end 2022 (2021: \u20ac\u00a011,181 million). The decrease in value is driven by a lower market value of the mortgages (due to the increase of interest rates) and positive revaluations of the underlying property.
The Loan-to-Value ratio is based on the value of the mortgage according to Solvency II principals with respect to the a.s.r. calculated collateral. The percentage of mortgages which are in arrears for over three months has increased from 0.02% in December 2021 to 0.03% in December 2022.
The counterparty default risk of the savings-linked mortgage loans ('Spaarlossen') depends on the counterparty. For 13% of the portfolio, the counterparties are Special Purpose Vehicles. The risk is limited due to the robust quality of the mortgages in the Special Purpose Vehicles in combination with the tranching. a.s.r. has a cession-retrocession agreement with the counterparty for 84% of the portfolio, for which the risk is limited. Effectively, a.s.r. recognises the underlying receivable from the counterparty (or in the case of insolvency of the counterparty the mortgage loans transfers as collateral), mitigating the counterparty default risk of the savings-linked mortgage loans.
On September 1, 2021 DNB issued the Q&A and Good Practices document on the treatment of saving mortgages and in December, the Dutch Association of Insurers shared its additional guidance on this subject. These documents provide further requirements and guidelines on the valuation, risk calculations and balance sheet classification. Saving deposits without collateral agreement are considered in the SCR Spread Risk Module. The saving deposits with collateral are treated in the Counterparty Risk Module. Furthermore the collaterised deposits are split in two: a) the outstanding part and corresponding interest are considered in the SCR Counterparty risk type 2 (zero risk); b) the future premiums and corresponding interest are treated as the uncollaterised derivative contract of SCR Counterparty Risk Type 1.
Please note that due to a methodology change, the composition of the savings-linked mortgage loans portfolio for 2021 has been adjusted.
Over the Counter (OTC) derivatives are primarily used by a.s.r. to manage the interest-rate risks incorporated into the insurance liabilities. Interest-rate derivatives are traded with a well-diversified and qualitative dealer panel with whom there is an established International Swaps and Derivatives Association (ISDA) contract and a Credit Support Annex (CSA) in place. These CSAs include specific agreements on the exchange of collateral limiting market and counterparty risk. The outstanding value of the interest rate derivative positions is matched by collateral received from eligible counterparties, minimising the net counterparty default risk.
a.s.r. collaborates with reinsurers for fire and catastrophe risk. When entering into reinsurance contracts for fire and catastrophe, a.s.r. requires the counterparty to be rated at least single A. With respect to long-tail business and other sectors, the minimum permitted rating is single A.
The table above shows the exposure to reinsurers per rating. The total exposure to reinsurers at year-end 2022 was \u20ac\u00a0309 million (2021: \u20ac\u00a0419 million).
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| AAA | 0% | 0% |
| AA | 86% | 93% |
| A | 14% | 6% |
| NR | 0% | 1% |
| Total | 100% | 100% |
The receivables decreased to \u20ac\u00a0632 million in 2022 (2021: \u20ac\u00a0853 million), mainly driven by lower other receivables and lower receivables from Health insurance fund. The receivables of Policyholders increased due to the new VVT-contract. The composition of the receivables is presented in the table below.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Policyholders | 133 | 75 |
| Intermediaries | 65 | 89 |
| Reinsurance receivables | 63 | 83 |
| Health insurance fund | 70 | 148 |
| Other | 301 | 459 |
| \u00a0 | \u00a0 | \u00a0 |
| Total | 632 | 853 |
The current accounts on the balance sheet amounted \u20ac\u00a01,756 million in 2022 (2021: \u20ac\u00a01,517 million).
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| AAA | 0 | 0 |
| AA | 0 | 0 |
| A | 1,744 | 1,489 |
| Lower than A | 11 | 28 |
| Total | 1,756 | 1,517 |
a.s.r. has no deposits in scope of counterparty default risk.
Liquidity risk is the risk that a.s.r. is not able to meet its financial obligations to policyholders and other creditors when they become due and payable, at a reasonable cost and in a timely manner. Liquidity risk is not quantified in the SCR of a.s.r. and is therefore separately discussed.
a.s.r. recognises different levels of liquidity management. First, short-term liquidity management which covers the day-to-day cash requirements and aims to meet short term liquidity risk targets. Second level covers the long-term liquidity management. This, among others, considers the strategic matching of liquidity & funding needs in different business conditions in which market liquidity risk could materialise. Finally stress liquidity management refers to the ability to respond to a potential crisis situation as a result of a market event and/or an a.s.r.-specific event.
Due to rising interest rates in 2022, a.s.r. experienced liquidity outflow as a result of cash variation margin outflow related to the ISDA/CSA- and Clearing agreements of derivatives. The cash outflow was financed by returning earlier received cash collateral to counterparties. As at 31 December 2022 a.s.r. remained a net receiver of cash collateral. Other sources of liquidity risk are (unexpected) lapses in the insurance portfolios and catastrophe risk. a.s.r. monitors its liquidity risk via different risk reporting and monitoring processes including cash management reports, cash flow forecasts and liquidity dashboards in which liquidity outflows are calculated for different stress scenarios. For long-term liquidity management purposes, liquidity is also taken into account in the asset allocation process.
a.s.r.\u2019s liquidity management principle consists of three components. First, a well-diversified funding base in order to provide liquidity for cash management purposes. A portion of assets must be held in cash and invested in unencumbered marketable securities so it can be used for collateralised borrowing or asset sales. In order to cover liquidity needs in stress events a.s.r. has committed repo-facilities in place to ensure liquidity under all market circumstances. Second, the strategic asset allocation should reflect the expected and contingent liquidity needs of liabilities. Finally, an adequate and up-to-date liquidity policy and contingency plan are in place to enable management to act effectively and efficiently in times of crisis.
In managing the liquidity risk from financial liabilities, a.s.r. relies on holding liquid assets comprising cash and cash equivalents and investment grade securities for which there is an active and liquid market. These assets can be readily sold or lend to meet liquidity requirements. As at 31 December 2022, a.s.r. had cash (\u20ac\u00a01,546 million), short-term secured deposits (\u20ac\u00a0700 million) and liquid government bonds (\u20ac\u00a09,309 million).
The following table shows the contractual undiscounted cash flows of the insurance liabilities based on Solvency II. All other line items as well as the total carrying value are based on IFRS principles.
The insurance liabilities include the impact of expected lapses and mortality as well as non profit sharing cash flows. Profit sharing cash flows of insurance liabilities are not taken into account, nor are equities, property and swaptions. Since the portfolio of a.s.r. PPI is fully consolidated, an extra line-item relating to liabilities arising from investment contracts, is included. Furthermore, cash flows of the pension benefit obligations are taken into account.
| \u00a0 | Payable on demand | < 1 years | 1-5 years | 5-10 years | > 10 years | Carrying value |
|---|---|---|---|---|---|---|
| 31 December 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Insurance liabilities | - | 5,234 | 10,236 | 9,845 | 34,294 | 42,639 |
| Liabilities arising from investment contracts | - | 11 | 95 | 225 | 1,669 | 2,000 |
| Pension Benefit Obligation | - | 64 | 540 | 725 | 3,594 | 2,722 |
| Derivatives liabilities | - | 360 | 2,608 | 2,006 | 1,310 | 5,523 |
| Financial liabilities | 2,219 | 1,064 | 215 | 74 | 2,088 | 5,639 |
| Future interest payments | - | 90 | 450 | 563 | 1,390 | - |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total | 2,219 | 6,822 | 14,144 | 13,438 | 44,345 | 58,523 |
| \u00a0 | Payable on demand | < 1 years | 1-5 years | 5-10 years | > 10 years | Carrying value |
|---|---|---|---|---|---|---|
| 31 December 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Insurance liabilities | - | 5,240 | 10,134 | 9,722 | 33,335 | 52,404 |
| Liabilities arising from investment contracts | - | 12 | 89 | 227 | 1,624 | 1,952 |
| Pension Benefit Obligation | - | 54 | 468 | 638 | 3,288 | 3,990 |
| Derivatives liabilities | - | 230 | 183 | 185 | 293 | 759 |
| Financial liabilities | 6,155 | 597 | 250 | 67 | 1,060 | 8,117 |
| Future interest payments | - | 27 | 177 | 218 | 664 | - |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total | 6,155 | 6,159 | 11,301 | 11,056 | 40,264 | 67,223 |
When the amount payable is not fixed the amount reported is determined by reference to the conditions existing at the reporting date.
Financial liabilities payable on demand include the liability recognised for cash collateral received under ISDAs, concluded with counterparties. The related cash collateral received is recognised as cash and cash equivalents, and not part of the liquidity risk exposure table.
Operational risk concerns the risk of direct and / or indirect losses which can occur within a.s.r. as a result of inadequate or failing (changing) internal processes, people, systems and/or as a result of external events. Operational risks occurred are most times being caused by the failure of processes, people, systems, external events or a combination of these factors.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| SCR operational risk - required capital | 200 | 249 |
The SCR for operational risk amounts to \u20ac\u00a0200 million at the end of 2022 (2021: \u20ac\u00a0249 million) and is determined with the standard formula under Solvency II. The operational risk is based on the basic SCR, the volumes of premiums and technical provisions, and the amount of expenses.
Operational risk slightly lower mainly as a result of driven by lower best estimate liabilities due to the increased interest rates in 2022.
The system of internal control includes the management of risks at different levels in the organisation, both operational and strategic.
Strategic risk management aims to identify and manage the most significant risks that may impact a.s.r.\u2019s strategic objectives. Subsequently, the aim is to identify and analyse the risk profile as a whole, including risk interdependencies. The process of strategic risk analysis (SRA) is designed to identify, measure, manage, monitor, report and evaluate those risks that are of strategic importance to a.s.r.:
Through the SRA process, identification of risks is structurally organised through the combined top-down and bottom-up SRA approach. The SRA outcomes are jointly translated into \u2018risk priorities\u2019 and \u2018emerging risks\u2019, in which the most significant risks for a.s.r. are represented.
Through the SRA process, the likelihood and impact of the identified risks are assessed, taking into account (the effectiveness of) risk mitigating measures and planned improvement actions. Information from other processes is used to gain additional insights into the likelihood and impact. One single risk priority can take multiple risks into account. In this manner, the risk priorities provide (further) insights into risk interdependencies.
As part of the SRA processes, the effectiveness of risk mitigating measures and planned measures of improvement is assessed. This means risk management strategies are discussed, resulting in refined risk management strategies.
The output of the SRA process is translated into day-to-day risk management and monitoring and reporting, both at group level and product line levels. At group level, the risk priorities are discussed in the a.s.r. risk committee and the Audit & Risk Committee. At the level of the product lines, risks are discussed in the BRC\u2019s.
Insights regarding likelihood and impact are evaluated against solvency targets in the SRA process. Based on this evaluation, conclusions are formulated regarding the adequacy of solvency objectives at group and individual legal entity level.
One of the areas within Strategic Risk Management concerns climate change. For a.s.r., climate change is a direct and indirect risk, both to its assets and liabilities. In chapter 4.7.3 Identified risks and 4.9.2 Climate change, the relevant climate related risks for a.s.r. are discussed including how these risks are managed. Climate change related risks have had no direct impact on the valuation in the current accounting and disclosures of a.s.r.'s assets and liabilities.
Operational Risk Management (ORM) involves the management of all possible risks that may influence the achievement of the business goals and that can cause financial or reputational damage. ORM includes the identification, analysis, prioritisation and management of these risks in line with the risk appetite. The policy on ORM is drafted and periodically evaluated under the coordination of ERM. The policy is implemented in the decentralised business entities under the responsibility of the management boards. A variety of risks is covered by ORM policy: IT, outsourcing, project, reporting etc.
With the operational targets as a starting point, each business entity performs risk assessments to identify events that could influence these targets. In each business entity the business risk manager facilitates the periodic identification of the key operational risks. All business processes are taken into account to identify the risks. All identified risks are prioritised and recorded in a risk-control framework.
The risk policies prescribe specific risk analyses to be performed to identify and analyse the risks. For IT systems, Information Security Analyses (Dienstverlening en Informatie Veiligheids Analyse) have to be performed and for large outsourcing projects a specific risk analysis is required.
All risks in the risk-control frameworks are assessed on likelihood of defaults and impact. Where applicable, the variables are quantified, but often judgments of subject matter experts are required. Based on the estimation of the variables, each risk is labelled with a specific level of concern (1 to 4). Gross risks with a level of concern 3 or 4 are considered \u2018key\u2019.
For each risk, identified controls are implemented into the processes to keep the level of risk within the agreed risk appetite (level of concern 1 or 2). In general, risks can be accepted, mitigated, avoided or transferred. A large range of options is available to mitigate operational risks, depending on the type. An estimation is made of the net risk, after implementing the control(s). A more effective and efficient approach to managing risks is required driven by increased complexity of processes, data processing and the need for a timely and accurate view on the risk profile. a.s.r. is therefore in the process of shifting towards a more automated approach to manage risks, for example automated controls and data analysis.
The effectiveness of operational risk management is periodically monitored by the business risk manager at each business line or legal entity. For each key control in the risk-control framework a testing calendar is established, based on auditing standards. Each control is tested regularly and the outcomes of the effectiveness of the management of key risks are reported to the management board. Outcomes are also reported to the NFRC and a.s.r. risk committee.
Periodically, yet at least annually, the risk-control frameworks and ORM policies are evaluated to see if revisions are necessary. The risk management function also challenges the business segments and legal entities regarding their risk-control frameworks.
Operational incidents are reported to GRM, in accordance with the operational risk policy. The causes of losses are evaluated in order to learn from these experiences. An overview of the largest operational incidents and the level of operational losses is reported to the NFRC. Actions are defined and implemented to avoid repetition of operational losses.
Through IT risk management, a.s.r. devotes attention to the confidentiality, integrity and availability of ICT, including End User Computations. The logical access control for key systems used in the financial reporting process remains a high priority in order to enhance the integrity of applications and data. The logical access control procedures also prevents fraud by improving segregation of duties and by offsetting current and desired access levels within the systems and applications. Proper understanding of information, security and cyber risks is essential and the reason for which continuous actions are carried out to create awareness among employees. All of a.s.r.\u2019s security measures are tested periodically. To increase cyberresilience, a.s.r. is participating in de DNB Threat Intel Based Ethical Red Teaming exercise.
Operational management can be disrupted significantly by unforeseen circumstances or calamities which could ultimately disrupt the execution of critical and operational processes. Business Continuity Management enables a.s.r. to resume its daily business with limited interruptions and to react quickly and effectively during such situations.
Critical processes and activities and the tools necessary to use for these processes are identified during the Business Impact Analysis. The factors that can threaten the availability of those tools necessary for the critical processes are identified in the Threat Analysis.
a.s.r. defines a crisis as: one or more product lines are (in danger of being) disrupted in their operations, due to a calamity, or when there is a reputational threat. In order to manage the crisis, and to be able to react timely, efficiently and effectively, a.s.r. has set up a crisis organisation.
There is a central crisis team led by a member of the board. Each business line has their own crisis team led by the director of the business line. The continuity of activities and the systems supporting critical activities are regularly tested and crisis teams are trained annually. The objective of the training is to give the teams insights in how they function during emergencies and to help them perform their duties more effectively during such situations. Some important training scenarios used are scenarios that include cyber threats.
On 1 January 2019 Dutch legislation entered into force that addresses the recovery and settlement of insurance companies ('Wet herstel en afwikkeling van verzekeraars' in Dutch). The objective is that insurance companies and supervisors are better prepared against a crisis and that insurance companies can recover from a crisis without government aid. a.s.r. is obliged to have a Preparatory Crisis Plan ('Voorbereidend Crisisplan' in Dutch) in place that has been approved by DNB. In 2021 a.s.r. established its Preparatory Crisis Plan. a.s.r.\u2019s Preparatory Crisis Plan helps to be prepared and supports the organisation in various scenarios of extreme financial stress. The Preparatory Crisis Plan describes and quantifies the measures that can be applied to handle a crisis situation and to resume business. These measures are tested in the scenario analysis, in which the effects of each recovery measure on a.s.r.\u2019s financial position (solvency and liquidity) are quantified. The required preparations for implementing the measures, their implementation time and effectiveness, potential obstacles, impact on clients and operational effects are also assessed. The main purpose of the Preparatory Crisis Plan is to increase the chances of early intervention in the event of a financial crisis situation and to further guarantee that the interest of clients and other stakeholders are protected.
a.s.r. aims to obtain reasonable assurance regarding the adequacy and accuracy of the outcomes of models that are used to provide best estimate values and solvency capital requirements. To this end, multiple instruments are applied, including model validation. Two times a year a model inventory is performed by the productlines to determine if and when a model (re)validation is required. Triggers for model (re)validation are diverse, e.g. regulation, conversions, analysis of change. Materiality is determined by means of an assessment of impact and complexity. Impact and complexity is expressed in terms of High (H), Medium (M), or Low (L). The model inventories are discussed in the Model Committee.
In the pursuit of reasonable assurance, model risk is mitigated and unacceptable deviations are avoided, against acceptable costs.
The solvency ratio stood at 222% as at 31 December 2022 after distribution of the proposed dividend and the proceeds of the \u20ac\u00a00.6 billion share issue and is based on the standard formula as a result of \u20ac\u00a07,346 million EOF and \u20ac\u00a03,307 million SCR.
The decrease of EOF was mainly driven by interest and spread developments and decreasing stock markets partially offset by organic capital creation and an increasing VA. The decrease of required was mainly the result of the development of market risks (interest, equity and spread).
The table above presents the reconciliation of IFRS equity to the solvency II as per 31 December 2022. The main differences between the IFRS equity and EOF Solvency II are:
Adjustment of other equity instruments (the other equity instruments excludes any discretionary interest);
Total net revaluation of assets, such as loans and mortgages, and revaluation of the technical provisions;
Other revaluations mainly elimination of goodwill;
Own fund items, for example addition of subordinated liabilities, other equity instruments (excluding any discretionary interest), foreseeable dividend and valuation difference of financial institutions.
Overall capital management is administered at group level. a.s.r. currently intends to consider investing capital above the management target Solvency II ratio (calculated based on the standard formula) of 160% with the objective of creating value for its shareholders. If and when a.s.r. operates at a certain level (which may change over time) that is considerably above the management target, and it assesses that it cannot invest this capital in value-creating opportunities for a prolonged period of time, a.s.r. may decide, but is not obliged, to return (part of this) capital to its shareholders.
If a.s.r. chooses to return capital, it plans to do so in a form that is efficient for shareholders at that time. a.s.r. actively manages its in-force business, which is expected to result in free capital generation over time. Additionally, business improvement and balance sheet restructuring should improve the capital generation capacity while advancing the risk profile of the company. The legal entities are individually capitalised and excess capital over management\u2019s targets for the legal entities is intended to be upstreamed to the holding company as far as is needed for amongst others covering external dividend, coupon payments on hybrids / senior financing instruments and holding costs and in so far the local regulations and the internal risk appetite statement allow. Excess capital that is upstreamed to the holding company is added to and managed in the holding cash buffer until it is further distributed and used to cover dividends, coupons and other holding expenses. The capital and cash attribution to the holding is closely monitored and managed on a continuous basis.
The group is committed to maintain a strong capital position in order to be a robust and sustainable insurer for its policyholders and other stakeholders. The objective is to maintain a solvency ratio well above the minimum levels as defined in the risk appetite statements and above the relevant management threshold levels. Sensitivities are periodically performed for principal risks and annual stress tests are performed to test a.s.r.\u2019s robustness to withstand moderate to severe scenarios. An additional objective is to achieve a combination of a capital position and a risk profile that is at least in line with a 'single A' rating by Standard & Poor\u2019s.
The SCR is reported on a quarterly basis and proxies are made on both a monthly and weekly basis. The internal minimum solvency ratio for a.s.r. as formulated in the risk appetite statement is 120%. The lower limit solvency target is 140%. The management threshold level for the solvency ratio is above 160%. The solvency ratio stood at 222% at 31 December 2022 after final dividend and proceeds of the share issue, which was comfortably above the internal requirement of 120% and the management threshold level of 160%.
In accordance with a.s.r.\u2019s dividend policy, the liquidity of the underlying entities is not taken into account for the liquidity position of the group. However, the capital is recognised in the capital position of the group, since a.s.r. has the ability to realise the capital of this OTSO, for example by selling the entity. Specifically regarding a.s.r. health basic in 2022, no dividend or capital withdrawals have taken place.
The table below shows how the eligible own funds of a.s.r. relate to the different capital targets.
The required capital stood at \u20ac\u00a03,307 million per 31 December 2022 (2021: \u20ac\u00a04,185 million). The required capital (before diversification) consists for 2022 \u20ac\u00a02,481 million out of market risk and the insurance risk amounted to \u20ac\u00a03,166 million.
a.s.r.'s Solvency II ratio, including financial institutions, complied during 2022 with the applicable externally imposed capital requirement. The capital requirements of the financial institutions fall under a different sectoral supervision regime.
The table below presents the solvency ratio at group level as at the date indicated.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Eligible Own Funds Solvency II | 7,346 | 8,189 |
| Required capital | 3,307 | 4,185 |
| \u00a0 | \u00a0 | \u00a0 |
| Solvency II ratio excluding Financial Institutions | 222% | 196% |
| \u00a0 | \u00a0 | \u00a0 |
| Eligible Own Funds Solvency II | 7,441 | 8,270 |
| Required capital | 3,360 | 4,233 |
| \u00a0 | \u00a0 | \u00a0 |
| Solvency II ratio including Financial Institutions | 221% | 195% |
The Solvency II ratio stood at 222% (excluding financial institutions) as at 31 December 2022 (2021: 196%). The Solvency II ratio including financial institutions stood at 221% as at 31 December 2022 (2021: 195%). The Solvency II ratios presented are not final until filed with the regulators.
Under Solvency II it is permitted to reduce the required capital with the mitigating tax effects resulting from a 1-in-200-year loss (Shock loss). There is a mitigating tax effect to the extent that the Shock loss (BSCR + Operational risk) is deductible for tax purposes and can be compensated with taxable profits. This positive tax effect can only be taken into account when sufficiently substantiated (\u2018more likely than not\u2019). a.s.r. included a beneficial effect on its solvency ratio(s) due to the application of the LAC DT. The LAC DT benefit was \u20ac\u00a0804 million at year-end 2022.
Relevant regulation and current guidance (Delegated Regulation, Level 3 guidelines, Dutch Central Bank Q&A\u2019s and IAS12) is taken into account in the development of the LAC DT methodology.
a.s.r. uses an advanced model for the LAC DT of both a.s.r. life and a.s.r. non-life and a \u2018basic\u2019 model for a.s.r. health basic and supplementary. In the advanced model future fiscal profits are used to underpin the LAC DT, while in the basic model no future profits are used. Both models are and will be updated in case constrained by additional guidance or legislation provided.
The a.s.r. solvency ratio does not include any contingent liability potentially arising from any of the current and / or future legal proceedings in relation to unit-linked insurance contracts or for other products sold, issued or advised on by a.s.r.\u2019s insurance subsidiaries in the past, the reason being that it is impossible at this time to make reliable estimates because the book of policies of a.s.r. dates back many years, contains of a variety of products with different features and conditions and because of the fact that rulings are diverse.
On 22 September 2021 the European Commission published its proposal for the revision of Solvency II. It consists of various changes to the Solvency II framework, affecting most notably the liability discount curve, the risk margin and the volatility adjustment (VA). In July 2022, the Council reached an agreement on their common position. The Parliament has tabled many amendments and will vote on their final position in early 2023. The next step then is for the European Parliament, the Council to negotiate the final legislative texts of the revision of Solvency II. It is expected that the changes will come into effect in 2025 at the earliest and that some measures will include a phase-in period. Quantitative impact of the EC proposal has been analysed and appears to be more favourable compared to the earlier EIOPA advice, but a conclusion is only possible after specifications have been finalised.
Standard & Poor\u2019s confirmed the single A rating of a.s.r., a.s.r. Life and a.s.r. Non-life on 9 September 2022 and on 27 October 2022 for a.s.r. including Aegon Nederland.
| Ratings Standard & Poor's | Type | Rating | Outlook | Rating & outlook since |
|---|---|---|---|---|
| ASR Nederland N.V. | CCR | BBB+ | Stable | 15 May 2014 |
| ASR Levensverzekering N.V. | FSR | A | Stable | 23 August 2012 |
| ASR Levensverzekering N.V. | CCR | A | Stable | 23 August 2012 |
| ASR Schadeverzekering N.V. | FSR | A | Stable | 23 August 2012 |
| ASR Schadeverzekering N.V. | CCR | A | Stable | 23 August 2012 |
CCR: counterparty credit rating
FSR: financial strength rating
Rating reports can be found on the corporate website: www.asrnl.com
On 31 March 2022, a.s.r. announced the acquisition of Sweco Capital Consultants, to be effective from 1 May 2022. With the acquisition, a.s.r.\u2019s Real Estate Investment Manager strengthens is position in real estate and infrastructure investments. The acquisition will add to a.s.r.\u2019s ambition to develop into a full-service real estate investment manager.
As part of the funding for the Aegon transaction, on 22 November 2022 a.s.r. issued a \u20ac\u00a01 billion subordinated Tier 2 capital instrument (\u201cTier 2 Notes\u201d). The Tier 2 Notes are priced at 430 basis points over the 11 year EUR mid-swap rate, with a fixed rate coupon of 7%. The Tier 2 Notes have a scheduled maturity date in 2043 and are first callable at a.s.r.\u2019s discretion in 2033. As the issue is specifically earmarked to fund the Aegon transaction, the Tier 2 Notes are not included in the Solvency position.
On 27 October 2022, the date of the announcement of the Aegon transaction, a.s.r. issued \u20ac\u00a0593.6 million capital by way of an accelerated bookbuild offering of 13,805,720 new ordinary shares in the Company with a nominal value of \u20ac\u00a00.16 per ordinary share. The new shares have been placed at a price of \u20ac\u00a043.00 per new share.
Following the additional capital distributions of \u20ac\u00a075 million per annum in 2020 and 2021, a.s.r. made a further capital distribution of \u20ac\u00a075 million in 2022 between 24 February 2022 and 24 May 2022. In total, 1.798.472 ordinary shares a.s.r. were repurchased at an average price of \u20ac\u00a041.70 per share.\u00a0
Upon announcement of the Aegon transaction, a.s.r. announced that the share buy back programme would be halted, in line with policy. a.s.r.\u2019s capital management states that any additional capital distribution shall be considered in the light of opportunities for larger acquisitions and will be conditional upon our Solvency II ratio (based on the standard formula) to remain above 175% (lowered from 180%), as a.s.r. aims to maintain a robust balance sheet. Any additional distribution will be financed from the available OCC, taking into account the regular dividend, room for potential bolt-on acquisitions and re-risking.
a.s.r. has proposed a total dividend per share of \u20ac\u00a02.70 over the full year 2022 (2021: \u20ac\u00a02.42 per share). Taking into account the interim dividend of \u20ac\u00a00.98 per share, the final dividend amounts to \u20ac\u00a01.72 per share. The final dividend amounts to \u20ac\u00a0254.4 million based on the number of shares per 31 December 2022. Upon announcement of the Aegon transaction, a.s.r. communicated that the progressive dividend policy will be increased to mid to high single digit annual growth until 2025.
In accordance with the Delegated Regulation and the recommendations of DNB, netting on de balance sheet is only allowed with same tax authority and with same timing. Based on this netting principles, a.s.r. group contains a DTA and a DTL on the balance sheet. For tiering principles the split in DTA and DTL is not applicable.
a.s.r. manages its business primarily using operational key performance indicators (KPIs). The operating result is the KPI covering the overall profitability of the business. Furthermore, a.s.r. uses other operational measures such as the COR, the life operating expenses as well as the availability and creation of capital, based on the Solvency II standard formula, as key figures in business decision making (see chapter 6.9).
The operating result is managed and presented at the consolidated a.s.r. and at a segment level (see chapter 6.4.3) and is also the key profitability indicator at business line level. The operating result is an inclusive measure covering all result components that can be influenced by the regular business. As such the operating result is the single bottom line performance indicator covering the performance of the business.
As a.s.r. applies shadow accounting and realised gains and loss accounting under IFRS 4, to ensure that insurance liabilities are adequate and to ensure that capital gains or losses on assets backing the insurance liabilities are allocated to the insurance liabilities, the operating result only differentiates from the IFRS result on items which are not directly related to its business. The capital gains on assets backing the insurance liabilities are allocated to the technical provisions and are released into the (operating) result over time. The operating result therefore reflects all investment related components that can be influenced by the business, as included in the IFRS result, but does not include any impairments on financial instruments, nor capital gains and fair value changes on the assets not backing the insurance liabilities (mostly equity and real estate investments).
It is current market practice for insurers to use an operating result to measure the underlying business performance, however the various current operating result definitions in the market seem to diverge. The a.s.r. operating result definition has limited deviations from the IFRS result. Following the implementation of IFRS 17 the operating result definitions need to be revised which may provide the opportunity to enhance the comparability of the operating result definition in the market.
Operating result is calculated by adjusting result before tax for continuing operations reported in accordance with IFRS, as adjusted for the changes in accounting policies and for the following:
Investment related: investment income of an incidental nature (including capital gains and losses, impairments, fair value changes and inflation linked value changes of bonds) on financial instruments for own account, net of applicable shadow accounting and net of additional provisions recognised for realised gains and losses on financial assets backing the insurance liabilities (\u2018compensation of realised capital gains\u2019) impact;
Incidental items:
Model- and methodological changes of a fundamental nature;
Results of non-core operations;
Non-recurring or one-off items related to the ongoing business; and
Other non-recurring or one-off items, which are not directly related to the core business and/or ongoing business of the group, restructuring costs, regulatory costs not related to business activities, changes in the own pension arrangements and expenses related to M&A activities and start-ups.
Starting from 2022 the inflation linked value changes of bonds are classified as non-operating result. These are added under the header 'investment related'. Also in line with the a.s.r. accounting manual, the non-recurring or one-off items related to the ongoing business are included in the definition above; since 2022, this includes the impact of the increase of minimum wages due to government intervention as a result of high inflation.
The RoE, which is based on the operating result, is defined as:
The operating result adjusted for hybrid expenses and the applicable tax divided by
The IFRS equity adjusted for unrealised capital gains reserve and equity components of non-core activities.
a.s.r. introduced the operating result in 2015 prior to the IPO. The operating result has since been the KPI for managing the profitability of the business. The eight-year comparison of the IFRS result and the operating result shows that the IFRS result for the year is more prone to volatility. In every year except 2020 and 2022 the IFRS result has exceeded the operating result. In 2020 and 2022, the operating result was higher than the IFRS result.
In 2022, indirect investment income decreased (\u20ac\u00a0-226 million), mostly driven by lower, but still positive, revaluations on real estate and lower realised results on fixed income securities. Impairments on investments increased by \u20ac\u00a067 million, related to decreasing equity prices on the stock markets and negative revaluations of participations in fixed income and mortgage funds driven by increasing market interest rates, see chapter 6.5.5 and 6.6.9.
In addition, the impact of incidentals was more negative in 2022 compared to 2021, see below.
The development of the operating results shows a steady increase as the business has grown.
The reconciliation of the IFRS result for the year to the operating result is presented as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Result before tax | 929 | 1,209 |
| minus: investment related | 78 | 303 |
| minus: incidentals | -188 | -104 |
| \u00a0 | \u00a0 | \u00a0 |
| Operating result | 1,039 | 1,009 |
Starting from 2022 the inflation linked value changes are classified as non-operating result. The comparative figures 'investment related' in 2021 have been adjusted accordingly for an amount of \u20ac\u00a012 million.
Indirect investment income amounted to \u20ac\u00a078 million, a decrease of \u20ac\u00a0226 million compared to 2021. The decrease is due to market developments as outlined above. Indirect investment income consists of \u20ac\u00a0-288 million realised gains and losses (2021: \u20ac\u00a0490 million), \u20ac\u00a038 million fair value gains and losses (2021: \u20ac\u00a0110 million), \u20ac\u00a0-95 million impairments (2021: \u20ac\u00a0-22 million), \u20ac\u00a0303 million realised gains and losses release from insurance liabilities (2021: \u20ac\u00a0-263 million addition), \u20ac\u00a058 million inflation linked value changes included in investment income (2021: \u20ac\u00a012 million) and \u20ac\u00a061 million other adjustments mainly to prevent doublecounting with own pension scheme results under incidentals (2021: \u20ac\u00a0-23 million). See respective notes for further information on the movements between 2021 and 2022.
Incidentals decreased by \u20ac\u00a084 million to \u20ac\u00a0-188 million. This was primarily driven by strengthening of Disability provisions related to the 10% increase of the legal minimum wage as of 1 January 2023 (\u20ac\u00a0-91 million). In 2022, incidentals also comprise results of the employee benefit pension scheme, revaluations of property development operations, regulatory project implementation costs (IFRS 17 and IFRS 9), amortisation of intangibles identified in business combinations (VOBA, other intangible assets), M&A costs related to the business combination of a.s.r. and Aegon Nederland N.V. and start-up costs for innovations.
| (in \u20ac\u00a0millions and before profit appropriation) | Note | 31 December 2022 | 31 December 2021 |
|---|---|---|---|
| Non-current assets | \u00a0 | \u00a0 | \u00a0 |
| Intangible assets | 6.11.3.2 | 35 | 38 |
| Property and equipment | 6.11.3.3 | 219 | 229 |
| Subsidiaries | 6.11.3.4 | 6,265 | 8,293 |
| Investments | 6.11.3.5 | 2,039 | 502 |
| Loans to group companies | 6.11.3.6 | 71 | 45 |
| Loans and deposits | 6.11.3.7 | - | 20 |
| Derivatives | \u00a0 | 3 | - |
| Deferred tax assets | 6.11.3.8 | - | 62 |
| Total non-current assets | \u00a0 | 8,633 | 9,191 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Current assets | \u00a0 | \u00a0 | \u00a0 |
| Other receivables | 6.11.3.9 | 3,363 | 3,587 |
| Cash and cash equivalents | 6.11.3.10 | 104 | 18 |
| Total current assets | \u00a0 | 3,468 | 3,605 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total assets | \u00a0 | 12,101 | 12,796 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Equity | \u00a0 | \u00a0 | \u00a0 |
| Share capital | 6.11.3.11 | 24 | 22 |
| Share premium reserve | 6.11.3.11 | 1,533 | 956 |
| Legal reserves | 6.11.3.11 | 27 | 2,445 |
| Actuarial gains and losses | 6.11.3.11 | -168 | -1,055 |
| Retained earnings | 6.11.3.11 | 3,783 | 3,247 |
| Treasury shares | 6.11.3.11 | -79 | -83 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Net result for the year | \u00a0 | 732 | 942 |
| Less: interim dividend | \u00a0 | -131 | -111 |
| Unappropriated result | 6.11.3.11 | 601 | 830 |
| Equity attributable to shareholders | \u00a0 | 5,722 | 6,363 |
| Other equity instruments | 6.11.3.11 | 1,004 | 1,004 |
| Equity attributable to holders of equity instruments | \u00a0 | 6,726 | 7,367 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Provisions | \u00a0 | \u00a0 | \u00a0 |
| Employee benefits | 6.11.3.12 | 2,742 | 4,013 |
| Other provisions | 6.11.3.13 | 3 | 8 |
| Total provisions | \u00a0 | 2,745 | 4,021 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Long-term liabilities | \u00a0 | \u00a0 | \u00a0 |
| Subordinated liabilities | 6.11.3.14 | 1,980 | 992 |
| Borrowings | 6.11.3.15 | 226 | 234 |
| Deferred tax liabilities | 6.11.3.8 | 130 | - |
| Total long-term liabilities | \u00a0 | 2,336 | 1,226 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Current liabilities | \u00a0 | \u00a0 | \u00a0 |
| Due to banks | 6.11.3.16 | 78 | 105 |
| Other liabilities | 6.11.3.17 | 216 | 77 |
| Total current liabilities | \u00a0 | 294 | 182 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total equity and liabilities | \u00a0 | 12,101 | 12,796 |
The numbers following the line items refer to the relevant chapters in the notes to the company financial statements.
| (in \u20ac\u00a0millions) | Note | 2022 | 2021 |
|---|---|---|---|
| Operating expenses | 6.11.3.18 | -141 | -135 |
| Impairments | 6.11.3.7 | 19 | - |
| Other expenses | 6.11.3.19 | -1 | -99 |
| Restructuring provision expenses | \u00a0 | -1 | - |
| Other income | \u00a0 | 4 | - |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Income from subsidiaries and investments | \u00a0 | \u00a0 | \u00a0 |
| Share of result in subsidiaries | 6.11.3.4 | 777 | 1,109 |
| Investment income | 6.11.3.20 | 106 | 51 |
| Realised gains and losses | \u00a0 | 3 | - |
| Fair value gains and losses | \u00a0 | -3 | -2 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest expense | 6.11.3.21 | -61 | -51 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Result before tax | \u00a0 | 702 | 874 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Income tax (expense) / gain | \u00a0 | 30 | 68 |
| Net result | \u00a0 | 732 | 942 |
The share of result in subsidiaries is non-taxable as a result of the participation exemption under Dutch tax law.
The company financial statements are prepared in accordance with Title 9, Book 2 of the Dutch Civil Code. The consolidated financial statements of a.s.r. for 2022 have been prepared in accordance with IFRS \u2013 including the IAS and Interpretations \u2013 as adopted by the EU (EU-IFRS), and with part 9 of the book of the Dutch Civil Code. In accordance with Section 362(8), Book 2 of the Dutch Civil Code, the same accounting policies for the recognition and measurement of assets and liabilities and determination of results applied to the company financial statements are applied to the consolidated financial statements.
Investments in group companies are recognised, using the equity method, in accordance with the accounting policies used in a.s.r.\u2019s consolidated financial statements whereby the goodwill, if any, is presented separately. The share of profit of group companies is reported in conformity with the accounting policies used in a.s.r.\u2019s consolidated financial statements.
Lease contracts are disclosed using IFRS 16 based on the option under RJ 292.1.
Unless stated otherwise, all amounts presented in these financial statements are in millions of \u20ac. Calculations in the tables are made using unrounded figures. As a result rounding differences can occur.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Goodwill | 17 | 17 |
| Intangible assets | 17 | 21 |
| \u00a0 | \u00a0 | \u00a0 |
| Total intangible assets | 35 | 38 |
The goodwill relates to the acquisition of BNG Vermogensbeheer in 2016 (\u20ac\u00a04 million) and to the acquisition of Generali in 2018 (\u20ac\u00a013 million). No impairments were deemed necessary. For more information see chapter 6.5.1.
The change in the amount of intangible assets relates to amortisation which is presented in the operating expenses.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Right-of-use assets: | \u00a0 | \u00a0 |
| Land and buildings owned by subsidiary | 209 | 216 |
| Vehicles | 7 | 10 |
| Other | 3 | 3 |
| \u00a0 | \u00a0 | \u00a0 |
| Total property and equipment | 219 | 229 |
The right-of-use assets includes property and equipment that is leased by a.s.r. Land and buildings owned by subsidiary relates mainly to the a.s.r. head office, which is owned by a.s.r. life.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 229 | 272 |
| Additions | 2 | 3 |
| Depreciation | -11 | -12 |
| Remeasurement | - | -33 |
| Impairments | - | - |
| Other changes | - | -1 |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | 219 | 229 |
| \u00a0 | \u00a0 | \u00a0 |
| Gross carrying amount as at 31 December | 259 | 260 |
| Accumulated depreciation as at 31 December | -40 | -31 |
| Accumulated impairments as at 31 December | - | - |
| \u00a0 | \u00a0 | \u00a0 |
| Net carrying value as at 31 December | 219 | 229 |
Depreciation of property and equipment is recorded in the operating expenses (see chapter 6.11.3.19).
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 8,293 | 7,572 |
| Additions | 39 | 4 |
| Share of result | 777 | 1,109 |
| Dividend received | -753 | -683 |
| Revaluations | -2,091 | 318 |
| Other changes | - | -27 |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | 6,265 | 8,293 |
The decrease in revaluations is mainly due to unrealised losses in a.s.r. life and a.s.r. non-life.
The investments consists of cash invested in government bonds with a maturity of less than one year to optimise the Solvency II ratio, see chapter 6.11.3.10.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 45 | 41 |
| Issues | 26 | 9 |
| Repayments | - | -5 |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | 71 | 45 |
The loans to group companies are \u20ac\u00a071 million (2021: \u20ac\u00a045 million) which are expected to be settled more than one year after the balance sheet date and an average interest rate of 5.90% (2021: 5.14%).
Interest income on loans to group companies amounts to \u20ac\u00a02 million (2021: \u20ac\u00a02 million).
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 20 | 18 |
| Issues | - | 1 |
| Repayments | -1 | - |
| Impairments | 19 | - |
| Other changes | -38 | 1 |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | - | 20 |
An impairment in due from banks was reversed. Other changes mainly relates to the sale of a loan to a.s.r. life.
The deferred tax assets mainly arises from the difference in commercial and fiscal valuation of employee benefits (including the assets resulting from the insurance contracts, which are administrated by a.s.r. life) amounting to \u20ac\u00a0-130 million (2021: \u20ac\u00a0170 million). The deferred tax of the equalisation reserve amounts nil, due to the release of the equalisation reserve in 2022 (2021: \u20ac\u00a0108 million).
The other receivables includes receivables from group companies, which include the receivable with respect to non-qualifying plan assets (see chapter 6.5.17) administered by a.s.r. life amounting to \u20ac\u00a03,193 million (2021: \u20ac\u00a03,308 million). The plan assets administered by a.s.r. life include the separate account to fund future inflation indexation amounting to \u20ac\u00a0372 million as at 31 December 2022 (2021: \u20ac\u00a0192 million). The remaining portion of the receivables from group companies is payable on demand.
In 2022, cash is invested in short-term government bonds, see chapter 6.11.3.5.
Cash and cash equivalents are fully and freely available.
| \u00a0 | Share capital | Share premium reserve | Legal reserves | Actuarial gains and losses | Retained earnings | Treasury shares | Unappropriated result | Other equity instruments | Equity |
|---|---|---|---|---|---|---|---|---|---|
| At 1 January 2022 | 22 | 956 | 2,445 | -1,055 | 3,247 | -83 | 830 | 1,004 | 7,366 |
| Appropriation of the result previous year | - | - | - | - | 830 | - | -830 | - | - |
| Net result for the year | - | - | - | - | - | - | 732 | - | 732 |
| Dividend paid | - | - | - | - | -214 | - | -131 | - | -346 |
| Remeasurement of post-employment benefit obligation | - | - | - | 887 | - | - | - | - | 887 |
| Unrealised change in value | - | - | -2,091 | - | -292 | - | - | - | -2,383 |
| Change in reserves required by law | - | - | -327 | - | 327 | - | - | - | - |
| Discretionary interest on other equity instruments | - | - | - | - | -48 | - | - | - | -48 |
| Treasury shares acquired (-) / sold | - | - | - | - | -0 | -71 | - | - | -71 |
| Increase (decrease) in capital | 2 | 577 | - | - | -68 | 75 | - | - | 586 |
| Other movements | - | - | - | - | 1 | - | - | - | 1 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| At 31 December 2022 | 24 | 1,533 | 27 | -168 | 3,783 | -79 | 601 | 1,004 | 6,725 |
| \u00a0 | Share capital | Share premium reserve | Legal reserves | Actuarial gains and losses | Retained earnings | Treasury shares | Unappropriated result | Other equity instruments | Equity |
|---|---|---|---|---|---|---|---|---|---|
| At 1 January 2021 | 23 | 976 | 1,995 | -1,253 | 3,099 | -82 | 552 | 1,004 | 6,313 |
| Appropriation of the result previous year | - | - | - | - | 552 | - | -552 | - | - |
| Net result for the year | - | - | - | - | - | - | 942 | - | 942 |
| Dividend paid | - | - | - | - | -174 | - | -111 | - | -285 |
| Remeasurement of post-employment benefit obligation | - | - | - | 198 | - | - | - | - | 198 |
| Unrealised change in value | - | - | 318 | - | 7 | - | - | - | 325 |
| Change in reserves required by law | - | - | 133 | - | -133 | - | - | - | - |
| Discretionary interest on other equity instruments | - | - | - | - | -48 | - | - | - | -48 |
| Treasury shares acquired (-) / sold | - | - | - | - | -1 | -78 | - | - | -79 |
| Increase (decrease) in capital | - | -20 | - | - | -57 | 78 | - | - | - |
| Other movements | - | - | - | - | 1 | - | - | - | 1 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| At 31 December 2021 | 22 | 956 | 2,445 | -1,055 | 3,247 | -83 | 830 | 1,004 | 7,366 |
For a breakdown of the share capital, see chapter 6.5.13.1.
The legal reserves relate to the revaluation of investments in group companies. The legal reserves are maintained in relation to the (not yet received as dividend) share in the result (and other additions to equity) of group companies accounted for using the equity method since initial recognition reduced with the amount of dividend that a.s.r. is able to distribute without restrictions. The legal reserves are not freely distributable. See chapter 6.9 for more information on the regulatory restrictions.
The other equity instruments relate to two (2021: two) different hybrid Tier 1 and Tier 2 instruments classified as equity, see chapter 6.5.13.6.
The part of equity attributable to shareholders that is available for dividend distributions is limited by the Dutch Civil Code and the Dutch Supervisory Rules and Regulations (Solvency II requirements). The distribution of capital is restricted in accordance with the Dutch Civil Code for share capital and statutory reserves. The Solvency II requirements stipulate that a.s.r. must maintain a minimum amount of capital.
The freely distributable items is based on the lowest outcome of the restrictions from the Dutch Civil Code and the Solvency II requirements. This is further explained in the table below:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Equity attributable to shareholders | 5,722 | 6,363 |
| Non distributable items | \u00a0 | \u00a0 |
| - Share capital1 | 24 | 22 |
| - Legal reserves | 27 | 2,445 |
| Distributable items based on the Dutch Civil Code | 5,671 | 3,896 |
| \u00a0 | \u00a0 | \u00a0 |
| Reserves available for financial supervision purposes | 7,441 | 8,270 |
| Solvency II requirement under the Financial Supervision Act | 3,360 | 4,233 |
| Distributable items based on the Solvency II requirements | 4,081 | 4,037 |
| \u00a0 | \u00a0 | \u00a0 |
| Freely distributable items (lower of the values above) | 4,081 | 3,896 |
For more information on Solvency II capital management objectives see chapter 6.9.1.
Employee benefits can be broken down as follows (see chapter 6.5.17 for further details):
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Post-employment benefits pensions | 2,722 | 3,990 |
| Post-employment benefits other than pensions | 7 | 9 |
| Post-employment benefit obligation | 2,730 | 3,999 |
| \u00a0 | \u00a0 | \u00a0 |
| Other long-term employee benefits | 12 | 14 |
| \u00a0 | \u00a0 | \u00a0 |
| Total | 2,742 | 4,013 |
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 8 | 18 |
| Additional provisions | 4 | 4 |
| Reversal of unused amounts | -2 | -1 |
| Utilised in course of year | -6 | -13 |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | 3 | 8 |
Provisions primarily relate to provisions for employee restructuring and retained disability risk.
The timing of the outflow of resources related to these provisions is uncertain because of the unpredictability of the outcome and time required for the settlement of disputes.
An amount of \u20ac\u00a03 million (2021: \u20ac\u00a08 million) of the provisions is expected to be settled within twelve months after the balance sheet date.
For information regarding the subordinated liabilities see chapter 6.5.14.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Lease liabilities | 226 | 234 |
| \u00a0 | \u00a0 | \u00a0 |
| Total borrowings | 226 | 234 |
The lease liabilities consist primarily (\u20ac\u00a0216 million, 2021: \u20ac\u00a0221 million) of the lease of the a.s.r. head office from a.s.r. life. The interest rate for the lease of the head office is 1.5% (2021: 1.5%). The maturity of this contract is 33 years, which includes the total of five extension options of five years each.
An amount of \u20ac\u00a012 million (2021: \u20ac\u00a013 million) of the lease liabilities is expected to be settled within twelve months after the balance sheet date.
In 2022 due to banks amounted to \u20ac\u00a078 million (2021: \u20ac\u00a0105 million). The entire amount of due to banks is expected to be settled less than or equal to one year after the balance sheet date.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Accrued interest | 26 | 19 |
| Short-term employee benefits | 16 | 20 |
| Tax payables | 131 | - |
| Other liabilities | 44 | 38 |
| \u00a0 | \u00a0 | \u00a0 |
| Total other liabilities | 216 | 77 |
The carrying amount of other liabilities is a good approximation of their fair value.
The operating expenses of \u20ac\u00a0141 million (2021: \u20ac\u00a0135 million) are operating expenses relating to holding activities. The increase in the operating expenses is mainly a result of an increase in staff expenses. See chapter 6.6.8 for the total operating expenses of the group. Operating expenses also include depreciation of the right-of-use assets owned by subsidiaries of \u20ac\u00a011 million (2021: \u20ac\u00a012 million).
The decrease of \u20ac\u00a098 million relates for \u20ac\u00a090 million to the reassessment of the past service costs related to the defined benefit obligation in 2021 (2022: \u20ac\u00a0nil), see chapter 6.5.17.1.
The investment income of \u20ac\u00a0106 million (2021: \u20ac\u00a051 million) mainly increased as a result from an increase in interest income relating to the employee benefits obligation allocated to the Holding.
The interest expense relates primarily to the interest on subordinated liabilities, interest on employee benefits, interest owed to credit institutions and to the interest on the lease liabilities.
The following fees for the financial years have been charged by KPMG Accountants N.V. to a.s.r., its subsidiaries and other consolidated entities, on an accrual basis.
| Amounts in \u20ac\u00a0thousands | 2022 | 2021 |
|---|---|---|
| Audit of the financial statements | 6,548 | 5,635 |
| Other audit engagements | 1,324 | 829 |
| \u00a0 | \u00a0 | \u00a0 |
| Total audit fees | 7,872 | 6,464 |
Fees for audit engagements include fees paid for the audit of the consolidated and company financial statements, quarterly reports and other reports.
In the above mentioned years no fees were paid for tax-related advisory services to KPMG Accountants N.V. and no fees were paid to other KPMG networks, other than KPMG Accountants N.V.
A related party is a person or entity that has significant influence over another entity, or has the ability to affect the financial and operating policies of the other party. Parties related to a.s.r. include associates, joint ventures, members of the EB, members of the SB, close family members of any person referred to above, entities controlled or significantly influenced by any person referred to above and any other affiliated entity.
The group regularly enters into transactions with related parties during the conduct of its business. These transactions mainly involve loans, deposits and commissions, and are conducted on terms equivalent to those that prevail in arm\u2019s length transactions. These disclosures related to these transactions are included in the relevant note in the company financial statements and in the consolidated financial statements (see primarily chapters 6.7.4 and 6.7.9).
The remuneration of the EB and SB members of a.s.r. is disclosed in chapter 6.7.5.
a.s.r. forms a fiscal unity for corporate income tax and VAT with nearly all of its subsidiaries. The company and its subsidiaries that form part of the fiscal unity are jointly and separately liable for taxation payable by the fiscal entity.
A statement of joint and several liability under section 403, Book 2 of the Dutch Civil Code has been issued by a.s.r. for the companies identified in chapter 6.7.9.
As in 2021, a.s.r. has issued no investment obligations or guarantees to third parties.
Utrecht, 21 March 2023
Jos Baeten
Ewout Hollegien
Ingrid de Swart
Joop Wijn
Herman Hintzen
Sonja Barendregt
Gisella van Vollenhoven
Gerard van Olphen
", "dimensions": { "concept": "ifrs-full:DisclosureOfNotesAndOtherExplanatoryInformationExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-485": { "value": "6.1.1 General information ASR Nederland N.V. (a.s.r.) is the Dutch insurance company and ranks among the top two insurers in the Netherlands. a.s.r. offers a wide range of financial products for consumers, self-employed persons and companies covering non-life, life, income protection and health insurance, group and individual pensions and mortgages. In addition, a.s.r. is active as an asset manager for third parties.a.s.r. is listed on Euronext Amsterdam. Until 19 March 2023 a.s.r. was included in the MidKap index and as of 20 March 2023 a.s.r is included in the AEX index. At year-end, a.s.r. has a total of 4,313 internal FTE\u2019s (2021: 4,155). a.s.r. is a public limited company under Dutch law having its registered office located at Archimedeslaan 10, 3584 BA in Utrecht, the Netherlands. Country of incorporation is the Netherlands. a.s.r. has chosen the Netherlands as \u2018country of origin\u2019 (land van herkomst) for the issued share capital and corporate bonds which are listed on Euronext Amsterdam and Euronext Dublin (Ticker: ASRNL). a.s.r. is registered under number 30070695 in the register of the Chamber of Commerce. The consolidated financial statements are presented in euros (\u20ac), being the functional currency of a.s.r. and all of its group entities. All amounts quoted in these financial statements are in euros and rounded to the nearest million, unless otherwise indicated. Calculations are made using unrounded figures. As a result rounding differences can occur. These statements have been prepared on a going concern basis. The financial statements for 2022 were authorised for issue by the Executive Board (EB) and approved by the Supervisory Board (SB) on 21 March 2023. The financial statements for 2022 will be presented to the Annual General Meeting (AGM) of Shareholders for adoption on 31 May 2023. ", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-486": { "value": "6.1.1 General information ASR Nederland N.V. (a.s.r.) is the Dutch insurance company and ranks among the top two insurers in the Netherlands. a.s.r. offers a wide range of financial products for consumers, self-employed persons and companies covering non-life, life, income protection and health insurance, group and individual pensions and mortgages. In addition, a.s.r. is active as an asset manager for third parties.a.s.r. is listed on Euronext Amsterdam. Until 19 March 2023 a.s.r. was included in the MidKap index and as of 20 March 2023 a.s.r is included in the AEX index. At year-end, a.s.r. has a total of 4,313 internal FTE\u2019s (2021: 4,155). a.s.r. is a public limited company under Dutch law having its registered office located at Archimedeslaan 10, 3584 BA in Utrecht, the Netherlands. Country of incorporation is the Netherlands. a.s.r. has chosen the Netherlands as \u2018country of origin\u2019 (land van herkomst) for the issued share capital and corporate bonds which are listed on Euronext Amsterdam and Euronext Dublin (Ticker: ASRNL). a.s.r. is registered under number 30070695 in the register of the Chamber of Commerce. The consolidated financial statements are presented in euros (\u20ac), being the functional currency of a.s.r. and all of its group entities. All amounts quoted in these financial statements are in euros and rounded to the nearest million, unless otherwise indicated. Calculations are made using unrounded figures. As a result rounding differences can occur. These statements have been prepared on a going concern basis. The financial statements for 2022 were authorised for issue by the Executive Board (EB) and approved by the Supervisory Board (SB) on 21 March 2023. The financial statements for 2022 will be presented to the Annual General Meeting (AGM) of Shareholders for adoption on 31 May 2023. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAuthorisationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-487": { "value": "6.1.1 General information ASR Nederland N.V. (a.s.r.) is the Dutch insurance company and ranks among the top two insurers in the Netherlands. a.s.r. offers a wide range of financial products for consumers, self-employed persons and companies covering non-life, life, income protection and health insurance, group and individual pensions and mortgages. In addition, a.s.r. is active as an asset manager for third parties.a.s.r. is listed on Euronext Amsterdam. Until 19 March 2023 a.s.r. was included in the MidKap index and as of 20 March 2023 a.s.r is included in the AEX index. At year-end, a.s.r. has a total of 4,313 internal FTE\u2019s (2021: 4,155). a.s.r. is a public limited company under Dutch law having its registered office located at Archimedeslaan 10, 3584 BA in Utrecht, the Netherlands. Country of incorporation is the Netherlands. a.s.r. has chosen the Netherlands as \u2018country of origin\u2019 (land van herkomst) for the issued share capital and corporate bonds which are listed on Euronext Amsterdam and Euronext Dublin (Ticker: ASRNL). a.s.r. is registered under number 30070695 in the register of the Chamber of Commerce. The consolidated financial statements are presented in euros (\u20ac), being the functional currency of a.s.r. and all of its group entities. All amounts quoted in these financial statements are in euros and rounded to the nearest million, unless otherwise indicated. Calculations are made using unrounded figures. As a result rounding differences can occur. These statements have been prepared on a going concern basis. The financial statements for 2022 were authorised for issue by the Executive Board (EB) and approved by the Supervisory Board (SB) on 21 March 2023. The financial statements for 2022 will be presented to the Annual General Meeting (AGM) of Shareholders for adoption on 31 May 2023. 6.6.8 Operating expenses See accounting policy KK. Operating expenses \u00a02022 2021 Salaries and wages -316 -292 Social security contributions -41 -37 Employee benefit charges -61 -58 Employee discounts -3 -3 Other short-term employee benefits -11 -6 Total cost of internal staff -432 -396 \u00a0\u00a0\u00a0Cost of external staff -98 -83 Consultancy costs and fees -111 -110 Marketing, advertising and public relations expenses -22 -20 Technology and system costs -71 -63 Amortisation of other intangible assets -11 -10 Depreciation of property, plant and equipment -17 -19 Other operating expenses -17 -24 Total other operating expenses -347 -329 \u00a0\u00a0\u00a0Total operating expenses -779 -725 The increase in total operating expenses is primarily a result of various acquisitions (see chapter 6.4.5), organic growth, and a one-off payment to employees originating from the new collective labor agreement. Other operating expenses include travel and subsistence, telephone and personnel training expenses. Segmentation of a.s.r.'s internal workforce Segments 2022 2021 Non-life 1,541 1,508 Life 488 493 Asset Management 409 373 Distribution and Services 745 706 Holding and Other 1,130 1,075 \u00a0\u00a0\u00a0Total workforce in FTE 4,313 4,155 The increase of a.s.r.'s total internal work force is mainly the result of organic growth. Employees related to administrative activities and overhead are allocated to segment Holding and Other. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-673": { "value": "6.1.1 General information ASR Nederland N.V. (a.s.r.) is the Dutch insurance company and ranks among the top two insurers in the Netherlands. a.s.r. offers a wide range of financial products for consumers, self-employed persons and companies covering non-life, life, income protection and health insurance, group and individual pensions and mortgages. In addition, a.s.r. is active as an asset manager for third parties.a.s.r. is listed on Euronext Amsterdam. Until 19 March 2023 a.s.r. was included in the MidKap index and as of 20 March 2023 a.s.r is included in the AEX index. At year-end, a.s.r. has a total of 4,313 internal FTE\u2019s (2021: 4,155). a.s.r. is a public limited company under Dutch law having its registered office located at Archimedeslaan 10, 3584 BA in Utrecht, the Netherlands. Country of incorporation is the Netherlands. a.s.r. has chosen the Netherlands as \u2018country of origin\u2019 (land van herkomst) for the issued share capital and corporate bonds which are listed on Euronext Amsterdam and Euronext Dublin (Ticker: ASRNL). a.s.r. is registered under number 30070695 in the register of the Chamber of Commerce. The consolidated financial statements are presented in euros (\u20ac), being the functional currency of a.s.r. and all of its group entities. All amounts quoted in these financial statements are in euros and rounded to the nearest million, unless otherwise indicated. Calculations are made using unrounded figures. As a result rounding differences can occur. These statements have been prepared on a going concern basis. The financial statements for 2022 were authorised for issue by the Executive Board (EB) and approved by the Supervisory Board (SB) on 21 March 2023. The financial statements for 2022 will be presented to the Annual General Meeting (AGM) of Shareholders for adoption on 31 May 2023. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-0": { "value": "ASR Nederland N.V.", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-6": { "value": "a.s.r. offers a wide range of financial products for consumers, self-employed persons and companies covering non-life, life, income protection and health insurance, group and individual pensions and mortgages. In addition, a.s.r. is active as an asset manager for third parties.", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-2": { "value": "public limited company", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-4": { "value": "Archimedeslaan 10, 3584 BA", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-5": { "value": "Utrecht", "dimensions": { "concept": "ifrs-full:PrincipalPlaceOfBusiness", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-1": { "value": "the Netherlands", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-3": { "value": "the Netherlands", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-488": { "value": "6.1.2 Statement of compliance The consolidated financial statements of a.s.r. have been prepared in accordance with IFRS \u2013 including the International Accounting Standards (IAS) and Interpretations \u2013 as adopted by the EU (EU-IFRS), and with the financial reporting requirements included in Title 9, Book 2 of the Dutch Civil Code, where applicable. a.s.r.'s\u00a0 interpretation of the EU-IFRS is included in the a.s.r. accounting manual. The accounting policies included in chapter 6.3 are a summary of the relevant accounting policies of the a.s.r. accounting manual.\u00a0Pursuant to the options offered by Section 362, Book 2 of the Dutch Civil Code, a.s.r. has prepared its company financial statements in accordance with the same principles as those used for the consolidated financial statements. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-489": { "value": "6.1.2 Statement of compliance The consolidated financial statements of a.s.r. have been prepared in accordance with IFRS \u2013 including the International Accounting Standards (IAS) and Interpretations \u2013 as adopted by the EU (EU-IFRS), and with the financial reporting requirements included in Title 9, Book 2 of the Dutch Civil Code, where applicable. a.s.r.'s\u00a0 interpretation of the EU-IFRS is included in the a.s.r. accounting manual. The accounting policies included in chapter 6.3 are a summary of the relevant accounting policies of the a.s.r. accounting manual.\u00a0Pursuant to the options offered by Section 362, Book 2 of the Dutch Civil Code, a.s.r. has prepared its company financial statements in accordance with the same principles as those used for the consolidated financial statements. ", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-8": { "value": "418000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:IntangibleAssetsAndGoodwill", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-9": { "value": "428000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:IntangibleAssetsAndGoodwill", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-10": { "value": "679000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:PropertyPlantAndEquipment", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-11": { "value": "556000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:PropertyPlantAndEquipment", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-12": { "value": "664000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:InvestmentProperty", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-13": { "value": "2052000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:InvestmentProperty", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-14": { "value": "79000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:InvestmentAccountedForUsingEquityMethod", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-15": { "value": "102000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:InvestmentAccountedForUsingEquityMethod", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-16": { "value": "25640000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:InvestmentsOtherThanInvestmentsAccountedForUsingEquityMethod", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-17": { "value": "33550000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:InvestmentsOtherThanInvestmentsAccountedForUsingEquityMethod", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-18": { "value": "9912000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:InvestmentsForRiskOfPolicyholders", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-19": { "value": "11574000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:InvestmentsForRiskOfPolicyholders", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-20": { "value": "2000000000", "decimals": -6, "dimensions": { "concept": "ASR:InvestmentContractsAssets", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-21": { "value": "1952000000", "decimals": -6, "dimensions": { "concept": "ASR:InvestmentContractsAssets", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-22": { "value": "17171000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:LoansAndReceivables", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-23": { "value": "15259000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:LoansAndReceivables", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-24": { "value": "5428000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:DerivativeFinancialAssets", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-25": { "value": "6212000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:DerivativeFinancialAssets", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-26": { "value": "119000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:DeferredTaxAssets", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-27": { "value": "0", "decimals": -6, "dimensions": { "concept": "ifrs-full:DeferredTaxAssets", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-28": { "value": "357000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:ReinsuranceContractsHeldThatAreAssets", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-29": { "value": "417000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:ReinsuranceContractsHeldThatAreAssets", "entity": 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"dimensions": { "concept": "ifrs-full:SharePremium", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-40": { "value": "-922000000", "decimals": -6, "dimensions": { "concept": "ASR:RevaluationSurplusAndReserveOfGainsAndLossesOnRemeasuringAvailableForSaleFinancialAssets", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-41": { "value": "1461000000", "decimals": -6, "dimensions": { "concept": "ASR:RevaluationSurplusAndReserveOfGainsAndLossesOnRemeasuringAvailableForSaleFinancialAssets", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-42": { "value": "-168000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:ReserveOfRemeasurementsOfDefinedBenefitPlans", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-43": { "value": "-1055000000", "decimals": -6, 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"unit": "iso4217:EUR" } }, "ixv-393": { "value": "6000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashOutflowForLeases", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2021-01-01T00:00:00/2022-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-491": { "value": "6.3.1 Changes in presentation The current presentation differs from last year\u2019s presentation in some aspects. Where applicable, in accordance with IFRS, comparative figures have been included in the new presentation format, including related disclosures, to ensure comparability. These changes in presentation have no impact on net result nor equity. A. Estimates and assumptions The preparation of the financial statements requires a.s.r. to make estimates, assumptions and judgements in applying accounting policies that have an effect on the reported amounts in the financial statements. These relate primarily to the following: The fair value and impairments of unlisted financial instruments (see accounting policy B and E); The estimated useful life, residual value and fair value of property, plant and equipment, investment property, and intangible assets (see accounting policy C, D and U); The measurement of liabilities arising from insurance contracts (see accounting policy J); Actuarial assumptions used for measuring employee benefit obligations (see chapter 6.5.17); When forming provisions, the required estimate of existing obligations arising from past events; The recoverable amount of impaired assets (see accounting policy B, E and H); The fair value used to determine the net asset value in acquisitions. The estimates and assumptions are based on management\u2019s best knowledge of current facts, actions and events. The actual outcomes may ultimately differ from the results reported earlier on the basis of estimates and assumptions. A detailed explanation of the estimates and assumptions are given in the relevant notes to the consolidated financial statements. As mentioned in paragraph 6.3.4 (accounting policy J) a.s.r. applies shadow accounting. In 2022, triggered by increasing interest rates, a.s.r. enhanced the application of shadow accounting by adding the sequencing of applying shadow accounting, resulting in shadow accounting adjustments related to instruments with a revaluation reserve amount below cost that are made to the level that the Liability Adequacy Test (LAT) will not get triggered (i.e. shows a positive margin). This mirrors the existing unrealised gains treatment, whilst ensuring the adequacy of the insurance liabilities. Further details are disclosed in paragraph 6.5.15. ", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-492": { "value": "6.3.1 Changes in presentation The current presentation differs from last year\u2019s presentation in some aspects. Where applicable, in accordance with IFRS, comparative figures have been included in the new presentation format, including related disclosures, to ensure comparability. These changes in presentation have no impact on net result nor equity. ", "dimensions": { "concept": "ifrs-full:DisclosureOfReclassificationsOrChangesInPresentationExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-493": { "value": "6.3.2 Changes in EU endorsed published IFRS standards and interpretations effective in 2022 In 2022, no changes in EU endorsed published IFRS Standards and Interpretations with a significant impact are relevant to a.s.r. ", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-494": { "value": "The following new standards, amendments to existing standards and interpretations, relevant to a.s.r. and published prior to 1 January 2023 and effective for accounting periods beginning on or after 1 January 2023, were not early adopted by a.s.r.:
IFRS 17: Insurance Contracts (2023);
IFRS 9: Financial Instruments (2023).
IFRS 17 Insurance Contracts revised was issued by the IASB in June 2020 and endorsed by the EU to replace IFRS 4 Insurance Contracts. In December 2021, the IASB issued a limited scope amendment to IFRS 17 related to the classification overlay which has been endorsed by the EU. This approach addresses possible accounting mismatches between financial assets and insurance contract liabilities in the comparative information presented on initial application when IFRS 9 and IFRS 17 become effective at the same time. IFRS 17 and IFRS 9 will be effective from 1 January 2023 and the transition date will be 1 January 2022.
IFRS 17 is expected to increase comparability between insurers by requiring all insurance contracts to be accounted for in a consistent manner. Insurance obligations will be accounted for using current fulfilment value every reporting period with current assumptions and discount rates, \u2013 instead of using the highest value of either the tariff rates (\u2018tariefgrondslagen\u2019) or Solvency II value (as used for the Liability adequacy test) which is currently the a.s.r. accounting policy (see accounting policies J and K). Shadow accounting and provisions for the realised gains and losses on financial assets allocated to insurance contracts have been a significant driver in ensuring that the insurance contract liabilities remain adequate compared to Solvency II valuation of insurance contracts. Shadow accounting and provisions for realised gains and losses will be discontinued under IFRS 17.
This standard represents the most significant change to European insurance accounting requirements in decennia and will have a significant impact on the information presented in the financial statements (the primary statements as well as the disclosures). The standard introduces three models for the measurement of the insurance contracts.
The general model (GM) for the life insurance contracts (including funerals and pension contracts) and income insurance contracts in the Non-life segment and the long-term reinsurance contracts within the life segment.
The variable fee approach (VFA) for contracts with a direct participating feature such as the unit linked type insurance contracts and defined contribution pension type contracts.
The premium allocation approach (PAA) which is a simplified version of the GM and is mainly opted to be used for short-term duration contracts consisting of property and casualty (P&C) and health insurance contracts. PAA is also used for most reinsurance contracts based on the short-term nature of these contracts.
The GM measures insurance liabilities by taking the fulfilment cash flows, being the present value of future cash flows (PVFCF) including a risk adjustment to account for future uncertainty of non-financial risks, and a contractual service margin (CSM). The CSM represents the unearned profits of insurance contracts and will change the recognition of revenue in each reporting period for insurance companies.
The VFA model is required for contracts with direct participating features and although it contains the same basic components as the GM (PVFCF, RA and CSM), the way in which the investments interact and specifically the manner in which the fair value movements of the related assets and returns are recognised differ from the GM, whereby the outcome under VFA provides a better matching in the balance sheet and income statement for these contracts. In applying IFRS 17 for both the GM and VFA, directly attributable acquisition costs are accounted for as part of the insurance liability.
The PAA has similar mechanics as the current IFRS approach and therefore only limited impact on main result drivers and only limited judgmental areas for the underwriting result.
Under current a.s.r.\u2019s accounting policy, revenue for insurance contracts is recognised when premiums are earned or received. Under IFRS 17, the insurance contract revenue depicts the insurance coverage and other services provided arising from the group of insurance contracts at an amount that reflects the consideration to which a.s.r. expects to be entitled in exchange for those insurance contract services. Revenue includes the release of the CSM and RA in profit or loss over the coverage period and excludes the non-distinct investment component when applicable. Insurance service result is a new income statement line item which is effectively a net result on non-financial risks of all insurance contracts. Current economic and non-economic (e.g. actuarial) assumptions are used in remeasuring the fulfilment value at each reporting period. Changes in non-economic assumptions related to future services are absorbed in the CSM, while under IFRS 4 these changes did not have an impact as they were measured based on tariff rates at inception, taking into account shadow accounting and provisions for the realised gains and losses on financial assets allocated to insurance contracts.
The following aspects are important to a.s.r.\u2019s implementation (IFRS 17):
a.s.r. has opted to recognise all insurance finance income or expenses for the reporting period in profit or loss (P&L). a.s.r. also opted to disaggregate the change in the RA for non-financial risk between the insurance service result and insurance finance income or expenses in the income statement.
Given the nature of the service provided to policyholders with GM (Insurance services) and VFA (investment type service) the CSM is released for a group of contracts in line with the services provided and is expected to be generally on a straight-line basis over the expected remaining duration (taking into account contract terms and lapse assumptions) on an individual insurance contract basis.
Although the PAA methodology does not have a CSM, the insurance service revenue will also be generally recognised on a straight-line basis over the insurance contracts duration generally similar to the current accounting treatment.
The incorporation of a RA is a significant change from IFRS 4 but similar to Solvency II risk margin methodology and is recognised in both the liability for remaining coverage (LRC) and the liability for incurred claims (LIC). The RA uses amongst others a 6% Cost of Capital methodology and takes into account diversification in line with Non-Life pricing policy.
Discount rates to discount the expected future fulfilment cash flows are determined using a liquid risk free curve to which an illiquidity premium is added. The risk-free curve is based on the swap rate and includes a credit-risk adjustment and a first smoothing point of 20 years. The illiquidity premium is derived from a.s.r.\u2019s own asset portfolio.
Contracts are grouped together if, at inception, these are in the same portfolio and managed together, (generally based on the Solvency II homogeneous risk groups and disaggregated when needed based on the IFRS 17 assumptions), same level of profitability and recognised within the same annual reporting period (\u2018annual cohorts\u2019) a.s.r. will not make use of the carve-out for annual cohorts on the IFRS 17 standard as endorsed by the EU.
The cashflows included in the contract boundaries are aligned with Solvency II except for initial recognition regarding non-onerous contracts.
a.s.r. will keep using the operating result, adjusted for the different aspects under IFRS 17, as a main KPI performance measure. For insurance contracts in the Non-Life segment the (net) combined ratio will remain the main KPI and will be defined as the sum of insurance service expenses divided by insurance contract revenue.
IFRS 17 must be implemented retrospectively with amendment of comparative figures. However, other approaches are used on transition when the full retrospective approach (FRA) is impracticable. On transition a.s.r. will primarily use the FRA for funeral, P&C and health insurance contracts. The Fair Value Approach (FVA) will be used for most individual life, pension and individual income insurance contracts. The modified retrospective approach (MRA) will be applied for the group income insurance contracts. In the fair value transition approach, the contractual service margin is determined by reference to the fair value of insurance liabilities in a manner consistent with the fair value as determined in the acquisitions over the last number of years. The fair value is based on the compensation for fulfilling the insurance obligations and includes a market based compensation for transferring the risk.
IFRS 9 is effective from 1 January 2018 and EU endorsed. a.s.r. applies the temporary exemption from applying IFRS 9 for predominant insurance entities as permitted by the amendments to IFRS 4. The IFRS 4 amendments postpone the implementation of IFRS 9 until the effective date of the new insurance contracts standard IFRS 17. Due to this exemption, there is currently no impact of IFRS 9 on the consolidated financial statements of a.s.r. but it may have a significant impact on shareholders\u2019 equity, net result and/or other comprehensive income and on the consolidated financial statements of a.s.r. in 2023.
IFRS 9 replaces most of the current IAS 39 Financial Instruments: Recognition and Measurement, and includes requirements for classification and measurement of financial assets and liabilities, impairment of financial assets and hedge accounting.
a.s.r. bases the classification and measurement of financial assets under IFRS 9 on its business model. a.s.r. determined its business model as \u201cother\u201d as a.s.r. manages assets and liabilities on a fair value basis and uses that information to assess the performance and to make decisions. This is also in line with Solvency II. This business model results primarily in a valuation of assets designated at fair value through profit or loss. In many instances, the classification and measurement under IFRS 9 will be similar to IAS 39, although certain differences will arise. The classification and measurement of financial liabilities remains unchanged. The classification and measurement is based on the interaction between IFRS 17 insurance contract accounting and IFRS 9 accounting for financial assets and liabilities, taking into account decisions and guidance prepared in the IFRS 17 and IFRS 9 implementation project.
The following aspects are important to a.s.r.\u2019s implementation (IFRS 9):
Classification and measurement. a.s.r. intends to align the accounting for financial assets under IFRS 9 as much as possible to the accounting for insurance. As a result to avoid accounting mismatches in the income statement, investments backing the insurance contracts will be valued at fair value through profit or loss (excluding equities). These financial instruments consist primarily of government and corporate bonds, loans and mortgages.
In line with Solvency II reporting a.s.r. will account for debt instruments at their \u201cdirty\u201d fair value, thus including any related accrued interest.
Equities will generally be measured at fair value through other comprehensive income (FVOCI). Any gains and losses will not be recycled to the income statement, thereby reducing volatility in the income statement under IFRS 9.
a.s.r. will use the classification overlay approach whereby the 2022 comparative figures will be adjusted retrospectively as though IFRS 9 was implemented on 1 January 2022.
a.s.r. currently does not apply hedge accounting and will not apply hedge accounting under IFRS 9 to its insurance activities.
Although the accounting for the post-employment benefits related to pensions (IAS 19) is unchanged, as a result of the FVTP&L classification of the investments an accounting mismatch arises in the income statement. This is due to the actuarial gain and losses related to the DBO being recognised in OCI (i.e. discount rate, indexation and mortality) while the fair value movements on the investments are recognised in the income statement (FVTP&L). This mismatch will be addressed through the revised operating result.
a.s.r. applies FVTP&L and FVOCI non-recycling to most of the financial instruments. Therefore the changes with respect to the expected credit loss model are limited to the impact on the other receivables in the Distribution & Services and Asset Management segments.
In 2022, the programme IFRS 17 and IFRS 9 entered its final implementation phase. Systems and models were brought into production or are being further improved or reviewed. The opening balance sheet and comparative figures 2022 have been prepared and analysed and included in the audit process. a.s.r. expects all systems, processes, models and the control environment to be implemented before the end of 2023.
The presented condensed opening balance sheet and related disclosures in these consolidated financial statements 2022 are provisional. Since implementation has not been finalised some uncertainties have been identified. Due to the complexity of IFRS 17 and the lack of experience with this new standard this will influence the control environment. Management has taken mitigating measures like the hiring of expertise and resources, performing more thorough analysis. The main areas where finalisation of the implementation is work in progress are the business lines Income and Pensions. The IFRS 17 model validation in the Life segment is also still work in progress. As a result, there is an inherent uncertainty related to the figures presented in the condensed opening balance sheet as at 1 January 2022.
a.s.r. has as part of its opening balance sheet assessed the estimated impact that the initial application of IFRS 17 and IFRS 9 will have on its consolidated financial statements. Based on assessments undertaken to date, the total adjustment (after tax) to the balance of a.s.r.\u2019s total equity is estimated to decrease by \u20ac\u00a00.1 billion at 1 January 2022 and is presented in the condensed balance sheet on the next page. The balance sheet per 31 December 2022 and the income statement for 2022, are still being reviewed by a.s.r. and therefore not finalised for publication.
| (in \u20ac\u00a0billions) | 31 December 2021 | Reclassification | Revaluation | Restated 1 January 2022 |
|---|---|---|---|---|
| Investments | 33.5 | 14.7 | 1.4 | 49.6 |
| Investments on behalf of policyholders | 11.6 | -11.6 | - | - |
| Investments related to direct participating contracts | - | 11.6 | 0.0 | 11.6 |
| Investments related to investment contracts | 2.0 | 0.0 | 0.0 | 2.0 |
| Loans and receivables | 15.3 | -15.3 | - | - |
| Derivatives | 6.2 | 0.2 | 0.0 | 6.4 |
| Reinsurance contracts | 0.4 | -0.4 | - | - |
| Reinsurance contract assets | - | 0.5 | 0.0 | 0.5 |
| Remaining assets (not specified above) | 6.1 | -0.1 | -0.1 | 5.9 |
| Total assets | 75.0 | -0.4 | 1.4 | 76.0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total equity | 7.4 | 0.0 | -0.2 | 7.2 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Subordinated liabilities | 1.0 | 0.0 | -0.0 | 1.0 |
| Liabilities arising from insurance contracts | 37.8 | -37.8 | - | - |
| Liabilities arising from insurance contracts on behalf of policyholders | 14.6 | -14.6 | - | - |
| Insurance contract liabilities | - | 40.4 | 1.8 | 42.2 |
| Liabilities arising from direct participating insurance contracts | - | 12.1 | -0.2 | 11.9 |
| Liabilities arising from investment contracts | 2.0 | 0.0 | 0.0 | 2.0 |
| Employee benefits | 4.0 | - | 0.0 | 4.0 |
| Derivatives | 0.8 | 0.1 | 0.0 | 0.8 |
| Remaining liabilities (not specified above) | 7.6 | -0.7 | -0.1 | 6.8 |
| Total liabilities | 67.7 | -0.4 | 1.6 | 68.8 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total equity and liabilities | 75.0 | -0.4 | 1.4 | 76.0 |
The condensed opening balance sheet is provisional with regard to the insurance contracts and presented in euro billions. The opening balance sheet will be finalised with the publication of the interim financial statements 2023.
The CSM included in the insurance contract liabilities and liabilities arising from direct participating insurance contracts is expected to be in the range between \u20ac\u00a01.7 billion and \u20ac\u00a02.3 billion.
For measuring the insurance contracts a.s.r. has used the best information and knowledge currently available and put internal controls in place to ensure reliable figures. However given the complexity of IFRS 17, the recent transition, increasing experience or changes based on market consensus prior to publication of the interim financial statements 2023, certain assumptions and calculations might improve resulting in an amended opening balance sheet. Any changes or adjustments may have an impact on the measurement of the insurance contracts (including CSM) and total equity.
The accounting policy choices made when implementing IFRS 17 and IFRS 9 aim to reduce the net volatility as presented in the income statement and to avoid accounting mismatches where possible. However, volatility in the shareholders\u2019 equity and net result is still expected to increase significantly compared to reporting under IFRS 4. As a result, a.s.r. will be steering primarily on a revised operating result, as an alternative performance measure, which is expected to be less volatile than the IFRS result.
", "dimensions": { "concept": "ifrs-full:DescriptionOfExpectedImpactOfInitialApplicationOfNewStandardsOrInterpretations", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-495": { "value": "The preparation of the financial statements requires a.s.r. to make estimates, assumptions and judgements in applying accounting policies that have an effect on the reported amounts in the financial statements. These relate primarily to the following:
The fair value and impairments of unlisted financial instruments (see accounting policy B and E);
The estimated useful life, residual value and fair value of property, plant and equipment, investment property, and intangible assets (see accounting policy C, D and U);
The measurement of liabilities arising from insurance contracts (see accounting policy J);
Actuarial assumptions used for measuring employee benefit obligations (see chapter 6.5.17);
When forming provisions, the required estimate of existing obligations arising from past events;
The recoverable amount of impaired assets (see accounting policy B, E and H);
The fair value used to determine the net asset value in acquisitions.
The estimates and assumptions are based on management\u2019s best knowledge of current facts, actions and events. The actual outcomes may ultimately differ from the results reported earlier on the basis of estimates and assumptions.
A detailed explanation of the estimates and assumptions are given in the relevant notes to the consolidated financial statements.
As mentioned in paragraph 6.3.4 (accounting policy J) a.s.r. applies shadow accounting. In 2022, triggered by increasing interest rates, a.s.r. enhanced the application of shadow accounting by adding the sequencing of applying shadow accounting, resulting in shadow accounting adjustments related to instruments with a revaluation reserve amount below cost that are made to the level that the Liability Adequacy Test (LAT) will not get triggered (i.e. shows a positive margin). This mirrors the existing unrealised gains treatment, whilst ensuring the adequacy of the insurance liabilities. Further details are disclosed in paragraph 6.5.15.
The fair value is the price that a.s.r. would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants on the transaction date or reporting date in the principal market for the asset or liability, or in the most advantageous market for the asset or liability and assuming the highest and best use for non-financial assets. Where possible, a.s.r. determines the fair value of assets and liabilities on the basis of quoted prices in an active market. In the absence of an active market for a financial instrument, the fair value is determined using valuation techniques. Although valuation techniques are based on observable market data where possible, results are affected by the assumptions used, such as discount rates and estimates of future cash flows. In the unlikely event that the fair value of a financial instrument cannot be measured, it is carried at cost.
The following three hierarchical levels are used to determine the fair value of financial instruments and non-financial instruments when accounting for assets and liabilities at fair value and disclosing the comparative fair value of assets and liabilities:
Level 1 includes assets and liabilities whose value is determined by quoted (unadjusted) prices in the primary active market for identical assets or liabilities.
A financial instrument is quoted in an active market if:
Quoted prices are readily and regularly available (from an exchange, dealer, broker, sector organisation, third party pricing service, or a regulatory body); and
These prices represent actual and regularly occurring transactions on an arm\u2019s length basis.
Financial instruments in this category primarily consist of bonds and equities listed in active markets. Cash and cash equivalents and reverse repurchase agreements are also included as level 1.
Determining fair value on the basis of Level 2 involves the use of valuation techniques that use inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is derived from prices of identical or similar assets and liabilities). These observable inputs are obtained from a broker or third party pricing service and include:
Quoted prices in active markets for similar (not identical) assets or liabilities;
Quoted prices for identical or similar assets or liabilities in inactive markets;
Input variables other than quoted prices observable for the asset or liability. These include interest rates and yield curves observable at commonly quoted intervals, volatility, loss ratio, credit risks and default percentages.
This category primarily includes:
Financial instruments: unlisted fixed-interest preference shares and interest rate contracts;
Financial instruments: loans and receivables (excluding mortgage loans and reverse repurchase agreements)1;
Other financial assets and liabilities1.
This category includes unlisted fixed-interest preference shares and interest rate contracts. The valuation techniques for financial instruments use present value calculations and in the case of derivatives, include forward pricing and swap models. The observable market data contains yield curves based on company ratings and characteristics of the unlisted fixed-interest preference shares.
The fair value of the loans and receivables is based on the discounted cash flow method. It is obtained by calculating the present value based on expected future cash flows and assuming an interest rate curve used in the market that includes an additional spread based on the risk profile of the counterparty.
For other financial assets and liabilities where the fair value is disclosed these fair values are based on observable market inputs, primarily being the price paid to acquire the asset or received to assume the liability on initial recognition, assuming that the transactions have taken place on an arm\u2019s length basis. Valuation techniques using present value calculations are applied using current interest rates where the payment terms are longer than one year.
The fair value of the level 3 assets and liabilities are determined in whole or in part using a valuation technique based on assumptions that are not supported by prices from observable current market transactions in the same instrument and for which any significant inputs are not based on available observable market data. The financial assets and liabilities in this category are assessed individually.
Valuation techniques are used to the extent that observable inputs are not available. The basic principle of fair value measurement is still to determine a fair, arm\u2019s length price. Unobservable inputs therefore reflect management\u2019s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). These inputs are generally based on the available observable data (adjusted for factors that contribute towards the value of the asset) and own source information.
This category primarily includes:
Financial instruments: private equity investments (or private equity partners) and equity funds third parties directly investing in real estate;
Financial instruments: loans and receivables \u2013 mortgage loans, and mortgage equity funds;
Investment property, real estate equity funds associates, rural property contracts, buildings for own use and plant (e.g. wind farms);
Financial instruments: asset-backed securities.
The main non-observable market input for private equity investments and equity funds third parties directly investing in real estate is the net asset value of the investment as published by the private equity company (or partner) and real estate equity funds respectively.
The fair value of the mortgage loan portfolio is based on the discounted cash flow method. It is obtained by calculating the present value based on expected future cash flows and assuming an interest rate curve used in the market that includes an additional spread based on the risk profile of the counterparty. The valuation method used to determine the fair value of the mortgage loan portfolio bases the spread on the interest rate curve for discounting the mortgage portfolio cash flows on consumer rates and includes assumptions for originating cost, proposal risk, and the options related to early redemption and moving.
The method of determining the fair value of the mortgage equity funds is similar to that of mortgage loans, however it excludes assumptions for originating cost and is determined within the funds structure.
The following categories of investment properties, buildings for own use and plant is recognised and methods of calculating fair value are distinguished:
Residential \u2013 based on reference transaction and discounted cash flow method;
Retail \u2013 based on reference transaction and income capitalisation method;
Rural \u2013 based on reference transaction and discounted cash flow method;
Offices \u2013 based on reference transaction and discounted cash flow method (including buildings for own use);
Other investment property \u2013 based on reference transaction and discounted cash flow method;
Property under development \u2013 based on both discounted cash flow and income capitalisation method;
Plant - based on reference transaction and discounted cash flow method.
The following valuation methods are available for the calculation of fair value by the external professional appraisers for investment property, including real estate equity funds associates, rural property contracts, buildings for own use and plant:
Independent professional appraisers use transactions in comparable properties and plant as a reference for determining the fair value of the property and plant. The reference transactions of comparable objects are generally based on observable data consisting of the land register \u2018Kadaster\u2019 and the rural land price monitor as published by the Dutch government \u2018grondprijsmonitor\u2019 in an active property market and in some instances accompanied by own use information.
The external professional appraisers valuate the property or plant using the reference transaction in combination with the following valuation methods to ensure the appropriate valuation of the property:
Discounted cash flow method;
Income capitalisation method (property only).
Under the discounted cash flow method, fair value is estimated using assumptions regarding the benefits and liabilities of ownership over the asset\u2019s life including an exit or terminal value. This method involves the projection of a series of cash flows on the investment property or plant dependent on the duration of the lease contracts.
A market-derived discount rate is applied to these projected cash flow series in order to establish the present value of the cash flows associated with the asset. The exit yield is normally determined separately, and differs from the discount rate.
The duration of the cash flows and the specific timing of inflows and outflows are determined by events such as rent reviews, lease renewal and related re-letting, redevelopment, or refurbishment. The appropriate duration is typically driven by market behaviour, which depends on the class of investment property. Periodic cash flow is typically estimated as gross rental income less vacancy (apart from the rural category), non-recoverable expenses, collection losses, lease incentives, maintenance costs, agent and commission costs and other operating and management expenses. The series of periodic net operating income, along with an estimate of the terminal value anticipated at the end of the projection period, is then discounted.
For the categories residential, offices and other in applying the discounted cash flow method, the significant inputs are the discount rate and market rental value. These inputs are verified with the following market observable data (that are adjusted to reflect the state and condition, location, development potential etc. of the specific property):
Market rent per square meter for renewals and their respective re-letting rates;
Reviewed rent per square meter;
Investment transactions of comparable objects;
10 Year Dutch Government Bond Yield (%) as published by the DNB.
When applying the discounted cash flow method for rural valuations, the significant inputs are the discount rate and market lease values. These inputs are verified with the following market observable data (that are adjusted to reflect the state and condition, location, development potential etc. of the specific property):
Market value per acre per region in accordance with the \u2018rural land price monitor\u2019;
10 Year Dutch Government Bond Yield (%) as published by the DNB.
When applying the discounted cash flow method for plant, the significant inputs are the discount rate and energy prices.
Under the income capitalisation method, a property\u2019s fair value is estimated based on the normalised net operating income generated by the property, which is divided by the capitalisation rate (the investor\u2019s rate of return). The difference between gross and net rental income includes the same expense categories as those for the discounted cash flow method with the exception that certain expenses are not measured over time, but included on the basis of a time weighted average, such as the average lease up costs. Under the income capitalisation method, rents above or below the market rent are capitalised separately.
The significant inputs for retail valuations are the reversionary yield and the market or reviewed rental value. These inputs are generally verified with the following observable data (that are adjusted to reflect the state and condition, location, development potential etc. of the specific property):
Market rent per square meter for renewals;
Reviewed rent per square meter (based on the rent reviews performed in accordance with Section 303, Book 7 of the Dutch Civil Code).
The fair value of investment properties and buildings for own use, are appraised annually. Valuations are conducted by independent professional appraisers who hold recognised and relevant professional qualifications and have recent experience in the location and category of the property being valued. Market value property valuations were prepared in accordance with the Royal Institution of Chartered Surveyors Valuation Standards, 7th Edition (the \u2018Red Book\u2019). a.s.r. provides adequate information to the professional appraisers, in order to conduct a comprehensive valuation. The professional appraisers are changed or rotated at least once every three years.
The fair value of the asset-backed securities is based on quotes published by an independent data vendor.
The hierarchical level per individual instrument, or group of instruments, is reassessed at every reporting period. If the instrument, or group of instruments, no longer complies with the criteria of the level in question, it is transferred to the hierarchical level that does meet the criteria. A transfer can for instance occur when the market becomes less liquid or when quoted market prices for the instrument are no longer available.
Intangible assets are carried at cost, less any accumulated amortisation and impairment losses. The residual value and the estimated useful life of intangible assets are assessed on each balance sheet date and adjusted where applicable.
Acquisitions by a.s.r. are accounted for using the acquisition method. Goodwill represents the excess of the cost of an acquisition over the fair value of a.s.r.\u2019s share of the net identifiable assets and liabilities and contingent liabilities of the acquired company at acquisition date. If there is no excess (purchase gain), the carrying amount is directly recognised through the income statement. At the acquisition date, goodwill is allocated to the cash-generating units (CGUs) that are expected to benefit from the business combination.
Goodwill has an indefinite useful life and is not amortised. a.s.r. performs an impairment test annually, or more frequently if events or circumstances warrant so, to ascertain whether goodwill has been subject to impairment. As part of this, the carrying amount of the cash-generating unit to which the goodwill has been allocated is compared with its recoverable amount. The recoverable amount is the higher of a CGU\u2019s fair value less costs to sell and value in use. The carrying value is determined as the net asset value including goodwill. The methodologies applied to arrive at the best estimate of the recoverable amount involves two steps.
In the first step of the impairment test, the best estimate of the recoverable amount of the CGU to which goodwill is allocated is determined separately based on Price to Earnings or Price to EBITDA ratios (fair value less cost to sell model). The ratio used per CGU depends on the characteristics of the entity in question. The main assumptions in this valuation are the multiples for the aforementioned ratios. These are developed internally but are either derived from or corroborated against market information that is related to observable transactions in the market for comparable businesses.
If the outcome of the first step indicates that the difference between the recoverable amount and the carrying value may not be sufficient to support the amount of goodwill allocated to the CGU, step two is performed. In step two an additional analysis is performed in order to determine a recoverable amount in a manner that better addresses the specific characteristics of the relevant CGU.
The additional analysis is based on internal value-in-use models, wherein managements assumptions in relation to cash flow projections for budget periods up to and including five years are used and, if deemed justified, expanded to a longer period given the nature of the insurance activities. Other assumptions, such as the (pre-tax) discount rate and the steady state growth rate, are determined on the advice of an independent external party and are based on a Capital Asset Pricing Model. This methodology is based on a risk-free rate plus a risk premium. Operating assumptions are best estimate assumptions and based on historical data where available. Economic assumptions are based on observable market data and projections of future trends.
If the recoverable amount is lower than its carrying amount, the difference is directly charged to the income statement as an impairment loss.
In the event of impairment, a.s.r. first reduces the carrying amount of the goodwill allocated to the CGU. After that, the carrying amount of the other assets included in the unit is reduced pro rata to the carrying amount of all the assets in the unit.
The Value of Business Acquired (VOBA) represents the difference between the fair value and the carrying amount of insurance portfolios that have been acquired, either directly from another insurer or through the acquisition of a subsidiary. VOBA is recognised as an intangible asset with a finite useful life and amortised over the term of the current insurance contracts at acquisition date, in conjunction with the corresponding obligations. With regard to VOBA, allowance is made for the outcome of the annual compulsory LAT for insurance contracts (see accounting policy J). Amortisation charges related to VOBA are included in net claims and benefits. The negative VOBA is amortised based on the weighted average term of the acquired insurance contracts at acquisition date. Negative VOBA, or an additional provision, is recognised and presented under the Liabilities arising from insurance contracts.
Should VOBA\u2019s carrying amount exceed the difference between the carrying amount of the liabilities arising from insurance contracts and the liabilities identified as part of the LAT and no other adjustment is made to the liabilities as a result of the LAT outcomes, VOBA is impaired to a level where the values are equal. This is charged to the income statement as an impairment loss.
Investment property is property held to earn rent or for capital appreciation or both. Property interests held under operating leases are classified and accounted for as investment property. In some cases, a.s.r. is the owner-occupier of investment properties. If owner-occupied properties cannot be sold separately, they are treated as investment property only if a.s.r. holds an insignificant portion for use in the supply of services or for administrative purposes. Property held for own uses (owner-occupied) is recognised within property, plant and equipment.
Investment property is primarily recognised using the fair value model. After initial recognition, a.s.r. remeasures all of its investment property (see accounting policy B) whereby any gain or loss arising from a change in the fair value of the specific investment property is recognised in the income statement under fair value gains and losses.
Residential property is generally let for an indefinite period. Other investment property is let for defined periods under leases that cannot be terminated early. Some contracts contain renewal options. Rentals are accounted for as investment income in the period to which they relate.
If there is a change in the designation of property, it can lead to:
Reclassification from property, plant and equipment to investment property: at the end of the period of owner-occupation or at inception of an operating lease with a third party; or
Reclassification from investment property to property, plant and equipment: at the commencement of owner-occupation or at the start of developments initiated with a view to selling the property to a third party.
The following categories of investment property are recognised by a.s.r. based primarily on the techniques used in determining the fair value of the investment property:
Retail;
Residential;
Rural;
Offices;
Other (consisting primarily of parking);
Investment property under development.
Property under development for future use as investment property is recognised as investment property. The valuation of investment property takes (expected) vacancies into account.
Borrowing costs directly attributable to the acquisition or development of an asset are capitalised and are part of the cost of that asset. Borrowing costs are capitalised when the following conditions are met:
Expenditures for the asset and borrowing costs are incurred; and
Activities are undertaken that are necessary to prepare an asset for its intended use.
Borrowing costs are no longer capitalised when the asset is ready for use or sale. If the development of assets is interrupted for a longer period, capitalisation of borrowing costs is suspended. If the construction is completed in stages and each part of an asset can be used separately, the borrowing costs for each part that reaches completion are no longer capitalised.
Based on the amended IFRS 4, effective as of 1 January 2018, a.s.r. meets the criteria of a predominant insurer as of 31 December 2015 as the percentage of the total carrying amount of its liabilities connected with insurance related activities to the total carrying amount of all its liabilities exceeded 90% at that date. The liabilities connected with insurance, that are not liabilities directly arising from contracts within the scope of IFRS 4, have a carrying amount of \u20ac\u00a03.3 billion and primarily relate to the derivative liabilities and due to banks as included in the Non-life and Life segments and the subordinated liabilities.
As a result a.s.r. decided to apply the temporary exemption from applying IFRS 9 by deferral until IFRS 17 (new accounting standard for insurance contracts) is implemented. The implementation of amended IFRS 4 had no significant impact on the consolidated financial statements of a.s.r. The additional disclosure requirements are presented in the chapters on Risk management and Other notes.
When a.s.r. becomes party to a financial asset contract, the related assets are classified into one of the following categories:
Financial assets at fair value through profit or loss;
Loans and receivables (see accounting policy H); or
Financial assets available for sale.
The classification of the financial assets is determined at initial recognition. The classification depends on the purpose for which the investments were acquired. For detailed information on the fair value of the financial assets please see accounting policy B.
Financial assets at fair value through profit or loss include:
Derivatives that do not qualify for hedge accounting (see accounting policy B and I);
Financial assets, designated by a.s.r. as carried at fair value through profit or loss. This option is available whenever:
It eliminates or significantly reduces a measurement inconsistency that would otherwise arise from measuring assets or liabilities on different bases (accounting mismatch);
a.s.r. manages a group of financial instruments (assets, liabilities or both) on the basis of fair value in accordance with a documented risk management or investment strategy; or
The financial assets contain one or more embedded derivatives and a.s.r. does not separate the derivative from the host contract; and
Associates for which a.s.r. uses the fair value option under IAS 28.
Financial assets at fair value through profit or loss are stated at fair value. At initial recognition, transaction costs are recognised in the income statement. Realised and unrealised gains and losses in the fair value are also recognised in the income statement.
Financial assets available for sale are financial assets that are not accounted for as financial assets at fair value through profit or loss, or as loans and receivables. On initial recognition, financial assets available for sale are measured at fair value (including transaction costs). They are subsequently measured at fair value, including any unrealised fair value changes in equity and impairments, taking into account any deferred tax liabilities. Financial assets available for sale include equities (ordinary and preference shares), bonds, other fixed-income securities, unit trusts, variable-income securities and interests in investment pools.
At the end of each reporting period, a.s.r. assesses whether there is any objective evidence that a financial asset or a group of financial assets may be impaired. Financial assets at fair value through profit or loss are not subject to impairment testing, because the fair value of these assets reflects any impairment losses.
In the case of equity investments available for sale, a significant or prolonged decline in the fair value of the security below its cost is objective evidence of impairment. a.s.r. considers as a significant or prolonged decline to have occurred if the fair value:
Has fallen 25% or more below cost; or
Has fallen below cost for an uninterrupted period of twelve months or longer.
Fixed-income financial assets available for sale are tested for impairment if objective evidence exists that the counterparty will default. Objective evidence includes: bankruptcy, financial reorganisation or delinquency in payments for more than 30 days. The assessment may also involve circumstances requiring a more detailed estimate, such as in the event of an equity deficit, recurring financial difficulties, downgrading of the credit rating or other creditors reverting to legal action. This assessment is made at each reporting date by the Level of Concern Committee, where the portfolio managers and analysts assign a level of concern from \u2018Nil\u2019 to \u2018Three\u2019 to each of the fixed-income assets. A level of concern \u2018Nil\u2019 means that there is no reason for concern, while a level of concern \u2018Three\u2019 indicates that the situation is critical and that an impairment is highly recommended. The final decision to recognise an impairment loss on a financial asset or to reverse a prior impairment loss is taken in the Impairment and Valuation Committee, chaired by the director ASR Vermogensbeheer N.V.
Impairment losses are recognised directly in the income statement and represent the difference between amortised cost and the fair value at the balance sheet date, net of any previously recognised impairments.
If, at a later stage, the fair value of the financial assets available for sale should increase and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through the income statement. Impairment losses on equities available for sale are not reversed, and any increases in fair value are recorded in equity.
Investments made for the account and risk of policyholders mainly concern unit-linked insurance contracts and group contracts with segregated pools. These investments are carried at fair value. Any realised and unrealised value changes of the investments are recognised in the income statement as gains or losses on investments on behalf of policyholders. Where applicable the investments are consolidated in the financial statements and the breakdown is included in the related disclosure.
Investments related to investment contracts comprise investments made for the account and risk of policyholders. These investments are carried at fair value. Any realised and unrealised value changes of the investments are recognised in the income statement as gains or losses on investments related to investment contracts. Where applicable the investments are consolidated in the financial statements and the breakdown is included in the related disclosure.
Loans and receivables are measured at fair value plus transaction costs on initial recognition. They are subsequently measured at amortised cost based on the effective interest rate method, less impairment losses if deemed necessary.
Receivables from customers are primarily comprised of business loans and mortgage loans.
Receivables from credit institutions concern business loans, deposits and the savings portion of savings mortgages concluded by a.s.r.
Trade and other receivables are receivables arising from a.s.r.\u2019s normal business operations.
At each balance sheet date, a.s.r. assesses whether objective evidence of impairment exists of the loans and receivables.
An individually assessed asset is considered impaired if objective evidence exists that a.s.r. is unable to collect all the amounts due by the counterparty in accordance with the contractual terms and conditions. The amount of the impairment loss is equal to the difference between the asset\u2019s carrying amount and its recoverable amount. The recoverable amount equals the present value of estimated future cash flows, including amounts realised from guarantees and securities provided, discounted at the financial asset\u2019s original effective interest rate.
Loans and receivables that are not individually significant are grouped on the basis of similar credit risk characteristics.
Impairment based on the collective approach is determined by applying risk models for similar financial assets, taking account of historical information and regularly updated parameters for default.
Incurred but not reported (IBNR) losses are also taken into account. IBNR is estimated by reference to historical loss patterns. The current economic climate is reflected, and account is taken of potentially higher credit risk-based on an analysis of the economic situation.
Impairment losses are charged to the income statement. If, at a later stage, the impairment losses should decrease and the decrease can be related objectively to an event occurring after the impairment was recognised, the decrease in the impairment loss is recognised in the income statement.
Derivatives are primarily used by a.s.r. for hedging interest rate and exchange rate risks, for hedging future transactions and the exposure to market risks. Derivatives are mandatorily measured at fair value through profit or loss. a.s.r. does not apply hedge accounting.
This includes liabilities arising from insurance contracts issued by a.s.r. that transfer significant insurance risks, and in some cases also financial risk (FR), from the policyholder to a.s.r.
These liabilities comprise a provision for claims, a provision for current risks, and a provision for unearned premiums. The provision for claims is based on estimates of claims payable. Claims payable relate to unpaid claims and claims handling costs, as well as claims IBNR.
The estimates are based on individual assessments of the reported claims, on past experiences and estimates of trends (expert judgement) in claims behaviour, (national) social factors and economic factors and relevant court decisions. In the process of determining the liabilities, allowance is made for amounts recoverable from third parties and expected subrogation reimbursements.
Loss obligations in respect of occupational disability are discounted. The recognised provisions are sufficient to cover the cost of claims and claims handling fees. a.s.r. discounts obligations for losses only for claims with determinable and fixed payment terms.
Additional provisions are generally recognised for realised gains or losses on financial assets allocated to insurance contracts if and to the extent that the current interest rate is lower than the interest rate that was used in the pricing principles at inception of the insurance contract.
The provision for current risks is based on the estimate of future claims taking into account future premiums.
The provision for unearned premiums is equal to gross unearned premium income less commissions paid. The provision is determined on a time proportional basis.
Future obligations in respect of policy benefits for life insurance contracts are calculated based on a net premium method (the present value of future obligations less the present value of future net premiums) using the same principles as for calculating the premium at inception of the insurance contract. A provision for future administrative expenses is recognised for contracts whose future premium payment period is shorter than the future maturity of the insurance policy, or for which no more premiums are paid. A provision is recognised for part of longevity risk associated with life insurance contracts (e.g. group life and annuity contracts), a.s.r. manages the longevity risk exposure in combination with the mortality risk exposure. No addition to the provision for longevity risk is recognised if the outcome of the LAT (see \u2018IFRS LAT Life\u2019 later in this chapter) indicates that the total amount of the provision is adequate.
Additional provisions are generally recognised for realised gains or losses on financial assets allocated to:
Insurance contracts with participation features;
Non-participating insurance contracts if and to the extent that the current interest rate is lower than the interest rate that was used in the pricing principles at inception of the insurance contract.
These financial assets include fixed-income financial assets available for sale, specific financial assets designated at fair value through profit or loss, and specific derivatives (i.e. swaptions, interest rate swaps and inflation rate swaps). The realised gains or losses are amortised based on the remaining maturity period of the disposed financial assets. The realised gains or losses and the amortisation thereof are included in net insurance claims and benefits.
Participating contracts include additional obligations relating to contractual dividends or profit sharing and are stated net of capitalised interest rate rebates. These interest rate rebates are amortised in accordance with actuarial principles to the extent that the expected surplus interest is realised.
Reinsurance liabilities, with a.s.r. qualifying as the reinsurer and with significant insurance risk being transferred to a.s.r., are accounted for in the same way as regular directly written insurance contracts. They are included under liabilities arising from insurance contracts.
Obligations to insurers where a.s.r. qualifies as the reinsurer, and with no significant insurance risk being transferred to a.s.r., are recognised as debts to policyholders.
Under DPF life insurance contracts, policyholders are assigned, in addition to their entitlement to a guaranteed element, an entitlement to potentially significant additional benefits whose amount or timing is contractually at the discretion of a.s.r. These additional benefits are based on the performance of a specified pool of investment contracts, specific investments held by a.s.r. or on the issuer\u2019s operational result.
Expected entitlements to discretionary benefits are recorded in equity. Once a decision has been taken for discretionary participation features, any related benefits are recognised as liabilities.
The Group\u2019s insurance accounting policies include the application of shadow accounting which is a specialised accounting treatment commonly utilised in insurance accounting and is permitted under IFRS.
The purpose of shadow accounting is to help reduce potential accounting mismatches which can occur when related assets and liabilities:
Are measured on a different basis; or
Have changes in their measurements recorded in different IFRS performance statements (Income Statement or OCI).
Under shadow accounting, adjustments are made to the insurance liability to reflect the unrealised gains or losses from the financial instruments backing these insurance liabilities. For non-participating contracts, adjustments are made to the insurance liability to reflect the unrealised gains from the financial instruments (including derivatives) backing these insurance liabilities. In addition, shadow accounting is applied to the unrealised fair value losses on derivatives held to the extent that they are allocated to the entity.
The shadow accounting policy is applied to certain types of insurance liabilities:
Insurance contracts with participation features;
Non-participating insurance contracts (including disability insurance contracts) if and to the extent that the IFRS LAT would be triggered. This would be the case when current interest rates are lower than the interest rates that were used in the pricing principles at inception of the insurance contract.
Shadow accounting allows a recognised but unrealised gain or loss on an asset to affect the measurement of its insurance liabilities in the same way that a realised gain or loss does.
Shadow accounting is applied to unrealised value changes in fixed-income financial assets available for sale, specific financial assets designated at fair value through profit or loss, and specific derivatives (i.e. swaptions and interest rate and inflation rate swaps) that are backing the liabilities arising from insurance contracts. The related adjustment to the insurance liability is recognised in OCI if, and only if, the unrealised gains or losses are recognised in other comprehensive income. Unrealised gains and losses on assets at fair value through profit or loss are recognised in the income statement with a corresponding adjustment for shadow accounting in the income statement under \u2018Net insurance claims and benefits\u2019.
No shadow accounting is applied to:
Impairments; and
Revaluations of debt instrument that have been subject to impairment.
In 2022, triggered by increasing interest rates, a.s.r. enhanced the application of shadow accounting, see accounting policy A.
The LAT is performed at each reporting date to assess the adequacy of insurance liabilities. The insurance liabilities for the LAT are calculated in accordance with Solvency II, using the Ultimate Forward Rate (UFR) prevailing at the reporting date.
Where the Property & Casualty (P&C) (motor, fire and liability) and Health liabilities business is concerned, the LAT is performed using statistical analyses. Any identified losses are used as a basis for estimating future claims arising from an insurance contract from the portfolio on the balance sheet date. This is the best estimate. An appropriate risk margin is added. The risk margin is determined for each homogeneous risk group using the Cost of Capital (CoC) method that is also used for Life. With effect from 2016 the Non-life CoC rate of 6% is used for all Non-life business, including Disability. The total of best estimate and risk margin is compared to the technical provision recorded in the balance sheet.
The LAT for the disability portfolio is based on cash flow projections using realistic assumptions comparable to the LAT for the life portfolio (see below).
The total of best estimate and risk margin for Non-life segment as a whole, is compared to the technical provision recorded in the balance sheet. If there is a deficiency, the Non-life insurance liabilities are increased to adequate levels through a charge to the income statement.
The LAT is performed at each reporting date to assess the adequacy of insurance liabilities. The insurance liabilities for the LAT are calculated in accordance with Solvency II, using the UFR prevailing at the reporting date.
Liabilities are adequate if the technical provision recognised in a.s.r.\u2019s balance sheet for the Life segment as a whole at least equals the best estimate of the life insurance liabilities including an appropriate risk margin. If there is a deficiency in the life insurance liabilities, those liabilities are increased to adequate levels through a charge to the income statement.
Also unrecognised gains and losses from relevant assets that are not carried at fair value in the balance sheet are taken into account to the extent these assets are allocated to cover the insurance liabilities. The various elements of the LAT are further discussed below.
The best estimate of an insurance contract is the net present value of the projected cash flows of benefits and expenses, less the net present value of premiums. These cash flows are estimated using realistic, \u2018best estimate\u2019, assumptions in relation to mortality, longevity, lapse rate, expense and inflation. The best estimate assumptions regarding mortality and longevity include recent trend assumptions for life expectancy in the Netherlands, as provided by the Dutch Koninklijk Actuarieel Genootschap (Actuarial Association). The best estimate includes the intrinsic value and the time value of financial options and guarantees (TVOG) and is calculated using stochastic techniques.
Where applicable, the participating features of the insurance contracts, such as profit sharing, are taken into account in the future cash flows. The cash flows are discounted using the Euro swap curve including a credit risk adjustment (CRA), with UFR and volatility adjustment (VA).
In unit-linked contracts, the best estimate equals the fund value of the contract less the net present value of future margins on mortality and expense. Where unit-linked contracts with a guaranteed minimum benefit on expiration are concerned, the best estimate is increased by a TVOG.
The risk margin is determined for each homogeneous risk group using the CoC method. For life a CoC rate of 6% (2021: 6%) is used. a.s.r. uses the latest standard Solvency II model, to quantify the risks. The risks that are incorporated in the risk margin are: insurances risks, counterparty default risk related to reinsurance and operational risk. A projection of expected future risks is made and all these risks are projected into the future. The total risk for every future year is determined based on correlations between the risks described in the Solvency II standard model. The projected total risk for every year is multiplied by a cost of capital charge and discounted at the balance sheet date.
Options embedded in insurance contracts are not stated separately. They are treated in the same way as the host contract. These options are recognised in the adequacy test, taking into consideration both the intrinsic and the time value.
Liabilities arising from insurance contracts for the account and risk of policyholders mainly concern unit-linked contracts.
An investment unit is a share in an investment fund that a.s.r. acquires on behalf of the policyholders using net premiums paid by the policyholders. The gain upon maturity of the contract is equal to the current value of the investment units of the fund in question. The current value of an investment unit (unit value) reflects the fair value of the financial assets held by a.s.r.\u2019s investment funds divided by the number of units.
The fair value of the financial liabilities is obtained by multiplying the number of units attributed to each contract holder at the end of the reporting period by the unit value on the same date. Allowance is also made for liabilities arising from technical insurance risks (death, occupational disability).
Some unit-linked contracts include guaranteed benefits at maturity. To cover these guarantees, an additional obligation is recognised in the balance sheet that depends on the current fund value and the level of the guarantee. Actuarial assumptions about future fund developments and mortality are taken into account in the determination this obligation.
Liabilities arising from insurance contracts on behalf of policyholders also include obligations in connection with savings pools and group pension contracts, with policyholders bearing the investment risk. These liabilities also include a provision for compensation of possible high cost of the unit linked insurance contracts, as agreed in 2008 with the consumer organisations. The additional compensation related to the unit linked insurance contracts for the past has been included in the insurance liability and is therefore included in the investment portfolio. In addition, there is still a provision for compensation for claimants and compassionate and supportive policy \u2018flankerend beleid\u2019.
For the LAT relating to the liabilities arising from insurance contracts on behalf of policyholders see accounting policy J.
Investment contracts comprise investment contracts on behalf of policyholders that bear no insurance risk and for which the actual return on investments allocated to the contract is passed on to the policyholder. Investment contract liabilities are recognised when the contract is entered into and is derecognised when the contact expires, is discharged, cancelled or substantially modified.
a.s.r. has with effect 2021, defined contribution (DC) plans for all its employees, including employees that are employed by entities that operate in the Distribution and Service segment. For these DC plans, a.s.r. pays contributions to privately administered pension insurance plans with ASR Levensverzekering N.V. (hereafter a.s.r. life) on a contractual basis. a.s.r. life recognises these contracts as insurance contracts. They are accounted for in accordance with liabilities arising from insurance contracts (accounting policy J).
a.s.r. has no further payment obligations to the employees once the contributions have been paid. The contributions are recognised as operating expenses in the income statement during the period the services are rendered. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.
In addition, a number of defined benefit (DB) plans for own employees exist, which ended at the end of 2020, and were left non-contributory. The defined benefit obligation continues to exist. The plans are schemes under which employees are awarded pension benefits upon retirement, usually dependent on one or more factors, such as years of service and compensation. The defined benefit obligation is calculated at each reporting date by independent actuaries.
The liability in respect of DB plans is the present value of the defined benefit obligation at the balance sheet date, less the fair value of the plan assets where the pension plans are insured by third parties.
a.s.r. life administers most of the post-employment benefit plans and holds the investments that are intended to cover the employee benefit obligation. These investments do not qualify as plan assets in the consolidated financial statements under IFRS.
Pension obligations are calculated using the projected unit credit method. Inherent to this method is the application of actuarial assumptions for discount rates, future salary increases and bonuses, mortality rates and consumer price indices. The assumptions are updated and checked at each reporting date, based on available market data. The assumptions and reports were reviewed by Risk Management.
Actuarial assumptions may differ from actual results due to changes in market conditions, economic trends, mortality trends and other assumptions. Any change in these assumptions can have a significant impact on the defined benefit obligation and future pension costs.
Changes in the expected actuarial assumptions and differences with the actual actuarial outcomes are recognised in the actuarial gains and losses included in other comprehensive income (component of total equity).
When employee benefit plans are modified and when no further obligations exist, a gain or loss, resulting from the changes are recognised directly in the income statement. Consistent with the calculation of a gain or loss on a plan amendment, a.s.r. will use updated actuarial assumptions to determine the current service cost and net interest for the remainder of the annual reporting period upon the time of such amendment. The effect of the asset ceiling, if applicable, is disregarded when calculating the gain or loss on any settlement of the plan.
The financing cost related to employee benefits is recognised in interest expense. The current service costs are included in operating expenses.
Plans that offer benefits for long-service (leave), but do not qualify as a post-employment benefit plan, such as jubilee benefits, are measured at present value using the projected unit credit method and changes are recognised directly in the income statement.
a.s.r. offers post-employment benefit plans, such as arrangement for mortgage loans at a discount (fixed amount, reference date December 2017). The entitlement to these benefits is usually conditional on the employee remaining in service up to retirement age and the completion of a minimum service period. The expected costs of these benefits are accrued over the period of employment using an accounting methodology that is similar to that for DB plans.
A liability is formed for the vacation days which have not been taken at year-end.
Acquisitions are accounted for according to the acquisition method, with the cost of the acquisitions being allocated to the fair value of the acquired identifiable assets, liabilities and contingent liabilities. Goodwill, being the difference between the cost of the acquisition and a.s.r.\u2019s interest in the fair value of the acquired identifiable assets, liabilities and contingent liabilities on the acquisition date, is capitalised as an intangible asset. Any gain as a result of a purchase is recognised directly in the statement of profit or loss. Any change, in the fair value of acquired assets and liabilities at the acquisition date, determined within one year after acquisition, is recognised as an adjustment charged to goodwill in case of a preliminary valuation. Adjustments that occur after a period of one year are recognised in the income statement.
Adjustments to the purchase price that are contingent on future events, and to the extent that these are not already included in the purchase price, are included in the purchase price of the acquisition at the time the adjustment is likely and can be measured reliably.
Where applicable in the notes to the financial statements the acquisitions are recognised in the changes in the composition of the group.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-674": { "value": "The preparation of the financial statements requires a.s.r. to make estimates, assumptions and judgements in applying accounting policies that have an effect on the reported amounts in the financial statements. These relate primarily to the following:
The fair value and impairments of unlisted financial instruments (see accounting policy B and E);
The estimated useful life, residual value and fair value of property, plant and equipment, investment property, and intangible assets (see accounting policy C, D and U);
The measurement of liabilities arising from insurance contracts (see accounting policy J);
Actuarial assumptions used for measuring employee benefit obligations (see chapter 6.5.17);
When forming provisions, the required estimate of existing obligations arising from past events;
The recoverable amount of impaired assets (see accounting policy B, E and H);
The fair value used to determine the net asset value in acquisitions.
The estimates and assumptions are based on management\u2019s best knowledge of current facts, actions and events. The actual outcomes may ultimately differ from the results reported earlier on the basis of estimates and assumptions.
A detailed explanation of the estimates and assumptions are given in the relevant notes to the consolidated financial statements.
As mentioned in paragraph 6.3.4 (accounting policy J) a.s.r. applies shadow accounting. In 2022, triggered by increasing interest rates, a.s.r. enhanced the application of shadow accounting by adding the sequencing of applying shadow accounting, resulting in shadow accounting adjustments related to instruments with a revaluation reserve amount below cost that are made to the level that the Liability Adequacy Test (LAT) will not get triggered (i.e. shows a positive margin). This mirrors the existing unrealised gains treatment, whilst ensuring the adequacy of the insurance liabilities. Further details are disclosed in paragraph 6.5.15.
The fair value is the price that a.s.r. would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants on the transaction date or reporting date in the principal market for the asset or liability, or in the most advantageous market for the asset or liability and assuming the highest and best use for non-financial assets. Where possible, a.s.r. determines the fair value of assets and liabilities on the basis of quoted prices in an active market. In the absence of an active market for a financial instrument, the fair value is determined using valuation techniques. Although valuation techniques are based on observable market data where possible, results are affected by the assumptions used, such as discount rates and estimates of future cash flows. In the unlikely event that the fair value of a financial instrument cannot be measured, it is carried at cost.
The following three hierarchical levels are used to determine the fair value of financial instruments and non-financial instruments when accounting for assets and liabilities at fair value and disclosing the comparative fair value of assets and liabilities:
Level 1 includes assets and liabilities whose value is determined by quoted (unadjusted) prices in the primary active market for identical assets or liabilities.
A financial instrument is quoted in an active market if:
Quoted prices are readily and regularly available (from an exchange, dealer, broker, sector organisation, third party pricing service, or a regulatory body); and
These prices represent actual and regularly occurring transactions on an arm\u2019s length basis.
Financial instruments in this category primarily consist of bonds and equities listed in active markets. Cash and cash equivalents and reverse repurchase agreements are also included as level 1.
Determining fair value on the basis of Level 2 involves the use of valuation techniques that use inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is derived from prices of identical or similar assets and liabilities). These observable inputs are obtained from a broker or third party pricing service and include:
Quoted prices in active markets for similar (not identical) assets or liabilities;
Quoted prices for identical or similar assets or liabilities in inactive markets;
Input variables other than quoted prices observable for the asset or liability. These include interest rates and yield curves observable at commonly quoted intervals, volatility, loss ratio, credit risks and default percentages.
This category primarily includes:
Financial instruments: unlisted fixed-interest preference shares and interest rate contracts;
Financial instruments: loans and receivables (excluding mortgage loans and reverse repurchase agreements)1;
Other financial assets and liabilities1.
This category includes unlisted fixed-interest preference shares and interest rate contracts. The valuation techniques for financial instruments use present value calculations and in the case of derivatives, include forward pricing and swap models. The observable market data contains yield curves based on company ratings and characteristics of the unlisted fixed-interest preference shares.
The fair value of the loans and receivables is based on the discounted cash flow method. It is obtained by calculating the present value based on expected future cash flows and assuming an interest rate curve used in the market that includes an additional spread based on the risk profile of the counterparty.
For other financial assets and liabilities where the fair value is disclosed these fair values are based on observable market inputs, primarily being the price paid to acquire the asset or received to assume the liability on initial recognition, assuming that the transactions have taken place on an arm\u2019s length basis. Valuation techniques using present value calculations are applied using current interest rates where the payment terms are longer than one year.
The fair value of the level 3 assets and liabilities are determined in whole or in part using a valuation technique based on assumptions that are not supported by prices from observable current market transactions in the same instrument and for which any significant inputs are not based on available observable market data. The financial assets and liabilities in this category are assessed individually.
Valuation techniques are used to the extent that observable inputs are not available. The basic principle of fair value measurement is still to determine a fair, arm\u2019s length price. Unobservable inputs therefore reflect management\u2019s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). These inputs are generally based on the available observable data (adjusted for factors that contribute towards the value of the asset) and own source information.
This category primarily includes:
Financial instruments: private equity investments (or private equity partners) and equity funds third parties directly investing in real estate;
Financial instruments: loans and receivables \u2013 mortgage loans, and mortgage equity funds;
Investment property, real estate equity funds associates, rural property contracts, buildings for own use and plant (e.g. wind farms);
Financial instruments: asset-backed securities.
The main non-observable market input for private equity investments and equity funds third parties directly investing in real estate is the net asset value of the investment as published by the private equity company (or partner) and real estate equity funds respectively.
The fair value of the mortgage loan portfolio is based on the discounted cash flow method. It is obtained by calculating the present value based on expected future cash flows and assuming an interest rate curve used in the market that includes an additional spread based on the risk profile of the counterparty. The valuation method used to determine the fair value of the mortgage loan portfolio bases the spread on the interest rate curve for discounting the mortgage portfolio cash flows on consumer rates and includes assumptions for originating cost, proposal risk, and the options related to early redemption and moving.
The method of determining the fair value of the mortgage equity funds is similar to that of mortgage loans, however it excludes assumptions for originating cost and is determined within the funds structure.
The following categories of investment properties, buildings for own use and plant is recognised and methods of calculating fair value are distinguished:
Residential \u2013 based on reference transaction and discounted cash flow method;
Retail \u2013 based on reference transaction and income capitalisation method;
Rural \u2013 based on reference transaction and discounted cash flow method;
Offices \u2013 based on reference transaction and discounted cash flow method (including buildings for own use);
Other investment property \u2013 based on reference transaction and discounted cash flow method;
Property under development \u2013 based on both discounted cash flow and income capitalisation method;
Plant - based on reference transaction and discounted cash flow method.
The following valuation methods are available for the calculation of fair value by the external professional appraisers for investment property, including real estate equity funds associates, rural property contracts, buildings for own use and plant:
Independent professional appraisers use transactions in comparable properties and plant as a reference for determining the fair value of the property and plant. The reference transactions of comparable objects are generally based on observable data consisting of the land register \u2018Kadaster\u2019 and the rural land price monitor as published by the Dutch government \u2018grondprijsmonitor\u2019 in an active property market and in some instances accompanied by own use information.
The external professional appraisers valuate the property or plant using the reference transaction in combination with the following valuation methods to ensure the appropriate valuation of the property:
Discounted cash flow method;
Income capitalisation method (property only).
Under the discounted cash flow method, fair value is estimated using assumptions regarding the benefits and liabilities of ownership over the asset\u2019s life including an exit or terminal value. This method involves the projection of a series of cash flows on the investment property or plant dependent on the duration of the lease contracts.
A market-derived discount rate is applied to these projected cash flow series in order to establish the present value of the cash flows associated with the asset. The exit yield is normally determined separately, and differs from the discount rate.
The duration of the cash flows and the specific timing of inflows and outflows are determined by events such as rent reviews, lease renewal and related re-letting, redevelopment, or refurbishment. The appropriate duration is typically driven by market behaviour, which depends on the class of investment property. Periodic cash flow is typically estimated as gross rental income less vacancy (apart from the rural category), non-recoverable expenses, collection losses, lease incentives, maintenance costs, agent and commission costs and other operating and management expenses. The series of periodic net operating income, along with an estimate of the terminal value anticipated at the end of the projection period, is then discounted.
For the categories residential, offices and other in applying the discounted cash flow method, the significant inputs are the discount rate and market rental value. These inputs are verified with the following market observable data (that are adjusted to reflect the state and condition, location, development potential etc. of the specific property):
Market rent per square meter for renewals and their respective re-letting rates;
Reviewed rent per square meter;
Investment transactions of comparable objects;
10 Year Dutch Government Bond Yield (%) as published by the DNB.
When applying the discounted cash flow method for rural valuations, the significant inputs are the discount rate and market lease values. These inputs are verified with the following market observable data (that are adjusted to reflect the state and condition, location, development potential etc. of the specific property):
Market value per acre per region in accordance with the \u2018rural land price monitor\u2019;
10 Year Dutch Government Bond Yield (%) as published by the DNB.
When applying the discounted cash flow method for plant, the significant inputs are the discount rate and energy prices.
Under the income capitalisation method, a property\u2019s fair value is estimated based on the normalised net operating income generated by the property, which is divided by the capitalisation rate (the investor\u2019s rate of return). The difference between gross and net rental income includes the same expense categories as those for the discounted cash flow method with the exception that certain expenses are not measured over time, but included on the basis of a time weighted average, such as the average lease up costs. Under the income capitalisation method, rents above or below the market rent are capitalised separately.
The significant inputs for retail valuations are the reversionary yield and the market or reviewed rental value. These inputs are generally verified with the following observable data (that are adjusted to reflect the state and condition, location, development potential etc. of the specific property):
Market rent per square meter for renewals;
Reviewed rent per square meter (based on the rent reviews performed in accordance with Section 303, Book 7 of the Dutch Civil Code).
The fair value of investment properties and buildings for own use, are appraised annually. Valuations are conducted by independent professional appraisers who hold recognised and relevant professional qualifications and have recent experience in the location and category of the property being valued. Market value property valuations were prepared in accordance with the Royal Institution of Chartered Surveyors Valuation Standards, 7th Edition (the \u2018Red Book\u2019). a.s.r. provides adequate information to the professional appraisers, in order to conduct a comprehensive valuation. The professional appraisers are changed or rotated at least once every three years.
The fair value of the asset-backed securities is based on quotes published by an independent data vendor.
The hierarchical level per individual instrument, or group of instruments, is reassessed at every reporting period. If the instrument, or group of instruments, no longer complies with the criteria of the level in question, it is transferred to the hierarchical level that does meet the criteria. A transfer can for instance occur when the market becomes less liquid or when quoted market prices for the instrument are no longer available.
Intangible assets are carried at cost, less any accumulated amortisation and impairment losses. The residual value and the estimated useful life of intangible assets are assessed on each balance sheet date and adjusted where applicable.
Acquisitions by a.s.r. are accounted for using the acquisition method. Goodwill represents the excess of the cost of an acquisition over the fair value of a.s.r.\u2019s share of the net identifiable assets and liabilities and contingent liabilities of the acquired company at acquisition date. If there is no excess (purchase gain), the carrying amount is directly recognised through the income statement. At the acquisition date, goodwill is allocated to the cash-generating units (CGUs) that are expected to benefit from the business combination.
Goodwill has an indefinite useful life and is not amortised. a.s.r. performs an impairment test annually, or more frequently if events or circumstances warrant so, to ascertain whether goodwill has been subject to impairment. As part of this, the carrying amount of the cash-generating unit to which the goodwill has been allocated is compared with its recoverable amount. The recoverable amount is the higher of a CGU\u2019s fair value less costs to sell and value in use. The carrying value is determined as the net asset value including goodwill. The methodologies applied to arrive at the best estimate of the recoverable amount involves two steps.
In the first step of the impairment test, the best estimate of the recoverable amount of the CGU to which goodwill is allocated is determined separately based on Price to Earnings or Price to EBITDA ratios (fair value less cost to sell model). The ratio used per CGU depends on the characteristics of the entity in question. The main assumptions in this valuation are the multiples for the aforementioned ratios. These are developed internally but are either derived from or corroborated against market information that is related to observable transactions in the market for comparable businesses.
If the outcome of the first step indicates that the difference between the recoverable amount and the carrying value may not be sufficient to support the amount of goodwill allocated to the CGU, step two is performed. In step two an additional analysis is performed in order to determine a recoverable amount in a manner that better addresses the specific characteristics of the relevant CGU.
The additional analysis is based on internal value-in-use models, wherein managements assumptions in relation to cash flow projections for budget periods up to and including five years are used and, if deemed justified, expanded to a longer period given the nature of the insurance activities. Other assumptions, such as the (pre-tax) discount rate and the steady state growth rate, are determined on the advice of an independent external party and are based on a Capital Asset Pricing Model. This methodology is based on a risk-free rate plus a risk premium. Operating assumptions are best estimate assumptions and based on historical data where available. Economic assumptions are based on observable market data and projections of future trends.
If the recoverable amount is lower than its carrying amount, the difference is directly charged to the income statement as an impairment loss.
In the event of impairment, a.s.r. first reduces the carrying amount of the goodwill allocated to the CGU. After that, the carrying amount of the other assets included in the unit is reduced pro rata to the carrying amount of all the assets in the unit.
The Value of Business Acquired (VOBA) represents the difference between the fair value and the carrying amount of insurance portfolios that have been acquired, either directly from another insurer or through the acquisition of a subsidiary. VOBA is recognised as an intangible asset with a finite useful life and amortised over the term of the current insurance contracts at acquisition date, in conjunction with the corresponding obligations. With regard to VOBA, allowance is made for the outcome of the annual compulsory LAT for insurance contracts (see accounting policy J). Amortisation charges related to VOBA are included in net claims and benefits. The negative VOBA is amortised based on the weighted average term of the acquired insurance contracts at acquisition date. Negative VOBA, or an additional provision, is recognised and presented under the Liabilities arising from insurance contracts.
Should VOBA\u2019s carrying amount exceed the difference between the carrying amount of the liabilities arising from insurance contracts and the liabilities identified as part of the LAT and no other adjustment is made to the liabilities as a result of the LAT outcomes, VOBA is impaired to a level where the values are equal. This is charged to the income statement as an impairment loss.
Investment property is property held to earn rent or for capital appreciation or both. Property interests held under operating leases are classified and accounted for as investment property. In some cases, a.s.r. is the owner-occupier of investment properties. If owner-occupied properties cannot be sold separately, they are treated as investment property only if a.s.r. holds an insignificant portion for use in the supply of services or for administrative purposes. Property held for own uses (owner-occupied) is recognised within property, plant and equipment.
Investment property is primarily recognised using the fair value model. After initial recognition, a.s.r. remeasures all of its investment property (see accounting policy B) whereby any gain or loss arising from a change in the fair value of the specific investment property is recognised in the income statement under fair value gains and losses.
Residential property is generally let for an indefinite period. Other investment property is let for defined periods under leases that cannot be terminated early. Some contracts contain renewal options. Rentals are accounted for as investment income in the period to which they relate.
If there is a change in the designation of property, it can lead to:
Reclassification from property, plant and equipment to investment property: at the end of the period of owner-occupation or at inception of an operating lease with a third party; or
Reclassification from investment property to property, plant and equipment: at the commencement of owner-occupation or at the start of developments initiated with a view to selling the property to a third party.
The following categories of investment property are recognised by a.s.r. based primarily on the techniques used in determining the fair value of the investment property:
Retail;
Residential;
Rural;
Offices;
Other (consisting primarily of parking);
Investment property under development.
Property under development for future use as investment property is recognised as investment property. The valuation of investment property takes (expected) vacancies into account.
Borrowing costs directly attributable to the acquisition or development of an asset are capitalised and are part of the cost of that asset. Borrowing costs are capitalised when the following conditions are met:
Expenditures for the asset and borrowing costs are incurred; and
Activities are undertaken that are necessary to prepare an asset for its intended use.
Borrowing costs are no longer capitalised when the asset is ready for use or sale. If the development of assets is interrupted for a longer period, capitalisation of borrowing costs is suspended. If the construction is completed in stages and each part of an asset can be used separately, the borrowing costs for each part that reaches completion are no longer capitalised.
Based on the amended IFRS 4, effective as of 1 January 2018, a.s.r. meets the criteria of a predominant insurer as of 31 December 2015 as the percentage of the total carrying amount of its liabilities connected with insurance related activities to the total carrying amount of all its liabilities exceeded 90% at that date. The liabilities connected with insurance, that are not liabilities directly arising from contracts within the scope of IFRS 4, have a carrying amount of \u20ac\u00a03.3 billion and primarily relate to the derivative liabilities and due to banks as included in the Non-life and Life segments and the subordinated liabilities.
As a result a.s.r. decided to apply the temporary exemption from applying IFRS 9 by deferral until IFRS 17 (new accounting standard for insurance contracts) is implemented. The implementation of amended IFRS 4 had no significant impact on the consolidated financial statements of a.s.r. The additional disclosure requirements are presented in the chapters on Risk management and Other notes.
When a.s.r. becomes party to a financial asset contract, the related assets are classified into one of the following categories:
Financial assets at fair value through profit or loss;
Loans and receivables (see accounting policy H); or
Financial assets available for sale.
The classification of the financial assets is determined at initial recognition. The classification depends on the purpose for which the investments were acquired. For detailed information on the fair value of the financial assets please see accounting policy B.
Financial assets at fair value through profit or loss include:
Derivatives that do not qualify for hedge accounting (see accounting policy B and I);
Financial assets, designated by a.s.r. as carried at fair value through profit or loss. This option is available whenever:
It eliminates or significantly reduces a measurement inconsistency that would otherwise arise from measuring assets or liabilities on different bases (accounting mismatch);
a.s.r. manages a group of financial instruments (assets, liabilities or both) on the basis of fair value in accordance with a documented risk management or investment strategy; or
The financial assets contain one or more embedded derivatives and a.s.r. does not separate the derivative from the host contract; and
Associates for which a.s.r. uses the fair value option under IAS 28.
Financial assets at fair value through profit or loss are stated at fair value. At initial recognition, transaction costs are recognised in the income statement. Realised and unrealised gains and losses in the fair value are also recognised in the income statement.
Financial assets available for sale are financial assets that are not accounted for as financial assets at fair value through profit or loss, or as loans and receivables. On initial recognition, financial assets available for sale are measured at fair value (including transaction costs). They are subsequently measured at fair value, including any unrealised fair value changes in equity and impairments, taking into account any deferred tax liabilities. Financial assets available for sale include equities (ordinary and preference shares), bonds, other fixed-income securities, unit trusts, variable-income securities and interests in investment pools.
At the end of each reporting period, a.s.r. assesses whether there is any objective evidence that a financial asset or a group of financial assets may be impaired. Financial assets at fair value through profit or loss are not subject to impairment testing, because the fair value of these assets reflects any impairment losses.
In the case of equity investments available for sale, a significant or prolonged decline in the fair value of the security below its cost is objective evidence of impairment. a.s.r. considers as a significant or prolonged decline to have occurred if the fair value:
Has fallen 25% or more below cost; or
Has fallen below cost for an uninterrupted period of twelve months or longer.
Fixed-income financial assets available for sale are tested for impairment if objective evidence exists that the counterparty will default. Objective evidence includes: bankruptcy, financial reorganisation or delinquency in payments for more than 30 days. The assessment may also involve circumstances requiring a more detailed estimate, such as in the event of an equity deficit, recurring financial difficulties, downgrading of the credit rating or other creditors reverting to legal action. This assessment is made at each reporting date by the Level of Concern Committee, where the portfolio managers and analysts assign a level of concern from \u2018Nil\u2019 to \u2018Three\u2019 to each of the fixed-income assets. A level of concern \u2018Nil\u2019 means that there is no reason for concern, while a level of concern \u2018Three\u2019 indicates that the situation is critical and that an impairment is highly recommended. The final decision to recognise an impairment loss on a financial asset or to reverse a prior impairment loss is taken in the Impairment and Valuation Committee, chaired by the director ASR Vermogensbeheer N.V.
Impairment losses are recognised directly in the income statement and represent the difference between amortised cost and the fair value at the balance sheet date, net of any previously recognised impairments.
If, at a later stage, the fair value of the financial assets available for sale should increase and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through the income statement. Impairment losses on equities available for sale are not reversed, and any increases in fair value are recorded in equity.
Investments made for the account and risk of policyholders mainly concern unit-linked insurance contracts and group contracts with segregated pools. These investments are carried at fair value. Any realised and unrealised value changes of the investments are recognised in the income statement as gains or losses on investments on behalf of policyholders. Where applicable the investments are consolidated in the financial statements and the breakdown is included in the related disclosure.
Investments related to investment contracts comprise investments made for the account and risk of policyholders. These investments are carried at fair value. Any realised and unrealised value changes of the investments are recognised in the income statement as gains or losses on investments related to investment contracts. Where applicable the investments are consolidated in the financial statements and the breakdown is included in the related disclosure.
Loans and receivables are measured at fair value plus transaction costs on initial recognition. They are subsequently measured at amortised cost based on the effective interest rate method, less impairment losses if deemed necessary.
Receivables from customers are primarily comprised of business loans and mortgage loans.
Receivables from credit institutions concern business loans, deposits and the savings portion of savings mortgages concluded by a.s.r.
Trade and other receivables are receivables arising from a.s.r.\u2019s normal business operations.
At each balance sheet date, a.s.r. assesses whether objective evidence of impairment exists of the loans and receivables.
An individually assessed asset is considered impaired if objective evidence exists that a.s.r. is unable to collect all the amounts due by the counterparty in accordance with the contractual terms and conditions. The amount of the impairment loss is equal to the difference between the asset\u2019s carrying amount and its recoverable amount. The recoverable amount equals the present value of estimated future cash flows, including amounts realised from guarantees and securities provided, discounted at the financial asset\u2019s original effective interest rate.
Loans and receivables that are not individually significant are grouped on the basis of similar credit risk characteristics.
Impairment based on the collective approach is determined by applying risk models for similar financial assets, taking account of historical information and regularly updated parameters for default.
Incurred but not reported (IBNR) losses are also taken into account. IBNR is estimated by reference to historical loss patterns. The current economic climate is reflected, and account is taken of potentially higher credit risk-based on an analysis of the economic situation.
Impairment losses are charged to the income statement. If, at a later stage, the impairment losses should decrease and the decrease can be related objectively to an event occurring after the impairment was recognised, the decrease in the impairment loss is recognised in the income statement.
Derivatives are primarily used by a.s.r. for hedging interest rate and exchange rate risks, for hedging future transactions and the exposure to market risks. Derivatives are mandatorily measured at fair value through profit or loss. a.s.r. does not apply hedge accounting.
This includes liabilities arising from insurance contracts issued by a.s.r. that transfer significant insurance risks, and in some cases also financial risk (FR), from the policyholder to a.s.r.
These liabilities comprise a provision for claims, a provision for current risks, and a provision for unearned premiums. The provision for claims is based on estimates of claims payable. Claims payable relate to unpaid claims and claims handling costs, as well as claims IBNR.
The estimates are based on individual assessments of the reported claims, on past experiences and estimates of trends (expert judgement) in claims behaviour, (national) social factors and economic factors and relevant court decisions. In the process of determining the liabilities, allowance is made for amounts recoverable from third parties and expected subrogation reimbursements.
Loss obligations in respect of occupational disability are discounted. The recognised provisions are sufficient to cover the cost of claims and claims handling fees. a.s.r. discounts obligations for losses only for claims with determinable and fixed payment terms.
Additional provisions are generally recognised for realised gains or losses on financial assets allocated to insurance contracts if and to the extent that the current interest rate is lower than the interest rate that was used in the pricing principles at inception of the insurance contract.
The provision for current risks is based on the estimate of future claims taking into account future premiums.
The provision for unearned premiums is equal to gross unearned premium income less commissions paid. The provision is determined on a time proportional basis.
Future obligations in respect of policy benefits for life insurance contracts are calculated based on a net premium method (the present value of future obligations less the present value of future net premiums) using the same principles as for calculating the premium at inception of the insurance contract. A provision for future administrative expenses is recognised for contracts whose future premium payment period is shorter than the future maturity of the insurance policy, or for which no more premiums are paid. A provision is recognised for part of longevity risk associated with life insurance contracts (e.g. group life and annuity contracts), a.s.r. manages the longevity risk exposure in combination with the mortality risk exposure. No addition to the provision for longevity risk is recognised if the outcome of the LAT (see \u2018IFRS LAT Life\u2019 later in this chapter) indicates that the total amount of the provision is adequate.
Additional provisions are generally recognised for realised gains or losses on financial assets allocated to:
Insurance contracts with participation features;
Non-participating insurance contracts if and to the extent that the current interest rate is lower than the interest rate that was used in the pricing principles at inception of the insurance contract.
These financial assets include fixed-income financial assets available for sale, specific financial assets designated at fair value through profit or loss, and specific derivatives (i.e. swaptions, interest rate swaps and inflation rate swaps). The realised gains or losses are amortised based on the remaining maturity period of the disposed financial assets. The realised gains or losses and the amortisation thereof are included in net insurance claims and benefits.
Participating contracts include additional obligations relating to contractual dividends or profit sharing and are stated net of capitalised interest rate rebates. These interest rate rebates are amortised in accordance with actuarial principles to the extent that the expected surplus interest is realised.
Reinsurance liabilities, with a.s.r. qualifying as the reinsurer and with significant insurance risk being transferred to a.s.r., are accounted for in the same way as regular directly written insurance contracts. They are included under liabilities arising from insurance contracts.
Obligations to insurers where a.s.r. qualifies as the reinsurer, and with no significant insurance risk being transferred to a.s.r., are recognised as debts to policyholders.
Under DPF life insurance contracts, policyholders are assigned, in addition to their entitlement to a guaranteed element, an entitlement to potentially significant additional benefits whose amount or timing is contractually at the discretion of a.s.r. These additional benefits are based on the performance of a specified pool of investment contracts, specific investments held by a.s.r. or on the issuer\u2019s operational result.
Expected entitlements to discretionary benefits are recorded in equity. Once a decision has been taken for discretionary participation features, any related benefits are recognised as liabilities.
The Group\u2019s insurance accounting policies include the application of shadow accounting which is a specialised accounting treatment commonly utilised in insurance accounting and is permitted under IFRS.
The purpose of shadow accounting is to help reduce potential accounting mismatches which can occur when related assets and liabilities:
Are measured on a different basis; or
Have changes in their measurements recorded in different IFRS performance statements (Income Statement or OCI).
Under shadow accounting, adjustments are made to the insurance liability to reflect the unrealised gains or losses from the financial instruments backing these insurance liabilities. For non-participating contracts, adjustments are made to the insurance liability to reflect the unrealised gains from the financial instruments (including derivatives) backing these insurance liabilities. In addition, shadow accounting is applied to the unrealised fair value losses on derivatives held to the extent that they are allocated to the entity.
The shadow accounting policy is applied to certain types of insurance liabilities:
Insurance contracts with participation features;
Non-participating insurance contracts (including disability insurance contracts) if and to the extent that the IFRS LAT would be triggered. This would be the case when current interest rates are lower than the interest rates that were used in the pricing principles at inception of the insurance contract.
Shadow accounting allows a recognised but unrealised gain or loss on an asset to affect the measurement of its insurance liabilities in the same way that a realised gain or loss does.
Shadow accounting is applied to unrealised value changes in fixed-income financial assets available for sale, specific financial assets designated at fair value through profit or loss, and specific derivatives (i.e. swaptions and interest rate and inflation rate swaps) that are backing the liabilities arising from insurance contracts. The related adjustment to the insurance liability is recognised in OCI if, and only if, the unrealised gains or losses are recognised in other comprehensive income. Unrealised gains and losses on assets at fair value through profit or loss are recognised in the income statement with a corresponding adjustment for shadow accounting in the income statement under \u2018Net insurance claims and benefits\u2019.
No shadow accounting is applied to:
Impairments; and
Revaluations of debt instrument that have been subject to impairment.
In 2022, triggered by increasing interest rates, a.s.r. enhanced the application of shadow accounting, see accounting policy A.
The LAT is performed at each reporting date to assess the adequacy of insurance liabilities. The insurance liabilities for the LAT are calculated in accordance with Solvency II, using the Ultimate Forward Rate (UFR) prevailing at the reporting date.
Where the Property & Casualty (P&C) (motor, fire and liability) and Health liabilities business is concerned, the LAT is performed using statistical analyses. Any identified losses are used as a basis for estimating future claims arising from an insurance contract from the portfolio on the balance sheet date. This is the best estimate. An appropriate risk margin is added. The risk margin is determined for each homogeneous risk group using the Cost of Capital (CoC) method that is also used for Life. With effect from 2016 the Non-life CoC rate of 6% is used for all Non-life business, including Disability. The total of best estimate and risk margin is compared to the technical provision recorded in the balance sheet.
The LAT for the disability portfolio is based on cash flow projections using realistic assumptions comparable to the LAT for the life portfolio (see below).
The total of best estimate and risk margin for Non-life segment as a whole, is compared to the technical provision recorded in the balance sheet. If there is a deficiency, the Non-life insurance liabilities are increased to adequate levels through a charge to the income statement.
The LAT is performed at each reporting date to assess the adequacy of insurance liabilities. The insurance liabilities for the LAT are calculated in accordance with Solvency II, using the UFR prevailing at the reporting date.
Liabilities are adequate if the technical provision recognised in a.s.r.\u2019s balance sheet for the Life segment as a whole at least equals the best estimate of the life insurance liabilities including an appropriate risk margin. If there is a deficiency in the life insurance liabilities, those liabilities are increased to adequate levels through a charge to the income statement.
Also unrecognised gains and losses from relevant assets that are not carried at fair value in the balance sheet are taken into account to the extent these assets are allocated to cover the insurance liabilities. The various elements of the LAT are further discussed below.
The best estimate of an insurance contract is the net present value of the projected cash flows of benefits and expenses, less the net present value of premiums. These cash flows are estimated using realistic, \u2018best estimate\u2019, assumptions in relation to mortality, longevity, lapse rate, expense and inflation. The best estimate assumptions regarding mortality and longevity include recent trend assumptions for life expectancy in the Netherlands, as provided by the Dutch Koninklijk Actuarieel Genootschap (Actuarial Association). The best estimate includes the intrinsic value and the time value of financial options and guarantees (TVOG) and is calculated using stochastic techniques.
Where applicable, the participating features of the insurance contracts, such as profit sharing, are taken into account in the future cash flows. The cash flows are discounted using the Euro swap curve including a credit risk adjustment (CRA), with UFR and volatility adjustment (VA).
In unit-linked contracts, the best estimate equals the fund value of the contract less the net present value of future margins on mortality and expense. Where unit-linked contracts with a guaranteed minimum benefit on expiration are concerned, the best estimate is increased by a TVOG.
The risk margin is determined for each homogeneous risk group using the CoC method. For life a CoC rate of 6% (2021: 6%) is used. a.s.r. uses the latest standard Solvency II model, to quantify the risks. The risks that are incorporated in the risk margin are: insurances risks, counterparty default risk related to reinsurance and operational risk. A projection of expected future risks is made and all these risks are projected into the future. The total risk for every future year is determined based on correlations between the risks described in the Solvency II standard model. The projected total risk for every year is multiplied by a cost of capital charge and discounted at the balance sheet date.
Options embedded in insurance contracts are not stated separately. They are treated in the same way as the host contract. These options are recognised in the adequacy test, taking into consideration both the intrinsic and the time value.
Liabilities arising from insurance contracts for the account and risk of policyholders mainly concern unit-linked contracts.
An investment unit is a share in an investment fund that a.s.r. acquires on behalf of the policyholders using net premiums paid by the policyholders. The gain upon maturity of the contract is equal to the current value of the investment units of the fund in question. The current value of an investment unit (unit value) reflects the fair value of the financial assets held by a.s.r.\u2019s investment funds divided by the number of units.
The fair value of the financial liabilities is obtained by multiplying the number of units attributed to each contract holder at the end of the reporting period by the unit value on the same date. Allowance is also made for liabilities arising from technical insurance risks (death, occupational disability).
Some unit-linked contracts include guaranteed benefits at maturity. To cover these guarantees, an additional obligation is recognised in the balance sheet that depends on the current fund value and the level of the guarantee. Actuarial assumptions about future fund developments and mortality are taken into account in the determination this obligation.
Liabilities arising from insurance contracts on behalf of policyholders also include obligations in connection with savings pools and group pension contracts, with policyholders bearing the investment risk. These liabilities also include a provision for compensation of possible high cost of the unit linked insurance contracts, as agreed in 2008 with the consumer organisations. The additional compensation related to the unit linked insurance contracts for the past has been included in the insurance liability and is therefore included in the investment portfolio. In addition, there is still a provision for compensation for claimants and compassionate and supportive policy \u2018flankerend beleid\u2019.
For the LAT relating to the liabilities arising from insurance contracts on behalf of policyholders see accounting policy J.
Investment contracts comprise investment contracts on behalf of policyholders that bear no insurance risk and for which the actual return on investments allocated to the contract is passed on to the policyholder. Investment contract liabilities are recognised when the contract is entered into and is derecognised when the contact expires, is discharged, cancelled or substantially modified.
a.s.r. has with effect 2021, defined contribution (DC) plans for all its employees, including employees that are employed by entities that operate in the Distribution and Service segment. For these DC plans, a.s.r. pays contributions to privately administered pension insurance plans with ASR Levensverzekering N.V. (hereafter a.s.r. life) on a contractual basis. a.s.r. life recognises these contracts as insurance contracts. They are accounted for in accordance with liabilities arising from insurance contracts (accounting policy J).
a.s.r. has no further payment obligations to the employees once the contributions have been paid. The contributions are recognised as operating expenses in the income statement during the period the services are rendered. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.
In addition, a number of defined benefit (DB) plans for own employees exist, which ended at the end of 2020, and were left non-contributory. The defined benefit obligation continues to exist. The plans are schemes under which employees are awarded pension benefits upon retirement, usually dependent on one or more factors, such as years of service and compensation. The defined benefit obligation is calculated at each reporting date by independent actuaries.
The liability in respect of DB plans is the present value of the defined benefit obligation at the balance sheet date, less the fair value of the plan assets where the pension plans are insured by third parties.
a.s.r. life administers most of the post-employment benefit plans and holds the investments that are intended to cover the employee benefit obligation. These investments do not qualify as plan assets in the consolidated financial statements under IFRS.
Pension obligations are calculated using the projected unit credit method. Inherent to this method is the application of actuarial assumptions for discount rates, future salary increases and bonuses, mortality rates and consumer price indices. The assumptions are updated and checked at each reporting date, based on available market data. The assumptions and reports were reviewed by Risk Management.
Actuarial assumptions may differ from actual results due to changes in market conditions, economic trends, mortality trends and other assumptions. Any change in these assumptions can have a significant impact on the defined benefit obligation and future pension costs.
Changes in the expected actuarial assumptions and differences with the actual actuarial outcomes are recognised in the actuarial gains and losses included in other comprehensive income (component of total equity).
When employee benefit plans are modified and when no further obligations exist, a gain or loss, resulting from the changes are recognised directly in the income statement. Consistent with the calculation of a gain or loss on a plan amendment, a.s.r. will use updated actuarial assumptions to determine the current service cost and net interest for the remainder of the annual reporting period upon the time of such amendment. The effect of the asset ceiling, if applicable, is disregarded when calculating the gain or loss on any settlement of the plan.
The financing cost related to employee benefits is recognised in interest expense. The current service costs are included in operating expenses.
Plans that offer benefits for long-service (leave), but do not qualify as a post-employment benefit plan, such as jubilee benefits, are measured at present value using the projected unit credit method and changes are recognised directly in the income statement.
a.s.r. offers post-employment benefit plans, such as arrangement for mortgage loans at a discount (fixed amount, reference date December 2017). The entitlement to these benefits is usually conditional on the employee remaining in service up to retirement age and the completion of a minimum service period. The expected costs of these benefits are accrued over the period of employment using an accounting methodology that is similar to that for DB plans.
A liability is formed for the vacation days which have not been taken at year-end.
Acquisitions are accounted for according to the acquisition method, with the cost of the acquisitions being allocated to the fair value of the acquired identifiable assets, liabilities and contingent liabilities. Goodwill, being the difference between the cost of the acquisition and a.s.r.\u2019s interest in the fair value of the acquired identifiable assets, liabilities and contingent liabilities on the acquisition date, is capitalised as an intangible asset. Any gain as a result of a purchase is recognised directly in the statement of profit or loss. Any change, in the fair value of acquired assets and liabilities at the acquisition date, determined within one year after acquisition, is recognised as an adjustment charged to goodwill in case of a preliminary valuation. Adjustments that occur after a period of one year are recognised in the income statement.
Adjustments to the purchase price that are contingent on future events, and to the extent that these are not already included in the purchase price, are included in the purchase price of the acquisition at the time the adjustment is likely and can be measured reliably.
Where applicable in the notes to the financial statements the acquisitions are recognised in the changes in the composition of the group.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-496": { "value": "A. Estimates and assumptions The preparation of the financial statements requires a.s.r. to make estimates, assumptions and judgements in applying accounting policies that have an effect on the reported amounts in the financial statements. These relate primarily to the following: The fair value and impairments of unlisted financial instruments (see accounting policy B and E); The estimated useful life, residual value and fair value of property, plant and equipment, investment property, and intangible assets (see accounting policy C, D and U); The measurement of liabilities arising from insurance contracts (see accounting policy J); Actuarial assumptions used for measuring employee benefit obligations (see chapter 6.5.17); When forming provisions, the required estimate of existing obligations arising from past events; The recoverable amount of impaired assets (see accounting policy B, E and H); The fair value used to determine the net asset value in acquisitions. The estimates and assumptions are based on management\u2019s best knowledge of current facts, actions and events. The actual outcomes may ultimately differ from the results reported earlier on the basis of estimates and assumptions. A detailed explanation of the estimates and assumptions are given in the relevant notes to the consolidated financial statements. As mentioned in paragraph 6.3.4 (accounting policy J) a.s.r. applies shadow accounting. In 2022, triggered by increasing interest rates, a.s.r. enhanced the application of shadow accounting by adding the sequencing of applying shadow accounting, resulting in shadow accounting adjustments related to instruments with a revaluation reserve amount below cost that are made to the level that the Liability Adequacy Test (LAT) will not get triggered (i.e. shows a positive margin). This mirrors the existing unrealised gains treatment, whilst ensuring the adequacy of the insurance liabilities. Further details are disclosed in paragraph 6.5.15. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-498": { "value": "A. Estimates and assumptions The preparation of the financial statements requires a.s.r. to make estimates, assumptions and judgements in applying accounting policies that have an effect on the reported amounts in the financial statements. These relate primarily to the following: The fair value and impairments of unlisted financial instruments (see accounting policy B and E); The estimated useful life, residual value and fair value of property, plant and equipment, investment property, and intangible assets (see accounting policy C, D and U); The measurement of liabilities arising from insurance contracts (see accounting policy J); Actuarial assumptions used for measuring employee benefit obligations (see chapter 6.5.17); When forming provisions, the required estimate of existing obligations arising from past events; The recoverable amount of impaired assets (see accounting policy B, E and H); The fair value used to determine the net asset value in acquisitions. The estimates and assumptions are based on management\u2019s best knowledge of current facts, actions and events. The actual outcomes may ultimately differ from the results reported earlier on the basis of estimates and assumptions. A detailed explanation of the estimates and assumptions are given in the relevant notes to the consolidated financial statements. As mentioned in paragraph 6.3.4 (accounting policy J) a.s.r. applies shadow accounting. In 2022, triggered by increasing interest rates, a.s.r. enhanced the application of shadow accounting by adding the sequencing of applying shadow accounting, resulting in shadow accounting adjustments related to instruments with a revaluation reserve amount below cost that are made to the level that the Liability Adequacy Test (LAT) will not get triggered (i.e. shows a positive margin). This mirrors the existing unrealised gains treatment, whilst ensuring the adequacy of the insurance liabilities. Further details are disclosed in paragraph 6.5.15. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAssetsAndLiabilitiesWithSignificantRiskOfMaterialAdjustmentExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-675": { "value": "B. Fair value of assets and liabilities The fair value is the price that a.s.r. would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants on the transaction date or reporting date in the principal market for the asset or liability, or in the most advantageous market for the asset or liability and assuming the highest and best use for non-financial assets. Where possible, a.s.r. determines the fair value of assets and liabilities on the basis of quoted prices in an active market. In the absence of an active market for a financial instrument, the fair value is determined using valuation techniques. Although valuation techniques are based on observable market data where possible, results are affected by the assumptions used, such as discount rates and estimates of future cash flows. In the unlikely event that the fair value of a financial instrument cannot be measured, it is carried at cost. Fair value hierarchy The following three hierarchical levels are used to determine the fair value of financial instruments and non-financial instruments when accounting for assets and liabilities at fair value and disclosing the comparative fair value of assets and liabilities: Level 1. Fair value based on quoted prices in an active market Level 1 includes assets and liabilities whose value is determined by quoted (unadjusted) prices in the primary active market for identical assets or liabilities. A financial instrument is quoted in an active market if: Quoted prices are readily and regularly available (from an exchange, dealer, broker, sector organisation, third party pricing service, or a regulatory body); and These prices represent actual and regularly occurring transactions on an arm\u2019s length basis. Financial instruments in this category primarily consist of bonds and equities listed in active markets. Cash and cash equivalents and reverse repurchase agreements are also included as level 1. Level 2. Fair value based on observable market data Determining fair value on the basis of Level 2 involves the use of valuation techniques that use inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is derived from prices of identical or similar assets and liabilities). These observable inputs are obtained from a broker or third party pricing service and include: Quoted prices in active markets for similar (not identical) assets or liabilities; Quoted prices for identical or similar assets or liabilities in inactive markets; Input variables other than quoted prices observable for the asset or liability. These include interest rates and yield curves observable at commonly quoted intervals, volatility, loss ratio, credit risks and default percentages. This category primarily includes: Financial instruments: unlisted fixed-interest preference shares and interest rate contracts; Financial instruments: loans and receivables (excluding mortgage loans and reverse repurchase agreements)1; Other financial assets and liabilities1. I. Financial instruments: unlisted fixed-interest preference shares and interest rate contracts This category includes unlisted fixed-interest preference shares and interest rate contracts. The valuation techniques for financial instruments use present value calculations and in the case of derivatives, include forward pricing and swap models. The observable market data contains yield curves based on company ratings and characteristics of the unlisted fixed-interest preference shares. II. Financial instruments: Loans and receivables (excluding mortgage loans and reverse repurchase agreements) The fair value of the loans and receivables is based on the discounted cash flow method. It is obtained by calculating the present value based on expected future cash flows and assuming an interest rate curve used in the market that includes an additional spread based on the risk profile of the counterparty. III. Other financial assets and liabilities For other financial assets and liabilities where the fair value is disclosed these fair values are based on observable market inputs, primarily being the price paid to acquire the asset or received to assume the liability on initial recognition, assuming that the transactions have taken place on an arm\u2019s length basis. Valuation techniques using present value calculations are applied using current interest rates where the payment terms are longer than one year. Level 3. Fair value not based on observable market data The fair value of the level 3 assets and liabilities are determined in whole or in part using a valuation technique based on assumptions that are not supported by prices from observable current market transactions in the same instrument and for which any significant inputs are not based on available observable market data. The financial assets and liabilities in this category are assessed individually. Valuation techniques are used to the extent that observable inputs are not available. The basic principle of fair value measurement is still to determine a fair, arm\u2019s length price. Unobservable inputs therefore reflect management\u2019s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). These inputs are generally based on the available observable data (adjusted for factors that contribute towards the value of the asset) and own source information. This category primarily includes: Financial instruments: private equity investments (or private equity partners) and equity funds third parties directly investing in real estate; Financial instruments: loans and receivables \u2013 mortgage loans, and mortgage equity funds; Investment property, real estate equity funds associates, rural property contracts, buildings for own use and plant (e.g. wind farms); Financial instruments: asset-backed securities. I. Financial instruments: private equity investments and real estate equity funds third parties The main non-observable market input for private equity investments and equity funds third parties directly investing in real estate is the net asset value of the investment as published by the private equity company (or partner) and real estate equity funds respectively. II. Financial instruments: loans and receivables \u2013 mortgage loans, and mortgage equity funds The fair value of the mortgage loan portfolio is based on the discounted cash flow method. It is obtained by calculating the present value based on expected future cash flows and assuming an interest rate curve used in the market that includes an additional spread based on the risk profile of the counterparty. The valuation method used to determine the fair value of the mortgage loan portfolio bases the spread on the interest rate curve for discounting the mortgage portfolio cash flows on consumer rates and includes assumptions for originating cost, proposal risk, and the options related to early redemption and moving. The method of determining the fair value of the mortgage equity funds is similar to that of mortgage loans, however it excludes assumptions for originating cost and is determined within the funds structure. III. Investment property, real estate equity funds associates, rural property contracts, buildings for own use and plant The following categories of investment properties, buildings for own use and plant is recognised and methods of calculating fair value are distinguished: Residential \u2013 based on reference transaction and discounted cash flow method; Retail \u2013 based on reference transaction and income capitalisation method; Rural \u2013 based on reference transaction and discounted cash flow method; Offices \u2013 based on reference transaction and discounted cash flow method (including buildings for own use); Other investment property \u2013 based on reference transaction and discounted cash flow method; Property under development \u2013 based on both discounted cash flow and income capitalisation method; Plant - based on reference transaction and discounted cash flow method. The following valuation methods are available for the calculation of fair value by the external professional appraisers for investment property, including real estate equity funds associates, rural property contracts, buildings for own use and plant: Reference transactions Independent professional appraisers use transactions in comparable properties and plant as a reference for determining the fair value of the property and plant. The reference transactions of comparable objects are generally based on observable data consisting of the land register \u2018Kadaster\u2019 and the rural land price monitor as published by the Dutch government \u2018grondprijsmonitor\u2019 in an active property market and in some instances accompanied by own use information. The external professional appraisers valuate the property or plant using the reference transaction in combination with the following valuation methods to ensure the appropriate valuation of the property: Discounted cash flow method; Income capitalisation method (property only). Discounted cash flow method Under the discounted cash flow method, fair value is estimated using assumptions regarding the benefits and liabilities of ownership over the asset\u2019s life including an exit or terminal value. This method involves the projection of a series of cash flows on the investment property or plant dependent on the duration of the lease contracts. A market-derived discount rate is applied to these projected cash flow series in order to establish the present value of the cash flows associated with the asset. The exit yield is normally determined separately, and differs from the discount rate. The duration of the cash flows and the specific timing of inflows and outflows are determined by events such as rent reviews, lease renewal and related re-letting, redevelopment, or refurbishment. The appropriate duration is typically driven by market behaviour, which depends on the class of investment property. Periodic cash flow is typically estimated as gross rental income less vacancy (apart from the rural category), non-recoverable expenses, collection losses, lease incentives, maintenance costs, agent and commission costs and other operating and management expenses. The series of periodic net operating income, along with an estimate of the terminal value anticipated at the end of the projection period, is then discounted. For the categories residential, offices and other in applying the discounted cash flow method, the significant inputs are the discount rate and market rental value. These inputs are verified with the following market observable data (that are adjusted to reflect the state and condition, location, development potential etc. of the specific property): Market rent per square meter for renewals and their respective re-letting rates; Reviewed rent per square meter; Investment transactions of comparable objects; 10 Year Dutch Government Bond Yield (%) as published by the DNB. When applying the discounted cash flow method for rural valuations, the significant inputs are the discount rate and market lease values. These inputs are verified with the following market observable data (that are adjusted to reflect the state and condition, location, development potential etc. of the specific property): Market value per acre per region in accordance with the \u2018rural land price monitor\u2019; 10 Year Dutch Government Bond Yield (%) as published by the DNB. When applying the discounted cash flow method for plant, the significant inputs are the discount rate and energy prices. Income capitalisation method Under the income capitalisation method, a property\u2019s fair value is estimated based on the normalised net operating income generated by the property, which is divided by the capitalisation rate (the investor\u2019s rate of return). The difference between gross and net rental income includes the same expense categories as those for the discounted cash flow method with the exception that certain expenses are not measured over time, but included on the basis of a time weighted average, such as the average lease up costs. Under the income capitalisation method, rents above or below the market rent are capitalised separately. The significant inputs for retail valuations are the reversionary yield and the market or reviewed rental value. These inputs are generally verified with the following observable data (that are adjusted to reflect the state and condition, location, development potential etc. of the specific property): Market rent per square meter for renewals; Reviewed rent per square meter (based on the rent reviews performed in accordance with Section 303, Book 7 of the Dutch Civil Code). The fair value of investment properties and buildings for own use, are appraised annually. Valuations are conducted by independent professional appraisers who hold recognised and relevant professional qualifications and have recent experience in the location and category of the property being valued. Market value property valuations were prepared in accordance with the Royal Institution of Chartered Surveyors Valuation Standards, 7th Edition (the \u2018Red Book\u2019). a.s.r. provides adequate information to the professional appraisers, in order to conduct a comprehensive valuation. The professional appraisers are changed or rotated at least once every three years. IV. Financial instruments: asset-backed securities The fair value of the asset-backed securities is based on quotes published by an independent data vendor. Transfers between levels The hierarchical level per individual instrument, or group of instruments, is reassessed at every reporting period. If the instrument, or group of instruments, no longer complies with the criteria of the level in question, it is transferred to the hierarchical level that does meet the criteria. A transfer can for instance occur when the market becomes less liquid or when quoted market prices for the instrument are no longer available. Not measured at fair value on the balance sheet and for which the fair value is disclosed. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-676": { "value": "C. Intangible assets Intangible assets are carried at cost, less any accumulated amortisation and impairment losses. The residual value and the estimated useful life of intangible assets are assessed on each balance sheet date and adjusted where applicable. Goodwill Acquisitions by a.s.r. are accounted for using the acquisition method. Goodwill represents the excess of the cost of an acquisition over the fair value of a.s.r.\u2019s share of the net identifiable assets and liabilities and contingent liabilities of the acquired company at acquisition date. If there is no excess (purchase gain), the carrying amount is directly recognised through the income statement. At the acquisition date, goodwill is allocated to the cash-generating units (CGUs) that are expected to benefit from the business combination. Goodwill has an indefinite useful life and is not amortised. a.s.r. performs an impairment test annually, or more frequently if events or circumstances warrant so, to ascertain whether goodwill has been subject to impairment. As part of this, the carrying amount of the cash-generating unit to which the goodwill has been allocated is compared with its recoverable amount. The recoverable amount is the higher of a CGU\u2019s fair value less costs to sell and value in use. The carrying value is determined as the net asset value including goodwill. The methodologies applied to arrive at the best estimate of the recoverable amount involves two steps. In the first step of the impairment test, the best estimate of the recoverable amount of the CGU to which goodwill is allocated is determined separately based on Price to Earnings or Price to EBITDA ratios (fair value less cost to sell model). The ratio used per CGU depends on the characteristics of the entity in question. The main assumptions in this valuation are the multiples for the aforementioned ratios. These are developed internally but are either derived from or corroborated against market information that is related to observable transactions in the market for comparable businesses. If the outcome of the first step indicates that the difference between the recoverable amount and the carrying value may not be sufficient to support the amount of goodwill allocated to the CGU, step two is performed. In step two an additional analysis is performed in order to determine a recoverable amount in a manner that better addresses the specific characteristics of the relevant CGU. The additional analysis is based on internal value-in-use models, wherein managements assumptions in relation to cash flow projections for budget periods up to and including five years are used and, if deemed justified, expanded to a longer period given the nature of the insurance activities. Other assumptions, such as the (pre-tax) discount rate and the steady state growth rate, are determined on the advice of an independent external party and are based on a Capital Asset Pricing Model. This methodology is based on a risk-free rate plus a risk premium. Operating assumptions are best estimate assumptions and based on historical data where available. Economic assumptions are based on observable market data and projections of future trends. If the recoverable amount is lower than its carrying amount, the difference is directly charged to the income statement as an impairment loss. In the event of impairment, a.s.r. first reduces the carrying amount of the goodwill allocated to the CGU. After that, the carrying amount of the other assets included in the unit is reduced pro rata to the carrying amount of all the assets in the unit. Value of Business Acquired The Value of Business Acquired (VOBA) represents the difference between the fair value and the carrying amount of insurance portfolios that have been acquired, either directly from another insurer or through the acquisition of a subsidiary. VOBA is recognised as an intangible asset with a finite useful life and amortised over the term of the current insurance contracts at acquisition date, in conjunction with the corresponding obligations. With regard to VOBA, allowance is made for the outcome of the annual compulsory LAT for insurance contracts (see accounting policy J). Amortisation charges related to VOBA are included in net claims and benefits. The negative VOBA is amortised based on the weighted average term of the acquired insurance contracts at acquisition date. Negative VOBA, or an additional provision, is recognised and presented under the Liabilities arising from insurance contracts. Should VOBA\u2019s carrying amount exceed the difference between the carrying amount of the liabilities arising from insurance contracts and the liabilities identified as part of the LAT and no other adjustment is made to the liabilities as a result of the LAT outcomes, VOBA is impaired to a level where the values are equal. This is charged to the income statement as an impairment loss. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-677": { "value": "C. Intangible assets Intangible assets are carried at cost, less any accumulated amortisation and impairment losses. The residual value and the estimated useful life of intangible assets are assessed on each balance sheet date and adjusted where applicable. Goodwill Acquisitions by a.s.r. are accounted for using the acquisition method. Goodwill represents the excess of the cost of an acquisition over the fair value of a.s.r.\u2019s share of the net identifiable assets and liabilities and contingent liabilities of the acquired company at acquisition date. If there is no excess (purchase gain), the carrying amount is directly recognised through the income statement. At the acquisition date, goodwill is allocated to the cash-generating units (CGUs) that are expected to benefit from the business combination. Goodwill has an indefinite useful life and is not amortised. a.s.r. performs an impairment test annually, or more frequently if events or circumstances warrant so, to ascertain whether goodwill has been subject to impairment. As part of this, the carrying amount of the cash-generating unit to which the goodwill has been allocated is compared with its recoverable amount. The recoverable amount is the higher of a CGU\u2019s fair value less costs to sell and value in use. The carrying value is determined as the net asset value including goodwill. The methodologies applied to arrive at the best estimate of the recoverable amount involves two steps. In the first step of the impairment test, the best estimate of the recoverable amount of the CGU to which goodwill is allocated is determined separately based on Price to Earnings or Price to EBITDA ratios (fair value less cost to sell model). The ratio used per CGU depends on the characteristics of the entity in question. The main assumptions in this valuation are the multiples for the aforementioned ratios. These are developed internally but are either derived from or corroborated against market information that is related to observable transactions in the market for comparable businesses. If the outcome of the first step indicates that the difference between the recoverable amount and the carrying value may not be sufficient to support the amount of goodwill allocated to the CGU, step two is performed. In step two an additional analysis is performed in order to determine a recoverable amount in a manner that better addresses the specific characteristics of the relevant CGU. The additional analysis is based on internal value-in-use models, wherein managements assumptions in relation to cash flow projections for budget periods up to and including five years are used and, if deemed justified, expanded to a longer period given the nature of the insurance activities. Other assumptions, such as the (pre-tax) discount rate and the steady state growth rate, are determined on the advice of an independent external party and are based on a Capital Asset Pricing Model. This methodology is based on a risk-free rate plus a risk premium. Operating assumptions are best estimate assumptions and based on historical data where available. Economic assumptions are based on observable market data and projections of future trends. If the recoverable amount is lower than its carrying amount, the difference is directly charged to the income statement as an impairment loss. In the event of impairment, a.s.r. first reduces the carrying amount of the goodwill allocated to the CGU. After that, the carrying amount of the other assets included in the unit is reduced pro rata to the carrying amount of all the assets in the unit. Value of Business Acquired The Value of Business Acquired (VOBA) represents the difference between the fair value and the carrying amount of insurance portfolios that have been acquired, either directly from another insurer or through the acquisition of a subsidiary. VOBA is recognised as an intangible asset with a finite useful life and amortised over the term of the current insurance contracts at acquisition date, in conjunction with the corresponding obligations. With regard to VOBA, allowance is made for the outcome of the annual compulsory LAT for insurance contracts (see accounting policy J). Amortisation charges related to VOBA are included in net claims and benefits. The negative VOBA is amortised based on the weighted average term of the acquired insurance contracts at acquisition date. Negative VOBA, or an additional provision, is recognised and presented under the Liabilities arising from insurance contracts. Should VOBA\u2019s carrying amount exceed the difference between the carrying amount of the liabilities arising from insurance contracts and the liabilities identified as part of the LAT and no other adjustment is made to the liabilities as a result of the LAT outcomes, VOBA is impaired to a level where the values are equal. This is charged to the income statement as an impairment loss. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-678": { "value": "C. Intangible assets Intangible assets are carried at cost, less any accumulated amortisation and impairment losses. The residual value and the estimated useful life of intangible assets are assessed on each balance sheet date and adjusted where applicable. Goodwill Acquisitions by a.s.r. are accounted for using the acquisition method. Goodwill represents the excess of the cost of an acquisition over the fair value of a.s.r.\u2019s share of the net identifiable assets and liabilities and contingent liabilities of the acquired company at acquisition date. If there is no excess (purchase gain), the carrying amount is directly recognised through the income statement. At the acquisition date, goodwill is allocated to the cash-generating units (CGUs) that are expected to benefit from the business combination. Goodwill has an indefinite useful life and is not amortised. a.s.r. performs an impairment test annually, or more frequently if events or circumstances warrant so, to ascertain whether goodwill has been subject to impairment. As part of this, the carrying amount of the cash-generating unit to which the goodwill has been allocated is compared with its recoverable amount. The recoverable amount is the higher of a CGU\u2019s fair value less costs to sell and value in use. The carrying value is determined as the net asset value including goodwill. The methodologies applied to arrive at the best estimate of the recoverable amount involves two steps. In the first step of the impairment test, the best estimate of the recoverable amount of the CGU to which goodwill is allocated is determined separately based on Price to Earnings or Price to EBITDA ratios (fair value less cost to sell model). The ratio used per CGU depends on the characteristics of the entity in question. The main assumptions in this valuation are the multiples for the aforementioned ratios. These are developed internally but are either derived from or corroborated against market information that is related to observable transactions in the market for comparable businesses. If the outcome of the first step indicates that the difference between the recoverable amount and the carrying value may not be sufficient to support the amount of goodwill allocated to the CGU, step two is performed. In step two an additional analysis is performed in order to determine a recoverable amount in a manner that better addresses the specific characteristics of the relevant CGU. The additional analysis is based on internal value-in-use models, wherein managements assumptions in relation to cash flow projections for budget periods up to and including five years are used and, if deemed justified, expanded to a longer period given the nature of the insurance activities. Other assumptions, such as the (pre-tax) discount rate and the steady state growth rate, are determined on the advice of an independent external party and are based on a Capital Asset Pricing Model. This methodology is based on a risk-free rate plus a risk premium. Operating assumptions are best estimate assumptions and based on historical data where available. Economic assumptions are based on observable market data and projections of future trends. If the recoverable amount is lower than its carrying amount, the difference is directly charged to the income statement as an impairment loss. In the event of impairment, a.s.r. first reduces the carrying amount of the goodwill allocated to the CGU. After that, the carrying amount of the other assets included in the unit is reduced pro rata to the carrying amount of all the assets in the unit. Value of Business Acquired The Value of Business Acquired (VOBA) represents the difference between the fair value and the carrying amount of insurance portfolios that have been acquired, either directly from another insurer or through the acquisition of a subsidiary. VOBA is recognised as an intangible asset with a finite useful life and amortised over the term of the current insurance contracts at acquisition date, in conjunction with the corresponding obligations. With regard to VOBA, allowance is made for the outcome of the annual compulsory LAT for insurance contracts (see accounting policy J). Amortisation charges related to VOBA are included in net claims and benefits. The negative VOBA is amortised based on the weighted average term of the acquired insurance contracts at acquisition date. Negative VOBA, or an additional provision, is recognised and presented under the Liabilities arising from insurance contracts. Should VOBA\u2019s carrying amount exceed the difference between the carrying amount of the liabilities arising from insurance contracts and the liabilities identified as part of the LAT and no other adjustment is made to the liabilities as a result of the LAT outcomes, VOBA is impaired to a level where the values are equal. This is charged to the income statement as an impairment loss. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-679": { "value": "C. Intangible assets Intangible assets are carried at cost, less any accumulated amortisation and impairment losses. The residual value and the estimated useful life of intangible assets are assessed on each balance sheet date and adjusted where applicable. Goodwill Acquisitions by a.s.r. are accounted for using the acquisition method. Goodwill represents the excess of the cost of an acquisition over the fair value of a.s.r.\u2019s share of the net identifiable assets and liabilities and contingent liabilities of the acquired company at acquisition date. If there is no excess (purchase gain), the carrying amount is directly recognised through the income statement. At the acquisition date, goodwill is allocated to the cash-generating units (CGUs) that are expected to benefit from the business combination. Goodwill has an indefinite useful life and is not amortised. a.s.r. performs an impairment test annually, or more frequently if events or circumstances warrant so, to ascertain whether goodwill has been subject to impairment. As part of this, the carrying amount of the cash-generating unit to which the goodwill has been allocated is compared with its recoverable amount. The recoverable amount is the higher of a CGU\u2019s fair value less costs to sell and value in use. The carrying value is determined as the net asset value including goodwill. The methodologies applied to arrive at the best estimate of the recoverable amount involves two steps. In the first step of the impairment test, the best estimate of the recoverable amount of the CGU to which goodwill is allocated is determined separately based on Price to Earnings or Price to EBITDA ratios (fair value less cost to sell model). The ratio used per CGU depends on the characteristics of the entity in question. The main assumptions in this valuation are the multiples for the aforementioned ratios. These are developed internally but are either derived from or corroborated against market information that is related to observable transactions in the market for comparable businesses. If the outcome of the first step indicates that the difference between the recoverable amount and the carrying value may not be sufficient to support the amount of goodwill allocated to the CGU, step two is performed. In step two an additional analysis is performed in order to determine a recoverable amount in a manner that better addresses the specific characteristics of the relevant CGU. The additional analysis is based on internal value-in-use models, wherein managements assumptions in relation to cash flow projections for budget periods up to and including five years are used and, if deemed justified, expanded to a longer period given the nature of the insurance activities. Other assumptions, such as the (pre-tax) discount rate and the steady state growth rate, are determined on the advice of an independent external party and are based on a Capital Asset Pricing Model. This methodology is based on a risk-free rate plus a risk premium. Operating assumptions are best estimate assumptions and based on historical data where available. Economic assumptions are based on observable market data and projections of future trends. If the recoverable amount is lower than its carrying amount, the difference is directly charged to the income statement as an impairment loss. In the event of impairment, a.s.r. first reduces the carrying amount of the goodwill allocated to the CGU. After that, the carrying amount of the other assets included in the unit is reduced pro rata to the carrying amount of all the assets in the unit. Value of Business Acquired The Value of Business Acquired (VOBA) represents the difference between the fair value and the carrying amount of insurance portfolios that have been acquired, either directly from another insurer or through the acquisition of a subsidiary. VOBA is recognised as an intangible asset with a finite useful life and amortised over the term of the current insurance contracts at acquisition date, in conjunction with the corresponding obligations. With regard to VOBA, allowance is made for the outcome of the annual compulsory LAT for insurance contracts (see accounting policy J). Amortisation charges related to VOBA are included in net claims and benefits. The negative VOBA is amortised based on the weighted average term of the acquired insurance contracts at acquisition date. Negative VOBA, or an additional provision, is recognised and presented under the Liabilities arising from insurance contracts. Should VOBA\u2019s carrying amount exceed the difference between the carrying amount of the liabilities arising from insurance contracts and the liabilities identified as part of the LAT and no other adjustment is made to the liabilities as a result of the LAT outcomes, VOBA is impaired to a level where the values are equal. This is charged to the income statement as an impairment loss. E. Investments Based on the amended IFRS 4, effective as of 1 January 2018, a.s.r. meets the criteria of a predominant insurer as of 31 December 2015 as the percentage of the total carrying amount of its liabilities connected with insurance related activities to the total carrying amount of all its liabilities exceeded 90% at that date. The liabilities connected with insurance, that are not liabilities directly arising from contracts within the scope of IFRS 4, have a carrying amount of \u20ac\u00a03.3 billion and primarily relate to the derivative liabilities and due to banks as included in the Non-life and Life segments and the subordinated liabilities. As a result a.s.r. decided to apply the temporary exemption from applying IFRS 9 by deferral until IFRS 17 (new accounting standard for insurance contracts) is implemented. The implementation of amended IFRS 4 had no significant impact on the consolidated financial statements of a.s.r. The additional disclosure requirements are presented in the chapters on Risk management and Other notes. When a.s.r. becomes party to a financial asset contract, the related assets are classified into one of the following categories: Financial assets at fair value through profit or loss; Loans and receivables (see accounting policy H); or Financial assets available for sale. The classification of the financial assets is determined at initial recognition. The classification depends on the purpose for which the investments were acquired. For detailed information on the fair value of the financial assets please see accounting policy B. Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include: Derivatives that do not qualify for hedge accounting (see accounting policy B and I); Financial assets, designated by a.s.r. as carried at fair value through profit or loss. This option is available whenever: It eliminates or significantly reduces a measurement inconsistency that would otherwise arise from measuring assets or liabilities on different bases (accounting mismatch); a.s.r. manages a group of financial instruments (assets, liabilities or both) on the basis of fair value in accordance with a documented risk management or investment strategy; or The financial assets contain one or more embedded derivatives and a.s.r. does not separate the derivative from the host contract; and Associates for which a.s.r. uses the fair value option under IAS 28. Financial assets at fair value through profit or loss are stated at fair value. At initial recognition, transaction costs are recognised in the income statement. Realised and unrealised gains and losses in the fair value are also recognised in the income statement. Financial assets available for sale Financial assets available for sale are financial assets that are not accounted for as financial assets at fair value through profit or loss, or as loans and receivables. On initial recognition, financial assets available for sale are measured at fair value (including transaction costs). They are subsequently measured at fair value, including any unrealised fair value changes in equity and impairments, taking into account any deferred tax liabilities. Financial assets available for sale include equities (ordinary and preference shares), bonds, other fixed-income securities, unit trusts, variable-income securities and interests in investment pools. Impairment of financial assets At the end of each reporting period, a.s.r. assesses whether there is any objective evidence that a financial asset or a group of financial assets may be impaired. Financial assets at fair value through profit or loss are not subject to impairment testing, because the fair value of these assets reflects any impairment losses. In the case of equity investments available for sale, a significant or prolonged decline in the fair value of the security below its cost is objective evidence of impairment. a.s.r. considers as a significant or prolonged decline to have occurred if the fair value: Has fallen 25% or more below cost; or Has fallen below cost for an uninterrupted period of twelve months or longer. Fixed-income financial assets available for sale are tested for impairment if objective evidence exists that the counterparty will default. Objective evidence includes: bankruptcy, financial reorganisation or delinquency in payments for more than 30 days. The assessment may also involve circumstances requiring a more detailed estimate, such as in the event of an equity deficit, recurring financial difficulties, downgrading of the credit rating or other creditors reverting to legal action. This assessment is made at each reporting date by the Level of Concern Committee, where the portfolio managers and analysts assign a level of concern from \u2018Nil\u2019 to \u2018Three\u2019 to each of the fixed-income assets. A level of concern \u2018Nil\u2019 means that there is no reason for concern, while a level of concern \u2018Three\u2019 indicates that the situation is critical and that an impairment is highly recommended. The final decision to recognise an impairment loss on a financial asset or to reverse a prior impairment loss is taken in the Impairment and Valuation Committee, chaired by the director ASR Vermogensbeheer N.V. Impairment losses are recognised directly in the income statement and represent the difference between amortised cost and the fair value at the balance sheet date, net of any previously recognised impairments. If, at a later stage, the fair value of the financial assets available for sale should increase and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through the income statement. Impairment losses on equities available for sale are not reversed, and any increases in fair value are recorded in equity. H. Loans and receivables Loans and receivables are measured at fair value plus transaction costs on initial recognition. They are subsequently measured at amortised cost based on the effective interest rate method, less impairment losses if deemed necessary. Receivables from customers Receivables from customers are primarily comprised of business loans and mortgage loans. Receivables from credit institutions Receivables from credit institutions concern business loans, deposits and the savings portion of savings mortgages concluded by a.s.r. Trade and other receivables Trade and other receivables are receivables arising from a.s.r.\u2019s normal business operations. Impairment of loans and receivables At each balance sheet date, a.s.r. assesses whether objective evidence of impairment exists of the loans and receivables. An individually assessed asset is considered impaired if objective evidence exists that a.s.r. is unable to collect all the amounts due by the counterparty in accordance with the contractual terms and conditions. The amount of the impairment loss is equal to the difference between the asset\u2019s carrying amount and its recoverable amount. The recoverable amount equals the present value of estimated future cash flows, including amounts realised from guarantees and securities provided, discounted at the financial asset\u2019s original effective interest rate. Loans and receivables that are not individually significant are grouped on the basis of similar credit risk characteristics. Impairment based on the collective approach is determined by applying risk models for similar financial assets, taking account of historical information and regularly updated parameters for default. Incurred but not reported (IBNR) losses are also taken into account. IBNR is estimated by reference to historical loss patterns. The current economic climate is reflected, and account is taken of potentially higher credit risk-based on an analysis of the economic situation. Impairment losses are charged to the income statement. If, at a later stage, the impairment losses should decrease and the decrease can be related objectively to an event occurring after the impairment was recognised, the decrease in the impairment loss is recognised in the income statement. U. Property, plant and equipment Property held for own use and plant Property held for own use and plant, comprise of land, office buildings, wind farms and solar parks, are measured at fair value (revaluation model) based on annual valuations. The valuation are conducted by external independent valuators with adequate professional expertise and experience in the specific location and categories of properties or plant. They are subsequently measured at fair value, including any unrealised fair value changes in equity, taking into account any deferred tax liabilities. For the method of determining the fair value reference is made to accounting policy B for investment property and plant. Increase in the fair value exceeding the cost price is added to the revaluation reserve in shareholders\u2019 equity, less deferred taxes. Decreases in the fair value that offset previous increases of the same asset, are charged against the revaluation reserve. The revaluation reserve cannot be negative. All other decreases in fair value are accounted for in the income statement. Increases that reverse a revaluation decrease on the same asset previously recognised in net result are recognised in the income statement. Buildings, wind farms and solar parks are depreciated using the straight-line method based on expected useful life, taking into account their fair value amount, the residual value from the time when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The useful life of buildings is assessed annually for every individual component (component approach). Property and plant classified into components and their maximum life Components Useful life (expressed in years) Land n.a. Shell 50 Outer layer 30 Wind turbines 25 Solar panels 25 Systems 20 Fittings and fixtures 15 Repair and maintenance costs are charged to the income statement in the period in which they are incurred. Expenses incurred after the acquisition of an asset are capitalised if it is probable that the future economic benefits will flow to a.s.r. and the cost of the asset can be measured reliably. Upon the sale of a property or plant, the part of the revaluation reserve related to the sold property or plant, within equity, is transferred to \u2018other reserves\u2019 and is not reclassified to the income statement. Therefore annually a transfer is also made from the revaluation reserve related to \u2018other reserves\u2019 in line with the depreciation recognised in the income statement for the revalued portion. Equipment Equipment is recognised at cost, less accumulated depreciation and/or any accumulated impairment losses. Cost corresponds with the cash paid or the fair value of the consideration given to acquire the asset. Equipment is depreciated over its useful life, which is determined individually (usually between three and five years). Repair and maintenance costs are charged to the income statement in the period in which they are incurred. Expenses incurred after the acquisition of an asset are capitalised if it is probable that the future economic benefits will flow to a.s.r. and the cost of the asset can be measured reliably. Accounting for borrowing costs attributable to the construction of property, plant and equipment is the same as accounting for borrowing costs attributable to investment property. For details, see accounting policy D. Right-of-use assets Right-of-use assets are recognised for lease contracts for which a.s.r. is the lessee. For more information reference is made to accounting policy BB. V. Associates and joint ventures Associates Associates are entities over which a.s.r. has significant influence on operating and financial contracts, without having control. Generally, associates are accounted for using the equity method from the date at which a.s.r. acquires significant influence until the date at which such influence ceases. This means that associates are initially recognised at cost, including any goodwill paid. This value is subsequently adjusted to take account of a.s.r.\u2019s share of the associate\u2019s comprehensive income. Comprehensive income is adjusted in accordance with the accounting principles used by a.s.r. Losses are accounted for until the carrying amount of the investment has reached zero. Further provisions are recognised only to the extent that a.s.r. has incurred legal or constructive obligations concerning these associates. If objective evidence of impairment exists, associates are tested for impairment and, if necessary, written down. When the application of the equity method produces information that is not relevant to the investors, a.s.r. may use the exemption of IAS 28 to measure the investments in those associates at fair value through profit or loss in accordance with IAS 39. a.s.r. applies fair value measurement for investments in real estate equity funds and mortgage equity funds, over which a.s.r. has significant influence. Joint ventures Joint ventures are contractual arrangements whereby a.s.r. and one or more parties undertake an economic activity that is subject to joint control. Joint control exists only when the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control. These interests are accounted for using the equity method as applied to associates. The interests are recognised in the financial statements from the date on which a.s.r. first obtains joint control until the date that this joint control ceases. If objective evidence of impairment exists, joint ventures are tested for impairment and, if necessary an impairment is recognised in the income statement. Joint operations a.s.r. has a limited number of non-material joint operations. These are recognised in relation to a.s.r.\u2019s interest in the joint operation\u2019s individual balance sheet and income statement items. W. Reinsurance contracts Contracts that transfer a significant insurance risk from a.s.r. to third parties are accounted for as reinsurance contracts, and are classified as outgoing reinsurance. The amounts that can be collected from reinsurers are estimated using a method that is in line with the reinsurance contract and the method for determining liabilities arising from reinsurance contracts. Assets arising from reinsurance contracts are recognised under reinsurance contracts, except for current receivables from reinsurers, which are included under loans and receivables. At each reporting date, a.s.r. assesses whether objective evidence of impairment exists. If a reinsurance asset is impaired, its carrying amount is reduced to its recoverable amount. X. Other assets Other assets include accrued investment and interest income, property developments, tax assets and accrued assets. Property developments consist of property under development commissioned by third parties. Development property is measured at cost including any incremental costs (if a.s.r. expects to recover those costs), directly related costs to the contract (i.e. labour, materials, allocation of directly related costs, payments to subcontractors) and construction period interest, less any invoiced instalments and impairments. Revenue on property development is primarily accounted for at the moment the property is sold. This is a performance obligation satisfied at a point in time. The point in time is the moment a customer obtains control of the promised asset. Property developments which are sold can have guarantees (such as rent guarantees or construction guarantees), which may give rise to a separate performance obligation. BB. Leasing A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for a consideration. For contracts that contain a lease component and one or more additional lease or non-lease components a.s.r. applies the practical expedient not to separate non-lease components from lease components. At the commencement date of the lease, a.s.r. recognises a right-of-use asset and a lease liability. The right-of-use asset comprises the amount of the lease liability at initial measurement. The lease liability is measured at the present value of the lease payments that are not paid at the commencement date. For vehicles, the lease payments are discounted using the interest rate implicit in the lease. For other leases a.s.r.\u2019s incremental borrowing rate is used. Subsequently, the right-of-use asset is valued at cost less any cumulated depreciation and any accumulated impairment losses and adjusted for any remeasurement of the lease liability. The lease liability is increased with interest accrued and reduced for lease payments made. When applicable the lease liability is remeasured for changes in future payments resulting from a change in index or lease term. The right-of-use assets are presented under property, plant and equipment. The lease liabilities are presented under borrowings. MM. Impairments An asset is impaired when its carrying amount exceeds its recoverable amount. Impairment losses are recognised in the income statement as soon as they are identified. For details, see the relevant items of chapter 6.3.4 as mentioned earlier. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-680": { "value": "C. Intangible assets Intangible assets are carried at cost, less any accumulated amortisation and impairment losses. The residual value and the estimated useful life of intangible assets are assessed on each balance sheet date and adjusted where applicable. Goodwill Acquisitions by a.s.r. are accounted for using the acquisition method. Goodwill represents the excess of the cost of an acquisition over the fair value of a.s.r.\u2019s share of the net identifiable assets and liabilities and contingent liabilities of the acquired company at acquisition date. If there is no excess (purchase gain), the carrying amount is directly recognised through the income statement. At the acquisition date, goodwill is allocated to the cash-generating units (CGUs) that are expected to benefit from the business combination. Goodwill has an indefinite useful life and is not amortised. a.s.r. performs an impairment test annually, or more frequently if events or circumstances warrant so, to ascertain whether goodwill has been subject to impairment. As part of this, the carrying amount of the cash-generating unit to which the goodwill has been allocated is compared with its recoverable amount. The recoverable amount is the higher of a CGU\u2019s fair value less costs to sell and value in use. The carrying value is determined as the net asset value including goodwill. The methodologies applied to arrive at the best estimate of the recoverable amount involves two steps. In the first step of the impairment test, the best estimate of the recoverable amount of the CGU to which goodwill is allocated is determined separately based on Price to Earnings or Price to EBITDA ratios (fair value less cost to sell model). The ratio used per CGU depends on the characteristics of the entity in question. The main assumptions in this valuation are the multiples for the aforementioned ratios. These are developed internally but are either derived from or corroborated against market information that is related to observable transactions in the market for comparable businesses. If the outcome of the first step indicates that the difference between the recoverable amount and the carrying value may not be sufficient to support the amount of goodwill allocated to the CGU, step two is performed. In step two an additional analysis is performed in order to determine a recoverable amount in a manner that better addresses the specific characteristics of the relevant CGU. The additional analysis is based on internal value-in-use models, wherein managements assumptions in relation to cash flow projections for budget periods up to and including five years are used and, if deemed justified, expanded to a longer period given the nature of the insurance activities. Other assumptions, such as the (pre-tax) discount rate and the steady state growth rate, are determined on the advice of an independent external party and are based on a Capital Asset Pricing Model. This methodology is based on a risk-free rate plus a risk premium. Operating assumptions are best estimate assumptions and based on historical data where available. Economic assumptions are based on observable market data and projections of future trends. If the recoverable amount is lower than its carrying amount, the difference is directly charged to the income statement as an impairment loss. In the event of impairment, a.s.r. first reduces the carrying amount of the goodwill allocated to the CGU. After that, the carrying amount of the other assets included in the unit is reduced pro rata to the carrying amount of all the assets in the unit. Value of Business Acquired The Value of Business Acquired (VOBA) represents the difference between the fair value and the carrying amount of insurance portfolios that have been acquired, either directly from another insurer or through the acquisition of a subsidiary. VOBA is recognised as an intangible asset with a finite useful life and amortised over the term of the current insurance contracts at acquisition date, in conjunction with the corresponding obligations. With regard to VOBA, allowance is made for the outcome of the annual compulsory LAT for insurance contracts (see accounting policy J). Amortisation charges related to VOBA are included in net claims and benefits. The negative VOBA is amortised based on the weighted average term of the acquired insurance contracts at acquisition date. Negative VOBA, or an additional provision, is recognised and presented under the Liabilities arising from insurance contracts. Should VOBA\u2019s carrying amount exceed the difference between the carrying amount of the liabilities arising from insurance contracts and the liabilities identified as part of the LAT and no other adjustment is made to the liabilities as a result of the LAT outcomes, VOBA is impaired to a level where the values are equal. This is charged to the income statement as an impairment loss. U. Property, plant and equipment Property held for own use and plant Property held for own use and plant, comprise of land, office buildings, wind farms and solar parks, are measured at fair value (revaluation model) based on annual valuations. The valuation are conducted by external independent valuators with adequate professional expertise and experience in the specific location and categories of properties or plant. They are subsequently measured at fair value, including any unrealised fair value changes in equity, taking into account any deferred tax liabilities. For the method of determining the fair value reference is made to accounting policy B for investment property and plant. Increase in the fair value exceeding the cost price is added to the revaluation reserve in shareholders\u2019 equity, less deferred taxes. Decreases in the fair value that offset previous increases of the same asset, are charged against the revaluation reserve. The revaluation reserve cannot be negative. All other decreases in fair value are accounted for in the income statement. Increases that reverse a revaluation decrease on the same asset previously recognised in net result are recognised in the income statement. Buildings, wind farms and solar parks are depreciated using the straight-line method based on expected useful life, taking into account their fair value amount, the residual value from the time when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The useful life of buildings is assessed annually for every individual component (component approach). Property and plant classified into components and their maximum life Components Useful life (expressed in years) Land n.a. Shell 50 Outer layer 30 Wind turbines 25 Solar panels 25 Systems 20 Fittings and fixtures 15 Repair and maintenance costs are charged to the income statement in the period in which they are incurred. Expenses incurred after the acquisition of an asset are capitalised if it is probable that the future economic benefits will flow to a.s.r. and the cost of the asset can be measured reliably. Upon the sale of a property or plant, the part of the revaluation reserve related to the sold property or plant, within equity, is transferred to \u2018other reserves\u2019 and is not reclassified to the income statement. Therefore annually a transfer is also made from the revaluation reserve related to \u2018other reserves\u2019 in line with the depreciation recognised in the income statement for the revalued portion. Equipment Equipment is recognised at cost, less accumulated depreciation and/or any accumulated impairment losses. Cost corresponds with the cash paid or the fair value of the consideration given to acquire the asset. Equipment is depreciated over its useful life, which is determined individually (usually between three and five years). Repair and maintenance costs are charged to the income statement in the period in which they are incurred. Expenses incurred after the acquisition of an asset are capitalised if it is probable that the future economic benefits will flow to a.s.r. and the cost of the asset can be measured reliably. Accounting for borrowing costs attributable to the construction of property, plant and equipment is the same as accounting for borrowing costs attributable to investment property. For details, see accounting policy D. Right-of-use assets Right-of-use assets are recognised for lease contracts for which a.s.r. is the lessee. For more information reference is made to accounting policy BB. V. Associates and joint ventures Associates Associates are entities over which a.s.r. has significant influence on operating and financial contracts, without having control. Generally, associates are accounted for using the equity method from the date at which a.s.r. acquires significant influence until the date at which such influence ceases. This means that associates are initially recognised at cost, including any goodwill paid. This value is subsequently adjusted to take account of a.s.r.\u2019s share of the associate\u2019s comprehensive income. Comprehensive income is adjusted in accordance with the accounting principles used by a.s.r. Losses are accounted for until the carrying amount of the investment has reached zero. Further provisions are recognised only to the extent that a.s.r. has incurred legal or constructive obligations concerning these associates. If objective evidence of impairment exists, associates are tested for impairment and, if necessary, written down. When the application of the equity method produces information that is not relevant to the investors, a.s.r. may use the exemption of IAS 28 to measure the investments in those associates at fair value through profit or loss in accordance with IAS 39. a.s.r. applies fair value measurement for investments in real estate equity funds and mortgage equity funds, over which a.s.r. has significant influence. Joint ventures Joint ventures are contractual arrangements whereby a.s.r. and one or more parties undertake an economic activity that is subject to joint control. Joint control exists only when the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control. These interests are accounted for using the equity method as applied to associates. The interests are recognised in the financial statements from the date on which a.s.r. first obtains joint control until the date that this joint control ceases. If objective evidence of impairment exists, joint ventures are tested for impairment and, if necessary an impairment is recognised in the income statement. Joint operations a.s.r. has a limited number of non-material joint operations. These are recognised in relation to a.s.r.\u2019s interest in the joint operation\u2019s individual balance sheet and income statement items. X. Other assets Other assets include accrued investment and interest income, property developments, tax assets and accrued assets. Property developments consist of property under development commissioned by third parties. Development property is measured at cost including any incremental costs (if a.s.r. expects to recover those costs), directly related costs to the contract (i.e. labour, materials, allocation of directly related costs, payments to subcontractors) and construction period interest, less any invoiced instalments and impairments. Revenue on property development is primarily accounted for at the moment the property is sold. This is a performance obligation satisfied at a point in time. The point in time is the moment a customer obtains control of the promised asset. Property developments which are sold can have guarantees (such as rent guarantees or construction guarantees), which may give rise to a separate performance obligation. BB. Leasing A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for a consideration. For contracts that contain a lease component and one or more additional lease or non-lease components a.s.r. applies the practical expedient not to separate non-lease components from lease components. At the commencement date of the lease, a.s.r. recognises a right-of-use asset and a lease liability. The right-of-use asset comprises the amount of the lease liability at initial measurement. The lease liability is measured at the present value of the lease payments that are not paid at the commencement date. For vehicles, the lease payments are discounted using the interest rate implicit in the lease. For other leases a.s.r.\u2019s incremental borrowing rate is used. Subsequently, the right-of-use asset is valued at cost less any cumulated depreciation and any accumulated impairment losses and adjusted for any remeasurement of the lease liability. The lease liability is increased with interest accrued and reduced for lease payments made. When applicable the lease liability is remeasured for changes in future payments resulting from a change in index or lease term. The right-of-use assets are presented under property, plant and equipment. The lease liabilities are presented under borrowings. MM. Impairments An asset is impaired when its carrying amount exceeds its recoverable amount. Impairment losses are recognised in the income statement as soon as they are identified. For details, see the relevant items of chapter 6.3.4 as mentioned earlier. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-681": { "value": "C. Intangible assets Intangible assets are carried at cost, less any accumulated amortisation and impairment losses. The residual value and the estimated useful life of intangible assets are assessed on each balance sheet date and adjusted where applicable. Goodwill Acquisitions by a.s.r. are accounted for using the acquisition method. Goodwill represents the excess of the cost of an acquisition over the fair value of a.s.r.\u2019s share of the net identifiable assets and liabilities and contingent liabilities of the acquired company at acquisition date. If there is no excess (purchase gain), the carrying amount is directly recognised through the income statement. At the acquisition date, goodwill is allocated to the cash-generating units (CGUs) that are expected to benefit from the business combination. Goodwill has an indefinite useful life and is not amortised. a.s.r. performs an impairment test annually, or more frequently if events or circumstances warrant so, to ascertain whether goodwill has been subject to impairment. As part of this, the carrying amount of the cash-generating unit to which the goodwill has been allocated is compared with its recoverable amount. The recoverable amount is the higher of a CGU\u2019s fair value less costs to sell and value in use. The carrying value is determined as the net asset value including goodwill. The methodologies applied to arrive at the best estimate of the recoverable amount involves two steps. In the first step of the impairment test, the best estimate of the recoverable amount of the CGU to which goodwill is allocated is determined separately based on Price to Earnings or Price to EBITDA ratios (fair value less cost to sell model). The ratio used per CGU depends on the characteristics of the entity in question. The main assumptions in this valuation are the multiples for the aforementioned ratios. These are developed internally but are either derived from or corroborated against market information that is related to observable transactions in the market for comparable businesses. If the outcome of the first step indicates that the difference between the recoverable amount and the carrying value may not be sufficient to support the amount of goodwill allocated to the CGU, step two is performed. In step two an additional analysis is performed in order to determine a recoverable amount in a manner that better addresses the specific characteristics of the relevant CGU. The additional analysis is based on internal value-in-use models, wherein managements assumptions in relation to cash flow projections for budget periods up to and including five years are used and, if deemed justified, expanded to a longer period given the nature of the insurance activities. Other assumptions, such as the (pre-tax) discount rate and the steady state growth rate, are determined on the advice of an independent external party and are based on a Capital Asset Pricing Model. This methodology is based on a risk-free rate plus a risk premium. Operating assumptions are best estimate assumptions and based on historical data where available. Economic assumptions are based on observable market data and projections of future trends. If the recoverable amount is lower than its carrying amount, the difference is directly charged to the income statement as an impairment loss. In the event of impairment, a.s.r. first reduces the carrying amount of the goodwill allocated to the CGU. After that, the carrying amount of the other assets included in the unit is reduced pro rata to the carrying amount of all the assets in the unit. Value of Business Acquired The Value of Business Acquired (VOBA) represents the difference between the fair value and the carrying amount of insurance portfolios that have been acquired, either directly from another insurer or through the acquisition of a subsidiary. VOBA is recognised as an intangible asset with a finite useful life and amortised over the term of the current insurance contracts at acquisition date, in conjunction with the corresponding obligations. With regard to VOBA, allowance is made for the outcome of the annual compulsory LAT for insurance contracts (see accounting policy J). Amortisation charges related to VOBA are included in net claims and benefits. The negative VOBA is amortised based on the weighted average term of the acquired insurance contracts at acquisition date. Negative VOBA, or an additional provision, is recognised and presented under the Liabilities arising from insurance contracts. Should VOBA\u2019s carrying amount exceed the difference between the carrying amount of the liabilities arising from insurance contracts and the liabilities identified as part of the LAT and no other adjustment is made to the liabilities as a result of the LAT outcomes, VOBA is impaired to a level where the values are equal. This is charged to the income statement as an impairment loss. N. Acquisitions (Business combinations) Acquisitions are accounted for according to the acquisition method, with the cost of the acquisitions being allocated to the fair value of the acquired identifiable assets, liabilities and contingent liabilities. Goodwill, being the difference between the cost of the acquisition and a.s.r.\u2019s interest in the fair value of the acquired identifiable assets, liabilities and contingent liabilities on the acquisition date, is capitalised as an intangible asset. Any gain as a result of a purchase is recognised directly in the statement of profit or loss. Any change, in the fair value of acquired assets and liabilities at the acquisition date, determined within one year after acquisition, is recognised as an adjustment charged to goodwill in case of a preliminary valuation. Adjustments that occur after a period of one year are recognised in the income statement. Adjustments to the purchase price that are contingent on future events, and to the extent that these are not already included in the purchase price, are included in the purchase price of the acquisition at the time the adjustment is likely and can be measured reliably. Where applicable in the notes to the financial statements the acquisitions are recognised in the changes in the composition of the group. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-682": { "value": "C. Intangible assets Intangible assets are carried at cost, less any accumulated amortisation and impairment losses. The residual value and the estimated useful life of intangible assets are assessed on each balance sheet date and adjusted where applicable. Goodwill Acquisitions by a.s.r. are accounted for using the acquisition method. Goodwill represents the excess of the cost of an acquisition over the fair value of a.s.r.\u2019s share of the net identifiable assets and liabilities and contingent liabilities of the acquired company at acquisition date. If there is no excess (purchase gain), the carrying amount is directly recognised through the income statement. At the acquisition date, goodwill is allocated to the cash-generating units (CGUs) that are expected to benefit from the business combination. Goodwill has an indefinite useful life and is not amortised. a.s.r. performs an impairment test annually, or more frequently if events or circumstances warrant so, to ascertain whether goodwill has been subject to impairment. As part of this, the carrying amount of the cash-generating unit to which the goodwill has been allocated is compared with its recoverable amount. The recoverable amount is the higher of a CGU\u2019s fair value less costs to sell and value in use. The carrying value is determined as the net asset value including goodwill. The methodologies applied to arrive at the best estimate of the recoverable amount involves two steps. In the first step of the impairment test, the best estimate of the recoverable amount of the CGU to which goodwill is allocated is determined separately based on Price to Earnings or Price to EBITDA ratios (fair value less cost to sell model). The ratio used per CGU depends on the characteristics of the entity in question. The main assumptions in this valuation are the multiples for the aforementioned ratios. These are developed internally but are either derived from or corroborated against market information that is related to observable transactions in the market for comparable businesses. If the outcome of the first step indicates that the difference between the recoverable amount and the carrying value may not be sufficient to support the amount of goodwill allocated to the CGU, step two is performed. In step two an additional analysis is performed in order to determine a recoverable amount in a manner that better addresses the specific characteristics of the relevant CGU. The additional analysis is based on internal value-in-use models, wherein managements assumptions in relation to cash flow projections for budget periods up to and including five years are used and, if deemed justified, expanded to a longer period given the nature of the insurance activities. Other assumptions, such as the (pre-tax) discount rate and the steady state growth rate, are determined on the advice of an independent external party and are based on a Capital Asset Pricing Model. This methodology is based on a risk-free rate plus a risk premium. Operating assumptions are best estimate assumptions and based on historical data where available. Economic assumptions are based on observable market data and projections of future trends. If the recoverable amount is lower than its carrying amount, the difference is directly charged to the income statement as an impairment loss. In the event of impairment, a.s.r. first reduces the carrying amount of the goodwill allocated to the CGU. After that, the carrying amount of the other assets included in the unit is reduced pro rata to the carrying amount of all the assets in the unit. Value of Business Acquired The Value of Business Acquired (VOBA) represents the difference between the fair value and the carrying amount of insurance portfolios that have been acquired, either directly from another insurer or through the acquisition of a subsidiary. VOBA is recognised as an intangible asset with a finite useful life and amortised over the term of the current insurance contracts at acquisition date, in conjunction with the corresponding obligations. With regard to VOBA, allowance is made for the outcome of the annual compulsory LAT for insurance contracts (see accounting policy J). Amortisation charges related to VOBA are included in net claims and benefits. The negative VOBA is amortised based on the weighted average term of the acquired insurance contracts at acquisition date. Negative VOBA, or an additional provision, is recognised and presented under the Liabilities arising from insurance contracts. Should VOBA\u2019s carrying amount exceed the difference between the carrying amount of the liabilities arising from insurance contracts and the liabilities identified as part of the LAT and no other adjustment is made to the liabilities as a result of the LAT outcomes, VOBA is impaired to a level where the values are equal. This is charged to the income statement as an impairment loss. U. Property, plant and equipment Property held for own use and plant Property held for own use and plant, comprise of land, office buildings, wind farms and solar parks, are measured at fair value (revaluation model) based on annual valuations. The valuation are conducted by external independent valuators with adequate professional expertise and experience in the specific location and categories of properties or plant. They are subsequently measured at fair value, including any unrealised fair value changes in equity, taking into account any deferred tax liabilities. For the method of determining the fair value reference is made to accounting policy B for investment property and plant. Increase in the fair value exceeding the cost price is added to the revaluation reserve in shareholders\u2019 equity, less deferred taxes. Decreases in the fair value that offset previous increases of the same asset, are charged against the revaluation reserve. The revaluation reserve cannot be negative. All other decreases in fair value are accounted for in the income statement. Increases that reverse a revaluation decrease on the same asset previously recognised in net result are recognised in the income statement. Buildings, wind farms and solar parks are depreciated using the straight-line method based on expected useful life, taking into account their fair value amount, the residual value from the time when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The useful life of buildings is assessed annually for every individual component (component approach). Property and plant classified into components and their maximum life Components Useful life (expressed in years) Land n.a. Shell 50 Outer layer 30 Wind turbines 25 Solar panels 25 Systems 20 Fittings and fixtures 15 Repair and maintenance costs are charged to the income statement in the period in which they are incurred. Expenses incurred after the acquisition of an asset are capitalised if it is probable that the future economic benefits will flow to a.s.r. and the cost of the asset can be measured reliably. Upon the sale of a property or plant, the part of the revaluation reserve related to the sold property or plant, within equity, is transferred to \u2018other reserves\u2019 and is not reclassified to the income statement. Therefore annually a transfer is also made from the revaluation reserve related to \u2018other reserves\u2019 in line with the depreciation recognised in the income statement for the revalued portion. Equipment Equipment is recognised at cost, less accumulated depreciation and/or any accumulated impairment losses. Cost corresponds with the cash paid or the fair value of the consideration given to acquire the asset. Equipment is depreciated over its useful life, which is determined individually (usually between three and five years). Repair and maintenance costs are charged to the income statement in the period in which they are incurred. Expenses incurred after the acquisition of an asset are capitalised if it is probable that the future economic benefits will flow to a.s.r. and the cost of the asset can be measured reliably. Accounting for borrowing costs attributable to the construction of property, plant and equipment is the same as accounting for borrowing costs attributable to investment property. For details, see accounting policy D. Right-of-use assets Right-of-use assets are recognised for lease contracts for which a.s.r. is the lessee. For more information reference is made to accounting policy BB. BB. Leasing A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for a consideration. For contracts that contain a lease component and one or more additional lease or non-lease components a.s.r. applies the practical expedient not to separate non-lease components from lease components. At the commencement date of the lease, a.s.r. recognises a right-of-use asset and a lease liability. The right-of-use asset comprises the amount of the lease liability at initial measurement. The lease liability is measured at the present value of the lease payments that are not paid at the commencement date. For vehicles, the lease payments are discounted using the interest rate implicit in the lease. For other leases a.s.r.\u2019s incremental borrowing rate is used. Subsequently, the right-of-use asset is valued at cost less any cumulated depreciation and any accumulated impairment losses and adjusted for any remeasurement of the lease liability. The lease liability is increased with interest accrued and reduced for lease payments made. When applicable the lease liability is remeasured for changes in future payments resulting from a change in index or lease term. The right-of-use assets are presented under property, plant and equipment. The lease liabilities are presented under borrowings. KK. Operating expenses This item relates to expenses associated with a.s.r.\u2019s operations that are directly attributable to the reporting period, such as marketing costs, ICT expenses, consulting fees, business accommodation expenses, cost of temporary employees, and depreciation charges. Personnel expenses are mainly comprised of salaries, social security contributions and pension costs. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-683": { "value": "Intangible assets are carried at cost, less any accumulated amortisation and impairment losses. The residual value and the estimated useful life of intangible assets are assessed on each balance sheet date and adjusted where applicable.
Acquisitions by a.s.r. are accounted for using the acquisition method. Goodwill represents the excess of the cost of an acquisition over the fair value of a.s.r.\u2019s share of the net identifiable assets and liabilities and contingent liabilities of the acquired company at acquisition date. If there is no excess (purchase gain), the carrying amount is directly recognised through the income statement. At the acquisition date, goodwill is allocated to the cash-generating units (CGUs) that are expected to benefit from the business combination.
Goodwill has an indefinite useful life and is not amortised. a.s.r. performs an impairment test annually, or more frequently if events or circumstances warrant so, to ascertain whether goodwill has been subject to impairment. As part of this, the carrying amount of the cash-generating unit to which the goodwill has been allocated is compared with its recoverable amount. The recoverable amount is the higher of a CGU\u2019s fair value less costs to sell and value in use. The carrying value is determined as the net asset value including goodwill. The methodologies applied to arrive at the best estimate of the recoverable amount involves two steps.
In the first step of the impairment test, the best estimate of the recoverable amount of the CGU to which goodwill is allocated is determined separately based on Price to Earnings or Price to EBITDA ratios (fair value less cost to sell model). The ratio used per CGU depends on the characteristics of the entity in question. The main assumptions in this valuation are the multiples for the aforementioned ratios. These are developed internally but are either derived from or corroborated against market information that is related to observable transactions in the market for comparable businesses.
If the outcome of the first step indicates that the difference between the recoverable amount and the carrying value may not be sufficient to support the amount of goodwill allocated to the CGU, step two is performed. In step two an additional analysis is performed in order to determine a recoverable amount in a manner that better addresses the specific characteristics of the relevant CGU.
The additional analysis is based on internal value-in-use models, wherein managements assumptions in relation to cash flow projections for budget periods up to and including five years are used and, if deemed justified, expanded to a longer period given the nature of the insurance activities. Other assumptions, such as the (pre-tax) discount rate and the steady state growth rate, are determined on the advice of an independent external party and are based on a Capital Asset Pricing Model. This methodology is based on a risk-free rate plus a risk premium. Operating assumptions are best estimate assumptions and based on historical data where available. Economic assumptions are based on observable market data and projections of future trends.
If the recoverable amount is lower than its carrying amount, the difference is directly charged to the income statement as an impairment loss.
In the event of impairment, a.s.r. first reduces the carrying amount of the goodwill allocated to the CGU. After that, the carrying amount of the other assets included in the unit is reduced pro rata to the carrying amount of all the assets in the unit.
The Value of Business Acquired (VOBA) represents the difference between the fair value and the carrying amount of insurance portfolios that have been acquired, either directly from another insurer or through the acquisition of a subsidiary. VOBA is recognised as an intangible asset with a finite useful life and amortised over the term of the current insurance contracts at acquisition date, in conjunction with the corresponding obligations. With regard to VOBA, allowance is made for the outcome of the annual compulsory LAT for insurance contracts (see accounting policy J). Amortisation charges related to VOBA are included in net claims and benefits. The negative VOBA is amortised based on the weighted average term of the acquired insurance contracts at acquisition date. Negative VOBA, or an additional provision, is recognised and presented under the Liabilities arising from insurance contracts.
Should VOBA\u2019s carrying amount exceed the difference between the carrying amount of the liabilities arising from insurance contracts and the liabilities identified as part of the LAT and no other adjustment is made to the liabilities as a result of the LAT outcomes, VOBA is impaired to a level where the values are equal. This is charged to the income statement as an impairment loss.
This includes liabilities arising from insurance contracts issued by a.s.r. that transfer significant insurance risks, and in some cases also financial risk (FR), from the policyholder to a.s.r.
These liabilities comprise a provision for claims, a provision for current risks, and a provision for unearned premiums. The provision for claims is based on estimates of claims payable. Claims payable relate to unpaid claims and claims handling costs, as well as claims IBNR.
The estimates are based on individual assessments of the reported claims, on past experiences and estimates of trends (expert judgement) in claims behaviour, (national) social factors and economic factors and relevant court decisions. In the process of determining the liabilities, allowance is made for amounts recoverable from third parties and expected subrogation reimbursements.
Loss obligations in respect of occupational disability are discounted. The recognised provisions are sufficient to cover the cost of claims and claims handling fees. a.s.r. discounts obligations for losses only for claims with determinable and fixed payment terms.
Additional provisions are generally recognised for realised gains or losses on financial assets allocated to insurance contracts if and to the extent that the current interest rate is lower than the interest rate that was used in the pricing principles at inception of the insurance contract.
The provision for current risks is based on the estimate of future claims taking into account future premiums.
The provision for unearned premiums is equal to gross unearned premium income less commissions paid. The provision is determined on a time proportional basis.
Future obligations in respect of policy benefits for life insurance contracts are calculated based on a net premium method (the present value of future obligations less the present value of future net premiums) using the same principles as for calculating the premium at inception of the insurance contract. A provision for future administrative expenses is recognised for contracts whose future premium payment period is shorter than the future maturity of the insurance policy, or for which no more premiums are paid. A provision is recognised for part of longevity risk associated with life insurance contracts (e.g. group life and annuity contracts), a.s.r. manages the longevity risk exposure in combination with the mortality risk exposure. No addition to the provision for longevity risk is recognised if the outcome of the LAT (see \u2018IFRS LAT Life\u2019 later in this chapter) indicates that the total amount of the provision is adequate.
Additional provisions are generally recognised for realised gains or losses on financial assets allocated to:
Insurance contracts with participation features;
Non-participating insurance contracts if and to the extent that the current interest rate is lower than the interest rate that was used in the pricing principles at inception of the insurance contract.
These financial assets include fixed-income financial assets available for sale, specific financial assets designated at fair value through profit or loss, and specific derivatives (i.e. swaptions, interest rate swaps and inflation rate swaps). The realised gains or losses are amortised based on the remaining maturity period of the disposed financial assets. The realised gains or losses and the amortisation thereof are included in net insurance claims and benefits.
Participating contracts include additional obligations relating to contractual dividends or profit sharing and are stated net of capitalised interest rate rebates. These interest rate rebates are amortised in accordance with actuarial principles to the extent that the expected surplus interest is realised.
Reinsurance liabilities, with a.s.r. qualifying as the reinsurer and with significant insurance risk being transferred to a.s.r., are accounted for in the same way as regular directly written insurance contracts. They are included under liabilities arising from insurance contracts.
Obligations to insurers where a.s.r. qualifies as the reinsurer, and with no significant insurance risk being transferred to a.s.r., are recognised as debts to policyholders.
Under DPF life insurance contracts, policyholders are assigned, in addition to their entitlement to a guaranteed element, an entitlement to potentially significant additional benefits whose amount or timing is contractually at the discretion of a.s.r. These additional benefits are based on the performance of a specified pool of investment contracts, specific investments held by a.s.r. or on the issuer\u2019s operational result.
Expected entitlements to discretionary benefits are recorded in equity. Once a decision has been taken for discretionary participation features, any related benefits are recognised as liabilities.
The Group\u2019s insurance accounting policies include the application of shadow accounting which is a specialised accounting treatment commonly utilised in insurance accounting and is permitted under IFRS.
The purpose of shadow accounting is to help reduce potential accounting mismatches which can occur when related assets and liabilities:
Are measured on a different basis; or
Have changes in their measurements recorded in different IFRS performance statements (Income Statement or OCI).
Under shadow accounting, adjustments are made to the insurance liability to reflect the unrealised gains or losses from the financial instruments backing these insurance liabilities. For non-participating contracts, adjustments are made to the insurance liability to reflect the unrealised gains from the financial instruments (including derivatives) backing these insurance liabilities. In addition, shadow accounting is applied to the unrealised fair value losses on derivatives held to the extent that they are allocated to the entity.
The shadow accounting policy is applied to certain types of insurance liabilities:
Insurance contracts with participation features;
Non-participating insurance contracts (including disability insurance contracts) if and to the extent that the IFRS LAT would be triggered. This would be the case when current interest rates are lower than the interest rates that were used in the pricing principles at inception of the insurance contract.
Shadow accounting allows a recognised but unrealised gain or loss on an asset to affect the measurement of its insurance liabilities in the same way that a realised gain or loss does.
Shadow accounting is applied to unrealised value changes in fixed-income financial assets available for sale, specific financial assets designated at fair value through profit or loss, and specific derivatives (i.e. swaptions and interest rate and inflation rate swaps) that are backing the liabilities arising from insurance contracts. The related adjustment to the insurance liability is recognised in OCI if, and only if, the unrealised gains or losses are recognised in other comprehensive income. Unrealised gains and losses on assets at fair value through profit or loss are recognised in the income statement with a corresponding adjustment for shadow accounting in the income statement under \u2018Net insurance claims and benefits\u2019.
No shadow accounting is applied to:
Impairments; and
Revaluations of debt instrument that have been subject to impairment.
In 2022, triggered by increasing interest rates, a.s.r. enhanced the application of shadow accounting, see accounting policy A.
The LAT is performed at each reporting date to assess the adequacy of insurance liabilities. The insurance liabilities for the LAT are calculated in accordance with Solvency II, using the Ultimate Forward Rate (UFR) prevailing at the reporting date.
Where the Property & Casualty (P&C) (motor, fire and liability) and Health liabilities business is concerned, the LAT is performed using statistical analyses. Any identified losses are used as a basis for estimating future claims arising from an insurance contract from the portfolio on the balance sheet date. This is the best estimate. An appropriate risk margin is added. The risk margin is determined for each homogeneous risk group using the Cost of Capital (CoC) method that is also used for Life. With effect from 2016 the Non-life CoC rate of 6% is used for all Non-life business, including Disability. The total of best estimate and risk margin is compared to the technical provision recorded in the balance sheet.
The LAT for the disability portfolio is based on cash flow projections using realistic assumptions comparable to the LAT for the life portfolio (see below).
The total of best estimate and risk margin for Non-life segment as a whole, is compared to the technical provision recorded in the balance sheet. If there is a deficiency, the Non-life insurance liabilities are increased to adequate levels through a charge to the income statement.
The LAT is performed at each reporting date to assess the adequacy of insurance liabilities. The insurance liabilities for the LAT are calculated in accordance with Solvency II, using the UFR prevailing at the reporting date.
Liabilities are adequate if the technical provision recognised in a.s.r.\u2019s balance sheet for the Life segment as a whole at least equals the best estimate of the life insurance liabilities including an appropriate risk margin. If there is a deficiency in the life insurance liabilities, those liabilities are increased to adequate levels through a charge to the income statement.
Also unrecognised gains and losses from relevant assets that are not carried at fair value in the balance sheet are taken into account to the extent these assets are allocated to cover the insurance liabilities. The various elements of the LAT are further discussed below.
The best estimate of an insurance contract is the net present value of the projected cash flows of benefits and expenses, less the net present value of premiums. These cash flows are estimated using realistic, \u2018best estimate\u2019, assumptions in relation to mortality, longevity, lapse rate, expense and inflation. The best estimate assumptions regarding mortality and longevity include recent trend assumptions for life expectancy in the Netherlands, as provided by the Dutch Koninklijk Actuarieel Genootschap (Actuarial Association). The best estimate includes the intrinsic value and the time value of financial options and guarantees (TVOG) and is calculated using stochastic techniques.
Where applicable, the participating features of the insurance contracts, such as profit sharing, are taken into account in the future cash flows. The cash flows are discounted using the Euro swap curve including a credit risk adjustment (CRA), with UFR and volatility adjustment (VA).
In unit-linked contracts, the best estimate equals the fund value of the contract less the net present value of future margins on mortality and expense. Where unit-linked contracts with a guaranteed minimum benefit on expiration are concerned, the best estimate is increased by a TVOG.
The risk margin is determined for each homogeneous risk group using the CoC method. For life a CoC rate of 6% (2021: 6%) is used. a.s.r. uses the latest standard Solvency II model, to quantify the risks. The risks that are incorporated in the risk margin are: insurances risks, counterparty default risk related to reinsurance and operational risk. A projection of expected future risks is made and all these risks are projected into the future. The total risk for every future year is determined based on correlations between the risks described in the Solvency II standard model. The projected total risk for every year is multiplied by a cost of capital charge and discounted at the balance sheet date.
Options embedded in insurance contracts are not stated separately. They are treated in the same way as the host contract. These options are recognised in the adequacy test, taking into consideration both the intrinsic and the time value.
Liabilities arising from insurance contracts for the account and risk of policyholders mainly concern unit-linked contracts.
An investment unit is a share in an investment fund that a.s.r. acquires on behalf of the policyholders using net premiums paid by the policyholders. The gain upon maturity of the contract is equal to the current value of the investment units of the fund in question. The current value of an investment unit (unit value) reflects the fair value of the financial assets held by a.s.r.\u2019s investment funds divided by the number of units.
The fair value of the financial liabilities is obtained by multiplying the number of units attributed to each contract holder at the end of the reporting period by the unit value on the same date. Allowance is also made for liabilities arising from technical insurance risks (death, occupational disability).
Some unit-linked contracts include guaranteed benefits at maturity. To cover these guarantees, an additional obligation is recognised in the balance sheet that depends on the current fund value and the level of the guarantee. Actuarial assumptions about future fund developments and mortality are taken into account in the determination this obligation.
Liabilities arising from insurance contracts on behalf of policyholders also include obligations in connection with savings pools and group pension contracts, with policyholders bearing the investment risk. These liabilities also include a provision for compensation of possible high cost of the unit linked insurance contracts, as agreed in 2008 with the consumer organisations. The additional compensation related to the unit linked insurance contracts for the past has been included in the insurance liability and is therefore included in the investment portfolio. In addition, there is still a provision for compensation for claimants and compassionate and supportive policy \u2018flankerend beleid\u2019.
For the LAT relating to the liabilities arising from insurance contracts on behalf of policyholders see accounting policy J.
Insurance contracts are defined as contracts under which a.s.r. accepts significant insurance risk from policyholders by agreeing to compensate policyholders if a specified uncertain future event adversely affects the policyholder. These contracts are considered insurance contracts throughout the remaining term to maturity, irrespective of when the insured event occurs. In addition, these contracts can also transfer FR.
a.s.r. offers non-life insurance contracts and life insurance contracts.
Non-life insurance contracts are contracts that provide cover that is not related to the life or death of insured persons. These insurance contracts are classified into the following categories: Disability, Health, P&C (motor, fire and liability) and Other.
Life insurance contracts (in cash) include savings-linked mortgages, annuities, term insurance policies, savings contracts and funeral insurance contracts. In addition to non-participating life insurance contracts, the insurance portfolio also includes:
Individual and group participating contracts;
Individual contracts with DPF (see accounting policy J);
Group contracts with segregated pools with return on investment guarantees.
Claims from these life insurance contracts are directly linked to the underlying investments. The investment risk and return are borne fully for policyholders (see accounting policy K). Life insurance contracts for the account and risk of policyholders generally consist of contracts where premiums, after deduction of costs and risk premium, are invested in unit-linked funds. For some individual contracts, a.s.r. guarantees returns on unit-linked investment funds. In addition, group contracts with segregated pools are classified as life insurance contracts on behalf of policyholders.
Contracts that transfer a significant insurance risk from a.s.r. to third parties are accounted for as reinsurance contracts, and are classified as outgoing reinsurance.
The amounts that can be collected from reinsurers are estimated using a method that is in line with the reinsurance contract and the method for determining liabilities arising from reinsurance contracts.
Assets arising from reinsurance contracts are recognised under reinsurance contracts, except for current receivables from reinsurers, which are included under loans and receivables.
At each reporting date, a.s.r. assesses whether objective evidence of impairment exists. If a reinsurance asset is impaired, its carrying amount is reduced to its recoverable amount.
Non-life insurance premiums are accounted for in the period in which they are earned. As indicated in accounting policy J, invoiced but not yet earned premiums are included under liabilities arising from insurance contracts.
Life insurance premiums relating to life insurance contracts are recognised as income when received from policyholders. Liabilities arising from insurance contracts are recognised based on estimated future benefits and expenses, and charged to the income statement. These expenses are recorded within \u2018insurance claims and benefits\u2019. Therefore, in accordance with the matching principle, the profits are realised over the estimated term of the contracts.
Investments on behalf of policyholders are measured at fair value through profit or loss. Any changes in value are recognised in result on investments on behalf of policyholders. This also includes interest income and dividends received on investments on behalf of policyholders.
This item includes changes in liabilities arising from insurance contracts (see accounting policy J) and the related benefits. Expenses associated with contracts on behalf of policyholders relate to changes in liabilities arising from insurance contracts on behalf of policyholders, including the benefits charged to the liabilities.
This mainly relates to commissions paid. Commission paid to acquire insurance contracts are charged to the income statement, generally within one year.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInsuranceContracts", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-684": { "value": "D. Investment property Investment property is property held to earn rent or for capital appreciation or both. Property interests held under operating leases are classified and accounted for as investment property. In some cases, a.s.r. is the owner-occupier of investment properties. If owner-occupied properties cannot be sold separately, they are treated as investment property only if a.s.r. holds an insignificant portion for use in the supply of services or for administrative purposes. Property held for own uses (owner-occupied) is recognised within property, plant and equipment. Investment property is primarily recognised using the fair value model. After initial recognition, a.s.r. remeasures all of its investment property (see accounting policy B) whereby any gain or loss arising from a change in the fair value of the specific investment property is recognised in the income statement under fair value gains and losses. Residential property is generally let for an indefinite period. Other investment property is let for defined periods under leases that cannot be terminated early. Some contracts contain renewal options. Rentals are accounted for as investment income in the period to which they relate. If there is a change in the designation of property, it can lead to: Reclassification from property, plant and equipment to investment property: at the end of the period of owner-occupation or at inception of an operating lease with a third party; or Reclassification from investment property to property, plant and equipment: at the commencement of owner-occupation or at the start of developments initiated with a view to selling the property to a third party. The following categories of investment property are recognised by a.s.r. based primarily on the techniques used in determining the fair value of the investment property: Retail; Residential; Rural; Offices; Other (consisting primarily of parking); Investment property under development. Property under development for future use as investment property is recognised as investment property. The valuation of investment property takes (expected) vacancies into account. Borrowing costs directly attributable to the acquisition or development of an asset are capitalised and are part of the cost of that asset. Borrowing costs are capitalised when the following conditions are met: Expenditures for the asset and borrowing costs are incurred; and Activities are undertaken that are necessary to prepare an asset for its intended use. Borrowing costs are no longer capitalised when the asset is ready for use or sale. If the development of assets is interrupted for a longer period, capitalisation of borrowing costs is suspended. If the construction is completed in stages and each part of an asset can be used separately, the borrowing costs for each part that reaches completion are no longer capitalised. U. Property, plant and equipment Property held for own use and plant Property held for own use and plant, comprise of land, office buildings, wind farms and solar parks, are measured at fair value (revaluation model) based on annual valuations. The valuation are conducted by external independent valuators with adequate professional expertise and experience in the specific location and categories of properties or plant. They are subsequently measured at fair value, including any unrealised fair value changes in equity, taking into account any deferred tax liabilities. For the method of determining the fair value reference is made to accounting policy B for investment property and plant. Increase in the fair value exceeding the cost price is added to the revaluation reserve in shareholders\u2019 equity, less deferred taxes. Decreases in the fair value that offset previous increases of the same asset, are charged against the revaluation reserve. The revaluation reserve cannot be negative. All other decreases in fair value are accounted for in the income statement. Increases that reverse a revaluation decrease on the same asset previously recognised in net result are recognised in the income statement. Buildings, wind farms and solar parks are depreciated using the straight-line method based on expected useful life, taking into account their fair value amount, the residual value from the time when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The useful life of buildings is assessed annually for every individual component (component approach). Property and plant classified into components and their maximum life Components Useful life (expressed in years) Land n.a. Shell 50 Outer layer 30 Wind turbines 25 Solar panels 25 Systems 20 Fittings and fixtures 15 Repair and maintenance costs are charged to the income statement in the period in which they are incurred. Expenses incurred after the acquisition of an asset are capitalised if it is probable that the future economic benefits will flow to a.s.r. and the cost of the asset can be measured reliably. Upon the sale of a property or plant, the part of the revaluation reserve related to the sold property or plant, within equity, is transferred to \u2018other reserves\u2019 and is not reclassified to the income statement. Therefore annually a transfer is also made from the revaluation reserve related to \u2018other reserves\u2019 in line with the depreciation recognised in the income statement for the revalued portion. Equipment Equipment is recognised at cost, less accumulated depreciation and/or any accumulated impairment losses. Cost corresponds with the cash paid or the fair value of the consideration given to acquire the asset. Equipment is depreciated over its useful life, which is determined individually (usually between three and five years). Repair and maintenance costs are charged to the income statement in the period in which they are incurred. Expenses incurred after the acquisition of an asset are capitalised if it is probable that the future economic benefits will flow to a.s.r. and the cost of the asset can be measured reliably. Accounting for borrowing costs attributable to the construction of property, plant and equipment is the same as accounting for borrowing costs attributable to investment property. For details, see accounting policy D. Right-of-use assets Right-of-use assets are recognised for lease contracts for which a.s.r. is the lessee. For more information reference is made to accounting policy BB. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingCostsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-685": { "value": "D. Investment property Investment property is property held to earn rent or for capital appreciation or both. Property interests held under operating leases are classified and accounted for as investment property. In some cases, a.s.r. is the owner-occupier of investment properties. If owner-occupied properties cannot be sold separately, they are treated as investment property only if a.s.r. holds an insignificant portion for use in the supply of services or for administrative purposes. Property held for own uses (owner-occupied) is recognised within property, plant and equipment. Investment property is primarily recognised using the fair value model. After initial recognition, a.s.r. remeasures all of its investment property (see accounting policy B) whereby any gain or loss arising from a change in the fair value of the specific investment property is recognised in the income statement under fair value gains and losses. Residential property is generally let for an indefinite period. Other investment property is let for defined periods under leases that cannot be terminated early. Some contracts contain renewal options. Rentals are accounted for as investment income in the period to which they relate. If there is a change in the designation of property, it can lead to: Reclassification from property, plant and equipment to investment property: at the end of the period of owner-occupation or at inception of an operating lease with a third party; or Reclassification from investment property to property, plant and equipment: at the commencement of owner-occupation or at the start of developments initiated with a view to selling the property to a third party. The following categories of investment property are recognised by a.s.r. based primarily on the techniques used in determining the fair value of the investment property: Retail; Residential; Rural; Offices; Other (consisting primarily of parking); Investment property under development. Property under development for future use as investment property is recognised as investment property. The valuation of investment property takes (expected) vacancies into account. Borrowing costs directly attributable to the acquisition or development of an asset are capitalised and are part of the cost of that asset. Borrowing costs are capitalised when the following conditions are met: Expenditures for the asset and borrowing costs are incurred; and Activities are undertaken that are necessary to prepare an asset for its intended use. Borrowing costs are no longer capitalised when the asset is ready for use or sale. If the development of assets is interrupted for a longer period, capitalisation of borrowing costs is suspended. If the construction is completed in stages and each part of an asset can be used separately, the borrowing costs for each part that reaches completion are no longer capitalised. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentPropertyExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-686": { "value": "D. Investment property Investment property is property held to earn rent or for capital appreciation or both. Property interests held under operating leases are classified and accounted for as investment property. In some cases, a.s.r. is the owner-occupier of investment properties. If owner-occupied properties cannot be sold separately, they are treated as investment property only if a.s.r. holds an insignificant portion for use in the supply of services or for administrative purposes. Property held for own uses (owner-occupied) is recognised within property, plant and equipment. Investment property is primarily recognised using the fair value model. After initial recognition, a.s.r. remeasures all of its investment property (see accounting policy B) whereby any gain or loss arising from a change in the fair value of the specific investment property is recognised in the income statement under fair value gains and losses. Residential property is generally let for an indefinite period. Other investment property is let for defined periods under leases that cannot be terminated early. Some contracts contain renewal options. Rentals are accounted for as investment income in the period to which they relate. If there is a change in the designation of property, it can lead to: Reclassification from property, plant and equipment to investment property: at the end of the period of owner-occupation or at inception of an operating lease with a third party; or Reclassification from investment property to property, plant and equipment: at the commencement of owner-occupation or at the start of developments initiated with a view to selling the property to a third party. The following categories of investment property are recognised by a.s.r. based primarily on the techniques used in determining the fair value of the investment property: Retail; Residential; Rural; Offices; Other (consisting primarily of parking); Investment property under development. Property under development for future use as investment property is recognised as investment property. The valuation of investment property takes (expected) vacancies into account. Borrowing costs directly attributable to the acquisition or development of an asset are capitalised and are part of the cost of that asset. Borrowing costs are capitalised when the following conditions are met: Expenditures for the asset and borrowing costs are incurred; and Activities are undertaken that are necessary to prepare an asset for its intended use. Borrowing costs are no longer capitalised when the asset is ready for use or sale. If the development of assets is interrupted for a longer period, capitalisation of borrowing costs is suspended. If the construction is completed in stages and each part of an asset can be used separately, the borrowing costs for each part that reaches completion are no longer capitalised. E. Investments Based on the amended IFRS 4, effective as of 1 January 2018, a.s.r. meets the criteria of a predominant insurer as of 31 December 2015 as the percentage of the total carrying amount of its liabilities connected with insurance related activities to the total carrying amount of all its liabilities exceeded 90% at that date. The liabilities connected with insurance, that are not liabilities directly arising from contracts within the scope of IFRS 4, have a carrying amount of \u20ac\u00a03.3 billion and primarily relate to the derivative liabilities and due to banks as included in the Non-life and Life segments and the subordinated liabilities. As a result a.s.r. decided to apply the temporary exemption from applying IFRS 9 by deferral until IFRS 17 (new accounting standard for insurance contracts) is implemented. The implementation of amended IFRS 4 had no significant impact on the consolidated financial statements of a.s.r. The additional disclosure requirements are presented in the chapters on Risk management and Other notes. When a.s.r. becomes party to a financial asset contract, the related assets are classified into one of the following categories: Financial assets at fair value through profit or loss; Loans and receivables (see accounting policy H); or Financial assets available for sale. The classification of the financial assets is determined at initial recognition. The classification depends on the purpose for which the investments were acquired. For detailed information on the fair value of the financial assets please see accounting policy B. Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include: Derivatives that do not qualify for hedge accounting (see accounting policy B and I); Financial assets, designated by a.s.r. as carried at fair value through profit or loss. This option is available whenever: It eliminates or significantly reduces a measurement inconsistency that would otherwise arise from measuring assets or liabilities on different bases (accounting mismatch); a.s.r. manages a group of financial instruments (assets, liabilities or both) on the basis of fair value in accordance with a documented risk management or investment strategy; or The financial assets contain one or more embedded derivatives and a.s.r. does not separate the derivative from the host contract; and Associates for which a.s.r. uses the fair value option under IAS 28. Financial assets at fair value through profit or loss are stated at fair value. At initial recognition, transaction costs are recognised in the income statement. Realised and unrealised gains and losses in the fair value are also recognised in the income statement. Financial assets available for sale Financial assets available for sale are financial assets that are not accounted for as financial assets at fair value through profit or loss, or as loans and receivables. On initial recognition, financial assets available for sale are measured at fair value (including transaction costs). They are subsequently measured at fair value, including any unrealised fair value changes in equity and impairments, taking into account any deferred tax liabilities. Financial assets available for sale include equities (ordinary and preference shares), bonds, other fixed-income securities, unit trusts, variable-income securities and interests in investment pools. Impairment of financial assets At the end of each reporting period, a.s.r. assesses whether there is any objective evidence that a financial asset or a group of financial assets may be impaired. Financial assets at fair value through profit or loss are not subject to impairment testing, because the fair value of these assets reflects any impairment losses. In the case of equity investments available for sale, a significant or prolonged decline in the fair value of the security below its cost is objective evidence of impairment. a.s.r. considers as a significant or prolonged decline to have occurred if the fair value: Has fallen 25% or more below cost; or Has fallen below cost for an uninterrupted period of twelve months or longer. Fixed-income financial assets available for sale are tested for impairment if objective evidence exists that the counterparty will default. Objective evidence includes: bankruptcy, financial reorganisation or delinquency in payments for more than 30 days. The assessment may also involve circumstances requiring a more detailed estimate, such as in the event of an equity deficit, recurring financial difficulties, downgrading of the credit rating or other creditors reverting to legal action. This assessment is made at each reporting date by the Level of Concern Committee, where the portfolio managers and analysts assign a level of concern from \u2018Nil\u2019 to \u2018Three\u2019 to each of the fixed-income assets. A level of concern \u2018Nil\u2019 means that there is no reason for concern, while a level of concern \u2018Three\u2019 indicates that the situation is critical and that an impairment is highly recommended. The final decision to recognise an impairment loss on a financial asset or to reverse a prior impairment loss is taken in the Impairment and Valuation Committee, chaired by the director ASR Vermogensbeheer N.V. Impairment losses are recognised directly in the income statement and represent the difference between amortised cost and the fair value at the balance sheet date, net of any previously recognised impairments. If, at a later stage, the fair value of the financial assets available for sale should increase and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through the income statement. Impairment losses on equities available for sale are not reversed, and any increases in fair value are recorded in equity. F. Investments on behalf of policyholders Investments made for the account and risk of policyholders mainly concern unit-linked insurance contracts and group contracts with segregated pools. These investments are carried at fair value. Any realised and unrealised value changes of the investments are recognised in the income statement as gains or losses on investments on behalf of policyholders. Where applicable the investments are consolidated in the financial statements and the breakdown is included in the related disclosure. G. Investments related to investment contracts Investments related to investment contracts comprise investments made for the account and risk of policyholders. These investments are carried at fair value. Any realised and unrealised value changes of the investments are recognised in the income statement as gains or losses on investments related to investment contracts. Where applicable the investments are consolidated in the financial statements and the breakdown is included in the related disclosure. H. Loans and receivables Loans and receivables are measured at fair value plus transaction costs on initial recognition. They are subsequently measured at amortised cost based on the effective interest rate method, less impairment losses if deemed necessary. Receivables from customers Receivables from customers are primarily comprised of business loans and mortgage loans. Receivables from credit institutions Receivables from credit institutions concern business loans, deposits and the savings portion of savings mortgages concluded by a.s.r. Trade and other receivables Trade and other receivables are receivables arising from a.s.r.\u2019s normal business operations. Impairment of loans and receivables At each balance sheet date, a.s.r. assesses whether objective evidence of impairment exists of the loans and receivables. An individually assessed asset is considered impaired if objective evidence exists that a.s.r. is unable to collect all the amounts due by the counterparty in accordance with the contractual terms and conditions. The amount of the impairment loss is equal to the difference between the asset\u2019s carrying amount and its recoverable amount. The recoverable amount equals the present value of estimated future cash flows, including amounts realised from guarantees and securities provided, discounted at the financial asset\u2019s original effective interest rate. Loans and receivables that are not individually significant are grouped on the basis of similar credit risk characteristics. Impairment based on the collective approach is determined by applying risk models for similar financial assets, taking account of historical information and regularly updated parameters for default. Incurred but not reported (IBNR) losses are also taken into account. IBNR is estimated by reference to historical loss patterns. The current economic climate is reflected, and account is taken of potentially higher credit risk-based on an analysis of the economic situation. Impairment losses are charged to the income statement. If, at a later stage, the impairment losses should decrease and the decrease can be related objectively to an event occurring after the impairment was recognised, the decrease in the impairment loss is recognised in the income statement. I. Derivatives Derivatives are primarily used by a.s.r. for hedging interest rate and exchange rate risks, for hedging future transactions and the exposure to market risks. Derivatives are mandatorily measured at fair value through profit or loss. a.s.r. does not apply hedge accounting. U. Property, plant and equipment Property held for own use and plant Property held for own use and plant, comprise of land, office buildings, wind farms and solar parks, are measured at fair value (revaluation model) based on annual valuations. The valuation are conducted by external independent valuators with adequate professional expertise and experience in the specific location and categories of properties or plant. They are subsequently measured at fair value, including any unrealised fair value changes in equity, taking into account any deferred tax liabilities. For the method of determining the fair value reference is made to accounting policy B for investment property and plant. Increase in the fair value exceeding the cost price is added to the revaluation reserve in shareholders\u2019 equity, less deferred taxes. Decreases in the fair value that offset previous increases of the same asset, are charged against the revaluation reserve. The revaluation reserve cannot be negative. All other decreases in fair value are accounted for in the income statement. Increases that reverse a revaluation decrease on the same asset previously recognised in net result are recognised in the income statement. Buildings, wind farms and solar parks are depreciated using the straight-line method based on expected useful life, taking into account their fair value amount, the residual value from the time when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The useful life of buildings is assessed annually for every individual component (component approach). Property and plant classified into components and their maximum life Components Useful life (expressed in years) Land n.a. Shell 50 Outer layer 30 Wind turbines 25 Solar panels 25 Systems 20 Fittings and fixtures 15 Repair and maintenance costs are charged to the income statement in the period in which they are incurred. Expenses incurred after the acquisition of an asset are capitalised if it is probable that the future economic benefits will flow to a.s.r. and the cost of the asset can be measured reliably. Upon the sale of a property or plant, the part of the revaluation reserve related to the sold property or plant, within equity, is transferred to \u2018other reserves\u2019 and is not reclassified to the income statement. Therefore annually a transfer is also made from the revaluation reserve related to \u2018other reserves\u2019 in line with the depreciation recognised in the income statement for the revalued portion. Equipment Equipment is recognised at cost, less accumulated depreciation and/or any accumulated impairment losses. Cost corresponds with the cash paid or the fair value of the consideration given to acquire the asset. Equipment is depreciated over its useful life, which is determined individually (usually between three and five years). Repair and maintenance costs are charged to the income statement in the period in which they are incurred. Expenses incurred after the acquisition of an asset are capitalised if it is probable that the future economic benefits will flow to a.s.r. and the cost of the asset can be measured reliably. Accounting for borrowing costs attributable to the construction of property, plant and equipment is the same as accounting for borrowing costs attributable to investment property. For details, see accounting policy D. Right-of-use assets Right-of-use assets are recognised for lease contracts for which a.s.r. is the lessee. For more information reference is made to accounting policy BB. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-687": { "value": "E. Investments Based on the amended IFRS 4, effective as of 1 January 2018, a.s.r. meets the criteria of a predominant insurer as of 31 December 2015 as the percentage of the total carrying amount of its liabilities connected with insurance related activities to the total carrying amount of all its liabilities exceeded 90% at that date. The liabilities connected with insurance, that are not liabilities directly arising from contracts within the scope of IFRS 4, have a carrying amount of \u20ac\u00a03.3 billion and primarily relate to the derivative liabilities and due to banks as included in the Non-life and Life segments and the subordinated liabilities. As a result a.s.r. decided to apply the temporary exemption from applying IFRS 9 by deferral until IFRS 17 (new accounting standard for insurance contracts) is implemented. The implementation of amended IFRS 4 had no significant impact on the consolidated financial statements of a.s.r. The additional disclosure requirements are presented in the chapters on Risk management and Other notes. When a.s.r. becomes party to a financial asset contract, the related assets are classified into one of the following categories: Financial assets at fair value through profit or loss; Loans and receivables (see accounting policy H); or Financial assets available for sale. The classification of the financial assets is determined at initial recognition. The classification depends on the purpose for which the investments were acquired. For detailed information on the fair value of the financial assets please see accounting policy B. Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include: Derivatives that do not qualify for hedge accounting (see accounting policy B and I); Financial assets, designated by a.s.r. as carried at fair value through profit or loss. This option is available whenever: It eliminates or significantly reduces a measurement inconsistency that would otherwise arise from measuring assets or liabilities on different bases (accounting mismatch); a.s.r. manages a group of financial instruments (assets, liabilities or both) on the basis of fair value in accordance with a documented risk management or investment strategy; or The financial assets contain one or more embedded derivatives and a.s.r. does not separate the derivative from the host contract; and Associates for which a.s.r. uses the fair value option under IAS 28. Financial assets at fair value through profit or loss are stated at fair value. At initial recognition, transaction costs are recognised in the income statement. Realised and unrealised gains and losses in the fair value are also recognised in the income statement. Financial assets available for sale Financial assets available for sale are financial assets that are not accounted for as financial assets at fair value through profit or loss, or as loans and receivables. On initial recognition, financial assets available for sale are measured at fair value (including transaction costs). They are subsequently measured at fair value, including any unrealised fair value changes in equity and impairments, taking into account any deferred tax liabilities. Financial assets available for sale include equities (ordinary and preference shares), bonds, other fixed-income securities, unit trusts, variable-income securities and interests in investment pools. Impairment of financial assets At the end of each reporting period, a.s.r. assesses whether there is any objective evidence that a financial asset or a group of financial assets may be impaired. Financial assets at fair value through profit or loss are not subject to impairment testing, because the fair value of these assets reflects any impairment losses. In the case of equity investments available for sale, a significant or prolonged decline in the fair value of the security below its cost is objective evidence of impairment. a.s.r. considers as a significant or prolonged decline to have occurred if the fair value: Has fallen 25% or more below cost; or Has fallen below cost for an uninterrupted period of twelve months or longer. Fixed-income financial assets available for sale are tested for impairment if objective evidence exists that the counterparty will default. Objective evidence includes: bankruptcy, financial reorganisation or delinquency in payments for more than 30 days. The assessment may also involve circumstances requiring a more detailed estimate, such as in the event of an equity deficit, recurring financial difficulties, downgrading of the credit rating or other creditors reverting to legal action. This assessment is made at each reporting date by the Level of Concern Committee, where the portfolio managers and analysts assign a level of concern from \u2018Nil\u2019 to \u2018Three\u2019 to each of the fixed-income assets. A level of concern \u2018Nil\u2019 means that there is no reason for concern, while a level of concern \u2018Three\u2019 indicates that the situation is critical and that an impairment is highly recommended. The final decision to recognise an impairment loss on a financial asset or to reverse a prior impairment loss is taken in the Impairment and Valuation Committee, chaired by the director ASR Vermogensbeheer N.V. Impairment losses are recognised directly in the income statement and represent the difference between amortised cost and the fair value at the balance sheet date, net of any previously recognised impairments. If, at a later stage, the fair value of the financial assets available for sale should increase and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through the income statement. Impairment losses on equities available for sale are not reversed, and any increases in fair value are recorded in equity. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForAvailableforsaleFinancialAssetsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-688": { "value": "E. Investments Based on the amended IFRS 4, effective as of 1 January 2018, a.s.r. meets the criteria of a predominant insurer as of 31 December 2015 as the percentage of the total carrying amount of its liabilities connected with insurance related activities to the total carrying amount of all its liabilities exceeded 90% at that date. The liabilities connected with insurance, that are not liabilities directly arising from contracts within the scope of IFRS 4, have a carrying amount of \u20ac\u00a03.3 billion and primarily relate to the derivative liabilities and due to banks as included in the Non-life and Life segments and the subordinated liabilities. As a result a.s.r. decided to apply the temporary exemption from applying IFRS 9 by deferral until IFRS 17 (new accounting standard for insurance contracts) is implemented. The implementation of amended IFRS 4 had no significant impact on the consolidated financial statements of a.s.r. The additional disclosure requirements are presented in the chapters on Risk management and Other notes. When a.s.r. becomes party to a financial asset contract, the related assets are classified into one of the following categories: Financial assets at fair value through profit or loss; Loans and receivables (see accounting policy H); or Financial assets available for sale. The classification of the financial assets is determined at initial recognition. The classification depends on the purpose for which the investments were acquired. For detailed information on the fair value of the financial assets please see accounting policy B. Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include: Derivatives that do not qualify for hedge accounting (see accounting policy B and I); Financial assets, designated by a.s.r. as carried at fair value through profit or loss. This option is available whenever: It eliminates or significantly reduces a measurement inconsistency that would otherwise arise from measuring assets or liabilities on different bases (accounting mismatch); a.s.r. manages a group of financial instruments (assets, liabilities or both) on the basis of fair value in accordance with a documented risk management or investment strategy; or The financial assets contain one or more embedded derivatives and a.s.r. does not separate the derivative from the host contract; and Associates for which a.s.r. uses the fair value option under IAS 28. Financial assets at fair value through profit or loss are stated at fair value. At initial recognition, transaction costs are recognised in the income statement. Realised and unrealised gains and losses in the fair value are also recognised in the income statement. Financial assets available for sale Financial assets available for sale are financial assets that are not accounted for as financial assets at fair value through profit or loss, or as loans and receivables. On initial recognition, financial assets available for sale are measured at fair value (including transaction costs). They are subsequently measured at fair value, including any unrealised fair value changes in equity and impairments, taking into account any deferred tax liabilities. Financial assets available for sale include equities (ordinary and preference shares), bonds, other fixed-income securities, unit trusts, variable-income securities and interests in investment pools. Impairment of financial assets At the end of each reporting period, a.s.r. assesses whether there is any objective evidence that a financial asset or a group of financial assets may be impaired. Financial assets at fair value through profit or loss are not subject to impairment testing, because the fair value of these assets reflects any impairment losses. In the case of equity investments available for sale, a significant or prolonged decline in the fair value of the security below its cost is objective evidence of impairment. a.s.r. considers as a significant or prolonged decline to have occurred if the fair value: Has fallen 25% or more below cost; or Has fallen below cost for an uninterrupted period of twelve months or longer. Fixed-income financial assets available for sale are tested for impairment if objective evidence exists that the counterparty will default. Objective evidence includes: bankruptcy, financial reorganisation or delinquency in payments for more than 30 days. The assessment may also involve circumstances requiring a more detailed estimate, such as in the event of an equity deficit, recurring financial difficulties, downgrading of the credit rating or other creditors reverting to legal action. This assessment is made at each reporting date by the Level of Concern Committee, where the portfolio managers and analysts assign a level of concern from \u2018Nil\u2019 to \u2018Three\u2019 to each of the fixed-income assets. A level of concern \u2018Nil\u2019 means that there is no reason for concern, while a level of concern \u2018Three\u2019 indicates that the situation is critical and that an impairment is highly recommended. The final decision to recognise an impairment loss on a financial asset or to reverse a prior impairment loss is taken in the Impairment and Valuation Committee, chaired by the director ASR Vermogensbeheer N.V. Impairment losses are recognised directly in the income statement and represent the difference between amortised cost and the fair value at the balance sheet date, net of any previously recognised impairments. If, at a later stage, the fair value of the financial assets available for sale should increase and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through the income statement. Impairment losses on equities available for sale are not reversed, and any increases in fair value are recorded in equity. F. Investments on behalf of policyholders Investments made for the account and risk of policyholders mainly concern unit-linked insurance contracts and group contracts with segregated pools. These investments are carried at fair value. Any realised and unrealised value changes of the investments are recognised in the income statement as gains or losses on investments on behalf of policyholders. Where applicable the investments are consolidated in the financial statements and the breakdown is included in the related disclosure. G. Investments related to investment contracts Investments related to investment contracts comprise investments made for the account and risk of policyholders. These investments are carried at fair value. Any realised and unrealised value changes of the investments are recognised in the income statement as gains or losses on investments related to investment contracts. Where applicable the investments are consolidated in the financial statements and the breakdown is included in the related disclosure. H. Loans and receivables Loans and receivables are measured at fair value plus transaction costs on initial recognition. They are subsequently measured at amortised cost based on the effective interest rate method, less impairment losses if deemed necessary. Receivables from customers Receivables from customers are primarily comprised of business loans and mortgage loans. Receivables from credit institutions Receivables from credit institutions concern business loans, deposits and the savings portion of savings mortgages concluded by a.s.r. Trade and other receivables Trade and other receivables are receivables arising from a.s.r.\u2019s normal business operations. Impairment of loans and receivables At each balance sheet date, a.s.r. assesses whether objective evidence of impairment exists of the loans and receivables. An individually assessed asset is considered impaired if objective evidence exists that a.s.r. is unable to collect all the amounts due by the counterparty in accordance with the contractual terms and conditions. The amount of the impairment loss is equal to the difference between the asset\u2019s carrying amount and its recoverable amount. The recoverable amount equals the present value of estimated future cash flows, including amounts realised from guarantees and securities provided, discounted at the financial asset\u2019s original effective interest rate. Loans and receivables that are not individually significant are grouped on the basis of similar credit risk characteristics. Impairment based on the collective approach is determined by applying risk models for similar financial assets, taking account of historical information and regularly updated parameters for default. Incurred but not reported (IBNR) losses are also taken into account. IBNR is estimated by reference to historical loss patterns. The current economic climate is reflected, and account is taken of potentially higher credit risk-based on an analysis of the economic situation. Impairment losses are charged to the income statement. If, at a later stage, the impairment losses should decrease and the decrease can be related objectively to an event occurring after the impairment was recognised, the decrease in the impairment loss is recognised in the income statement. I. Derivatives Derivatives are primarily used by a.s.r. for hedging interest rate and exchange rate risks, for hedging future transactions and the exposure to market risks. Derivatives are mandatorily measured at fair value through profit or loss. a.s.r. does not apply hedge accounting. Y. Cash and cash equivalents Cash and cash equivalents include cash in hand, deposits held at call with banks, cash collateral and other short-term highly liquid investments that are not subject to a significant risk of changes in value. Cash and cash equivalents are measured at fair value through profit or loss. AA. Financing Financing includes borrowings, due to customers, due to banks, subordinated liabilities and other financial liabilities. On initial recognition, debt instruments and other loans are stated at fair value, net of transaction costs incurred. Subsequent valuation is at amortised cost. Any difference between the proceeds and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method. Lease liabilities are included under borrowings and measured in accordance with accounting policy BB. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-689": { "value": "E. Investments Based on the amended IFRS 4, effective as of 1 January 2018, a.s.r. meets the criteria of a predominant insurer as of 31 December 2015 as the percentage of the total carrying amount of its liabilities connected with insurance related activities to the total carrying amount of all its liabilities exceeded 90% at that date. The liabilities connected with insurance, that are not liabilities directly arising from contracts within the scope of IFRS 4, have a carrying amount of \u20ac\u00a03.3 billion and primarily relate to the derivative liabilities and due to banks as included in the Non-life and Life segments and the subordinated liabilities. As a result a.s.r. decided to apply the temporary exemption from applying IFRS 9 by deferral until IFRS 17 (new accounting standard for insurance contracts) is implemented. The implementation of amended IFRS 4 had no significant impact on the consolidated financial statements of a.s.r. The additional disclosure requirements are presented in the chapters on Risk management and Other notes. When a.s.r. becomes party to a financial asset contract, the related assets are classified into one of the following categories: Financial assets at fair value through profit or loss; Loans and receivables (see accounting policy H); or Financial assets available for sale. The classification of the financial assets is determined at initial recognition. The classification depends on the purpose for which the investments were acquired. For detailed information on the fair value of the financial assets please see accounting policy B. Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include: Derivatives that do not qualify for hedge accounting (see accounting policy B and I); Financial assets, designated by a.s.r. as carried at fair value through profit or loss. This option is available whenever: It eliminates or significantly reduces a measurement inconsistency that would otherwise arise from measuring assets or liabilities on different bases (accounting mismatch); a.s.r. manages a group of financial instruments (assets, liabilities or both) on the basis of fair value in accordance with a documented risk management or investment strategy; or The financial assets contain one or more embedded derivatives and a.s.r. does not separate the derivative from the host contract; and Associates for which a.s.r. uses the fair value option under IAS 28. Financial assets at fair value through profit or loss are stated at fair value. At initial recognition, transaction costs are recognised in the income statement. Realised and unrealised gains and losses in the fair value are also recognised in the income statement. Financial assets available for sale Financial assets available for sale are financial assets that are not accounted for as financial assets at fair value through profit or loss, or as loans and receivables. On initial recognition, financial assets available for sale are measured at fair value (including transaction costs). They are subsequently measured at fair value, including any unrealised fair value changes in equity and impairments, taking into account any deferred tax liabilities. Financial assets available for sale include equities (ordinary and preference shares), bonds, other fixed-income securities, unit trusts, variable-income securities and interests in investment pools. Impairment of financial assets At the end of each reporting period, a.s.r. assesses whether there is any objective evidence that a financial asset or a group of financial assets may be impaired. Financial assets at fair value through profit or loss are not subject to impairment testing, because the fair value of these assets reflects any impairment losses. In the case of equity investments available for sale, a significant or prolonged decline in the fair value of the security below its cost is objective evidence of impairment. a.s.r. considers as a significant or prolonged decline to have occurred if the fair value: Has fallen 25% or more below cost; or Has fallen below cost for an uninterrupted period of twelve months or longer. Fixed-income financial assets available for sale are tested for impairment if objective evidence exists that the counterparty will default. Objective evidence includes: bankruptcy, financial reorganisation or delinquency in payments for more than 30 days. The assessment may also involve circumstances requiring a more detailed estimate, such as in the event of an equity deficit, recurring financial difficulties, downgrading of the credit rating or other creditors reverting to legal action. This assessment is made at each reporting date by the Level of Concern Committee, where the portfolio managers and analysts assign a level of concern from \u2018Nil\u2019 to \u2018Three\u2019 to each of the fixed-income assets. A level of concern \u2018Nil\u2019 means that there is no reason for concern, while a level of concern \u2018Three\u2019 indicates that the situation is critical and that an impairment is highly recommended. The final decision to recognise an impairment loss on a financial asset or to reverse a prior impairment loss is taken in the Impairment and Valuation Committee, chaired by the director ASR Vermogensbeheer N.V. Impairment losses are recognised directly in the income statement and represent the difference between amortised cost and the fair value at the balance sheet date, net of any previously recognised impairments. If, at a later stage, the fair value of the financial assets available for sale should increase and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through the income statement. Impairment losses on equities available for sale are not reversed, and any increases in fair value are recorded in equity. F. Investments on behalf of policyholders Investments made for the account and risk of policyholders mainly concern unit-linked insurance contracts and group contracts with segregated pools. These investments are carried at fair value. Any realised and unrealised value changes of the investments are recognised in the income statement as gains or losses on investments on behalf of policyholders. Where applicable the investments are consolidated in the financial statements and the breakdown is included in the related disclosure. G. Investments related to investment contracts Investments related to investment contracts comprise investments made for the account and risk of policyholders. These investments are carried at fair value. Any realised and unrealised value changes of the investments are recognised in the income statement as gains or losses on investments related to investment contracts. Where applicable the investments are consolidated in the financial statements and the breakdown is included in the related disclosure. H. Loans and receivables Loans and receivables are measured at fair value plus transaction costs on initial recognition. They are subsequently measured at amortised cost based on the effective interest rate method, less impairment losses if deemed necessary. Receivables from customers Receivables from customers are primarily comprised of business loans and mortgage loans. Receivables from credit institutions Receivables from credit institutions concern business loans, deposits and the savings portion of savings mortgages concluded by a.s.r. Trade and other receivables Trade and other receivables are receivables arising from a.s.r.\u2019s normal business operations. Impairment of loans and receivables At each balance sheet date, a.s.r. assesses whether objective evidence of impairment exists of the loans and receivables. An individually assessed asset is considered impaired if objective evidence exists that a.s.r. is unable to collect all the amounts due by the counterparty in accordance with the contractual terms and conditions. The amount of the impairment loss is equal to the difference between the asset\u2019s carrying amount and its recoverable amount. The recoverable amount equals the present value of estimated future cash flows, including amounts realised from guarantees and securities provided, discounted at the financial asset\u2019s original effective interest rate. Loans and receivables that are not individually significant are grouped on the basis of similar credit risk characteristics. Impairment based on the collective approach is determined by applying risk models for similar financial assets, taking account of historical information and regularly updated parameters for default. Incurred but not reported (IBNR) losses are also taken into account. IBNR is estimated by reference to historical loss patterns. The current economic climate is reflected, and account is taken of potentially higher credit risk-based on an analysis of the economic situation. Impairment losses are charged to the income statement. If, at a later stage, the impairment losses should decrease and the decrease can be related objectively to an event occurring after the impairment was recognised, the decrease in the impairment loss is recognised in the income statement. I. Derivatives Derivatives are primarily used by a.s.r. for hedging interest rate and exchange rate risks, for hedging future transactions and the exposure to market risks. Derivatives are mandatorily measured at fair value through profit or loss. a.s.r. does not apply hedge accounting. Y. Cash and cash equivalents Cash and cash equivalents include cash in hand, deposits held at call with banks, cash collateral and other short-term highly liquid investments that are not subject to a significant risk of changes in value. Cash and cash equivalents are measured at fair value through profit or loss. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-690": { "value": "E. Investments Based on the amended IFRS 4, effective as of 1 January 2018, a.s.r. meets the criteria of a predominant insurer as of 31 December 2015 as the percentage of the total carrying amount of its liabilities connected with insurance related activities to the total carrying amount of all its liabilities exceeded 90% at that date. The liabilities connected with insurance, that are not liabilities directly arising from contracts within the scope of IFRS 4, have a carrying amount of \u20ac\u00a03.3 billion and primarily relate to the derivative liabilities and due to banks as included in the Non-life and Life segments and the subordinated liabilities. As a result a.s.r. decided to apply the temporary exemption from applying IFRS 9 by deferral until IFRS 17 (new accounting standard for insurance contracts) is implemented. The implementation of amended IFRS 4 had no significant impact on the consolidated financial statements of a.s.r. The additional disclosure requirements are presented in the chapters on Risk management and Other notes. When a.s.r. becomes party to a financial asset contract, the related assets are classified into one of the following categories: Financial assets at fair value through profit or loss; Loans and receivables (see accounting policy H); or Financial assets available for sale. The classification of the financial assets is determined at initial recognition. The classification depends on the purpose for which the investments were acquired. For detailed information on the fair value of the financial assets please see accounting policy B. Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include: Derivatives that do not qualify for hedge accounting (see accounting policy B and I); Financial assets, designated by a.s.r. as carried at fair value through profit or loss. This option is available whenever: It eliminates or significantly reduces a measurement inconsistency that would otherwise arise from measuring assets or liabilities on different bases (accounting mismatch); a.s.r. manages a group of financial instruments (assets, liabilities or both) on the basis of fair value in accordance with a documented risk management or investment strategy; or The financial assets contain one or more embedded derivatives and a.s.r. does not separate the derivative from the host contract; and Associates for which a.s.r. uses the fair value option under IAS 28. Financial assets at fair value through profit or loss are stated at fair value. At initial recognition, transaction costs are recognised in the income statement. Realised and unrealised gains and losses in the fair value are also recognised in the income statement. Financial assets available for sale Financial assets available for sale are financial assets that are not accounted for as financial assets at fair value through profit or loss, or as loans and receivables. On initial recognition, financial assets available for sale are measured at fair value (including transaction costs). They are subsequently measured at fair value, including any unrealised fair value changes in equity and impairments, taking into account any deferred tax liabilities. Financial assets available for sale include equities (ordinary and preference shares), bonds, other fixed-income securities, unit trusts, variable-income securities and interests in investment pools. Impairment of financial assets At the end of each reporting period, a.s.r. assesses whether there is any objective evidence that a financial asset or a group of financial assets may be impaired. Financial assets at fair value through profit or loss are not subject to impairment testing, because the fair value of these assets reflects any impairment losses. In the case of equity investments available for sale, a significant or prolonged decline in the fair value of the security below its cost is objective evidence of impairment. a.s.r. considers as a significant or prolonged decline to have occurred if the fair value: Has fallen 25% or more below cost; or Has fallen below cost for an uninterrupted period of twelve months or longer. Fixed-income financial assets available for sale are tested for impairment if objective evidence exists that the counterparty will default. Objective evidence includes: bankruptcy, financial reorganisation or delinquency in payments for more than 30 days. The assessment may also involve circumstances requiring a more detailed estimate, such as in the event of an equity deficit, recurring financial difficulties, downgrading of the credit rating or other creditors reverting to legal action. This assessment is made at each reporting date by the Level of Concern Committee, where the portfolio managers and analysts assign a level of concern from \u2018Nil\u2019 to \u2018Three\u2019 to each of the fixed-income assets. A level of concern \u2018Nil\u2019 means that there is no reason for concern, while a level of concern \u2018Three\u2019 indicates that the situation is critical and that an impairment is highly recommended. The final decision to recognise an impairment loss on a financial asset or to reverse a prior impairment loss is taken in the Impairment and Valuation Committee, chaired by the director ASR Vermogensbeheer N.V. Impairment losses are recognised directly in the income statement and represent the difference between amortised cost and the fair value at the balance sheet date, net of any previously recognised impairments. If, at a later stage, the fair value of the financial assets available for sale should increase and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through the income statement. Impairment losses on equities available for sale are not reversed, and any increases in fair value are recorded in equity. F. Investments on behalf of policyholders Investments made for the account and risk of policyholders mainly concern unit-linked insurance contracts and group contracts with segregated pools. These investments are carried at fair value. Any realised and unrealised value changes of the investments are recognised in the income statement as gains or losses on investments on behalf of policyholders. Where applicable the investments are consolidated in the financial statements and the breakdown is included in the related disclosure. G. Investments related to investment contracts Investments related to investment contracts comprise investments made for the account and risk of policyholders. These investments are carried at fair value. Any realised and unrealised value changes of the investments are recognised in the income statement as gains or losses on investments related to investment contracts. Where applicable the investments are consolidated in the financial statements and the breakdown is included in the related disclosure. I. Derivatives Derivatives are primarily used by a.s.r. for hedging interest rate and exchange rate risks, for hedging future transactions and the exposure to market risks. Derivatives are mandatorily measured at fair value through profit or loss. a.s.r. does not apply hedge accounting. Y. Cash and cash equivalents Cash and cash equivalents include cash in hand, deposits held at call with banks, cash collateral and other short-term highly liquid investments that are not subject to a significant risk of changes in value. Cash and cash equivalents are measured at fair value through profit or loss. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-692": { "value": "E. Investments Based on the amended IFRS 4, effective as of 1 January 2018, a.s.r. meets the criteria of a predominant insurer as of 31 December 2015 as the percentage of the total carrying amount of its liabilities connected with insurance related activities to the total carrying amount of all its liabilities exceeded 90% at that date. The liabilities connected with insurance, that are not liabilities directly arising from contracts within the scope of IFRS 4, have a carrying amount of \u20ac\u00a03.3 billion and primarily relate to the derivative liabilities and due to banks as included in the Non-life and Life segments and the subordinated liabilities. As a result a.s.r. decided to apply the temporary exemption from applying IFRS 9 by deferral until IFRS 17 (new accounting standard for insurance contracts) is implemented. The implementation of amended IFRS 4 had no significant impact on the consolidated financial statements of a.s.r. The additional disclosure requirements are presented in the chapters on Risk management and Other notes. When a.s.r. becomes party to a financial asset contract, the related assets are classified into one of the following categories: Financial assets at fair value through profit or loss; Loans and receivables (see accounting policy H); or Financial assets available for sale. The classification of the financial assets is determined at initial recognition. The classification depends on the purpose for which the investments were acquired. For detailed information on the fair value of the financial assets please see accounting policy B. Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include: Derivatives that do not qualify for hedge accounting (see accounting policy B and I); Financial assets, designated by a.s.r. as carried at fair value through profit or loss. This option is available whenever: It eliminates or significantly reduces a measurement inconsistency that would otherwise arise from measuring assets or liabilities on different bases (accounting mismatch); a.s.r. manages a group of financial instruments (assets, liabilities or both) on the basis of fair value in accordance with a documented risk management or investment strategy; or The financial assets contain one or more embedded derivatives and a.s.r. does not separate the derivative from the host contract; and Associates for which a.s.r. uses the fair value option under IAS 28. Financial assets at fair value through profit or loss are stated at fair value. At initial recognition, transaction costs are recognised in the income statement. Realised and unrealised gains and losses in the fair value are also recognised in the income statement. Financial assets available for sale Financial assets available for sale are financial assets that are not accounted for as financial assets at fair value through profit or loss, or as loans and receivables. On initial recognition, financial assets available for sale are measured at fair value (including transaction costs). They are subsequently measured at fair value, including any unrealised fair value changes in equity and impairments, taking into account any deferred tax liabilities. Financial assets available for sale include equities (ordinary and preference shares), bonds, other fixed-income securities, unit trusts, variable-income securities and interests in investment pools. Impairment of financial assets At the end of each reporting period, a.s.r. assesses whether there is any objective evidence that a financial asset or a group of financial assets may be impaired. Financial assets at fair value through profit or loss are not subject to impairment testing, because the fair value of these assets reflects any impairment losses. In the case of equity investments available for sale, a significant or prolonged decline in the fair value of the security below its cost is objective evidence of impairment. a.s.r. considers as a significant or prolonged decline to have occurred if the fair value: Has fallen 25% or more below cost; or Has fallen below cost for an uninterrupted period of twelve months or longer. Fixed-income financial assets available for sale are tested for impairment if objective evidence exists that the counterparty will default. Objective evidence includes: bankruptcy, financial reorganisation or delinquency in payments for more than 30 days. The assessment may also involve circumstances requiring a more detailed estimate, such as in the event of an equity deficit, recurring financial difficulties, downgrading of the credit rating or other creditors reverting to legal action. This assessment is made at each reporting date by the Level of Concern Committee, where the portfolio managers and analysts assign a level of concern from \u2018Nil\u2019 to \u2018Three\u2019 to each of the fixed-income assets. A level of concern \u2018Nil\u2019 means that there is no reason for concern, while a level of concern \u2018Three\u2019 indicates that the situation is critical and that an impairment is highly recommended. The final decision to recognise an impairment loss on a financial asset or to reverse a prior impairment loss is taken in the Impairment and Valuation Committee, chaired by the director ASR Vermogensbeheer N.V. Impairment losses are recognised directly in the income statement and represent the difference between amortised cost and the fair value at the balance sheet date, net of any previously recognised impairments. If, at a later stage, the fair value of the financial assets available for sale should increase and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through the income statement. Impairment losses on equities available for sale are not reversed, and any increases in fair value are recorded in equity. H. Loans and receivables Loans and receivables are measured at fair value plus transaction costs on initial recognition. They are subsequently measured at amortised cost based on the effective interest rate method, less impairment losses if deemed necessary. Receivables from customers Receivables from customers are primarily comprised of business loans and mortgage loans. Receivables from credit institutions Receivables from credit institutions concern business loans, deposits and the savings portion of savings mortgages concluded by a.s.r. Trade and other receivables Trade and other receivables are receivables arising from a.s.r.\u2019s normal business operations. Impairment of loans and receivables At each balance sheet date, a.s.r. assesses whether objective evidence of impairment exists of the loans and receivables. An individually assessed asset is considered impaired if objective evidence exists that a.s.r. is unable to collect all the amounts due by the counterparty in accordance with the contractual terms and conditions. The amount of the impairment loss is equal to the difference between the asset\u2019s carrying amount and its recoverable amount. The recoverable amount equals the present value of estimated future cash flows, including amounts realised from guarantees and securities provided, discounted at the financial asset\u2019s original effective interest rate. Loans and receivables that are not individually significant are grouped on the basis of similar credit risk characteristics. Impairment based on the collective approach is determined by applying risk models for similar financial assets, taking account of historical information and regularly updated parameters for default. Incurred but not reported (IBNR) losses are also taken into account. IBNR is estimated by reference to historical loss patterns. The current economic climate is reflected, and account is taken of potentially higher credit risk-based on an analysis of the economic situation. Impairment losses are charged to the income statement. If, at a later stage, the impairment losses should decrease and the decrease can be related objectively to an event occurring after the impairment was recognised, the decrease in the impairment loss is recognised in the income statement. MM. Impairments An asset is impaired when its carrying amount exceeds its recoverable amount. Impairment losses are recognised in the income statement as soon as they are identified. For details, see the relevant items of chapter 6.3.4 as mentioned earlier. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-702": { "value": "H. Loans and receivables Loans and receivables are measured at fair value plus transaction costs on initial recognition. They are subsequently measured at amortised cost based on the effective interest rate method, less impairment losses if deemed necessary. Receivables from customers Receivables from customers are primarily comprised of business loans and mortgage loans. Receivables from credit institutions Receivables from credit institutions concern business loans, deposits and the savings portion of savings mortgages concluded by a.s.r. Trade and other receivables Trade and other receivables are receivables arising from a.s.r.\u2019s normal business operations. Impairment of loans and receivables At each balance sheet date, a.s.r. assesses whether objective evidence of impairment exists of the loans and receivables. An individually assessed asset is considered impaired if objective evidence exists that a.s.r. is unable to collect all the amounts due by the counterparty in accordance with the contractual terms and conditions. The amount of the impairment loss is equal to the difference between the asset\u2019s carrying amount and its recoverable amount. The recoverable amount equals the present value of estimated future cash flows, including amounts realised from guarantees and securities provided, discounted at the financial asset\u2019s original effective interest rate. Loans and receivables that are not individually significant are grouped on the basis of similar credit risk characteristics. Impairment based on the collective approach is determined by applying risk models for similar financial assets, taking account of historical information and regularly updated parameters for default. Incurred but not reported (IBNR) losses are also taken into account. IBNR is estimated by reference to historical loss patterns. The current economic climate is reflected, and account is taken of potentially higher credit risk-based on an analysis of the economic situation. Impairment losses are charged to the income statement. If, at a later stage, the impairment losses should decrease and the decrease can be related objectively to an event occurring after the impairment was recognised, the decrease in the impairment loss is recognised in the income statement. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-703": { "value": "H. Loans and receivables Loans and receivables are measured at fair value plus transaction costs on initial recognition. They are subsequently measured at amortised cost based on the effective interest rate method, less impairment losses if deemed necessary. Receivables from customers Receivables from customers are primarily comprised of business loans and mortgage loans. Receivables from credit institutions Receivables from credit institutions concern business loans, deposits and the savings portion of savings mortgages concluded by a.s.r. Trade and other receivables Trade and other receivables are receivables arising from a.s.r.\u2019s normal business operations. Impairment of loans and receivables At each balance sheet date, a.s.r. assesses whether objective evidence of impairment exists of the loans and receivables. An individually assessed asset is considered impaired if objective evidence exists that a.s.r. is unable to collect all the amounts due by the counterparty in accordance with the contractual terms and conditions. The amount of the impairment loss is equal to the difference between the asset\u2019s carrying amount and its recoverable amount. The recoverable amount equals the present value of estimated future cash flows, including amounts realised from guarantees and securities provided, discounted at the financial asset\u2019s original effective interest rate. Loans and receivables that are not individually significant are grouped on the basis of similar credit risk characteristics. Impairment based on the collective approach is determined by applying risk models for similar financial assets, taking account of historical information and regularly updated parameters for default. Incurred but not reported (IBNR) losses are also taken into account. IBNR is estimated by reference to historical loss patterns. The current economic climate is reflected, and account is taken of potentially higher credit risk-based on an analysis of the economic situation. Impairment losses are charged to the income statement. If, at a later stage, the impairment losses should decrease and the decrease can be related objectively to an event occurring after the impairment was recognised, the decrease in the impairment loss is recognised in the income statement. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLoansAndReceivablesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-709": { "value": "I. Derivatives Derivatives are primarily used by a.s.r. for hedging interest rate and exchange rate risks, for hedging future transactions and the exposure to market risks. Derivatives are mandatorily measured at fair value through profit or loss. a.s.r. does not apply hedge accounting. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-710": { "value": "I. Derivatives Derivatives are primarily used by a.s.r. for hedging interest rate and exchange rate risks, for hedging future transactions and the exposure to market risks. Derivatives are mandatorily measured at fair value through profit or loss. a.s.r. does not apply hedge accounting. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-711": { "value": "I. Derivatives Derivatives are primarily used by a.s.r. for hedging interest rate and exchange rate risks, for hedging future transactions and the exposure to market risks. Derivatives are mandatorily measured at fair value through profit or loss. a.s.r. does not apply hedge accounting. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-718": { "value": "L. Liabilities arising from investment contracts Investment contracts comprise investment contracts on behalf of policyholders that bear no insurance risk and for which the actual return on investments allocated to the contract is passed on to the policyholder. Investment contract liabilities are recognised when the contract is entered into and is derecognised when the contact expires, is discharged, cancelled or substantially modified. R. Transaction date and settlement date All purchases and sales of financial instruments, which have to be settled in accordance with standard market conventions, are recognised at the transaction date, which is the date on which a.s.r. becomes party to the contractual stipulations of the instrument. Any purchases and sales other than those requiring delivery within the time frame established by regulations or market conventions are accounted for as forward transactions until the time of settlement. See accounting policy I. OO. Solvency II In accordance with the Solvency II regulations (2009/138/EG art. 75 - 86), Solvency II figures are based on fair value. Fair value measurement is based on the same fair value hierarchy described in the IFRS accounting policies (see accounting policy B). Most important adjustments in the balance sheet, compared to IFRS, are the valuation of the (savings-linked) mortgage loans-portfolio and the liabilities arising from insurance contracts (including the risk margin). Basis of Solvency II Eligible own funds (EOF) is the excess of assets over liabilities, adjusted with some specific EOF-items (subordinated liabilities which classify as EOF under Solvency II and foreseeable dividend). The Solvency Capital Requirement (SCR) of a.s.r. is based on the standard model, including the calculation of the Loss Absorbing Capacity of Deferred Tax (LAC DT). The LAC DT methodology is reviewed and properly documented. Usage of the models is agreed upon with DNB. The Solvency II ratio externally reported by a.s.r. is excluding financial institutions. ", "dimensions": { "concept": "ifrs-full:DescriptionOfOtherAccountingPoliciesRelevantToUnderstandingOfFinancialStatements", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-499": { "value": "L. Liabilities arising from investment contracts Investment contracts comprise investment contracts on behalf of policyholders that bear no insurance risk and for which the actual return on investments allocated to the contract is passed on to the policyholder. Investment contract liabilities are recognised when the contract is entered into and is derecognised when the contact expires, is discharged, cancelled or substantially modified. 6.5.16 Liabilities arising from investment contracts See accounting policy L. Liabilities arising from investment contracts \u00a02022 2021 At 1 January 1,952 - Gross premiums and deposits 447 279 Withdrawals -42 -31 Effect of fair value changes related to financial assets -351 175 Interest credited - 10 Changes in the composition of the group - 1,524 Other changes -5 -4 \u00a0\u00a0\u00a0At 31 December 2,000 1,952 ", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentContractsLiabilitiesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-719": { "value": "M. Employee benefits (IAS 19) Pension obligations a.s.r. has with effect 2021, defined contribution (DC) plans for all its employees, including employees that are employed by entities that operate in the Distribution and Service segment. For these DC plans, a.s.r. pays contributions to privately administered pension insurance plans with ASR Levensverzekering N.V. (hereafter a.s.r. life) on a contractual basis. a.s.r. life recognises these contracts as insurance contracts. They are accounted for in accordance with liabilities arising from insurance contracts (accounting policy J). a.s.r. has no further payment obligations to the employees once the contributions have been paid. The contributions are recognised as operating expenses in the income statement during the period the services are rendered. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available. In addition, a number of defined benefit (DB) plans for own employees exist, which ended at the end of 2020, and were left non-contributory. The defined benefit obligation continues to exist. The plans are schemes under which employees are awarded pension benefits upon retirement, usually dependent on one or more factors, such as years of service and compensation. The defined benefit obligation is calculated at each reporting date by independent actuaries. The liability in respect of DB plans is the present value of the defined benefit obligation at the balance sheet date, less the fair value of the plan assets where the pension plans are insured by third parties. a.s.r. life administers most of the post-employment benefit plans and holds the investments that are intended to cover the employee benefit obligation. These investments do not qualify as plan assets in the consolidated financial statements under IFRS. Pension obligations are calculated using the projected unit credit method. Inherent to this method is the application of actuarial assumptions for discount rates, future salary increases and bonuses, mortality rates and consumer price indices. The assumptions are updated and checked at each reporting date, based on available market data. The assumptions and reports were reviewed by Risk Management. Actuarial assumptions may differ from actual results due to changes in market conditions, economic trends, mortality trends and other assumptions. Any change in these assumptions can have a significant impact on the defined benefit obligation and future pension costs. Changes in the expected actuarial assumptions and differences with the actual actuarial outcomes are recognised in the actuarial gains and losses included in other comprehensive income (component of total equity). When employee benefit plans are modified and when no further obligations exist, a gain or loss, resulting from the changes are recognised directly in the income statement. Consistent with the calculation of a gain or loss on a plan amendment, a.s.r. will use updated actuarial assumptions to determine the current service cost and net interest for the remainder of the annual reporting period upon the time of such amendment. The effect of the asset ceiling, if applicable, is disregarded when calculating the gain or loss on any settlement of the plan. The financing cost related to employee benefits is recognised in interest expense. The current service costs are included in operating expenses. Other long-term employee benefits Plans that offer benefits for long-service (leave), but do not qualify as a post-employment benefit plan, such as jubilee benefits, are measured at present value using the projected unit credit method and changes are recognised directly in the income statement. Other post-retirements obligations a.s.r. offers post-employment benefit plans, such as arrangement for mortgage loans at a discount (fixed amount, reference date December 2017). The entitlement to these benefits is usually conditional on the employee remaining in service up to retirement age and the completion of a minimum service period. The expected costs of these benefits are accrued over the period of employment using an accounting methodology that is similar to that for DB plans. Vacation entitlements A liability is formed for the vacation days which have not been taken at year-end. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-721": { "value": "N. Acquisitions (Business combinations) Acquisitions are accounted for according to the acquisition method, with the cost of the acquisitions being allocated to the fair value of the acquired identifiable assets, liabilities and contingent liabilities. Goodwill, being the difference between the cost of the acquisition and a.s.r.\u2019s interest in the fair value of the acquired identifiable assets, liabilities and contingent liabilities on the acquisition date, is capitalised as an intangible asset. Any gain as a result of a purchase is recognised directly in the statement of profit or loss. Any change, in the fair value of acquired assets and liabilities at the acquisition date, determined within one year after acquisition, is recognised as an adjustment charged to goodwill in case of a preliminary valuation. Adjustments that occur after a period of one year are recognised in the income statement. Adjustments to the purchase price that are contingent on future events, and to the extent that these are not already included in the purchase price, are included in the purchase price of the acquisition at the time the adjustment is likely and can be measured reliably. Where applicable in the notes to the financial statements the acquisitions are recognised in the changes in the composition of the group. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-722": { "value": "O. Basis for consolidation - subsidiaries The consolidated financial statements include the financial statements of a.s.r. and its subsidiaries. Subsidiaries are those entities (which may include deemed separate entities, the so-called silos and investments on behalf of policyholders) over which a.s.r. has control. Control exists when a.s.r. is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. This is the case if more than half of the voting rights may be exercised or if a.s.r. has control in any other manner. Subsidiaries are fully consolidated from the date on which control is acquired by a.s.r. and are deconsolidated when control ceases to exist. A subsidiary\u2019s assets, liabilities and contingent liabilities are measured at fair value on the acquisition date and are subsequently accounted for in accordance with a.s.r.\u2019s accounting policies, which are consistent with IFRS. Non-controlling interests are initially stated at their proportionate share in the fair value of the net assets on the acquisition date and are subsequently adjusted for the non-controlling interest in changes in the subsidiary\u2019s equity. Intragroup transactions Intragroup balances and transactions between consolidated group companies are eliminated. Gains and losses on transactions between a.s.r. and associates and joint ventures are eliminated to the extent of a.s.r.\u2019s interest in these entities. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-500": { "value": "O. Basis for consolidation - subsidiaries The consolidated financial statements include the financial statements of a.s.r. and its subsidiaries. Subsidiaries are those entities (which may include deemed separate entities, the so-called silos and investments on behalf of policyholders) over which a.s.r. has control. Control exists when a.s.r. is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. This is the case if more than half of the voting rights may be exercised or if a.s.r. has control in any other manner. Subsidiaries are fully consolidated from the date on which control is acquired by a.s.r. and are deconsolidated when control ceases to exist. A subsidiary\u2019s assets, liabilities and contingent liabilities are measured at fair value on the acquisition date and are subsequently accounted for in accordance with a.s.r.\u2019s accounting policies, which are consistent with IFRS. Non-controlling interests are initially stated at their proportionate share in the fair value of the net assets on the acquisition date and are subsequently adjusted for the non-controlling interest in changes in the subsidiary\u2019s equity. Intragroup transactions Intragroup balances and transactions between consolidated group companies are eliminated. Gains and losses on transactions between a.s.r. and associates and joint ventures are eliminated to the extent of a.s.r.\u2019s interest in these entities. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-723": { "value": "O. Basis for consolidation - subsidiaries The consolidated financial statements include the financial statements of a.s.r. and its subsidiaries. Subsidiaries are those entities (which may include deemed separate entities, the so-called silos and investments on behalf of policyholders) over which a.s.r. has control. Control exists when a.s.r. is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. This is the case if more than half of the voting rights may be exercised or if a.s.r. has control in any other manner. Subsidiaries are fully consolidated from the date on which control is acquired by a.s.r. and are deconsolidated when control ceases to exist. A subsidiary\u2019s assets, liabilities and contingent liabilities are measured at fair value on the acquisition date and are subsequently accounted for in accordance with a.s.r.\u2019s accounting policies, which are consistent with IFRS. Non-controlling interests are initially stated at their proportionate share in the fair value of the net assets on the acquisition date and are subsequently adjusted for the non-controlling interest in changes in the subsidiary\u2019s equity. Intragroup transactions Intragroup balances and transactions between consolidated group companies are eliminated. Gains and losses on transactions between a.s.r. and associates and joint ventures are eliminated to the extent of a.s.r.\u2019s interest in these entities. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithNoncontrollingInterestsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-725": { "value": "Q. Segment information At organisational level, a.s.r.\u2019s operations have been divided into five operating segments. The main segments are the Non-life and Life segment that include all insurance activities. The non-insurance activities are presented as three separate segments being the Asset Management, Distribution and Services and Holding and Other segment. There is a clear difference between the risk and return profiles of these five segments. Intersegment transactions or transfers are conducted at arm\u2019s length conditions. For detailed information per segment, see chapter 6.4. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-727": { "value": "S. Securities lending a.s.r. participates in securities lending transactions, whereby collateral is received in the form of securities or cash. Cash received as collateral is recognised in the balance sheet and a corresponding liability is recognised as liabilities arising from securities lending in \u2018Due to banks\u2019. Securities lent remain on the balance sheet. Securities received as collateral are not recognised in the balance sheet. Y. Cash and cash equivalents Cash and cash equivalents include cash in hand, deposits held at call with banks, cash collateral and other short-term highly liquid investments that are not subject to a significant risk of changes in value. Cash and cash equivalents are measured at fair value through profit or loss. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForCollateralExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-728": { "value": "T. Statement of cash flows The statement of cash flows classifies cash flows by operating activities, investing activities and financing activities. Cash flows denominated in foreign currencies are converted at the exchange rates applicable on the transaction date. Cash flows from operating activities are reported using the indirect method. Cash flows from operating activities include result before tax, adjustments for gains and losses that did not result in income and payments in the same financial year, adjustments for movements in provisions, and accrued and deferred items. The statement of cash flows recognises interest received and paid, and dividends received within cash flows from operating activities. Cash flows from purchasing and selling investments and investment property are included in cash flows from operating activities on a net basis. Dividends paid are recognised within cash flows from financing activities. Z. Equity Share capital and share premium reserve The share capital disclosed in the balance sheet consists of issued and fully paid-up ordinary shares. The share premium reserve comprises additional paid-in capital in excess of the par value of the shares. Reserve for unrealised gains and losses This reserve consists of: Unrealised gains and losses from assets available for sale net of tax and taking account of adjustments due to shadow accounting (see accounting policy J); The share of unrealised gains and losses of associates and joint ventures held by a.s.r. (see accounting policy V); Unrealised change in value of property for own use (see accounting policy U); Reserve for discretionary participation features (see accounting policy J); Reserve for exchange rate differences arising from assets available for sale. Actuarial gains and losses Actuarial gains and losses result from the post-employment benefit pension plans (see accounting policy M). Retained earnings Retained earnings also include other reserves. Other equity instruments This item represents the par value of the other equity instruments. Costs directly attributable to the equity issue and the tax impact thereof are recognised in retained earnings. Treasury shares Treasury shares are a.s.r.\u2019s own ordinary shares that have been issued and subsequently reacquired by a.s.r. Treasury shares are deducted from equity, regardless of the objective of the transaction. No gain or loss is recognised in the income statement on the purchase, sale, issue or cancellation of the instruments. If sold, the difference between the carrying amount and the proceeds is reflected in retained earnings. The consideration paid or received is recognised directly in shareholders\u2019 equity. All treasury shares are eliminated in the calculation of earnings per share and dividend per ordinary share. Treasury shares are either required as part of the share buy-back programme, or acquired and resold as part of the employee share purchase plan, see chapter 6.7.6. Non-controlling interest The non-controlling interest relates to the equity in a consolidated subsidiary not attributable, directly or indirectly, to a.s.r. (see accounting policy O). Dividends on ordinary share capital Dividends on ordinary shares are recognised as a liability and recognised in equity when they are approved by a.s.r.\u2019s shareholders. Interim dividends are recognised in equity when they are paid. Dividends for the year that are approved after the reporting date are treated as an event after the reporting date. Discretionary interest on other equity instruments Discretionary interest on other equity instruments is recognised in equity upon payment. The related income tax on these equity instruments is recognised in the income statement. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-729": { "value": "T. Statement of cash flows The statement of cash flows classifies cash flows by operating activities, investing activities and financing activities. Cash flows denominated in foreign currencies are converted at the exchange rates applicable on the transaction date. Cash flows from operating activities are reported using the indirect method. Cash flows from operating activities include result before tax, adjustments for gains and losses that did not result in income and payments in the same financial year, adjustments for movements in provisions, and accrued and deferred items. The statement of cash flows recognises interest received and paid, and dividends received within cash flows from operating activities. Cash flows from purchasing and selling investments and investment property are included in cash flows from operating activities on a net basis. Dividends paid are recognised within cash flows from financing activities. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForCashFlowsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-731": { "value": "U. Property, plant and equipment Property held for own use and plant Property held for own use and plant, comprise of land, office buildings, wind farms and solar parks, are measured at fair value (revaluation model) based on annual valuations. The valuation are conducted by external independent valuators with adequate professional expertise and experience in the specific location and categories of properties or plant. They are subsequently measured at fair value, including any unrealised fair value changes in equity, taking into account any deferred tax liabilities. For the method of determining the fair value reference is made to accounting policy B for investment property and plant. Increase in the fair value exceeding the cost price is added to the revaluation reserve in shareholders\u2019 equity, less deferred taxes. Decreases in the fair value that offset previous increases of the same asset, are charged against the revaluation reserve. The revaluation reserve cannot be negative. All other decreases in fair value are accounted for in the income statement. Increases that reverse a revaluation decrease on the same asset previously recognised in net result are recognised in the income statement. Buildings, wind farms and solar parks are depreciated using the straight-line method based on expected useful life, taking into account their fair value amount, the residual value from the time when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The useful life of buildings is assessed annually for every individual component (component approach). Property and plant classified into components and their maximum life Components Useful life (expressed in years) Land n.a. Shell 50 Outer layer 30 Wind turbines 25 Solar panels 25 Systems 20 Fittings and fixtures 15 Repair and maintenance costs are charged to the income statement in the period in which they are incurred. Expenses incurred after the acquisition of an asset are capitalised if it is probable that the future economic benefits will flow to a.s.r. and the cost of the asset can be measured reliably. Upon the sale of a property or plant, the part of the revaluation reserve related to the sold property or plant, within equity, is transferred to \u2018other reserves\u2019 and is not reclassified to the income statement. Therefore annually a transfer is also made from the revaluation reserve related to \u2018other reserves\u2019 in line with the depreciation recognised in the income statement for the revalued portion. Equipment Equipment is recognised at cost, less accumulated depreciation and/or any accumulated impairment losses. Cost corresponds with the cash paid or the fair value of the consideration given to acquire the asset. Equipment is depreciated over its useful life, which is determined individually (usually between three and five years). Repair and maintenance costs are charged to the income statement in the period in which they are incurred. Expenses incurred after the acquisition of an asset are capitalised if it is probable that the future economic benefits will flow to a.s.r. and the cost of the asset can be measured reliably. Accounting for borrowing costs attributable to the construction of property, plant and equipment is the same as accounting for borrowing costs attributable to investment property. For details, see accounting policy D. Right-of-use assets Right-of-use assets are recognised for lease contracts for which a.s.r. is the lessee. For more information reference is made to accounting policy BB. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRepairsAndMaintenanceExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-732": { "value": "U. Property, plant and equipment Property held for own use and plant Property held for own use and plant, comprise of land, office buildings, wind farms and solar parks, are measured at fair value (revaluation model) based on annual valuations. The valuation are conducted by external independent valuators with adequate professional expertise and experience in the specific location and categories of properties or plant. They are subsequently measured at fair value, including any unrealised fair value changes in equity, taking into account any deferred tax liabilities. For the method of determining the fair value reference is made to accounting policy B for investment property and plant. Increase in the fair value exceeding the cost price is added to the revaluation reserve in shareholders\u2019 equity, less deferred taxes. Decreases in the fair value that offset previous increases of the same asset, are charged against the revaluation reserve. The revaluation reserve cannot be negative. All other decreases in fair value are accounted for in the income statement. Increases that reverse a revaluation decrease on the same asset previously recognised in net result are recognised in the income statement. Buildings, wind farms and solar parks are depreciated using the straight-line method based on expected useful life, taking into account their fair value amount, the residual value from the time when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The useful life of buildings is assessed annually for every individual component (component approach). Property and plant classified into components and their maximum life Components Useful life (expressed in years) Land n.a. Shell 50 Outer layer 30 Wind turbines 25 Solar panels 25 Systems 20 Fittings and fixtures 15 Repair and maintenance costs are charged to the income statement in the period in which they are incurred. Expenses incurred after the acquisition of an asset are capitalised if it is probable that the future economic benefits will flow to a.s.r. and the cost of the asset can be measured reliably. Upon the sale of a property or plant, the part of the revaluation reserve related to the sold property or plant, within equity, is transferred to \u2018other reserves\u2019 and is not reclassified to the income statement. Therefore annually a transfer is also made from the revaluation reserve related to \u2018other reserves\u2019 in line with the depreciation recognised in the income statement for the revalued portion. Equipment Equipment is recognised at cost, less accumulated depreciation and/or any accumulated impairment losses. Cost corresponds with the cash paid or the fair value of the consideration given to acquire the asset. Equipment is depreciated over its useful life, which is determined individually (usually between three and five years). Repair and maintenance costs are charged to the income statement in the period in which they are incurred. Expenses incurred after the acquisition of an asset are capitalised if it is probable that the future economic benefits will flow to a.s.r. and the cost of the asset can be measured reliably. Accounting for borrowing costs attributable to the construction of property, plant and equipment is the same as accounting for borrowing costs attributable to investment property. For details, see accounting policy D. Right-of-use assets Right-of-use assets are recognised for lease contracts for which a.s.r. is the lessee. For more information reference is made to accounting policy BB. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-737": { "value": "V. Associates and joint ventures Associates Associates are entities over which a.s.r. has significant influence on operating and financial contracts, without having control. Generally, associates are accounted for using the equity method from the date at which a.s.r. acquires significant influence until the date at which such influence ceases. This means that associates are initially recognised at cost, including any goodwill paid. This value is subsequently adjusted to take account of a.s.r.\u2019s share of the associate\u2019s comprehensive income. Comprehensive income is adjusted in accordance with the accounting principles used by a.s.r. Losses are accounted for until the carrying amount of the investment has reached zero. Further provisions are recognised only to the extent that a.s.r. has incurred legal or constructive obligations concerning these associates. If objective evidence of impairment exists, associates are tested for impairment and, if necessary, written down. When the application of the equity method produces information that is not relevant to the investors, a.s.r. may use the exemption of IAS 28 to measure the investments in those associates at fair value through profit or loss in accordance with IAS 39. a.s.r. applies fair value measurement for investments in real estate equity funds and mortgage equity funds, over which a.s.r. has significant influence. Joint ventures Joint ventures are contractual arrangements whereby a.s.r. and one or more parties undertake an economic activity that is subject to joint control. Joint control exists only when the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control. These interests are accounted for using the equity method as applied to associates. The interests are recognised in the financial statements from the date on which a.s.r. first obtains joint control until the date that this joint control ceases. If objective evidence of impairment exists, joint ventures are tested for impairment and, if necessary an impairment is recognised in the income statement. Joint operations a.s.r. has a limited number of non-material joint operations. These are recognised in relation to a.s.r.\u2019s interest in the joint operation\u2019s individual balance sheet and income statement items. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-738": { "value": "V. Associates and joint ventures Associates Associates are entities over which a.s.r. has significant influence on operating and financial contracts, without having control. Generally, associates are accounted for using the equity method from the date at which a.s.r. acquires significant influence until the date at which such influence ceases. This means that associates are initially recognised at cost, including any goodwill paid. This value is subsequently adjusted to take account of a.s.r.\u2019s share of the associate\u2019s comprehensive income. Comprehensive income is adjusted in accordance with the accounting principles used by a.s.r. Losses are accounted for until the carrying amount of the investment has reached zero. Further provisions are recognised only to the extent that a.s.r. has incurred legal or constructive obligations concerning these associates. If objective evidence of impairment exists, associates are tested for impairment and, if necessary, written down. When the application of the equity method produces information that is not relevant to the investors, a.s.r. may use the exemption of IAS 28 to measure the investments in those associates at fair value through profit or loss in accordance with IAS 39. a.s.r. applies fair value measurement for investments in real estate equity funds and mortgage equity funds, over which a.s.r. has significant influence. Joint ventures Joint ventures are contractual arrangements whereby a.s.r. and one or more parties undertake an economic activity that is subject to joint control. Joint control exists only when the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control. These interests are accounted for using the equity method as applied to associates. The interests are recognised in the financial statements from the date on which a.s.r. first obtains joint control until the date that this joint control ceases. If objective evidence of impairment exists, joint ventures are tested for impairment and, if necessary an impairment is recognised in the income statement. Joint operations a.s.r. has a limited number of non-material joint operations. These are recognised in relation to a.s.r.\u2019s interest in the joint operation\u2019s individual balance sheet and income statement items. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-739": { "value": "V. Associates and joint ventures Associates Associates are entities over which a.s.r. has significant influence on operating and financial contracts, without having control. Generally, associates are accounted for using the equity method from the date at which a.s.r. acquires significant influence until the date at which such influence ceases. This means that associates are initially recognised at cost, including any goodwill paid. This value is subsequently adjusted to take account of a.s.r.\u2019s share of the associate\u2019s comprehensive income. Comprehensive income is adjusted in accordance with the accounting principles used by a.s.r. Losses are accounted for until the carrying amount of the investment has reached zero. Further provisions are recognised only to the extent that a.s.r. has incurred legal or constructive obligations concerning these associates. If objective evidence of impairment exists, associates are tested for impairment and, if necessary, written down. When the application of the equity method produces information that is not relevant to the investors, a.s.r. may use the exemption of IAS 28 to measure the investments in those associates at fair value through profit or loss in accordance with IAS 39. a.s.r. applies fair value measurement for investments in real estate equity funds and mortgage equity funds, over which a.s.r. has significant influence. Joint ventures Joint ventures are contractual arrangements whereby a.s.r. and one or more parties undertake an economic activity that is subject to joint control. Joint control exists only when the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control. These interests are accounted for using the equity method as applied to associates. The interests are recognised in the financial statements from the date on which a.s.r. first obtains joint control until the date that this joint control ceases. If objective evidence of impairment exists, joint ventures are tested for impairment and, if necessary an impairment is recognised in the income statement. Joint operations a.s.r. has a limited number of non-material joint operations. These are recognised in relation to a.s.r.\u2019s interest in the joint operation\u2019s individual balance sheet and income statement items. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsInJointVentures", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-742": { "value": "W. Reinsurance contracts Contracts that transfer a significant insurance risk from a.s.r. to third parties are accounted for as reinsurance contracts, and are classified as outgoing reinsurance. The amounts that can be collected from reinsurers are estimated using a method that is in line with the reinsurance contract and the method for determining liabilities arising from reinsurance contracts. Assets arising from reinsurance contracts are recognised under reinsurance contracts, except for current receivables from reinsurers, which are included under loans and receivables. At each reporting date, a.s.r. assesses whether objective evidence of impairment exists. If a reinsurance asset is impaired, its carrying amount is reduced to its recoverable amount. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForReinsuranceExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-745": { "value": "X. Other assets Other assets include accrued investment and interest income, property developments, tax assets and accrued assets. Property developments consist of property under development commissioned by third parties. Development property is measured at cost including any incremental costs (if a.s.r. expects to recover those costs), directly related costs to the contract (i.e. labour, materials, allocation of directly related costs, payments to subcontractors) and construction period interest, less any invoiced instalments and impairments. Revenue on property development is primarily accounted for at the moment the property is sold. This is a performance obligation satisfied at a point in time. The point in time is the moment a customer obtains control of the promised asset. Property developments which are sold can have guarantees (such as rent guarantees or construction guarantees), which may give rise to a separate performance obligation. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForConstructionInProgressExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-748": { "value": "Y. Cash and cash equivalents Cash and cash equivalents include cash in hand, deposits held at call with banks, cash collateral and other short-term highly liquid investments that are not subject to a significant risk of changes in value. Cash and cash equivalents are measured at fair value through profit or loss. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-753": { "value": "Z. Equity Share capital and share premium reserve The share capital disclosed in the balance sheet consists of issued and fully paid-up ordinary shares. The share premium reserve comprises additional paid-in capital in excess of the par value of the shares. Reserve for unrealised gains and losses This reserve consists of: Unrealised gains and losses from assets available for sale net of tax and taking account of adjustments due to shadow accounting (see accounting policy J); The share of unrealised gains and losses of associates and joint ventures held by a.s.r. (see accounting policy V); Unrealised change in value of property for own use (see accounting policy U); Reserve for discretionary participation features (see accounting policy J); Reserve for exchange rate differences arising from assets available for sale. Actuarial gains and losses Actuarial gains and losses result from the post-employment benefit pension plans (see accounting policy M). Retained earnings Retained earnings also include other reserves. Other equity instruments This item represents the par value of the other equity instruments. Costs directly attributable to the equity issue and the tax impact thereof are recognised in retained earnings. Treasury shares Treasury shares are a.s.r.\u2019s own ordinary shares that have been issued and subsequently reacquired by a.s.r. Treasury shares are deducted from equity, regardless of the objective of the transaction. No gain or loss is recognised in the income statement on the purchase, sale, issue or cancellation of the instruments. If sold, the difference between the carrying amount and the proceeds is reflected in retained earnings. The consideration paid or received is recognised directly in shareholders\u2019 equity. All treasury shares are eliminated in the calculation of earnings per share and dividend per ordinary share. Treasury shares are either required as part of the share buy-back programme, or acquired and resold as part of the employee share purchase plan, see chapter 6.7.6. Non-controlling interest The non-controlling interest relates to the equity in a consolidated subsidiary not attributable, directly or indirectly, to a.s.r. (see accounting policy O). Dividends on ordinary share capital Dividends on ordinary shares are recognised as a liability and recognised in equity when they are approved by a.s.r.\u2019s shareholders. Interim dividends are recognised in equity when they are paid. Dividends for the year that are approved after the reporting date are treated as an event after the reporting date. Discretionary interest on other equity instruments Discretionary interest on other equity instruments is recognised in equity upon payment. The related income tax on these equity instruments is recognised in the income statement. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-755": { "value": "Z. Equity Share capital and share premium reserve The share capital disclosed in the balance sheet consists of issued and fully paid-up ordinary shares. The share premium reserve comprises additional paid-in capital in excess of the par value of the shares. Reserve for unrealised gains and losses This reserve consists of: Unrealised gains and losses from assets available for sale net of tax and taking account of adjustments due to shadow accounting (see accounting policy J); The share of unrealised gains and losses of associates and joint ventures held by a.s.r. (see accounting policy V); Unrealised change in value of property for own use (see accounting policy U); Reserve for discretionary participation features (see accounting policy J); Reserve for exchange rate differences arising from assets available for sale. Actuarial gains and losses Actuarial gains and losses result from the post-employment benefit pension plans (see accounting policy M). Retained earnings Retained earnings also include other reserves. Other equity instruments This item represents the par value of the other equity instruments. Costs directly attributable to the equity issue and the tax impact thereof are recognised in retained earnings. Treasury shares Treasury shares are a.s.r.\u2019s own ordinary shares that have been issued and subsequently reacquired by a.s.r. Treasury shares are deducted from equity, regardless of the objective of the transaction. No gain or loss is recognised in the income statement on the purchase, sale, issue or cancellation of the instruments. If sold, the difference between the carrying amount and the proceeds is reflected in retained earnings. The consideration paid or received is recognised directly in shareholders\u2019 equity. All treasury shares are eliminated in the calculation of earnings per share and dividend per ordinary share. Treasury shares are either required as part of the share buy-back programme, or acquired and resold as part of the employee share purchase plan, see chapter 6.7.6. Non-controlling interest The non-controlling interest relates to the equity in a consolidated subsidiary not attributable, directly or indirectly, to a.s.r. (see accounting policy O). Dividends on ordinary share capital Dividends on ordinary shares are recognised as a liability and recognised in equity when they are approved by a.s.r.\u2019s shareholders. Interim dividends are recognised in equity when they are paid. Dividends for the year that are approved after the reporting date are treated as an event after the reporting date. Discretionary interest on other equity instruments Discretionary interest on other equity instruments is recognised in equity upon payment. The related income tax on these equity instruments is recognised in the income statement. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTreasurySharesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-756": { "value": "AA. Financing Financing includes borrowings, due to customers, due to banks, subordinated liabilities and other financial liabilities. On initial recognition, debt instruments and other loans are stated at fair value, net of transaction costs incurred. Subsequent valuation is at amortised cost. Any difference between the proceeds and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method. Lease liabilities are included under borrowings and measured in accordance with accounting policy BB. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-757": { "value": "AA. Financing Financing includes borrowings, due to customers, due to banks, subordinated liabilities and other financial liabilities. On initial recognition, debt instruments and other loans are stated at fair value, net of transaction costs incurred. Subsequent valuation is at amortised cost. Any difference between the proceeds and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method. Lease liabilities are included under borrowings and measured in accordance with accounting policy BB. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-758": { "value": "AA. Financing Financing includes borrowings, due to customers, due to banks, subordinated liabilities and other financial liabilities. On initial recognition, debt instruments and other loans are stated at fair value, net of transaction costs incurred. Subsequent valuation is at amortised cost. Any difference between the proceeds and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method. Lease liabilities are included under borrowings and measured in accordance with accounting policy BB. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-760": { "value": "BB. Leasing A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for a consideration. For contracts that contain a lease component and one or more additional lease or non-lease components a.s.r. applies the practical expedient not to separate non-lease components from lease components. At the commencement date of the lease, a.s.r. recognises a right-of-use asset and a lease liability. The right-of-use asset comprises the amount of the lease liability at initial measurement. The lease liability is measured at the present value of the lease payments that are not paid at the commencement date. For vehicles, the lease payments are discounted using the interest rate implicit in the lease. For other leases a.s.r.\u2019s incremental borrowing rate is used. Subsequently, the right-of-use asset is valued at cost less any cumulated depreciation and any accumulated impairment losses and adjusted for any remeasurement of the lease liability. The lease liability is increased with interest accrued and reduced for lease payments made. When applicable the lease liability is remeasured for changes in future payments resulting from a change in index or lease term. The right-of-use assets are presented under property, plant and equipment. The lease liabilities are presented under borrowings. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-765": { "value": "DD. Investment income Investment income primarily comprises interest income, dividends on equities and rentals from investment property. Interest income Interest income for all interest-bearing instruments is recognised using the effective interest method, including all transaction costs incurred and share premium / discount. When a receivable is impaired, its carrying amount is reduced to the recoverable amount, i.e. estimated future cash flows discounted at the original effective interest rate of the instrument. Dividends Dividend income is recognised in the income statement when a right to receive payment is established. Rental income Rental income from investment property is allocated to the period to which they relate. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDividendsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-766": { "value": "DD. Investment income Investment income primarily comprises interest income, dividends on equities and rentals from investment property. Interest income Interest income for all interest-bearing instruments is recognised using the effective interest method, including all transaction costs incurred and share premium / discount. When a receivable is impaired, its carrying amount is reduced to the recoverable amount, i.e. estimated future cash flows discounted at the original effective interest rate of the instrument. Dividends Dividend income is recognised in the income statement when a right to receive payment is established. Rental income Rental income from investment property is allocated to the period to which they relate. EE. Realised gains and losses Realised gains and losses include proceeds from the disposal of financial assets available for sale, associates and joint ventures and loans and receivables. With respect to financial assets available for sale, realised gains or losses comprise: The proceeds from the sale or disposal of an asset or liability less the amortised cost of the asset or liability sold; Impairments previously recognised (except for equity instruments). Any unrealised gains and losses previously recorded in equity (the difference between the carrying amount and amortised cost) are recognised in the income statement. FF. Fair value gains and losses Fair value gains and losses include realised and unrealised changes in the value of financial assets at fair value through profit or loss, derivatives and investment property held at fair value. With respect to derivatives, this is based on the fair value excluding accrued interest (clean fair value). GG. Result on investments on behalf of policyholders Investments on behalf of policyholders are measured at fair value through profit or loss. Any changes in value are recognised in result on investments on behalf of policyholders. This also includes interest income and dividends received on investments on behalf of policyholders. HH. Result on investments related to investment contracts Investments related to investment contracts are measured at fair value through profit or loss. Any changes in value are recognised in result on investments related to investment contracts. This also includes interest income and dividends received. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceIncomeAndCostsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-767": { "value": "DD. Investment income Investment income primarily comprises interest income, dividends on equities and rentals from investment property. Interest income Interest income for all interest-bearing instruments is recognised using the effective interest method, including all transaction costs incurred and share premium / discount. When a receivable is impaired, its carrying amount is reduced to the recoverable amount, i.e. estimated future cash flows discounted at the original effective interest rate of the instrument. Dividends Dividend income is recognised in the income statement when a right to receive payment is established. Rental income Rental income from investment property is allocated to the period to which they relate. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInterestIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-773": { "value": "II. Fee and commission income Determining the revenue to be recognised from fee and commission income relating to contracts with customers is based on a 5-step model: Step 1 \u2013 Identifying the contract Step 2 \u2013 Identify the performance obligation Step 3 \u2013 Determining the transaction price Step 4 \u2013 Allocating the transaction price to performance obligations Step 5 \u2013 Recognising revenue when the performance obligation is satisfied. A contract with a customer generally explicitly states the goods or services that a.s.r. promises to transfer to a customer. The transaction price is the amount of consideration to which a.s.r. expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties. a.s.r. allocates the transaction price to each performance obligation in an amount that depicts the amount of consideration to which a.s.r. expects to be entitled in exchange for transferring the promised goods or services to the customer. a.s.r. satisfies its performance obligation by transferring control of a good or service over time and as a result recognises revenue over time. a.s.r. determined that the output method is the best method in measuring progress of the related services because the selected measure reflects best the services for which control has transferred to the customer. a.s.r. recognises revenue on the basis of the time elapsed relative to the total term of performing the service. Fee and commission income relates mainly to asset management, Distribution and services, investment contracts and reinsurance fees. These items are recognised as income in the period in which the services are performed. The asset management fees are periodically charged to the fund (or individual) customer for which the services were performed. The reinsurance and distribution and services fees are invoiced regularly with normal commercial payment terms. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFeeAndCommissionIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-774": { "value": "II. Fee and commission income Determining the revenue to be recognised from fee and commission income relating to contracts with customers is based on a 5-step model: Step 1 \u2013 Identifying the contract Step 2 \u2013 Identify the performance obligation Step 3 \u2013 Determining the transaction price Step 4 \u2013 Allocating the transaction price to performance obligations Step 5 \u2013 Recognising revenue when the performance obligation is satisfied. A contract with a customer generally explicitly states the goods or services that a.s.r. promises to transfer to a customer. The transaction price is the amount of consideration to which a.s.r. expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties. a.s.r. allocates the transaction price to each performance obligation in an amount that depicts the amount of consideration to which a.s.r. expects to be entitled in exchange for transferring the promised goods or services to the customer. a.s.r. satisfies its performance obligation by transferring control of a good or service over time and as a result recognises revenue over time. a.s.r. determined that the output method is the best method in measuring progress of the related services because the selected measure reflects best the services for which control has transferred to the customer. a.s.r. recognises revenue on the basis of the time elapsed relative to the total term of performing the service. Fee and commission income relates mainly to asset management, Distribution and services, investment contracts and reinsurance fees. These items are recognised as income in the period in which the services are performed. The asset management fees are periodically charged to the fund (or individual) customer for which the services were performed. The reinsurance and distribution and services fees are invoiced regularly with normal commercial payment terms. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-776": { "value": "KK. Operating expenses This item relates to expenses associated with a.s.r.\u2019s operations that are directly attributable to the reporting period, such as marketing costs, ICT expenses, consulting fees, business accommodation expenses, cost of temporary employees, and depreciation charges. Personnel expenses are mainly comprised of salaries, social security contributions and pension costs. LL. Commission expenses This mainly relates to commissions paid. Commission paid to acquire insurance contracts are charged to the income statement, generally within one year. MM. Impairments An asset is impaired when its carrying amount exceeds its recoverable amount. Impairment losses are recognised in the income statement as soon as they are identified. For details, see the relevant items of chapter 6.3.4 as mentioned earlier. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForExpensesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-784": { "value": "NN. Income tax expense Income tax is based on result before tax, after any adjustments for previous periods and changes in deferred tax assets and liabilities using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Income tax is recognised in the period in which the income was earned. Deferred taxes in respect of revalued assets and liabilities, whose value adjustments were directly credited or charged to equity, are taken to equity and, upon realisation, included in the income statement together with the value adjustments. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-785": { "value": "NN. Income tax expense Income tax is based on result before tax, after any adjustments for previous periods and changes in deferred tax assets and liabilities using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Income tax is recognised in the period in which the income was earned. Deferred taxes in respect of revalued assets and liabilities, whose value adjustments were directly credited or charged to equity, are taken to equity and, upon realisation, included in the income statement together with the value adjustments. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-502": { "value": "The a.s.r. group comprises a number of operating and holding companies.
The operations of a.s.r. have been divided into five operating segments. The main segments are the Non-life and Life segment in which all insurance activities are presented. The other activities are presented as three separate segments being Asset Management, Distribution and Services and Holding and Other.
Insurance entities are entities that accept the transfer of insurance risks from policyholders. The Non-life segment consists of non-life insurance entities and their subsidiaries. These non-life insurance entities offer Non-life insurance contracts such as disability insurance and property and casualty insurance. The Life segment comprises the life insurance entity and its subsidiaries. This life insurance entity offers financial products such as life insurance contracts and life insurance contracts on behalf of policyholders. The Life segment also includes ASR Premiepensioeninstelling N.V. (a.s.r. PPI, previously known as Brand New Day Premiepensioeninstelling N.V.), which offers investment contracts to policyholders that bear no insurance risk and for which the actual return on investments allocated to the contract is passed on to the policyholder. The Non-life and Life segments have different levels of profitability and growth opportunities, as well as a different outlook and risk profile. See chapter 6.7.9 for a list of principal group companies and associates in the relevant segments.
The other activities consist of:
The Asset Management segment involves all activities related to asset management including investment property management. These activities include amongst others ASR Vermogensbeheer N.V., ASR Financieringen B.V., ASR Real Estate B.V. and ASR Hypotheken B.V.;
The Distribution and Services segment includes the activities related to distribution of insurance contracts and include amongst other Poliservice B.V. (Poliservice), Van Kampen Groep Holding B.V. (VKG), Van Kampen Geld B.V., Dutch ID B.V., Corins B.V., SuperGarant Verzekeringen B.V. (and ZZP Nederland Verzekeringen B.V. and Bedrijfsartsengroep B.V.), and ASR Vitaliteit & Preventieve Diensten B.V. (Vitality); and
The segment Holding and Other consists primarily of the holding activities of a.s.r. (including the group related activities), other holding and intermediate holding companies, the real estate development business (ASR Vastgoed Projecten B.V.), ASR Vooruit B.V., the investment firm that performs activities related to private investing for customers, and the activities of ASR Deelnemingen N.V.
The eliminations applied in the reconciliation of the segment information to the consolidated balance sheet and the consolidated income statement are separately presented in chapter 6.4.2 and 6.4.3.
The a.s.r. segment reporting shows the financial performance of each segment. The purpose is to allocate all items in the balance sheet and income statement to the segments that hold full management responsibility for them.
Segment information has been prepared in accordance with the accounting principles used for the preparation of a.s.r.\u2019s consolidated financial statements (see chapter 6.3). Goodwill and other intangibles are presented in the related CGU\u2019s segment. Intersegment transactions are conducted at arm\u2019s length conditions. In general, cost related to centralised services are allocated to the segments based on the utilisation of these services.
The segments are assessed on their operating result as defined in chapter 6.10.
| Company | Equity interest | Rate of control | Seat | Segment |
|---|---|---|---|---|
| ASR Aanvullende Ziektekostenverzekeringen N.V.1 | 100.00 | 100.00 | Utrecht | Non-life |
| ASR Basis Ziektekostenverzekeringen N.V.1 | 100.00 | 100.00 | Utrecht | Non-life |
| ASR Schadeverzekering N.V.1 | 100.00 | 100.00 | Utrecht | Non-life |
| ASR Wlz-uitvoerder B.V. | 100.00 | 100.00 | Utrecht | Non-life |
| ASR Ziektekostenverzekeringen N.V.2 | 100.00 | 100.00 | Utrecht | Non-life |
| ASR Infrastructure Renewables B.V. | 100.00 | 100.00 | Utrecht | Life |
| ASR Levensverzekering N.V.1 | 100.00 | 100.00 | Utrecht | Life |
| ASR Utrecht Real Estate Investments Netherlands B.V. | 100.00 | 100.00 | Amsterdam | Life |
| ASR Premiepensioeninstelling N.V.3 | 100.00 | 100.00 | Amsterdam | Life |
| ASR Financieringen B.V.2 | 100.00 | 100.00 | Utrecht | Asset Management |
| ASR Hypotheken B.V.2 | 100.00 | 100.00 | Utrecht | Asset Management |
| ASR Real Estate B.V.43 | 100.00 | 100.00 | Utrecht | Asset Management |
| ASR Vermogensbeheer N.V.43 | 100.00 | 100.00 | Utrecht | Asset Management |
| Anac Verzekeringen B.V.5 | 100.00 | 100.00 | Eindhoven | Distribution & Services |
| Anac, All-Finance Nederland Advies-Combinatie B.V.5 | 100.00 | 100.00 | Eindhoven | Distribution & Services |
| ASR Vitaliteit & Preventieve Diensten B.V. | 100.00 | 100.00 | Utrecht | Distribution & Services |
| Assurantiekantoor Lodewijk B.V.5 | 100.00 | 100.00 | Wezep | Distribution & Services |
| Bedrijfsartsengroep Holding B.V. | 100.00 | 100.00 | Heerenveen | Distribution & Services |
| Boval Assuranti\u00ebn B.V.5 | 100.00 | 100.00 | Velserbroek | Distribution & Services |
| Corins B.V.5 | 100.00 | 100.00 | Amsterdam | Distribution & Services |
| Dutch ID B.V. | 100.00 | 100.00 | Velserbroek | Distribution & Services |
| Felison Assuradeuren B.V.5 | 100.00 | 100.00 | Velserbroek | Distribution & Services |
| Van Helvoort Assuradeuren B.V.5 | 100.00 | 100.00 | Gemert | Distribution & Services |
| Van Helvoort Registermakelaars in Assuranti\u00ebn B.V.5 | 100.00 | 100.00 | Gemert | Distribution & Services |
| PoliService B.V.5 | 100.00 | 100.00 | Hardinxveld-Giessendam | Distribution & Services |
| Supergarant Verzekeringen B.V.5 | 100.00 | 100.00 | Leidschendam | Distribution & Services |
| Van Kampen Geld B.V.5 | 100.00 | 100.00 | Hoorn | Distribution & Services |
| Van Kampen Groep Holding B.V.5 | 100.00 | 100.00 | Hoorn | Distribution & Services |
| ZZP Nederland Verzekeringen B.V.5 | 100.00 | 100.00 | Groningen | Distribution & Services |
| D&S Holding B.V.2 | 100.00 | 100.00 | Velserbroek | Distribution & Services |
| D&S Participaties B.V.2 | 100.00 | 100.00 | Velserbroek | Distribution & Services |
| Administratie- en Adviesbureau voor Belegging en Krediet (A.B.K.) B.V.2 | 100.00 | 100.00 | Amersfoort | Holding & Other |
| ASAM N.V.2 | 100.00 | 100.00 | Utrecht | Holding & Other |
| ASR Betalingscentrum B.V.2 | 100.00 | 100.00 | Utrecht | Holding & Other |
| ASR Deelnemingen N.V.2 | 100.00 | 100.00 | Utrecht | Holding & Other |
| ASR Nederland N.V. | 100.00 | 100.00 | Utrecht | Holding & Other |
| ASR Service Maatschappij N.V.2 | 100.00 | 100.00 | Rotterdam | Holding & Other |
| ASR Vastgoed Projecten B.V. | 100.00 | 100.00 | Utrecht | Holding & Other |
| ASR Vooruit B.V.5 | 100.00 | 100.00 | Utrecht | Holding & Other |
| Servicemaatschappij \"De Hoofdpoort\" N.V.2 | 100.00 | 100.00 | Utrecht | Holding & Other |
The principal group companies and associates are located in the Netherlands.
For notes to equity interests in associates and joint ventures, see chapter 6.5.4. The list of equity interests which are required under Sections 379 and 414, Book 2 of the Dutch Civil Code has been filed with the Trade Register of the Chamber of Commerce in Utrecht.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCompositionOfGroupExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-503": { "value": "The a.s.r. group comprises a number of operating and holding companies.
The operations of a.s.r. have been divided into five operating segments. The main segments are the Non-life and Life segment in which all insurance activities are presented. The other activities are presented as three separate segments being Asset Management, Distribution and Services and Holding and Other.
Insurance entities are entities that accept the transfer of insurance risks from policyholders. The Non-life segment consists of non-life insurance entities and their subsidiaries. These non-life insurance entities offer Non-life insurance contracts such as disability insurance and property and casualty insurance. The Life segment comprises the life insurance entity and its subsidiaries. This life insurance entity offers financial products such as life insurance contracts and life insurance contracts on behalf of policyholders. The Life segment also includes ASR Premiepensioeninstelling N.V. (a.s.r. PPI, previously known as Brand New Day Premiepensioeninstelling N.V.), which offers investment contracts to policyholders that bear no insurance risk and for which the actual return on investments allocated to the contract is passed on to the policyholder. The Non-life and Life segments have different levels of profitability and growth opportunities, as well as a different outlook and risk profile. See chapter 6.7.9 for a list of principal group companies and associates in the relevant segments.
The other activities consist of:
The Asset Management segment involves all activities related to asset management including investment property management. These activities include amongst others ASR Vermogensbeheer N.V., ASR Financieringen B.V., ASR Real Estate B.V. and ASR Hypotheken B.V.;
The Distribution and Services segment includes the activities related to distribution of insurance contracts and include amongst other Poliservice B.V. (Poliservice), Van Kampen Groep Holding B.V. (VKG), Van Kampen Geld B.V., Dutch ID B.V., Corins B.V., SuperGarant Verzekeringen B.V. (and ZZP Nederland Verzekeringen B.V. and Bedrijfsartsengroep B.V.), and ASR Vitaliteit & Preventieve Diensten B.V. (Vitality); and
The segment Holding and Other consists primarily of the holding activities of a.s.r. (including the group related activities), other holding and intermediate holding companies, the real estate development business (ASR Vastgoed Projecten B.V.), ASR Vooruit B.V., the investment firm that performs activities related to private investing for customers, and the activities of ASR Deelnemingen N.V.
The eliminations applied in the reconciliation of the segment information to the consolidated balance sheet and the consolidated income statement are separately presented in chapter 6.4.2 and 6.4.3.
The a.s.r. segment reporting shows the financial performance of each segment. The purpose is to allocate all items in the balance sheet and income statement to the segments that hold full management responsibility for them.
Segment information has been prepared in accordance with the accounting principles used for the preparation of a.s.r.\u2019s consolidated financial statements (see chapter 6.3). Goodwill and other intangibles are presented in the related CGU\u2019s segment. Intersegment transactions are conducted at arm\u2019s length conditions. In general, cost related to centralised services are allocated to the segments based on the utilisation of these services.
The segments are assessed on their operating result as defined in chapter 6.10.
| As at 31 December 2022 | Non-life | Life | Asset Management | Distribution and Services | Holding and Other | Eliminations | Total |
|---|---|---|---|---|---|---|---|
| Intangible assets | 78 | 116 | 41 | 183 | - | - | 418 |
| Property, plant and equipment | - | 637 | - | 13 | 238 | -209 | 679 |
| Investment property | 49 | 616 | - | - | - | - | 664 |
| Associates and joint ventures at equity method | - | 3 | - | 9 | 66 | - | 79 |
| Investments | 6,077 | 17,459 | - | - | 5,295 | -3,193 | 25,640 |
| Investments on behalf of policyholders | - | 9,912 | - | - | - | - | 9,912 |
| Investments related to investment contracts | - | 2,000 | - | - | - | - | 2,000 |
| Loans and receivables | 2,394 | 14,938 | 19 | 50 | 132 | -361 | 17,171 |
| Derivatives | 185 | 5,240 | - | - | 3 | - | 5,428 |
| Deferred tax assets | - | 283 | - | - | - | -164 | 119 |
| Reinsurance contracts | 212 | 145 | - | - | - | - | 357 |
| Other assets | 140 | 646 | 29 | 15 | - | -2 | 828 |
| Cash and cash equivalents | 262 | 1,720 | 85 | 46 | 132 | - | 2,245 |
| Total assets | 9,397 | 53,715 | 174 | 317 | 5,865 | -3,929 | 65,539 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Equity attributable to holders of equity instruments | 1,698 | 4,663 | 150 | 46 | 360 | -192 | 6,726 |
| Non-controlling interests | 4 | 22 | - | - | 1 | - | 27 |
| Total equity | 1,702 | 4,685 | 150 | 46 | 361 | -192 | 6,753 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Subordinated liabilities | 71 | - | - | - | 1,980 | -71 | 1,980 |
| Liabilities arising from insurance contracts | 7,027 | 25,184 | - | - | - | -2,579 | 29,633 |
| Liabilities arising from insurance contracts on behalf of policyholders | - | 13,007 | - | - | - | - | 13,007 |
| Liabilities arising from investment contracts | - | 2,000 | - | - | - | - | 2,000 |
| Employee benefits | - | - | - | - | 2,742 | - | 2,742 |
| Provisions | 1 | 13 | - | - | 4 | - | 18 |
| Borrowings | - | 199 | - | 199 | 307 | -491 | 214 |
| Derivatives | 315 | 5,208 | - | - | - | - | 5,523 |
| Deferred tax liabilities | 82 | - | 6 | 9 | 134 | -231 | - |
| Due to customers | 108 | 679 | - | 21 | - | -338 | 471 |
| Due to banks | 21 | 2,163 | - | - | 78 | - | 2,262 |
| Other liabilities | 70 | 576 | 18 | 41 | 260 | -28 | 938 |
| Total liabilities | 7,695 | 49,030 | 24 | 271 | 5,504 | -3,737 | 58,787 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total equity and liabilities | 9,397 | 53,715 | 174 | 317 | 5,865 | -3,929 | 65,539 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Additions to | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Intangible assets | - | 1 | 6 | 18 | - | - | 25 |
| Property and equipment | - | 169 | - | 5 | 5 | - | 179 |
| Total additions | - | 170 | 6 | 22 | 5 | - | 204 |
| As at 31 December 2021 | Non-life | Life | Asset Management | Distribution and Services | Holding and Other | Eliminations | Total |
|---|---|---|---|---|---|---|---|
| Intangible assets | 96 | 125 | 35 | 172 | - | - | 428 |
| Property, plant and equipment | - | 512 | - | 12 | 249 | -216 | 556 |
| Investment property | 285 | 1,768 | - | - | - | - | 2,052 |
| Associates and joint ventures at equity method | - | 23 | - | 9 | 69 | - | 102 |
| Investments | 7,578 | 25,398 | - | - | 3,881 | -3,308 | 33,550 |
| Investments on behalf of policyholders | - | 11,574 | - | - | - | - | 11,574 |
| Investments related to investment contracts | - | 1,952 | - | - | - | - | 1,952 |
| Loans and receivables | 1,557 | 13,842 | 18 | 45 | 134 | -336 | 15,259 |
| Derivatives | 124 | 6,088 | - | - | - | - | 6,212 |
| Deferred tax assets | - | 22 | - | - | 58 | -80 | - |
| Reinsurance contracts | 263 | 154 | - | - | - | - | 417 |
| Other assets | 137 | 412 | 24 | -5 | 65 | -2 | 631 |
| Cash and cash equivalents | 109 | 2,005 | 83 | 48 | 62 | - | 2,306 |
| Total assets | 10,150 | 63,874 | 160 | 280 | 4,517 | -3,942 | 75,040 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Equity attributable to holders of equity instruments | 2,420 | 5,876 | 141 | 164 | -1,122 | -112 | 7,366 |
| Non-controlling interests | 3 | 15 | - | - | - | - | 18 |
| Total equity | 2,423 | 5,891 | 141 | 164 | -1,121 | -112 | 7,385 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Subordinated liabilities | 45 | - | - | - | 992 | -45 | 992 |
| Liabilities arising from insurance contracts | 7,051 | 33,621 | - | - | - | -2,874 | 37,797 |
| Liabilities arising from insurance contracts on behalf of policyholders | - | 14,566 | - | - | - | - | 14,566 |
| Liabilities arising from investment contracts | - | 1,952 | - | - | - | - | 1,952 |
| Employee benefits | - | - | - | - | 4,013 | - | 4,013 |
| Provisions | 1 | 14 | - | - | 9 | - | 24 |
| Borrowings | - | 175 | - | 47 | 433 | -463 | 192 |
| Derivatives | 64 | 695 | - | - | 1 | - | 759 |
| Deferred tax liabilities | 174 | - | 5 | 9 | - | -119 | 69 |
| Due to customers | 99 | 746 | - | 24 | - | -296 | 573 |
| Due to banks | 88 | 5,549 | - | - | 105 | - | 5,741 |
| Other liabilities | 206 | 666 | 14 | 36 | 86 | -32 | 976 |
| Total liabilities | 7,727 | 57,983 | 19 | 116 | 5,639 | -3,830 | 67,655 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total equity and liabilities | 10,150 | 63,874 | 160 | 280 | 4,517 | -3,942 | 75,040 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Additions to | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Intangible assets | - | 71 | 28 | 23 | - | - | 122 |
| Property and equipment | - | 370 | - | 3 | 14 | - | 387 |
| Total additions | - | 440 | 28 | 27 | 14 | - | 508 |
| 2022 | Non-life | Life | Asset Management | Distribution and Services | Holding and Other | Eliminations | Total |
|---|---|---|---|---|---|---|---|
| Gross written premiums | 4,276 | 1,952 | - | - | - | -187 | 6,041 |
| Change in provision for unearned premiums | -4 | - | - | - | - | - | -4 |
| Gross insurance premiums | 4,272 | 1,952 | - | - | - | -187 | 6,037 |
| Reinsurance premiums | -113 | -1 | - | - | - | - | -114 |
| Net insurance premiums | 4,159 | 1,951 | - | - | \u00a0 | -187 | 5,923 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Investment income | 195 | 1,523 | - | 1 | 111 | -97 | 1,732 |
| Realised gains and losses | -34 | -335 | - | - | 3 | 78 | -288 |
| Fair value gains and losses | -76 | 154 | - | - | -3 | -38 | 38 |
| Result on investments on behalf of policyholders | - | -1,943 | - | - | - | - | -1,943 |
| Result on investments related to investment contracts | - | -351 | - | - | - | - | -351 |
| Fee and commission income | 24 | 19 | 201 | 122 | - | -118 | 247 |
| Other income | 1 | 127 | - | 1 | 15 | - | 144 |
| Share of result of associates and joint ventures | - | - | - | 1 | -3 | - | -3 |
| Total income | 4,269 | 1,145 | 201 | 124 | 123 | -362 | 5,500 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Insurance claims and benefits | -3,290 | 180 | - | - | - | 126 | -2,984 |
| Insurance claims and benefits recovered from reinsurers | 63 | 1 | - | - | - | - | 64 |
| Net insurance claims and benefits | -3,227 | 181 | - | - | \u00a0 | 126 | -2,919 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Changes in liabilities arising from investment contracts | - | 351 | - | - | - | - | 351 |
| Operating expenses | -286 | -182 | -115 | -102 | -146 | 52 | -779 |
| Restructuring provision expenses | -3 | 1 | - | - | -1 | - | -4 |
| Commission expenses | -602 | -20 | -29 | - | - | 62 | -589 |
| Impairments | -36 | -76 | - | - | 17 | - | -95 |
| Interest expense | -24 | -337 | - | -2 | -62 | -21 | -447 |
| Other expenses | -4 | -40 | -18 | -5 | -34 | 12 | -90 |
| Total expenses | -955 | -303 | -163 | -110 | -226 | 104 | -1,652 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Result before tax | 87 | 1,023 | 38 | 15 | -103 | -131 | 929 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Income tax (expense) / gain | -14 | -245 | -10 | -4 | 34 | 34 | -204 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Net result | 73 | 779 | 28 | 11 | -68 | -97 | 725 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Attributable to: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-controlling interests | - | 1 | - | - | -9 | - | -8 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| - Shareholders of the parent | 73 | 778 | 28 | 10 | -107 | -97 | 685 |
| - Holders of other equity instruments | - | - | - | - | 48 | - | 48 |
| Result attributable to holders of equity instruments | 73 | 778 | 28 | 10 | -59 | -97 | 733 |
| 2022 | Non-life | Life | Asset Management | Distribution and Services | Holding and Other | Eliminations | Total |
|---|---|---|---|---|---|---|---|
| Result before tax | 87 | 1,023 | 38 | 15 | -103 | -131 | 929 |
| minus: investment related | -127 | 187 | - | - | 18 | -1 | 78 |
| minus: incidentals | -112 | 68 | -1 | -11 | - | -132 | -188 |
| Operating result | 325 | 768 | 39 | 25 | -120 | 2 | 1,039 |
In 2022, incidentals are mainly related to strengthening of Non-life provisions due to the 10% increase of the legal minimum wage as of 1 January 2023 (\u20ac\u00a0-91 million for the 8% extra increase on top of the 2% normally provisioned), results of the employee benefit pension scheme, amortisations of VOBA on the acquisitions of Loyalis and Veherex (see chapter 6.5.1), M&A costs related to the business combination of a.s.r. and Aegon Nederland N.V., project costs for the implementation of IFRS 17 and IFRS 9 and start-up costs for innovations.
For more information see chapter 6.10.
| 2022 | \u00a0 | Non-life | Life | Asset Management | Distribution and Services | Holding and Other | Eliminations | Total |
|---|---|---|---|---|---|---|---|---|
| Associates and joint ventures | Impairment | - | - | - | - | -1 | - | -1 |
| \u00a0 | Reversal | - | - | - | - | - | - | - |
| Investments | Impairment | -35 | -98 | - | - | - | - | -133 |
| \u00a0 | Reversal | - | 23 | - | - | - | - | 23 |
| Loans and receivables | Impairment | -8 | -2 | - | - | - | - | -10 |
| \u00a0 | Reversal | 6 | 2 | - | - | 19 | - | 27 |
| Total impairments | Impairment | -43 | -101 | - | - | -1 | - | -145 |
| \u00a0 | Reversal | 7 | 24 | - | - | 19 | - | 50 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | Total | -36 | -76 | - | - | 17 | - | -95 |
| 2021 | Non-life | Life | Asset Management | Distribution and Services | Holding and Other | Eliminations | Total |
|---|---|---|---|---|---|---|---|
| Gross written premiums | 4,124 | 1,893 | - | - | - | -157 | 5,859 |
| Change in provision for unearned premiums | 16 | - | - | - | - | - | 16 |
| Gross insurance premiums | 4,140 | 1,893 | - | - | - | -157 | 5,875 |
| Reinsurance premiums | -98 | -1 | - | - | - | - | -99 |
| Net insurance premiums | 4,042 | 1,892 | - | - | - | -157 | 5,777 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Investment income | 142 | 1,422 | - | - | 10 | -4 | 1,571 |
| Realised gains and losses | 45 | 422 | - | - | 34 | -11 | 490 |
| Fair value gains and losses | 16 | 94 | - | - | -2 | 2 | 110 |
| Result on investments on behalf of policyholders | - | 1,636 | - | - | - | - | 1,636 |
| Result on investments related to investment contracts | - | 185 | - | - | - | - | 185 |
| Fee and commission income | 23 | 12 | 161 | 117 | - | -110 | 204 |
| Other income | 1 | 23 | - | 2 | 32 | -2 | 56 |
| Share of result of associates and joint ventures | - | 1 | - | 1 | 7 | - | 9 |
| Total income | 4,269 | 5,688 | 161 | 119 | 81 | -283 | 10,036 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Insurance claims and benefits | -3,079 | -3,986 | - | - | - | 219 | -6,846 |
| Insurance claims and benefits recovered from reinsurers | 23 | 7 | - | - | - | - | 29 |
| Net insurance claims and benefits | -3,056 | -3,980 | - | - | - | 219 | -6,817 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Changes in liabilities arising from investment contracts | - | -185 | - | - | - | - | -185 |
| Operating expenses | -269 | -173 | -102 | -94 | -137 | 51 | -725 |
| Restructuring provision expenses | -3 | -1 | - | - | - | - | -4 |
| Commission expenses | -564 | -19 | - | - | - | 57 | -526 |
| Impairments | -1 | -13 | - | -9 | - | - | -22 |
| Interest expense | -15 | -293 | -1 | -1 | -9 | -43 | -362 |
| Other expenses | -4 | -43 | -23 | -6 | -126 | 16 | -186 |
| Total expenses | -856 | -727 | -125 | -110 | -272 | 80 | -2,010 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Result before tax | 357 | 981 | 36 | 10 | -191 | 16 | 1,209 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Income tax (expense) / gain | -88 | -230 | -9 | -5 | 65 | -3 | -270 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Net result | 269 | 751 | 27 | 5 | -126 | 13 | 939 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Attributable to: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-controlling interests | - | 1 | - | - | -4 | - | -3 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| - Shareholders of the parent | 269 | 750 | 27 | 5 | -170 | 13 | 894 |
| - Holders of other equity instruments | - | - | - | - | 48 | - | 48 |
| Result attributable to holders of equity instruments | 269 | 750 | 27 | 5 | -122 | 13 | 942 |
| 2021 | Non-life | Life | Asset Management | Distribution and Services | Holding and Other | Eliminations | Total |
|---|---|---|---|---|---|---|---|
| Result before tax | 357 | 981 | 36 | 10 | -191 | 16 | 1,209 |
| minus: investment related | 57 | 217 | - | - | 32 | -3 | 303 |
| minus: incidentals | -22 | 11 | - | -18 | -93 | 18 | -104 |
| Operating result | 322 | 754 | 36 | 28 | -131 | 1 | 1,009 |
In 2021, incidentals are mainly related to results of the employee benefit pension scheme, amortisations of VOBA on the acquisitions of Loyalis and Veherex (see chapter 6.5.1), project costs for the implementation of IFRS 17 and IFRS 9 and start-up costs for innovations.
Starting from 2022, the inflation linked value changes are classified as non-operating result. The comparative 2021 figures for the operating result of Non-life and Life have been adjusted accordingly for respectively \u20ac\u00a0-3 million and \u20ac\u00a0-9 million.
| 2021 | \u00a0 | Non-life | Life | Asset Management | Distribution and Services | Holding and Other | Eliminations | Total |
|---|---|---|---|---|---|---|---|---|
| Intangible assets | Impairment | - | - | - | -9 | - | - | -9 |
| \u00a0 | Reversal | - | - | - | - | - | - | - |
| Investments | Impairment | -3 | -12 | - | - | - | - | -16 |
| \u00a0 | Reversal | 3 | - | - | - | - | - | 3 |
| Loans and receivables | Impairment | -13 | -2 | - | - | - | - | -15 |
| \u00a0 | Reversal | 12 | 2 | - | - | - | - | 14 |
| Total impairments | Impairment | -16 | -15 | - | -9 | - | - | -40 |
| \u00a0 | Reversal | 15 | 2 | - | - | - | - | 17 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| \u00a0 | Total | -1 | -13 | - | -9 | - | - | -22 |
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Claims ratio | 74.0% | 73.7% |
| Commission ratio | 13.9% | 13.3% |
| Expense ratio | 6.7% | 6.5% |
| \u00a0 | \u00a0 | \u00a0 |
| Combined ratio | 94.6% | 93.6% |
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Property & Casualty (P&C) | 93.9% | 91.9% |
| Disability | 89.3% | 91.6% |
| P&C and Disability | 91.7% | 91.8% |
| Health | 100.8% | 96.2% |
The COR increased to 94.6% (2021: 93.6%) due to the increased COR's of the Health and P&C product lines as outlined below. The non-life business mix shifted, with growth in Disability and P&C and contraction in Health. This resulted in an increase in the commission ratio and expense ratio.
In P&C, the COR amounted to 93.9% (2021: 91.9%). Despite the increase of 2%-points, the combined ratio and underlying business performance remained strong. 2021 was impacted positively by COVID-19 restrictions, partly offset by the July floods and reserve strengthening. This year, weather related calamities (the \u2018triple storm\u2019 in February) and large claims had a higher impact than last year, and the level of claims rose due to increased traffic intensity as lockdown measures were lifted.
In Disability, the COR amounted to 89.3% (2021: 91.6%). The COR improved by 2.3%-point mainly due to improved underwriting results in Individual Disability and Sickness leave. The impact of the 8% extra increase of the minimum wage to a total of 10% was excluded from the COR. The COR including this impact amounted to 95.6%. (+6.2%-points).
The COR of Health deteriorated by 4.6%-points to 100.8%. In 2021, Health benefited from government support related to COVID-19 and an extraordinary inflow of customers. This year, a net outflow in combination with unfavorable claims experience, resulted in an increase of the COR. In addition, due to a large inflow in customers (to be insured in 2023), acquisition costs were taken into account in 2022, leading to an impact of 0.8%-points on the COR.
The claims, commission and expense ratio can be calculated based on the following information:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Net insurance premiums Non-life | 4,159 | 4,042 |
| \u00a0 | \u00a0 | \u00a0 |
| Net insurance claims and benefits | -3,227 | -3,056 |
| \u00a0 | \u00a0 | \u00a0 |
| Adjustments: | \u00a0 | \u00a0 |
| - Interest accrual on provisions (Disability) | 72 | 74 |
| - Compensation capital gains (Disability) | -11 | -6 |
| - Prudence margin (Health) | -5 | 8 |
| - Incidental | 91 | 0 |
| Total adjustments | 147 | 75 |
| \u00a0 | \u00a0 | \u00a0 |
| Net insurance claims and benefits (after adjustments) | -3,080 | -2,981 |
| \u00a0 | \u00a0 | \u00a0 |
| Fee and commission income | 24 | 23 |
| Commission expenses | -602 | -564 |
| Commission expenses - Investment related | 1 | 3 |
| Commission | -577 | -538 |
| \u00a0 | \u00a0 | \u00a0 |
| Operating expenses | -286 | -269 |
| Corrections made for investment charges | 8 | 6 |
| Operational expenses (after adjustments) | -278 | -263 |
The adjustment for incidental items in the table above refers to the strengthening of Disability provisions related to the 10% increase of the legal minimum wage as of 1 January 2023.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-504": { "value": "The a.s.r. group comprises a number of operating and holding companies.
The operations of a.s.r. have been divided into five operating segments. The main segments are the Non-life and Life segment in which all insurance activities are presented. The other activities are presented as three separate segments being Asset Management, Distribution and Services and Holding and Other.
Insurance entities are entities that accept the transfer of insurance risks from policyholders. The Non-life segment consists of non-life insurance entities and their subsidiaries. These non-life insurance entities offer Non-life insurance contracts such as disability insurance and property and casualty insurance. The Life segment comprises the life insurance entity and its subsidiaries. This life insurance entity offers financial products such as life insurance contracts and life insurance contracts on behalf of policyholders. The Life segment also includes ASR Premiepensioeninstelling N.V. (a.s.r. PPI, previously known as Brand New Day Premiepensioeninstelling N.V.), which offers investment contracts to policyholders that bear no insurance risk and for which the actual return on investments allocated to the contract is passed on to the policyholder. The Non-life and Life segments have different levels of profitability and growth opportunities, as well as a different outlook and risk profile. See chapter 6.7.9 for a list of principal group companies and associates in the relevant segments.
The other activities consist of:
The Asset Management segment involves all activities related to asset management including investment property management. These activities include amongst others ASR Vermogensbeheer N.V., ASR Financieringen B.V., ASR Real Estate B.V. and ASR Hypotheken B.V.;
The Distribution and Services segment includes the activities related to distribution of insurance contracts and include amongst other Poliservice B.V. (Poliservice), Van Kampen Groep Holding B.V. (VKG), Van Kampen Geld B.V., Dutch ID B.V., Corins B.V., SuperGarant Verzekeringen B.V. (and ZZP Nederland Verzekeringen B.V. and Bedrijfsartsengroep B.V.), and ASR Vitaliteit & Preventieve Diensten B.V. (Vitality); and
The segment Holding and Other consists primarily of the holding activities of a.s.r. (including the group related activities), other holding and intermediate holding companies, the real estate development business (ASR Vastgoed Projecten B.V.), ASR Vooruit B.V., the investment firm that performs activities related to private investing for customers, and the activities of ASR Deelnemingen N.V.
The eliminations applied in the reconciliation of the segment information to the consolidated balance sheet and the consolidated income statement are separately presented in chapter 6.4.2 and 6.4.3.
The a.s.r. segment reporting shows the financial performance of each segment. The purpose is to allocate all items in the balance sheet and income statement to the segments that hold full management responsibility for them.
Segment information has been prepared in accordance with the accounting principles used for the preparation of a.s.r.\u2019s consolidated financial statements (see chapter 6.3). Goodwill and other intangibles are presented in the related CGU\u2019s segment. Intersegment transactions are conducted at arm\u2019s length conditions. In general, cost related to centralised services are allocated to the segments based on the utilisation of these services.
The segments are assessed on their operating result as defined in chapter 6.10.
| Company | Equity interest | Rate of control | Seat | Segment |
|---|---|---|---|---|
| ASR Aanvullende Ziektekostenverzekeringen N.V.1 | 100.00 | 100.00 | Utrecht | Non-life |
| ASR Basis Ziektekostenverzekeringen N.V.1 | 100.00 | 100.00 | Utrecht | Non-life |
| ASR Schadeverzekering N.V.1 | 100.00 | 100.00 | Utrecht | Non-life |
| ASR Wlz-uitvoerder B.V. | 100.00 | 100.00 | Utrecht | Non-life |
| ASR Ziektekostenverzekeringen N.V.2 | 100.00 | 100.00 | Utrecht | Non-life |
| ASR Infrastructure Renewables B.V. | 100.00 | 100.00 | Utrecht | Life |
| ASR Levensverzekering N.V.1 | 100.00 | 100.00 | Utrecht | Life |
| ASR Utrecht Real Estate Investments Netherlands B.V. | 100.00 | 100.00 | Amsterdam | Life |
| ASR Premiepensioeninstelling N.V.3 | 100.00 | 100.00 | Amsterdam | Life |
| ASR Financieringen B.V.2 | 100.00 | 100.00 | Utrecht | Asset Management |
| ASR Hypotheken B.V.2 | 100.00 | 100.00 | Utrecht | Asset Management |
| ASR Real Estate B.V.43 | 100.00 | 100.00 | Utrecht | Asset Management |
| ASR Vermogensbeheer N.V.43 | 100.00 | 100.00 | Utrecht | Asset Management |
| Anac Verzekeringen B.V.5 | 100.00 | 100.00 | Eindhoven | Distribution & Services |
| Anac, All-Finance Nederland Advies-Combinatie B.V.5 | 100.00 | 100.00 | Eindhoven | Distribution & Services |
| ASR Vitaliteit & Preventieve Diensten B.V. | 100.00 | 100.00 | Utrecht | Distribution & Services |
| Assurantiekantoor Lodewijk B.V.5 | 100.00 | 100.00 | Wezep | Distribution & Services |
| Bedrijfsartsengroep Holding B.V. | 100.00 | 100.00 | Heerenveen | Distribution & Services |
| Boval Assuranti\u00ebn B.V.5 | 100.00 | 100.00 | Velserbroek | Distribution & Services |
| Corins B.V.5 | 100.00 | 100.00 | Amsterdam | Distribution & Services |
| Dutch ID B.V. | 100.00 | 100.00 | Velserbroek | Distribution & Services |
| Felison Assuradeuren B.V.5 | 100.00 | 100.00 | Velserbroek | Distribution & Services |
| Van Helvoort Assuradeuren B.V.5 | 100.00 | 100.00 | Gemert | Distribution & Services |
| Van Helvoort Registermakelaars in Assuranti\u00ebn B.V.5 | 100.00 | 100.00 | Gemert | Distribution & Services |
| PoliService B.V.5 | 100.00 | 100.00 | Hardinxveld-Giessendam | Distribution & Services |
| Supergarant Verzekeringen B.V.5 | 100.00 | 100.00 | Leidschendam | Distribution & Services |
| Van Kampen Geld B.V.5 | 100.00 | 100.00 | Hoorn | Distribution & Services |
| Van Kampen Groep Holding B.V.5 | 100.00 | 100.00 | Hoorn | Distribution & Services |
| ZZP Nederland Verzekeringen B.V.5 | 100.00 | 100.00 | Groningen | Distribution & Services |
| D&S Holding B.V.2 | 100.00 | 100.00 | Velserbroek | Distribution & Services |
| D&S Participaties B.V.2 | 100.00 | 100.00 | Velserbroek | Distribution & Services |
| Administratie- en Adviesbureau voor Belegging en Krediet (A.B.K.) B.V.2 | 100.00 | 100.00 | Amersfoort | Holding & Other |
| ASAM N.V.2 | 100.00 | 100.00 | Utrecht | Holding & Other |
| ASR Betalingscentrum B.V.2 | 100.00 | 100.00 | Utrecht | Holding & Other |
| ASR Deelnemingen N.V.2 | 100.00 | 100.00 | Utrecht | Holding & Other |
| ASR Nederland N.V. | 100.00 | 100.00 | Utrecht | Holding & Other |
| ASR Service Maatschappij N.V.2 | 100.00 | 100.00 | Rotterdam | Holding & Other |
| ASR Vastgoed Projecten B.V. | 100.00 | 100.00 | Utrecht | Holding & Other |
| ASR Vooruit B.V.5 | 100.00 | 100.00 | Utrecht | Holding & Other |
| Servicemaatschappij \"De Hoofdpoort\" N.V.2 | 100.00 | 100.00 | Utrecht | Holding & Other |
The principal group companies and associates are located in the Netherlands.
For notes to equity interests in associates and joint ventures, see chapter 6.5.4. The list of equity interests which are required under Sections 379 and 414, Book 2 of the Dutch Civil Code has been filed with the Trade Register of the Chamber of Commerce in Utrecht.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 8,293 | 7,572 |
| Additions | 39 | 4 |
| Share of result | 777 | 1,109 |
| Dividend received | -753 | -683 |
| Revaluations | -2,091 | 318 |
| Other changes | - | -27 |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | 6,265 | 8,293 |
The decrease in revaluations is mainly due to unrealised losses in a.s.r. life and a.s.r. non-life.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-508": { "value": " 6.4.5 Acquisitions See accounting policy N. Acquisitions 2022 Wind farms Jaap Rodenburg, Nieuwe Hemweg and Strekdammen and solar park Pesse In 2022, ASR Infrastructure Renewables B.V. completed the acquisitions of the assets and liabilities of wind farm Jaap Rodenburg, wind farm Nieuwe Hemweg, wind farm Strekdammen and solar park Pesse for a total consideration of \u20ac\u00a050 million. With these acquisitions, a.s.r. strengthens its contribution to the energy transition and sustainable living environment. a.s.r. fully included the results and the balance sheet positions in the a.s.r. consolidated financial statements from the acquisition dates. Fair values of the assets and liabilities acquired on acquisition date \u00a0Acquisition date balance sheet based on fair value Property, plant and equipment 154 Current assets 2 Total assets 156 \u00a0\u00a0Non current liabilities 91 Current liabilities 16 Total liabilities 106 \u00a0\u00a0Net assets and liabilities 50 No cash and cash equivalents were acquired. The a.s.r. Solvency II ratio is not significantly impacted as a result of the acquisition. Aegon Nederland In October 2022, a.s.r. announced the intended business combination between a.s.r. and Aegon Nederland N.V. by acquiring the shares of Aegon Nederland N.V. for a total consideration of \u20ac\u00a04.9 billion. The consideration will be paid out in newly issued ordinary shares to Aegon N.V. (29.99% interest in a.s.r. post-transaction) and a cash consideration of \u20ac\u00a02.5 billion which was funded through existing surplus capital, by offering 13.805.720 new ordinary shares (see chapter 6.5.13.1) and the issuance of a Tier 2 subordinated liability of \u20ac\u00a01.0 billion in November 2022 (see chapter 6.5.14). The cash component was reduced by \u20ac\u00a00.3 billion compensating for the additional 5.9 million shares to be issued to Aegon N.V. following an adjustment mechanism in relation to the issuance of the accelerated bookbuild offering shares. At 17 January 2023, shareholders approved the business combination of a.s.r. and Aegon Nederland N.V. The transaction is further subject to approval of the Dutch Central Bank, the European Central Bank and the Dutch Authority for Consumers and Markets. a.s.r. and Aegon N.V. are working closely together to comply with the conditions for the completion of the transaction. The acquisition of Aegon Nederland N.V. is expected to be completed in the second half of 2023 and has not been recognised in the 2022 financial statements. Other acquisitions ASR Real Estate B.V. acquired the assets and liabilities of a consultancy company as of 1 May 2022. In addition, VKG acquired a distribution and services company as of 1 July 2022. Acquisitions 2021 Brand New Day IORP On 1 April 2021, a.s.r. acquired the remaining 50% of outstanding shares of Brand New Day Premiepensioeninstelling N.V. (Brand New Day IORP). a.s.r. established the final acquisition balance sheet of Brand New Day IORP in 2021. On 29 March 2022, Brand New Day IORP changed its name to ASR Premiepensioeninstelling N.V. (a.s.r. PPI). Wind farm Wieringermeer On 23 December 2021, ASR Infrastructure Renewables B.V. acquired the assets and liabilities of Vattenfall Windpark Wieringermeer Ext B.V. (wind farm Wieringermeer). Other acquisitions In 2021, Van Kampen Group Holding B.V. acquired an entity in the Distribution and Services segment and established the final acquisition balance sheet in 2022. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-510": { "value": "See accounting policy C.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Goodwill | 234 | 224 |
| Value of business acquired (VOBA) | 96 | 119 |
| Other intangible assets | 89 | 86 |
| Total intangible assets | 418 | 428 |
| \u00a0 | 2022 | \u00a0 | \u00a0 | \u00a0 | 2021 |
|---|---|---|---|---|---|
| \u00a0 | Goodwill | VOBA | Other intangible assets | Total 2022 | Total 2021 |
| Cost price | 234 | 532 | 143 | 909 | 1,011 |
| Accumulated amortisation and impairments | - | -437 | -54 | -491 | -582 |
| At 31 December | 234 | 96 | 89 | 418 | 428 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| At 1 January | 224 | 119 | 86 | 428 | 345 |
| Acquisition | - | - | 11 | 11 | 1 |
| Amortisation and impairments | - | -23 | -11 | -34 | -41 |
| Transfer | - | - | -1 | -2 | - |
| Changes in composition of the group | 10 | - | 4 | 15 | 124 |
| At 31 December | 234 | 96 | 89 | 418 | 428 |
For the purpose of impairment testing, goodwill is allocated to the CGU's of the relevant operating segment.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Non-life | 13 | 13 |
| Life | 43 | 43 |
| Asset Management | 35 | 35 |
| Distribution and Services | 142 | 132 |
| Total Goodwill | 234 | 224 |
Goodwill has an indefinite useful life and is not amortised. a.s.r. performs an impairment test annually, or more frequently if events or circumstances warrant so, to ascertain whether goodwill has been subject to impairment.
The results of the annual goodwill impairment test are as follows:
The result of the goodwill impairment test, using updated multiples and discount rates, shows an excess recoverable value over the book value. As a result, a second step was not necessary and there is no significant exposure of goodwill impairment for sensitivities in the underlying assumptions. No goodwill impairment was recognised.
The outcome of the goodwill impairment test step 1, using updated price to book trading multiples of various international peers and discount rates, shows a slight excess book value over the recoverable value. It was therefore decided to perform a step 2 impairment test using a dividend discount model. The main assumptions used in this internal value-in-use model are:
The future cash flows are based on the specific portfolio characteristics and expected market developments for the life insurance market in which the CGU operates.
To reflect the long-term character of the life insurance business, the expected decrease of the SCR and own funds projections are used to extrapolate cash flow projections up to 100 years.
The lower limit solvency target is used to calculate future dividends, which are discounted with a 9.24% discount rate (cost of equity).
The second step of the impairment test showed an excess recoverable amount over the book value of the CGU and subsequently no goodwill impairment was recognised.
The result of the goodwill impairment test, using the multiples methodology, shows an excess recoverable value over the book value. As a result, a second step was not necessary and there is no significant exposure of goodwill impairment for sensitivities in the underlying assumptions. No goodwill impairment was recognised.
The goodwill impairment test was conducted at the CGU\u2019s within the segment Distribution and Services segment. The outcomes of the goodwill tests on step 1 showed that the differences between the recoverable amounts and the carrying values is sufficient to support the amounts of goodwill allocated to the CGU\u2019s.
In light of the goodwill impairment last year it was decided to perform a step 2 impairment test in order to determine a recoverable amount in a manner that better addresses the specific characteristics of this CGU. The CGU\u2019s operating activities concern those of a distribution partner and service provider. In step 2, future cash flows are based on expected market developments and past experience and on the long-term characteristics of the markets in which the CGU operates. The main assumptions used in this internal value-in-use model are:
Annual organic future growth of portfolio without impact of potential acquisitions;
Growth rate used to extrapolate cash flow projections beyond the most recent forecast projections leading to a terminal value of 0.5%;
Discount rate (post-tax) 6.9% (2021: 5.1%).
The second step of the impairment test showed an excess recoverable amount over the book value of the CGU and subsequently no goodwill impairment was recognised.
VOBA mainly relates to the acquisition of Amersfoortse Stad Rotterdam (\u20ac\u00a048 million), the acquisition of Loyalis (\u20ac\u00a042 million) and the acquisition of Veherex (\u20ac\u00a06 million).
The other intangible assets mainly relate to Real estate, Loyalis, a.s.r. PPI and D&S Holding and concern trade names, distribution relationships and customer relationships. The other intangible assets are amortised on a straight-line basis over their useful life, which is determined individually (between 5 and 20 years). The amortisation charges on other intangible assets are recorded in the operating expenses, see chapter 6.6.8.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-511": { "value": "See accounting policy C.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Goodwill | 234 | 224 |
| Value of business acquired (VOBA) | 96 | 119 |
| Other intangible assets | 89 | 86 |
| Total intangible assets | 418 | 428 |
| \u00a0 | 2022 | \u00a0 | \u00a0 | \u00a0 | 2021 |
|---|---|---|---|---|---|
| \u00a0 | Goodwill | VOBA | Other intangible assets | Total 2022 | Total 2021 |
| Cost price | 234 | 532 | 143 | 909 | 1,011 |
| Accumulated amortisation and impairments | - | -437 | -54 | -491 | -582 |
| At 31 December | 234 | 96 | 89 | 418 | 428 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| At 1 January | 224 | 119 | 86 | 428 | 345 |
| Acquisition | - | - | 11 | 11 | 1 |
| Amortisation and impairments | - | -23 | -11 | -34 | -41 |
| Transfer | - | - | -1 | -2 | - |
| Changes in composition of the group | 10 | - | 4 | 15 | 124 |
| At 31 December | 234 | 96 | 89 | 418 | 428 |
For the purpose of impairment testing, goodwill is allocated to the CGU's of the relevant operating segment.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Non-life | 13 | 13 |
| Life | 43 | 43 |
| Asset Management | 35 | 35 |
| Distribution and Services | 142 | 132 |
| Total Goodwill | 234 | 224 |
Goodwill has an indefinite useful life and is not amortised. a.s.r. performs an impairment test annually, or more frequently if events or circumstances warrant so, to ascertain whether goodwill has been subject to impairment.
The results of the annual goodwill impairment test are as follows:
The result of the goodwill impairment test, using updated multiples and discount rates, shows an excess recoverable value over the book value. As a result, a second step was not necessary and there is no significant exposure of goodwill impairment for sensitivities in the underlying assumptions. No goodwill impairment was recognised.
The outcome of the goodwill impairment test step 1, using updated price to book trading multiples of various international peers and discount rates, shows a slight excess book value over the recoverable value. It was therefore decided to perform a step 2 impairment test using a dividend discount model. The main assumptions used in this internal value-in-use model are:
The future cash flows are based on the specific portfolio characteristics and expected market developments for the life insurance market in which the CGU operates.
To reflect the long-term character of the life insurance business, the expected decrease of the SCR and own funds projections are used to extrapolate cash flow projections up to 100 years.
The lower limit solvency target is used to calculate future dividends, which are discounted with a 9.24% discount rate (cost of equity).
The second step of the impairment test showed an excess recoverable amount over the book value of the CGU and subsequently no goodwill impairment was recognised.
The result of the goodwill impairment test, using the multiples methodology, shows an excess recoverable value over the book value. As a result, a second step was not necessary and there is no significant exposure of goodwill impairment for sensitivities in the underlying assumptions. No goodwill impairment was recognised.
The goodwill impairment test was conducted at the CGU\u2019s within the segment Distribution and Services segment. The outcomes of the goodwill tests on step 1 showed that the differences between the recoverable amounts and the carrying values is sufficient to support the amounts of goodwill allocated to the CGU\u2019s.
In light of the goodwill impairment last year it was decided to perform a step 2 impairment test in order to determine a recoverable amount in a manner that better addresses the specific characteristics of this CGU. The CGU\u2019s operating activities concern those of a distribution partner and service provider. In step 2, future cash flows are based on expected market developments and past experience and on the long-term characteristics of the markets in which the CGU operates. The main assumptions used in this internal value-in-use model are:
Annual organic future growth of portfolio without impact of potential acquisitions;
Growth rate used to extrapolate cash flow projections beyond the most recent forecast projections leading to a terminal value of 0.5%;
Discount rate (post-tax) 6.9% (2021: 5.1%).
The second step of the impairment test showed an excess recoverable amount over the book value of the CGU and subsequently no goodwill impairment was recognised.
VOBA mainly relates to the acquisition of Amersfoortse Stad Rotterdam (\u20ac\u00a048 million), the acquisition of Loyalis (\u20ac\u00a042 million) and the acquisition of Veherex (\u20ac\u00a06 million).
The other intangible assets mainly relate to Real estate, Loyalis, a.s.r. PPI and D&S Holding and concern trade names, distribution relationships and customer relationships. The other intangible assets are amortised on a straight-line basis over their useful life, which is determined individually (between 5 and 20 years). The amortisation charges on other intangible assets are recorded in the operating expenses, see chapter 6.6.8.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-512": { "value": "See accounting policy C.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Goodwill | 234 | 224 |
| Value of business acquired (VOBA) | 96 | 119 |
| Other intangible assets | 89 | 86 |
| Total intangible assets | 418 | 428 |
| \u00a0 | 2022 | \u00a0 | \u00a0 | \u00a0 | 2021 |
|---|---|---|---|---|---|
| \u00a0 | Goodwill | VOBA | Other intangible assets | Total 2022 | Total 2021 |
| Cost price | 234 | 532 | 143 | 909 | 1,011 |
| Accumulated amortisation and impairments | - | -437 | -54 | -491 | -582 |
| At 31 December | 234 | 96 | 89 | 418 | 428 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| At 1 January | 224 | 119 | 86 | 428 | 345 |
| Acquisition | - | - | 11 | 11 | 1 |
| Amortisation and impairments | - | -23 | -11 | -34 | -41 |
| Transfer | - | - | -1 | -2 | - |
| Changes in composition of the group | 10 | - | 4 | 15 | 124 |
| At 31 December | 234 | 96 | 89 | 418 | 428 |
For the purpose of impairment testing, goodwill is allocated to the CGU's of the relevant operating segment.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Non-life | 13 | 13 |
| Life | 43 | 43 |
| Asset Management | 35 | 35 |
| Distribution and Services | 142 | 132 |
| Total Goodwill | 234 | 224 |
Goodwill has an indefinite useful life and is not amortised. a.s.r. performs an impairment test annually, or more frequently if events or circumstances warrant so, to ascertain whether goodwill has been subject to impairment.
The results of the annual goodwill impairment test are as follows:
The result of the goodwill impairment test, using updated multiples and discount rates, shows an excess recoverable value over the book value. As a result, a second step was not necessary and there is no significant exposure of goodwill impairment for sensitivities in the underlying assumptions. No goodwill impairment was recognised.
The outcome of the goodwill impairment test step 1, using updated price to book trading multiples of various international peers and discount rates, shows a slight excess book value over the recoverable value. It was therefore decided to perform a step 2 impairment test using a dividend discount model. The main assumptions used in this internal value-in-use model are:
The future cash flows are based on the specific portfolio characteristics and expected market developments for the life insurance market in which the CGU operates.
To reflect the long-term character of the life insurance business, the expected decrease of the SCR and own funds projections are used to extrapolate cash flow projections up to 100 years.
The lower limit solvency target is used to calculate future dividends, which are discounted with a 9.24% discount rate (cost of equity).
The second step of the impairment test showed an excess recoverable amount over the book value of the CGU and subsequently no goodwill impairment was recognised.
The result of the goodwill impairment test, using the multiples methodology, shows an excess recoverable value over the book value. As a result, a second step was not necessary and there is no significant exposure of goodwill impairment for sensitivities in the underlying assumptions. No goodwill impairment was recognised.
The goodwill impairment test was conducted at the CGU\u2019s within the segment Distribution and Services segment. The outcomes of the goodwill tests on step 1 showed that the differences between the recoverable amounts and the carrying values is sufficient to support the amounts of goodwill allocated to the CGU\u2019s.
In light of the goodwill impairment last year it was decided to perform a step 2 impairment test in order to determine a recoverable amount in a manner that better addresses the specific characteristics of this CGU. The CGU\u2019s operating activities concern those of a distribution partner and service provider. In step 2, future cash flows are based on expected market developments and past experience and on the long-term characteristics of the markets in which the CGU operates. The main assumptions used in this internal value-in-use model are:
Annual organic future growth of portfolio without impact of potential acquisitions;
Growth rate used to extrapolate cash flow projections beyond the most recent forecast projections leading to a terminal value of 0.5%;
Discount rate (post-tax) 6.9% (2021: 5.1%).
The second step of the impairment test showed an excess recoverable amount over the book value of the CGU and subsequently no goodwill impairment was recognised.
VOBA mainly relates to the acquisition of Amersfoortse Stad Rotterdam (\u20ac\u00a048 million), the acquisition of Loyalis (\u20ac\u00a042 million) and the acquisition of Veherex (\u20ac\u00a06 million).
The other intangible assets mainly relate to Real estate, Loyalis, a.s.r. PPI and D&S Holding and concern trade names, distribution relationships and customer relationships. The other intangible assets are amortised on a straight-line basis over their useful life, which is determined individually (between 5 and 20 years). The amortisation charges on other intangible assets are recorded in the operating expenses, see chapter 6.6.8.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-513": { "value": "6.5.2 Property, plant and equipment See accounting policies U and BB. Property, plant and equipment \u00a031 December 2022 31 December 2021 Land and buildings for own use 115 145 Plant 480 332 Equipment 24 25 Property, plant and equipment owned 618 502 \u00a0\u00a0\u00a0Vehicles 8 10 Land 46 37 Other 7 7 Right-of-use assets 61 54 \u00a0\u00a0\u00a0Total property, plant and equipment 679 556 Changes in property, plant and equipment \u00a0Land and buildings held for own use Plant Equipment Right-of-use assets Total 2022 Total 2021 At 1 January 145 332 25 54 556 198 Additions - 157 6 16 179 386 Transfer to Investment property -18 - - - -18 - Depreciation -5 -18 -6 -8 -37 -19 Revaluations through profit or loss - -5 - - -5 - Revaluations through equity -8 21 - - 13 -7 Other changes - -7 - -1 -9 -2 Changes in the composition of the group - - - - - 1 At 31 December 115 480 24 61 679 556 Gross carrying amount as at 31 December 222 498 58 81 859 705 Accumulated depreciation as at 31 December -108 -18 -34 -20 -180 -149 Net carrying value as at 31 December 115 480 24 61 679 556 Revaluation surplus \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0At 1 January 38 - - - 38 45 Revaluation in the year -8 21 - - 13 -7 At 31 December 30 21 - - 50 38 Additions mainly relate to the acquisition of wind farms Jaap Rodenburg, Nieuwe Hemweg and Strekdammen and solar park Pesse as part of the strategy to invest more in renewable energy, see chapter 6.4.5. Depreciation of land and buildings held for own use, equipment and right-of-use assets is recorded in the operating expenses, see chapter 6.6.8. Depreciation of plant is recorded in the other expenses, see chapter 6.6.11. The fair values of land and buildings for own use and plant are based on external valuations and is disclosed in chapter 6.7.1.3. Property, plant and equipment consists mainly of assets expected to have a useful life of more than one year after the balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-514": { "value": "6.5.2 Property, plant and equipment See accounting policies U and BB. Property, plant and equipment \u00a031 December 2022 31 December 2021 Land and buildings for own use 115 145 Plant 480 332 Equipment 24 25 Property, plant and equipment owned 618 502 \u00a0\u00a0\u00a0Vehicles 8 10 Land 46 37 Other 7 7 Right-of-use assets 61 54 \u00a0\u00a0\u00a0Total property, plant and equipment 679 556 Changes in property, plant and equipment \u00a0Land and buildings held for own use Plant Equipment Right-of-use assets Total 2022 Total 2021 At 1 January 145 332 25 54 556 198 Additions - 157 6 16 179 386 Transfer to Investment property -18 - - - -18 - Depreciation -5 -18 -6 -8 -37 -19 Revaluations through profit or loss - -5 - - -5 - Revaluations through equity -8 21 - - 13 -7 Other changes - -7 - -1 -9 -2 Changes in the composition of the group - - - - - 1 At 31 December 115 480 24 61 679 556 Gross carrying amount as at 31 December 222 498 58 81 859 705 Accumulated depreciation as at 31 December -108 -18 -34 -20 -180 -149 Net carrying value as at 31 December 115 480 24 61 679 556 Revaluation surplus \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0At 1 January 38 - - - 38 45 Revaluation in the year -8 21 - - 13 -7 At 31 December 30 21 - - 50 38 Additions mainly relate to the acquisition of wind farms Jaap Rodenburg, Nieuwe Hemweg and Strekdammen and solar park Pesse as part of the strategy to invest more in renewable energy, see chapter 6.4.5. Depreciation of land and buildings held for own use, equipment and right-of-use assets is recorded in the operating expenses, see chapter 6.6.8. Depreciation of plant is recorded in the other expenses, see chapter 6.6.11. The fair values of land and buildings for own use and plant are based on external valuations and is disclosed in chapter 6.7.1.3. Property, plant and equipment consists mainly of assets expected to have a useful life of more than one year after the balance sheet date. 6.5.19 Borrowings See accounting policies AA and BB. Borrowings \u00a031 December 2022 31 December 2021 Loans 152 137 Lease liabilities 62 55 \u00a0\u00a0\u00a0Total Borrowings 214 192 As at year-end, borrowings had the following terms to maturity: Maturity of borrowings \u00a031 December 2022 31 December 2021 Maturity - Falling due within 1 year 20 9 Maturity - Falling due between 1 and 5 years 61 58 Maturity - Falling due after 5 years 134 124 \u00a0\u00a0\u00a0Maturity Borrowings 214 192 Borrowings increased mainly due to the acquisition of wind farm Strekdammen, which was partially financed by a loan of \u20ac\u00a019 million. At year-end 2022, the fair value of borrowings was \u20ac\u00a0214 million (2021: \u20ac\u00a0192 million). For information regarding the fair value, see chapter 6.7.1.2. The average interest rate payable on loans was 1.40% (2021: 0.59%). The average incremental borrowing rate on the lease liabilities was 1.48% (2021: 1.63%). 6.7.7.4 Expected future lease payments The following table sets out the expected future lease payments for investment property and plant, showing the undiscounted lease payments to be received after the reporting date. Expected minimum future lease payments on non-cancellable investment property lease and plant \u00a031 December 2022 31 December 2021 To be received within 1 year 33 59 To be received between 1 and 2 years 29 44 To be received between 2 and 3 years 25 41 To be received between 3 and 4 years 21 38 To be received between 4 and 5 years 17 34 To be received after 5 years 89 396 \u00a0\u00a0\u00a0Total undiscounted lease payments 214 613 The investments properties, in retail, residential, offices and rural markets are leased to third parties, consisting of various lease terms in a range between shorter than one year and undetermined period with competitive rents mostly indexed to consumer prices. The plants are leased to third parties with lease terms longer than ten years. The strong decline in future lease payments is related to the reclassification of ASR DFLF to investments, see chapter 6.5.3. ", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-515": { "value": " 6.5.3 Investment property See accounting policy D. Changes in investment property \u00a02022 2021 At 1 January 2,052 1,973 \u00a0\u00a0\u00a0Changes in value of investments, realised/unrealised gains and losses: \u00a0\u00a0- Fair value gains and losses 122 91 \u00a0\u00a0\u00a0Purchases 59 53 Issues 3 1 Disposals -159 -63 \u00a0\u00a0\u00a0Transferred from property and equipment 18 - Transfer between investment property and investments - -2 Transfer of real estate equity funds to investments -1,431 - \u00a0\u00a0\u00a0At 31 December 664 2,052 Investment property is leased to third parties and is diversified over the rural, residential, offices and retail sectors and over property under development in the Netherlands. The significant inputs are the net initial yield and market rental value, see chapter 6.7.1. Purchases in 2022 mainly relates to acquisitions of rural property (\u20ac\u00a030 million) and offices (\u20ac\u00a029 million). Disposals relates to the disposal of rural property (\u20ac\u00a055 million) and the sale of shares in ASR Dutch Farmland Fund (ASR DFLF) to third parties (\u20ac\u00a0103 million). As a result a.s.r. lost control of ASR DFLF. The transfer of real estate equity funds (\u20ac\u00a01,431 million) to investments relates to the transfer of ASR DFLF to investments, see chapter 6.5.5.2. Rental income is recognised as investment income, see chapter 6.6.2. In 2022, rentals amounted to \u20ac\u00a058 million (2021: \u20ac\u00a064 million). The rental income decreased due to the transfer of real estate equity funds to investments. Direct operating expenses arising from investment property amounted to \u20ac\u00a09 million (2021: \u20ac\u00a010 million). Given the overall low vacancy rate, virtually all direct operating expenses relate to investment property generating rental income. Direct operating expenses of investment property are classified as other expenses, see chapter 6.6.11 . Investment property consists mainly of assets expected to be recovered after more than one year after the balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentPropertyExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-516": { "value": " 6.5.3 Investment property See accounting policy D. Changes in investment property \u00a02022 2021 At 1 January 2,052 1,973 \u00a0\u00a0\u00a0Changes in value of investments, realised/unrealised gains and losses: \u00a0\u00a0- Fair value gains and losses 122 91 \u00a0\u00a0\u00a0Purchases 59 53 Issues 3 1 Disposals -159 -63 \u00a0\u00a0\u00a0Transferred from property and equipment 18 - Transfer between investment property and investments - -2 Transfer of real estate equity funds to investments -1,431 - \u00a0\u00a0\u00a0At 31 December 664 2,052 Investment property is leased to third parties and is diversified over the rural, residential, offices and retail sectors and over property under development in the Netherlands. The significant inputs are the net initial yield and market rental value, see chapter 6.7.1. Purchases in 2022 mainly relates to acquisitions of rural property (\u20ac\u00a030 million) and offices (\u20ac\u00a029 million). Disposals relates to the disposal of rural property (\u20ac\u00a055 million) and the sale of shares in ASR Dutch Farmland Fund (ASR DFLF) to third parties (\u20ac\u00a0103 million). As a result a.s.r. lost control of ASR DFLF. The transfer of real estate equity funds (\u20ac\u00a01,431 million) to investments relates to the transfer of ASR DFLF to investments, see chapter 6.5.5.2. Rental income is recognised as investment income, see chapter 6.6.2. In 2022, rentals amounted to \u20ac\u00a058 million (2021: \u20ac\u00a064 million). The rental income decreased due to the transfer of real estate equity funds to investments. Direct operating expenses arising from investment property amounted to \u20ac\u00a09 million (2021: \u20ac\u00a010 million). Given the overall low vacancy rate, virtually all direct operating expenses relate to investment property generating rental income. Direct operating expenses of investment property are classified as other expenses, see chapter 6.6.11 . Investment property consists mainly of assets expected to be recovered after more than one year after the balance sheet date. 6.5.5 Investments See accounting policy E. Investments \u00a031 December 2022 31 December 2021 Available for sale 20,900 30,333 At fair value through profit or loss 4,740 3,216 \u00a025,640 33,550 For changes in investments available for sale and changes in investments at fair value through profit or loss see chapter 6.5.5.1 and chapter 6.5.5.2 respectively. Breakdown of investments \u00a031 December 2022 31 December 2021 \u00a0Available for sale Fair value through profit or loss Total Available for sale Fair value through profit or loss Total Fixed income investments \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Government bonds 9,227 - 9,227 14,149 - 14,149 Corporate bonds 7,188 - 7,188 10,827 - 10,827 Asset-backed securities 416 - 416 530 - 530 Preference shares 289 - 289 311 - 311 Rural property contracts - - - - 215 215 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Equities and similar investments \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Equities 3,471 82 3,553 4,111 18 4,129 Real estate equity funds - 3,974 3,974 - 2,202 2,202 Mortgage equity funds 303 684 987 398 781 1,179 Other participating interests 6 - 6 7 - 7 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total investments 20,900 4,740 25,640 30,333 3,216 33,550 In 2022, government bonds decreased to \u20ac\u00a09,227 million (2021: \u20ac\u00a014,149 million) mostly due to negative revaluations due to increasing interest rates and the disposal of government bonds. Cash collateral received on derivative instruments was reinvested into government bonds, cash collateral decreased due to increasing interest rates, therefore government bonds were sold. For more information regarding cash collateral received see chapter 6.5.21. The equities consist primarily of listed equities and investments in investment funds. Equities decreased mainly as a result of negative revaluations. Real estate equity funds increased mainly due to the addition of ASR DFLF. During 2022, a.s.r. lost control of ASR DFLF when external participants invested in ASR DFLF. The rural property contracts are held by ASR DFLF, and therefore transferred to real estate equity funds. For the real estate equity funds and mortgage equity funds for which a.s.r. has significant influence, being ASR DMOF, ASR DPRF, ASR DCRF, ASR DFLF and ASR MF, the exemption of IAS 28 was used, thereby measuring the investments at fair value through profit or loss and presenting them as a separate category within the investments at fair value through profit or loss. For a breakdown of the real estate equity funds ASR DMOF, ASR DPRF, ASR DCRF and ASR DFLF and ASR MF see chapter 6.5.4. All investments at fair value through profit or loss are designated as such by a.s.r. upon initial recognition. For more detailed information about the fair value valuation of the investments, see chapter 6.7.1. Based on their contractual maturity, an amount of \u20ac\u00a013,868 million (2021: \u20ac\u00a021,400 million) of fixed income investments is expected to be recovered after more than one year after the balance sheet date. For assets without a contractual maturity date, it is expected that they will be recovered after more than one year after the balance sheet date. 6.5.5.1 Investments available for sale Changes in investments available for sale \u00a02022 2021 At 1 January 30,333 33,774 Purchases 10,583 13,516 Repayments -2,229 -6,658 Disposal -12,614 -9,805 Realised gains and losses through profit or loss -222 429 Revaluation recognised in equity -4,918 -845 (Reversals of) Impairments -110 -13 Amortisation 23 -110 Exchange rate differences 54 46 Other changes -1 - \u00a0\u00a0\u00a0At 31 December 20,900 30,333 a.s.r. has bonds amounting to \u20ac\u00a03.237 million (2021: \u20ac\u00a03,524 million) and cash amounting to \u20ac\u00a0600 million (2021: \u20ac\u00a01,000 million) (see chapter 6.5.12) that have been transferred, but do not qualify for derecognition. The majority of these investments are part of a securities lending programme whereby the investments are lent in exchange for a fee with collateral obtained as a security. The collateral furnished as security representing a fair value of \u20ac\u00a04,914 million (2021: \u20ac\u00a05,383 million) consists of mortgage loans and corporate and government bonds. See accounting policy S about securities lending. Impairment of investments available for sale Changes in impairments of investments available for sale \u00a02022 2021 At 1 January -300 -354 Increase in impairments through profit or loss -133 -16 Reversal of impairments through profit or loss 23 3 Reversal of impairments due to disposal 43 68 Other -7 - \u00a0\u00a0\u00a0At 31 December -374 -300 The increase in impairments through profit or loss is related to impairments on equities and investment funds. The reversal of impairments through profit or loss relates to government bonds. The reversal of impairments due to disposal is mainly related to equities. 6.5.5.2 Investments at fair value through profit or loss Changes in investments at fair value through profit or loss \u00a02022 2021 At 1 January 3,216 2,825 Purchases 455 336 Disposal -222 -64 Revaluation through profit or loss -167 117 Net transfer of real estate equity funds 1,457 - Other changes - 2 \u00a0\u00a0\u00a0At 31 December 4,740 3,216 The net transfer of real estate equity funds relates to ASR DFLF. During 2022, a.s.r. lost control of ASR DFLF as a result of the entry of third party participants in ASR DFLF. 6.5.6 Investments on behalf of policyholders See accounting policy F. Investments on behalf of policyholders at fair value through profit or loss \u00a031 December 2022 31 December 2021 Government bonds 1,526 1,954 Corporate bonds 1,386 1,100 Equities 6,504 7,950 Real estate equity funds 170 249 Mortgage equity funds 252 234 Derivatives - 6 Cash and cash equivalents 9 18 Other investments 66 64 \u00a0\u00a0\u00a0Total investments on behalf of policyholders at fair value through profit or loss 9,912 11,574 Changes in investments on behalf of policyholders at fair value through profit or loss \u00a02022 2021 At 1 January 11,574 10,154 Purchases 1,101 1,125 Disposal -805 -1,237 Revaluation through profit or loss -1,946 1,629 Other changes -12 -98 \u00a0\u00a0\u00a0At 31 December 9,912 11,574 Investments on behalf of policyholders are managed on behalf of policyholders on a fair value basis. Although individual instruments may (or may not) have a maturity depending on their nature, this does not impact the liquidity position of a.s.r. 6.5.7 Investments related to investment contracts See accounting policy G. Investments related to investment contracts \u00a031 December 2022 31 December 2021 Government bonds 261 - Corporate bonds 149 - Equities 1,449 1,794 Real estate equity funds 97 119 Cash and cash equivalents 37 39 Other investments 6 - Total investments related to investment contracts 2,000 1,952 Changes in investments related to investment contracts \u00a02022 2021 At 1 January 1,952 - Purchases 2,419 355 Disposal -2,024 -110 Revaluation through profit or loss -351 175 Changes in the composition of the group - 1,524 Other changes 5 9 \u00a0\u00a0\u00a0At 31 December 2,000 1,952 The purchases and disposals increased mainly due to the sale of \u20ac\u00a01.878 million of investment funds owed by a.s.r. PPI and managed by BND Vermogensbeheer N.V. and the purchase of \u20ac\u00a01.878 million investment funds owed by a.s.r. PPI and now managed by ASR Vermogensbeheer N.V. Investments related to investment contracts are managed on behalf of contract holders on a fair value basis. Although individual instruments may (or may not) have a maturity depending on their nature, this does not impact the liquidity position of a.s.r. 6.5.8 Loans and receivables See accounting policy H. Loans and receivables measured at amortised cost \u00a031 December 2022 31 December 2021 Government and public sector 221 223 Mortgage loans 10,370 9,991 Other loans 1,723 1,253 Total due from customers 12,314 11,468 \u00a0\u00a0\u00a0Impairments \u00a0\u00a0Specific credit risks -7 -7 Due from customers 12,307 11,461 \u00a0\u00a0\u00a0Due from credit institutions - Interest bearing deposits 36 139 Due from credit institutions - Loans and advances 2,628 2,797 Due from credit institutions - Other 1,632 91 Total due from credit institutions 4,296 3,027 \u00a0\u00a0\u00a0Impairments \u00a0\u00a0Specific credit risks -37 -56 Due from credit institutions 4,259 2,971 \u00a0\u00a0\u00a0Due from policyholders 133 75 Due from intermediaries 65 89 Reinsurance receivables 63 83 Due from Health Insurance Fund 70 148 Other receivables 301 459 Total trade and other receivables 632 853 \u00a0\u00a0\u00a0Impairments \u00a0\u00a0Specific credit risks -27 -25 IBNR - -1 Trade and other receivables 605 827 \u00a0\u00a0\u00a0Total loans and receivables 17,171 15,259 The total amount due from credit institutions of \u20ac\u00a04,296 million (2021: \u20ac\u00a03,027 million) mainly increased due to paid cash collateral. Total due from credit institutions consists for \u20ac\u00a02,233 million (2021: \u20ac\u00a02,462 million) of savings-linked mortgage loans. The claim related to cash collateral paid on derivative instruments, included in total due from credit institutions, amounts to \u20ac\u00a01,632 million (2021: \u20ac\u00a091 million). Based on their contractual maturity, an amount of \u20ac\u00a015,023 million (2021: \u20ac\u00a014,368 million) of the loans and receivables is expected to be recovered after more than one year after the balance sheet date. For information regarding the fair value, see chapter 6.7.1.2. Changes in impairments of loans and receivables \u00a02022 2021 At 1 January -89 -90 Increase in impairment through profit and loss -10 -15 Reversal of impairment through profit and loss 27 14 Reversal of impairment due to disposal 1 2 Other - 1 \u00a0\u00a0\u00a0At 31 December -71 -89 6.5.9 Derivatives See accounting policy I. Derivatives consist primarily of derivatives used to hedge interest rate movements. Changes in the fair value of derivatives at fair value through profit or loss are recorded in \u2018fair value gains and losses\u2019, see chapter 6.6.4. a.s.r. trades both cleared and non-cleared derivatives on the basis of standardised contracts and exchanges cash variation margin with its counterparties. The derivatives are valued daily and cash collateral is exchanged to reflect the change in mark-to-market of the derivatives. Because of this periodic margining process, counterparty risk on derivatives is negligible. In addition to the above variation margin obligations, there is also an initial margin obligation for central cleared derivatives which further reduces the risk of a.s.r. and its counterparties that they cannot fulfil their obligations. Notional amounts are not recognised as assets or liabilities in the balance sheet, however notional amounts are used in determining the fair value of the derivatives. Notional amounts do not reflect the potential gain or loss on a derivative transaction. Derivatives \u00a031 December 2022 31 December 2021 \u00a0Asset Liability Notional amount Asset Liability Notional amount Foreign exchange contracts 80 29 2,924 25 78 3,873 Interest rate contracts \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0- Swaps 4,782 5,494 72,854 5,870 678 62,006 - Options 275 - 2,781 237 - 2,867 - Futures 215 - 1,176 37 3 939 Inflation linked swaps 44 - 290 14 - 235 Equity index contracts 31 - 643 28 - 802 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total 5,428 5,523 80,667 6,212 759 70,723 The derivatives do not include the derivatives on behalf of policyholders (2022: nil, 2021: \u20ac\u00a06 million). Derivatives assets decreased and derivatives liabilities increased primarily as a result of negative revaluations due to increasing interest rates. In addition to the use of swaps and options a.s.r. manages interest rate risk by using bond forwards, included in futures. The notional amounts of both receiver and payer swaps are included in the total notional amounts of foreign exchange contracts. The fair value of interest rate contracts is calculated by first determining the cash flows of the floating leg based on the Euribor-curve corresponding the interest reset period (3 months, 6 months or 12 months) of the swap. Then the net present value of the floating and fixed leg is determined by discounting the cash flows. As part of global industry efforts around benchmark reform, Central Clearing Counterparties (CCPs) have switched the overnight cost of funding collateral and discounting on all cleared EUR-denominated products to euro short-term (\u20acSTR) in July 2020, for USD-denominated derivatives to Secured Overnight Financing Rate in October 2020, and GBP-denominated derivatives to Sterling Overnight Index Average in December 2021. In the second half of 2021, all bilateral derivative agreements have been amended to reference the relevant Alternative Reference Rates. The fair value of the interest rate contracts using the above valuation method form the basis for the amount of collateral that is exchanged between a.s.r. and its counterparties in accordance with the underlying contracts. For more information see chapter 6.8 on risk management. Of the derivatives \u20ac\u00a05,237 million assets (2021: \u20ac\u00a06,121 million) and \u20ac\u00a05,485 million liabilities (2021: \u20ac\u00a0658 million) is expected to be recovered respectively settled more than one year after the balance sheet date. Transition Throughout the world, a transition is taking place from interbank offered rates (IBORs) to alternative benchmarks. In the EU, the transition to alternative interest-rate benchmarks is governed by the Benchmark Regulation (BMR). Pursuant to the BMR, IBOR based contracts need to be amended to reference alternative rates or to be provided with a fallback option. The transition away from IBORs is mainly affecting a.s.r.\u2019s derivative book, which is measured at fair value through profit or loss. Although most references under these derivatives remain BMR compliant, the Cash Collateral Interest Rate, and consequently discount rates, have required amendments towards Alternative Reference Rates (ARRs). During 2020 and 2021, all contracts referencing IBORs have been amended to reflect ARRs, with the exception of USD Libor Referenced Interest Rate Swaps, which are expected to remain BMR Compliant until June 2023. A project team has been formed in order to effectively manage the transition from IBORs to ARRs, and mitigating any adverse operational and/or financial impact. As at 31 December 2022, the transition from USD Libor References towards its respective ARRs is still outstanding and is expected to be finished well in advance of its cessation in June 2023. The following table provides details related to a.s.r.\u2019s exposure to USD Libor References at the end of 2022. Interest rate benchmark transition 31 December 2022 Non-derivative financial assets - carrying value Non-derivative financial liabilities - carrying value Derivatives - notional amount USD LIBOR (3 months) 28 - 258 USD LIBOR (6 months) 81 - - \u00a0109 - 258 ", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-517": { "value": "6.5.4 Associates and joint ventures See accounting policy V. Associates and joint ventures \u00a0Interest 31 December 2022 31 December 2021 At equity method \u00a0\u00a0\u00a0Associates and joint ventures ranging between 10 % and 50 % 79 102 \u00a0\u00a0\u00a0\u00a0At fair value through profit or loss \u00a0\u00a0\u00a0Real estate equity funds ranging between 30 % and 95 % 3,557 1,817 Mortgage equity funds ranging between 5 % and 20 % 684 781 Other equity funds ranging between 1 % and 10 % 66 - The real estate equity funds increased mainly due to the addition of ASR DFLF. During 2022, a.s.r. lost control of ASR DFLF as a result of the entry of third party participants in ASR DFLF. The real estate equity funds consists of the ASR Dutch Mobility Office Fund (ASR DMOF), ASR Dutch Prime Retail Fund (ASR DPRF), ASR Dutch Core Residential Fund (ASR DCRF) and ASR DFLF. The mortgage equity funds consists of the ASR Mortgage Fund (ASR MF). The other equity funds consists of two equity funds from a.s.r. PPI. The interests in these funds are classified and presented as an investment at fair value through profit or loss. For more information, see chapter 6.5.5 and 6.7.1. Investments in associates and joint ventures generally have a duration of more than one year after the balance sheet date. Changes in associates and joint ventures at equity method \u00a02022 2021 At 1 January 102 101 Acquisitions - 6 Disposal - -13 Share of profit/(loss) -3 9 Impairments -1 - Dividend -21 -2 Other changes 2 - \u00a0\u00a0\u00a0At 31 December 79 102 Some participating interests in which a.s.r. has an interest of less than 20% qualify as associates, because a.s.r. has significant influence as a result of contractual agreements. a.s.r. also has interests of 50% or more in associates at fair value through profit or loss. a.s.r. has no control over these entities as the ability to direct the relevant activities is limited by contractual agreements and therefore does not consolidate these entities. The information disclosed in the tables below is based on the most recent financial information available from the associates and joint ventures. This is primarily based on the investee\u2019s financial statements and their accounting policies. If these policies differ from a.s.r.'s accounting policies, carrying amounts in a.s.r.\u2019s consolidated financial statements have been changed to be in line with a.s.r.\u2019s policies. Financial information available from the associates and joint ventures \u00a031 December 2022 31 December 2021 \u00a0Associates and joint ventures at equity method Real estate equity funds Mortgage equity funds Other equity funds Total Associates and joint ventures at equity method Real estate equity funds Mortgage equity funds Other equity funds Total Total assets 318 6,021 7,885 4,124 18,348 376 4,019 8,168 - 12,563 Total liabilities 161 295 113 - 568 163 264 100 - 527 Total income 194 211 -1,679 -668 -1,942 197 171 240 - 607 Result -8 241 -1,714 -670 -2,151 20 266 208 - 494 Total comprehensive income -8 241 -1,714 -670 -2,150 20 266 208 - 494 The increase in assets and liabilities of the real estate equity funds relates mainly to the addition of ASR DFLF. The total assets of the real estate equity funds consist primarily of investment property, \u20ac\u00a05,777 million (2021: \u20ac\u00a03,766 million). The total assets of the mortgage equity funds consist primarily of mortgages, \u20ac\u00a07,708 million (2021: \u20ac\u00a07,991 million) and \u20ac\u00a04,101 million of the total assets of the other equity funds consists of equities. The interest in the real estate equity funds are as follows: Interest in real estate equity funds \u00a031 December 2022 31 December 2021 ASR DPRF 625 625 ASR DCRF 1,066 1,079 ASR DMOF 138 113 ASR DFLF 1,728 - \u00a0\u00a0\u00a0Total 3,557 1,817 ", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-518": { "value": "6.5.4 Associates and joint ventures See accounting policy V. Associates and joint ventures \u00a0Interest 31 December 2022 31 December 2021 At equity method \u00a0\u00a0\u00a0Associates and joint ventures ranging between 10 % and 50 % 79 102 \u00a0\u00a0\u00a0\u00a0At fair value through profit or loss \u00a0\u00a0\u00a0Real estate equity funds ranging between 30 % and 95 % 3,557 1,817 Mortgage equity funds ranging between 5 % and 20 % 684 781 Other equity funds ranging between 1 % and 10 % 66 - The real estate equity funds increased mainly due to the addition of ASR DFLF. During 2022, a.s.r. lost control of ASR DFLF as a result of the entry of third party participants in ASR DFLF. The real estate equity funds consists of the ASR Dutch Mobility Office Fund (ASR DMOF), ASR Dutch Prime Retail Fund (ASR DPRF), ASR Dutch Core Residential Fund (ASR DCRF) and ASR DFLF. The mortgage equity funds consists of the ASR Mortgage Fund (ASR MF). The other equity funds consists of two equity funds from a.s.r. PPI. The interests in these funds are classified and presented as an investment at fair value through profit or loss. For more information, see chapter 6.5.5 and 6.7.1. Investments in associates and joint ventures generally have a duration of more than one year after the balance sheet date. Changes in associates and joint ventures at equity method \u00a02022 2021 At 1 January 102 101 Acquisitions - 6 Disposal - -13 Share of profit/(loss) -3 9 Impairments -1 - Dividend -21 -2 Other changes 2 - \u00a0\u00a0\u00a0At 31 December 79 102 Some participating interests in which a.s.r. has an interest of less than 20% qualify as associates, because a.s.r. has significant influence as a result of contractual agreements. a.s.r. also has interests of 50% or more in associates at fair value through profit or loss. a.s.r. has no control over these entities as the ability to direct the relevant activities is limited by contractual agreements and therefore does not consolidate these entities. The information disclosed in the tables below is based on the most recent financial information available from the associates and joint ventures. This is primarily based on the investee\u2019s financial statements and their accounting policies. If these policies differ from a.s.r.'s accounting policies, carrying amounts in a.s.r.\u2019s consolidated financial statements have been changed to be in line with a.s.r.\u2019s policies. Financial information available from the associates and joint ventures \u00a031 December 2022 31 December 2021 \u00a0Associates and joint ventures at equity method Real estate equity funds Mortgage equity funds Other equity funds Total Associates and joint ventures at equity method Real estate equity funds Mortgage equity funds Other equity funds Total Total assets 318 6,021 7,885 4,124 18,348 376 4,019 8,168 - 12,563 Total liabilities 161 295 113 - 568 163 264 100 - 527 Total income 194 211 -1,679 -668 -1,942 197 171 240 - 607 Result -8 241 -1,714 -670 -2,151 20 266 208 - 494 Total comprehensive income -8 241 -1,714 -670 -2,150 20 266 208 - 494 The increase in assets and liabilities of the real estate equity funds relates mainly to the addition of ASR DFLF. The total assets of the real estate equity funds consist primarily of investment property, \u20ac\u00a05,777 million (2021: \u20ac\u00a03,766 million). The total assets of the mortgage equity funds consist primarily of mortgages, \u20ac\u00a07,708 million (2021: \u20ac\u00a07,991 million) and \u20ac\u00a04,101 million of the total assets of the other equity funds consists of equities. The interest in the real estate equity funds are as follows: Interest in real estate equity funds \u00a031 December 2022 31 December 2021 ASR DPRF 625 625 ASR DCRF 1,066 1,079 ASR DMOF 138 113 ASR DFLF 1,728 - \u00a0\u00a0\u00a0Total 3,557 1,817 ", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-519": { "value": "6.5.4 Associates and joint ventures See accounting policy V. Associates and joint ventures \u00a0Interest 31 December 2022 31 December 2021 At equity method \u00a0\u00a0\u00a0Associates and joint ventures ranging between 10 % and 50 % 79 102 \u00a0\u00a0\u00a0\u00a0At fair value through profit or loss \u00a0\u00a0\u00a0Real estate equity funds ranging between 30 % and 95 % 3,557 1,817 Mortgage equity funds ranging between 5 % and 20 % 684 781 Other equity funds ranging between 1 % and 10 % 66 - The real estate equity funds increased mainly due to the addition of ASR DFLF. During 2022, a.s.r. lost control of ASR DFLF as a result of the entry of third party participants in ASR DFLF. The real estate equity funds consists of the ASR Dutch Mobility Office Fund (ASR DMOF), ASR Dutch Prime Retail Fund (ASR DPRF), ASR Dutch Core Residential Fund (ASR DCRF) and ASR DFLF. The mortgage equity funds consists of the ASR Mortgage Fund (ASR MF). The other equity funds consists of two equity funds from a.s.r. PPI. The interests in these funds are classified and presented as an investment at fair value through profit or loss. For more information, see chapter 6.5.5 and 6.7.1. Investments in associates and joint ventures generally have a duration of more than one year after the balance sheet date. Changes in associates and joint ventures at equity method \u00a02022 2021 At 1 January 102 101 Acquisitions - 6 Disposal - -13 Share of profit/(loss) -3 9 Impairments -1 - Dividend -21 -2 Other changes 2 - \u00a0\u00a0\u00a0At 31 December 79 102 Some participating interests in which a.s.r. has an interest of less than 20% qualify as associates, because a.s.r. has significant influence as a result of contractual agreements. a.s.r. also has interests of 50% or more in associates at fair value through profit or loss. a.s.r. has no control over these entities as the ability to direct the relevant activities is limited by contractual agreements and therefore does not consolidate these entities. The information disclosed in the tables below is based on the most recent financial information available from the associates and joint ventures. This is primarily based on the investee\u2019s financial statements and their accounting policies. If these policies differ from a.s.r.'s accounting policies, carrying amounts in a.s.r.\u2019s consolidated financial statements have been changed to be in line with a.s.r.\u2019s policies. Financial information available from the associates and joint ventures \u00a031 December 2022 31 December 2021 \u00a0Associates and joint ventures at equity method Real estate equity funds Mortgage equity funds Other equity funds Total Associates and joint ventures at equity method Real estate equity funds Mortgage equity funds Other equity funds Total Total assets 318 6,021 7,885 4,124 18,348 376 4,019 8,168 - 12,563 Total liabilities 161 295 113 - 568 163 264 100 - 527 Total income 194 211 -1,679 -668 -1,942 197 171 240 - 607 Result -8 241 -1,714 -670 -2,151 20 266 208 - 494 Total comprehensive income -8 241 -1,714 -670 -2,150 20 266 208 - 494 The increase in assets and liabilities of the real estate equity funds relates mainly to the addition of ASR DFLF. The total assets of the real estate equity funds consist primarily of investment property, \u20ac\u00a05,777 million (2021: \u20ac\u00a03,766 million). The total assets of the mortgage equity funds consist primarily of mortgages, \u20ac\u00a07,708 million (2021: \u20ac\u00a07,991 million) and \u20ac\u00a04,101 million of the total assets of the other equity funds consists of equities. The interest in the real estate equity funds are as follows: Interest in real estate equity funds \u00a031 December 2022 31 December 2021 ASR DPRF 625 625 ASR DCRF 1,066 1,079 ASR DMOF 138 113 ASR DFLF 1,728 - \u00a0\u00a0\u00a0Total 3,557 1,817 ", "dimensions": { "concept": "ifrs-full:DisclosureOfJointVenturesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-520": { "value": "6.5.4 Associates and joint ventures See accounting policy V. Associates and joint ventures \u00a0Interest 31 December 2022 31 December 2021 At equity method \u00a0\u00a0\u00a0Associates and joint ventures ranging between 10 % and 50 % 79 102 \u00a0\u00a0\u00a0\u00a0At fair value through profit or loss \u00a0\u00a0\u00a0Real estate equity funds ranging between 30 % and 95 % 3,557 1,817 Mortgage equity funds ranging between 5 % and 20 % 684 781 Other equity funds ranging between 1 % and 10 % 66 - The real estate equity funds increased mainly due to the addition of ASR DFLF. During 2022, a.s.r. lost control of ASR DFLF as a result of the entry of third party participants in ASR DFLF. The real estate equity funds consists of the ASR Dutch Mobility Office Fund (ASR DMOF), ASR Dutch Prime Retail Fund (ASR DPRF), ASR Dutch Core Residential Fund (ASR DCRF) and ASR DFLF. The mortgage equity funds consists of the ASR Mortgage Fund (ASR MF). The other equity funds consists of two equity funds from a.s.r. PPI. The interests in these funds are classified and presented as an investment at fair value through profit or loss. For more information, see chapter 6.5.5 and 6.7.1. Investments in associates and joint ventures generally have a duration of more than one year after the balance sheet date. Changes in associates and joint ventures at equity method \u00a02022 2021 At 1 January 102 101 Acquisitions - 6 Disposal - -13 Share of profit/(loss) -3 9 Impairments -1 - Dividend -21 -2 Other changes 2 - \u00a0\u00a0\u00a0At 31 December 79 102 Some participating interests in which a.s.r. has an interest of less than 20% qualify as associates, because a.s.r. has significant influence as a result of contractual agreements. a.s.r. also has interests of 50% or more in associates at fair value through profit or loss. a.s.r. has no control over these entities as the ability to direct the relevant activities is limited by contractual agreements and therefore does not consolidate these entities. The information disclosed in the tables below is based on the most recent financial information available from the associates and joint ventures. This is primarily based on the investee\u2019s financial statements and their accounting policies. If these policies differ from a.s.r.'s accounting policies, carrying amounts in a.s.r.\u2019s consolidated financial statements have been changed to be in line with a.s.r.\u2019s policies. Financial information available from the associates and joint ventures \u00a031 December 2022 31 December 2021 \u00a0Associates and joint ventures at equity method Real estate equity funds Mortgage equity funds Other equity funds Total Associates and joint ventures at equity method Real estate equity funds Mortgage equity funds Other equity funds Total Total assets 318 6,021 7,885 4,124 18,348 376 4,019 8,168 - 12,563 Total liabilities 161 295 113 - 568 163 264 100 - 527 Total income 194 211 -1,679 -668 -1,942 197 171 240 - 607 Result -8 241 -1,714 -670 -2,151 20 266 208 - 494 Total comprehensive income -8 241 -1,714 -670 -2,150 20 266 208 - 494 The increase in assets and liabilities of the real estate equity funds relates mainly to the addition of ASR DFLF. The total assets of the real estate equity funds consist primarily of investment property, \u20ac\u00a05,777 million (2021: \u20ac\u00a03,766 million). The total assets of the mortgage equity funds consist primarily of mortgages, \u20ac\u00a07,708 million (2021: \u20ac\u00a07,991 million) and \u20ac\u00a04,101 million of the total assets of the other equity funds consists of equities. The interest in the real estate equity funds are as follows: Interest in real estate equity funds \u00a031 December 2022 31 December 2021 ASR DPRF 625 625 ASR DCRF 1,066 1,079 ASR DMOF 138 113 ASR DFLF 1,728 - \u00a0\u00a0\u00a0Total 3,557 1,817 6.5.5.2 Investments at fair value through profit or loss Changes in investments at fair value through profit or loss \u00a02022 2021 At 1 January 3,216 2,825 Purchases 455 336 Disposal -222 -64 Revaluation through profit or loss -167 117 Net transfer of real estate equity funds 1,457 - Other changes - 2 \u00a0\u00a0\u00a0At 31 December 4,740 3,216 The net transfer of real estate equity funds relates to ASR DFLF. During 2022, a.s.r. lost control of ASR DFLF as a result of the entry of third party participants in ASR DFLF. 6.5.6 Investments on behalf of policyholders See accounting policy F. Investments on behalf of policyholders at fair value through profit or loss \u00a031 December 2022 31 December 2021 Government bonds 1,526 1,954 Corporate bonds 1,386 1,100 Equities 6,504 7,950 Real estate equity funds 170 249 Mortgage equity funds 252 234 Derivatives - 6 Cash and cash equivalents 9 18 Other investments 66 64 \u00a0\u00a0\u00a0Total investments on behalf of policyholders at fair value through profit or loss 9,912 11,574 Changes in investments on behalf of policyholders at fair value through profit or loss \u00a02022 2021 At 1 January 11,574 10,154 Purchases 1,101 1,125 Disposal -805 -1,237 Revaluation through profit or loss -1,946 1,629 Other changes -12 -98 \u00a0\u00a0\u00a0At 31 December 9,912 11,574 Investments on behalf of policyholders are managed on behalf of policyholders on a fair value basis. Although individual instruments may (or may not) have a maturity depending on their nature, this does not impact the liquidity position of a.s.r. 6.5.7 Investments related to investment contracts See accounting policy G. Investments related to investment contracts \u00a031 December 2022 31 December 2021 Government bonds 261 - Corporate bonds 149 - Equities 1,449 1,794 Real estate equity funds 97 119 Cash and cash equivalents 37 39 Other investments 6 - Total investments related to investment contracts 2,000 1,952 Changes in investments related to investment contracts \u00a02022 2021 At 1 January 1,952 - Purchases 2,419 355 Disposal -2,024 -110 Revaluation through profit or loss -351 175 Changes in the composition of the group - 1,524 Other changes 5 9 \u00a0\u00a0\u00a0At 31 December 2,000 1,952 The purchases and disposals increased mainly due to the sale of \u20ac\u00a01.878 million of investment funds owed by a.s.r. PPI and managed by BND Vermogensbeheer N.V. and the purchase of \u20ac\u00a01.878 million investment funds owed by a.s.r. PPI and now managed by ASR Vermogensbeheer N.V. Investments related to investment contracts are managed on behalf of contract holders on a fair value basis. Although individual instruments may (or may not) have a maturity depending on their nature, this does not impact the liquidity position of a.s.r. 6.5.9 Derivatives See accounting policy I. Derivatives consist primarily of derivatives used to hedge interest rate movements. Changes in the fair value of derivatives at fair value through profit or loss are recorded in \u2018fair value gains and losses\u2019, see chapter 6.6.4. a.s.r. trades both cleared and non-cleared derivatives on the basis of standardised contracts and exchanges cash variation margin with its counterparties. The derivatives are valued daily and cash collateral is exchanged to reflect the change in mark-to-market of the derivatives. Because of this periodic margining process, counterparty risk on derivatives is negligible. In addition to the above variation margin obligations, there is also an initial margin obligation for central cleared derivatives which further reduces the risk of a.s.r. and its counterparties that they cannot fulfil their obligations. Notional amounts are not recognised as assets or liabilities in the balance sheet, however notional amounts are used in determining the fair value of the derivatives. Notional amounts do not reflect the potential gain or loss on a derivative transaction. Derivatives \u00a031 December 2022 31 December 2021 \u00a0Asset Liability Notional amount Asset Liability Notional amount Foreign exchange contracts 80 29 2,924 25 78 3,873 Interest rate contracts \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0- Swaps 4,782 5,494 72,854 5,870 678 62,006 - Options 275 - 2,781 237 - 2,867 - Futures 215 - 1,176 37 3 939 Inflation linked swaps 44 - 290 14 - 235 Equity index contracts 31 - 643 28 - 802 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total 5,428 5,523 80,667 6,212 759 70,723 The derivatives do not include the derivatives on behalf of policyholders (2022: nil, 2021: \u20ac\u00a06 million). Derivatives assets decreased and derivatives liabilities increased primarily as a result of negative revaluations due to increasing interest rates. In addition to the use of swaps and options a.s.r. manages interest rate risk by using bond forwards, included in futures. The notional amounts of both receiver and payer swaps are included in the total notional amounts of foreign exchange contracts. The fair value of interest rate contracts is calculated by first determining the cash flows of the floating leg based on the Euribor-curve corresponding the interest reset period (3 months, 6 months or 12 months) of the swap. Then the net present value of the floating and fixed leg is determined by discounting the cash flows. As part of global industry efforts around benchmark reform, Central Clearing Counterparties (CCPs) have switched the overnight cost of funding collateral and discounting on all cleared EUR-denominated products to euro short-term (\u20acSTR) in July 2020, for USD-denominated derivatives to Secured Overnight Financing Rate in October 2020, and GBP-denominated derivatives to Sterling Overnight Index Average in December 2021. In the second half of 2021, all bilateral derivative agreements have been amended to reference the relevant Alternative Reference Rates. The fair value of the interest rate contracts using the above valuation method form the basis for the amount of collateral that is exchanged between a.s.r. and its counterparties in accordance with the underlying contracts. For more information see chapter 6.8 on risk management. Of the derivatives \u20ac\u00a05,237 million assets (2021: \u20ac\u00a06,121 million) and \u20ac\u00a05,485 million liabilities (2021: \u20ac\u00a0658 million) is expected to be recovered respectively settled more than one year after the balance sheet date. Transition Throughout the world, a transition is taking place from interbank offered rates (IBORs) to alternative benchmarks. In the EU, the transition to alternative interest-rate benchmarks is governed by the Benchmark Regulation (BMR). Pursuant to the BMR, IBOR based contracts need to be amended to reference alternative rates or to be provided with a fallback option. The transition away from IBORs is mainly affecting a.s.r.\u2019s derivative book, which is measured at fair value through profit or loss. Although most references under these derivatives remain BMR compliant, the Cash Collateral Interest Rate, and consequently discount rates, have required amendments towards Alternative Reference Rates (ARRs). During 2020 and 2021, all contracts referencing IBORs have been amended to reflect ARRs, with the exception of USD Libor Referenced Interest Rate Swaps, which are expected to remain BMR Compliant until June 2023. A project team has been formed in order to effectively manage the transition from IBORs to ARRs, and mitigating any adverse operational and/or financial impact. As at 31 December 2022, the transition from USD Libor References towards its respective ARRs is still outstanding and is expected to be finished well in advance of its cessation in June 2023. The following table provides details related to a.s.r.\u2019s exposure to USD Libor References at the end of 2022. Interest rate benchmark transition 31 December 2022 Non-derivative financial assets - carrying value Non-derivative financial liabilities - carrying value Derivatives - notional amount USD LIBOR (3 months) 28 - 258 USD LIBOR (6 months) 81 - - \u00a0109 - 258 ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-521": { "value": "See accounting policy V.
| \u00a0 | Interest | 31 December 2022 | 31 December 2021 |
|---|---|---|---|
| At equity method | \u00a0 | \u00a0 | \u00a0 |
| Associates and joint ventures | ranging between 10 % and 50 % | 79 | 102 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| At fair value through profit or loss | \u00a0 | \u00a0 | \u00a0 |
| Real estate equity funds | ranging between 30 % and 95 % | 3,557 | 1,817 |
| Mortgage equity funds | ranging between 5 % and 20 % | 684 | 781 |
| Other equity funds | ranging between 1 % and 10 % | 66 | - |
The real estate equity funds increased mainly due to the addition of ASR DFLF. During 2022, a.s.r. lost control of ASR DFLF as a result of the entry of third party participants in ASR DFLF.
The real estate equity funds consists of the ASR Dutch Mobility Office Fund (ASR DMOF), ASR Dutch Prime Retail Fund (ASR DPRF), ASR Dutch Core Residential Fund (ASR DCRF) and ASR DFLF. The mortgage equity funds consists of the ASR Mortgage Fund (ASR MF). The other equity funds consists of two equity funds from a.s.r. PPI. The interests in these funds are classified and presented as an investment at fair value through profit or loss. For more information, see chapter 6.5.5 and 6.7.1.
Investments in associates and joint ventures generally have a duration of more than one year after the balance sheet date.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 102 | 101 |
| Acquisitions | - | 6 |
| Disposal | - | -13 |
| Share of profit/(loss) | -3 | 9 |
| Impairments | -1 | - |
| Dividend | -21 | -2 |
| Other changes | 2 | - |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | 79 | 102 |
Some participating interests in which a.s.r. has an interest of less than 20% qualify as associates, because a.s.r. has significant influence as a result of contractual agreements. a.s.r. also has interests of 50% or more in associates at fair value through profit or loss. a.s.r. has no control over these entities as the ability to direct the relevant activities is limited by contractual agreements and therefore does not consolidate these entities.
The information disclosed in the tables below is based on the most recent financial information available from the associates and joint ventures. This is primarily based on the investee\u2019s financial statements and their accounting policies. If these policies differ from a.s.r.'s accounting policies, carrying amounts in a.s.r.\u2019s consolidated financial statements have been changed to be in line with a.s.r.\u2019s policies.
| \u00a0 | 31 December 2022 | 31 December 2021 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| \u00a0 | Associates and joint ventures at equity method | Real estate equity funds | Mortgage equity funds | Other equity funds | Total | Associates and joint ventures at equity method | Real estate equity funds | Mortgage equity funds | Other equity funds | Total |
| Total assets | 318 | 6,021 | 7,885 | 4,124 | 18,348 | 376 | 4,019 | 8,168 | - | 12,563 |
| Total liabilities | 161 | 295 | 113 | - | 568 | 163 | 264 | 100 | - | 527 |
| Total income | 194 | 211 | -1,679 | -668 | -1,942 | 197 | 171 | 240 | - | 607 |
| Result | -8 | 241 | -1,714 | -670 | -2,151 | 20 | 266 | 208 | - | 494 |
| Total comprehensive income | -8 | 241 | -1,714 | -670 | -2,150 | 20 | 266 | 208 | - | 494 |
The increase in assets and liabilities of the real estate equity funds relates mainly to the addition of ASR DFLF.
The total assets of the real estate equity funds consist primarily of investment property, \u20ac\u00a05,777 million (2021: \u20ac\u00a03,766 million). The total assets of the mortgage equity funds consist primarily of mortgages, \u20ac\u00a07,708 million (2021: \u20ac\u00a07,991 million) and \u20ac\u00a04,101 million of the total assets of the other equity funds consists of equities.
The interest in the real estate equity funds are as follows:
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| ASR DPRF | 625 | 625 |
| ASR DCRF | 1,066 | 1,079 |
| ASR DMOF | 138 | 113 |
| ASR DFLF | 1,728 | - |
| \u00a0 | \u00a0 | \u00a0 |
| Total | 3,557 | 1,817 |
| Company | Equity interest | Rate of control | Seat | Segment |
|---|---|---|---|---|
| ASR Aanvullende Ziektekostenverzekeringen N.V.1 | 100.00 | 100.00 | Utrecht | Non-life |
| ASR Basis Ziektekostenverzekeringen N.V.1 | 100.00 | 100.00 | Utrecht | Non-life |
| ASR Schadeverzekering N.V.1 | 100.00 | 100.00 | Utrecht | Non-life |
| ASR Wlz-uitvoerder B.V. | 100.00 | 100.00 | Utrecht | Non-life |
| ASR Ziektekostenverzekeringen N.V.2 | 100.00 | 100.00 | Utrecht | Non-life |
| ASR Infrastructure Renewables B.V. | 100.00 | 100.00 | Utrecht | Life |
| ASR Levensverzekering N.V.1 | 100.00 | 100.00 | Utrecht | Life |
| ASR Utrecht Real Estate Investments Netherlands B.V. | 100.00 | 100.00 | Amsterdam | Life |
| ASR Premiepensioeninstelling N.V.3 | 100.00 | 100.00 | Amsterdam | Life |
| ASR Financieringen B.V.2 | 100.00 | 100.00 | Utrecht | Asset Management |
| ASR Hypotheken B.V.2 | 100.00 | 100.00 | Utrecht | Asset Management |
| ASR Real Estate B.V.43 | 100.00 | 100.00 | Utrecht | Asset Management |
| ASR Vermogensbeheer N.V.43 | 100.00 | 100.00 | Utrecht | Asset Management |
| Anac Verzekeringen B.V.5 | 100.00 | 100.00 | Eindhoven | Distribution & Services |
| Anac, All-Finance Nederland Advies-Combinatie B.V.5 | 100.00 | 100.00 | Eindhoven | Distribution & Services |
| ASR Vitaliteit & Preventieve Diensten B.V. | 100.00 | 100.00 | Utrecht | Distribution & Services |
| Assurantiekantoor Lodewijk B.V.5 | 100.00 | 100.00 | Wezep | Distribution & Services |
| Bedrijfsartsengroep Holding B.V. | 100.00 | 100.00 | Heerenveen | Distribution & Services |
| Boval Assuranti\u00ebn B.V.5 | 100.00 | 100.00 | Velserbroek | Distribution & Services |
| Corins B.V.5 | 100.00 | 100.00 | Amsterdam | Distribution & Services |
| Dutch ID B.V. | 100.00 | 100.00 | Velserbroek | Distribution & Services |
| Felison Assuradeuren B.V.5 | 100.00 | 100.00 | Velserbroek | Distribution & Services |
| Van Helvoort Assuradeuren B.V.5 | 100.00 | 100.00 | Gemert | Distribution & Services |
| Van Helvoort Registermakelaars in Assuranti\u00ebn B.V.5 | 100.00 | 100.00 | Gemert | Distribution & Services |
| PoliService B.V.5 | 100.00 | 100.00 | Hardinxveld-Giessendam | Distribution & Services |
| Supergarant Verzekeringen B.V.5 | 100.00 | 100.00 | Leidschendam | Distribution & Services |
| Van Kampen Geld B.V.5 | 100.00 | 100.00 | Hoorn | Distribution & Services |
| Van Kampen Groep Holding B.V.5 | 100.00 | 100.00 | Hoorn | Distribution & Services |
| ZZP Nederland Verzekeringen B.V.5 | 100.00 | 100.00 | Groningen | Distribution & Services |
| D&S Holding B.V.2 | 100.00 | 100.00 | Velserbroek | Distribution & Services |
| D&S Participaties B.V.2 | 100.00 | 100.00 | Velserbroek | Distribution & Services |
| Administratie- en Adviesbureau voor Belegging en Krediet (A.B.K.) B.V.2 | 100.00 | 100.00 | Amersfoort | Holding & Other |
| ASAM N.V.2 | 100.00 | 100.00 | Utrecht | Holding & Other |
| ASR Betalingscentrum B.V.2 | 100.00 | 100.00 | Utrecht | Holding & Other |
| ASR Deelnemingen N.V.2 | 100.00 | 100.00 | Utrecht | Holding & Other |
| ASR Nederland N.V. | 100.00 | 100.00 | Utrecht | Holding & Other |
| ASR Service Maatschappij N.V.2 | 100.00 | 100.00 | Rotterdam | Holding & Other |
| ASR Vastgoed Projecten B.V. | 100.00 | 100.00 | Utrecht | Holding & Other |
| ASR Vooruit B.V.5 | 100.00 | 100.00 | Utrecht | Holding & Other |
| Servicemaatschappij \"De Hoofdpoort\" N.V.2 | 100.00 | 100.00 | Utrecht | Holding & Other |
The principal group companies and associates are located in the Netherlands.
For notes to equity interests in associates and joint ventures, see chapter 6.5.4. The list of equity interests which are required under Sections 379 and 414, Book 2 of the Dutch Civil Code has been filed with the Trade Register of the Chamber of Commerce in Utrecht.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestsInOtherEntitiesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-522": { "value": "See accounting policy E.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Available for sale | 20,900 | 30,333 |
| At fair value through profit or loss | 4,740 | 3,216 |
| \u00a0 | 25,640 | 33,550 |
For changes in investments available for sale and changes in investments at fair value through profit or loss see chapter 6.5.5.1 and chapter 6.5.5.2 respectively.
| \u00a0 | 31 December 2022 | 31 December 2021 | ||||
|---|---|---|---|---|---|---|
| \u00a0 | Available for sale | Fair value through profit or loss | Total | Available for sale | Fair value through profit or loss | Total |
| Fixed income investments | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Government bonds | 9,227 | - | 9,227 | 14,149 | - | 14,149 |
| Corporate bonds | 7,188 | - | 7,188 | 10,827 | - | 10,827 |
| Asset-backed securities | 416 | - | 416 | 530 | - | 530 |
| Preference shares | 289 | - | 289 | 311 | - | 311 |
| Rural property contracts | - | - | - | - | 215 | 215 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Equities and similar investments | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Equities | 3,471 | 82 | 3,553 | 4,111 | 18 | 4,129 |
| Real estate equity funds | - | 3,974 | 3,974 | - | 2,202 | 2,202 |
| Mortgage equity funds | 303 | 684 | 987 | 398 | 781 | 1,179 |
| Other participating interests | 6 | - | 6 | 7 | - | 7 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total investments | 20,900 | 4,740 | 25,640 | 30,333 | 3,216 | 33,550 |
In 2022, government bonds decreased to \u20ac\u00a09,227 million (2021: \u20ac\u00a014,149 million) mostly due to negative revaluations due to increasing interest rates and the disposal of government bonds. Cash collateral received on derivative instruments was reinvested into government bonds, cash collateral decreased due to increasing interest rates, therefore government bonds were sold. For more information regarding cash collateral received see chapter 6.5.21.
The equities consist primarily of listed equities and investments in investment funds. Equities decreased mainly as a result of negative revaluations.
Real estate equity funds increased mainly due to the addition of ASR DFLF. During 2022, a.s.r. lost control of ASR DFLF when external participants invested in ASR DFLF. The rural property contracts are held by ASR DFLF, and therefore transferred to real estate equity funds.
For the real estate equity funds and mortgage equity funds for which a.s.r. has significant influence, being ASR DMOF, ASR DPRF, ASR DCRF, ASR DFLF and ASR MF, the exemption of IAS 28 was used, thereby measuring the investments at fair value through profit or loss and presenting them as a separate category within the investments at fair value through profit or loss. For a breakdown of the real estate equity funds ASR DMOF, ASR DPRF, ASR DCRF and ASR DFLF and ASR MF see chapter 6.5.4.
All investments at fair value through profit or loss are designated as such by a.s.r. upon initial recognition. For more detailed information about the fair value valuation of the investments, see chapter 6.7.1.
Based on their contractual maturity, an amount of \u20ac\u00a013,868 million (2021: \u20ac\u00a021,400 million) of fixed income investments is expected to be recovered after more than one year after the balance sheet date. For assets without a contractual maturity date, it is expected that they will be recovered after more than one year after the balance sheet date.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 30,333 | 33,774 |
| Purchases | 10,583 | 13,516 |
| Repayments | -2,229 | -6,658 |
| Disposal | -12,614 | -9,805 |
| Realised gains and losses through profit or loss | -222 | 429 |
| Revaluation recognised in equity | -4,918 | -845 |
| (Reversals of) Impairments | -110 | -13 |
| Amortisation | 23 | -110 |
| Exchange rate differences | 54 | 46 |
| Other changes | -1 | - |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | 20,900 | 30,333 |
a.s.r. has bonds amounting to \u20ac\u00a03.237 million (2021: \u20ac\u00a03,524 million) and cash amounting to \u20ac\u00a0600 million (2021: \u20ac\u00a01,000 million) (see chapter 6.5.12) that have been transferred, but do not qualify for derecognition. The majority of these investments are part of a securities lending programme whereby the investments are lent in exchange for a fee with collateral obtained as a security. The collateral furnished as security representing a fair value of \u20ac\u00a04,914 million (2021: \u20ac\u00a05,383 million) consists of mortgage loans and corporate and government bonds. See accounting policy S about securities lending.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | -300 | -354 |
| Increase in impairments through profit or loss | -133 | -16 |
| Reversal of impairments through profit or loss | 23 | 3 |
| Reversal of impairments due to disposal | 43 | 68 |
| Other | -7 | - |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | -374 | -300 |
The increase in impairments through profit or loss is related to impairments on equities and investment funds. The reversal of impairments through profit or loss relates to government bonds. The reversal of impairments due to disposal is mainly related to equities.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 3,216 | 2,825 |
| Purchases | 455 | 336 |
| Disposal | -222 | -64 |
| Revaluation through profit or loss | -167 | 117 |
| Net transfer of real estate equity funds | 1,457 | - |
| Other changes | - | 2 |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | 4,740 | 3,216 |
The net transfer of real estate equity funds relates to ASR DFLF. During 2022, a.s.r. lost control of ASR DFLF as a result of the entry of third party participants in ASR DFLF.
See accounting policy H.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Government and public sector | 221 | 223 |
| Mortgage loans | 10,370 | 9,991 |
| Other loans | 1,723 | 1,253 |
| Total due from customers | 12,314 | 11,468 |
| \u00a0 | \u00a0 | \u00a0 |
| Impairments | \u00a0 | \u00a0 |
| Specific credit risks | -7 | -7 |
| Due from customers | 12,307 | 11,461 |
| \u00a0 | \u00a0 | \u00a0 |
| Due from credit institutions - Interest bearing deposits | 36 | 139 |
| Due from credit institutions - Loans and advances | 2,628 | 2,797 |
| Due from credit institutions - Other | 1,632 | 91 |
| Total due from credit institutions | 4,296 | 3,027 |
| \u00a0 | \u00a0 | \u00a0 |
| Impairments | \u00a0 | \u00a0 |
| Specific credit risks | -37 | -56 |
| Due from credit institutions | 4,259 | 2,971 |
| \u00a0 | \u00a0 | \u00a0 |
| Due from policyholders | 133 | 75 |
| Due from intermediaries | 65 | 89 |
| Reinsurance receivables | 63 | 83 |
| Due from Health Insurance Fund | 70 | 148 |
| Other receivables | 301 | 459 |
| Total trade and other receivables | 632 | 853 |
| \u00a0 | \u00a0 | \u00a0 |
| Impairments | \u00a0 | \u00a0 |
| Specific credit risks | -27 | -25 |
| IBNR | - | -1 |
| Trade and other receivables | 605 | 827 |
| \u00a0 | \u00a0 | \u00a0 |
| Total loans and receivables | 17,171 | 15,259 |
The total amount due from credit institutions of \u20ac\u00a04,296 million (2021: \u20ac\u00a03,027 million) mainly increased due to paid cash collateral. Total due from credit institutions consists for \u20ac\u00a02,233 million (2021: \u20ac\u00a02,462 million) of savings-linked mortgage loans.
The claim related to cash collateral paid on derivative instruments, included in total due from credit institutions, amounts to \u20ac\u00a01,632 million (2021: \u20ac\u00a091 million).
Based on their contractual maturity, an amount of \u20ac\u00a015,023 million (2021: \u20ac\u00a014,368 million) of the loans and receivables is expected to be recovered after more than one year after the balance sheet date.
For information regarding the fair value, see chapter 6.7.1.2.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | -89 | -90 |
| Increase in impairment through profit and loss | -10 | -15 |
| Reversal of impairment through profit and loss | 27 | 14 |
| Reversal of impairment due to disposal | 1 | 2 |
| Other | - | 1 |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | -71 | -89 |
See accounting policy I.
Derivatives consist primarily of derivatives used to hedge interest rate movements. Changes in the fair value of derivatives at fair value through profit or loss are recorded in \u2018fair value gains and losses\u2019, see chapter 6.6.4.
a.s.r. trades both cleared and non-cleared derivatives on the basis of standardised contracts and exchanges cash variation margin with its counterparties. The derivatives are valued daily and cash collateral is exchanged to reflect the change in mark-to-market of the derivatives. Because of this periodic margining process, counterparty risk on derivatives is negligible.
In addition to the above variation margin obligations, there is also an initial margin obligation for central cleared derivatives which further reduces the risk of a.s.r. and its counterparties that they cannot fulfil their obligations.
Notional amounts are not recognised as assets or liabilities in the balance sheet, however notional amounts are used in determining the fair value of the derivatives. Notional amounts do not reflect the potential gain or loss on a derivative transaction.
| \u00a0 | 31 December 2022 | 31 December 2021 | ||||
|---|---|---|---|---|---|---|
| \u00a0 | Asset | Liability | Notional amount | Asset | Liability | Notional amount |
| Foreign exchange contracts | 80 | 29 | 2,924 | 25 | 78 | 3,873 |
| Interest rate contracts | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| - Swaps | 4,782 | 5,494 | 72,854 | 5,870 | 678 | 62,006 |
| - Options | 275 | - | 2,781 | 237 | - | 2,867 |
| - Futures | 215 | - | 1,176 | 37 | 3 | 939 |
| Inflation linked swaps | 44 | - | 290 | 14 | - | 235 |
| Equity index contracts | 31 | - | 643 | 28 | - | 802 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total | 5,428 | 5,523 | 80,667 | 6,212 | 759 | 70,723 |
The derivatives do not include the derivatives on behalf of policyholders (2022: nil, 2021: \u20ac\u00a06 million).
Derivatives assets decreased and derivatives liabilities increased primarily as a result of negative revaluations due to increasing interest rates.
In addition to the use of swaps and options a.s.r. manages interest rate risk by using bond forwards, included in futures.
The notional amounts of both receiver and payer swaps are included in the total notional amounts of foreign exchange contracts.
The fair value of interest rate contracts is calculated by first determining the cash flows of the floating leg based on the Euribor-curve corresponding the interest reset period (3 months, 6 months or 12 months) of the swap. Then the net present value of the floating and fixed leg is determined by discounting the cash flows. As part of global industry efforts around benchmark reform, Central Clearing Counterparties (CCPs) have switched the overnight cost of funding collateral and discounting on all cleared EUR-denominated products to euro short-term (\u20acSTR) in July 2020, for USD-denominated derivatives to Secured Overnight Financing Rate in October 2020, and GBP-denominated derivatives to Sterling Overnight Index Average in December 2021. In the second half of 2021, all bilateral derivative agreements have been amended to reference the relevant Alternative Reference Rates.
The fair value of the interest rate contracts using the above valuation method form the basis for the amount of collateral that is exchanged between a.s.r. and its counterparties in accordance with the underlying contracts. For more information see chapter 6.8 on risk management.
Of the derivatives \u20ac\u00a05,237 million assets (2021: \u20ac\u00a06,121 million) and \u20ac\u00a05,485 million liabilities (2021: \u20ac\u00a0658 million) is expected to be recovered respectively settled more than one year after the balance sheet date.
Throughout the world, a transition is taking place from interbank offered rates (IBORs) to alternative benchmarks. In the EU, the transition to alternative interest-rate benchmarks is governed by the Benchmark Regulation (BMR). Pursuant to the BMR, IBOR based contracts need to be amended to reference alternative rates or to be provided with a fallback option.
The transition away from IBORs is mainly affecting a.s.r.\u2019s derivative book, which is measured at fair value through profit or loss. Although most references under these derivatives remain BMR compliant, the Cash Collateral Interest Rate, and consequently discount rates, have required amendments towards Alternative Reference Rates (ARRs).
During 2020 and 2021, all contracts referencing IBORs have been amended to reflect ARRs, with the exception of USD Libor Referenced Interest Rate Swaps, which are expected to remain BMR Compliant until June 2023. A project team has been formed in order to effectively manage the transition from IBORs to ARRs, and mitigating any adverse operational and/or financial impact. As at 31 December 2022, the transition from USD Libor References towards its respective ARRs is still outstanding and is expected to be finished well in advance of its cessation in June 2023. The following table provides details related to a.s.r.\u2019s exposure to USD Libor References at the end of 2022.
| 31 December 2022 | Non-derivative financial assets - carrying value | Non-derivative financial liabilities - carrying value | Derivatives - notional amount |
|---|---|---|---|
| USD LIBOR (3 months) | 28 | - | 258 |
| USD LIBOR (6 months) | 81 | - | - |
| \u00a0 | 109 | - | 258 |
See accounting policy Y.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Due from banks | 1,645 | 1,306 |
| Due from banks falling due within three months | 600 | 1,000 |
| \u00a0 | \u00a0 | \u00a0 |
| Total cash and cash equivalents | 2,245 | 2,306 |
a.s.r. has cash amounting to \u20ac\u00a0600 million (2021: \u20ac\u00a01,000 million) that has been received as part of a securities lending programme, but does not qualify for derecognition. For more information see chapter 6.5.5.1. All other cash and cash equivalents are freely available.
The cash components include \u20ac\u00a0249 million (2021: \u20ac\u00a01,892 million) related to cash collateral received on derivative instruments and is managed separately from other cash equivalents. The decrease in these cash components was caused by the decrease in value of derivatives, as a result of which collateral was refunded.
The claim related to cash collateral paid on derivative instruments is included in the amount loans and receivables, see chapter 6.5.8. Debt related to cash collateral on derivatives instruments is included in the amount due to banks, see chapter 6.5.21.
Interest expenses on cash collateral is mainly based on \u20acSTR (2021: EONIA/\u20acSTR).
See accounting policy AA.
The amounts due to banks decreased from \u20ac\u00a05,741 million to \u20ac\u00a02,262 million primarily as a result of the decrease in liability recognised for cash collateral received under ISDAs (International Swaps and Derivatives Association) and Client Clearing Agreements (CCA) concluded with counterparties (see chapter 6.5.12). There is no significant difference between the carrying amount and the fair value of these liabilities (see chapter 6.7.1.2). The average interest rate for the cash collateral received in 2022 is -0.01% and based on \u20acSTR (2021: -0.48% (EONIA / \u20acSTR)).
\u20ac\u00a0450 million (2021 : nil) of cash on the balance sheet has been borrowed by entering into repurchase agreements. The asset recognised for cash collateral paid on repurchase agreements is presented under loans and receivables. The liability recognised for cash collateral received on repurchase agreements is presented under due to banks. The entire amount due to banks is expected to be settled less than or equal to twelve months after the balance sheet date.
a.s.r.\u2019s unsecured Revolving Credit Facility (RCF) amounts to \u20ac\u00a0400 million (2021: \u20ac\u00a0400 million). The RCF can be used for multiple purposes including investment purposes, balance sheet management and short-term cash flow management. As per the year-end 2022 the RCF is undrawn and fully available.
The entire amount of the due to banks is expected to be settled less than or equal to twelve months after the balance sheet date.
The following tables include information about rights to offset and the related arrangements. The amounts included consist of all recognised financial instruments that are presented net in the balance sheet under the IFRS-EU offsetting requirements (legal right to offset and intention to settle on a net basis) and amounts presented gross in the balance sheet but subject to enforceable master netting arrangements or similar arrangements.
| \u00a0 | Gross amounts of recognised financial assets | Gross amounts of recognised financial liabilities set off in the statement of financial position | Net amounts of financial assets presented in the statement of financial position | Related amounts not set off in the statement of financial position | Net amount | |
|---|---|---|---|---|---|---|
| Financial assets subject to offsetting, enforceable master netting arrangements and similar agreements | \u00a0 | \u00a0 | \u00a0 | Financial instruments | Cash Collateral received (excluding surplus) | \u00a0 |
| 31 December 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| - Derivatives | 5,389 | - | 5,389 | 3,829 | 1,560 | - |
| Total financial assets | 5,389 | - | 5,389 | 3,829 | 1,560 | - |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 31 December 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| - Derivatives | 6,212 | - | 6,212 | 743 | 5,469 | - |
| Total financial assets | 6,212 | - | 6,212 | 743 | 5,469 | - |
| \u00a0 | Gross amounts of recognised financial liabilities | Gross amounts of recognised financial assets set off in the statement of financial position | Net amounts of financial liabilities presented in the statement of financial position | Related amounts not set off in the statement of financial position | Net amount | |
|---|---|---|---|---|---|---|
| Financial liabilities subject to offsetting, enforceable master netting arrangements and similar agreements | \u00a0 | \u00a0 | \u00a0 | Financial instruments | Cash Collateral pledged (excluding surplus) | \u00a0 |
| 31 December 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| - Derivatives | 5,523 | - | 5,523 | 3,829 | 1,632 | 62 |
| Total financial liabilities | 5,523 | - | 5,523 | 3,829 | 1,632 | 62 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 31 December 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| - Derivatives | 759 | - | 759 | 743 | 16 | - |
| Total financial liabilities | 759 | - | 759 | 743 | 16 | - |
Counterparty default risk reflects possible losses due to unexpected default or deterioration in the credit standing of counterparties and debtors. Counterparty default risk affects several types of assets:
mortgages
savings-linked mortgage loans
derivatives
reinsurance
receivables
cash and deposits
Assets that are in scope of spread risk are, by definition, not in scope of counterparty default risk and vice versa. The Solvency II regime makes a distinction between two types of exposures:
Type 1: These counterparties generally have a rating (reinsurance, derivatives, current account balances, deposits with ceding companies and issued guarantee (letter of credit). The exposures are not diversified.
Type 2: These counterparties are normally unrated (receivables from intermediaries and policyholders, mortgages with private individuals or SMEs). The exposures are generally diversified.
The total capital requirement for counterparty risk is an aggregation of the capital requirement for type 1 exposure and the capital requirement for type 2 exposure by taking 75% correlation.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Type 1 | 103 | 113 |
| Type 2 | 138 | 289 |
| Diversification (negative) | -15 | -21 |
| \u00a0 | \u00a0 | \u00a0 |
| Total | 226 | 381 |
The Counterparty default risk type 1 has decreased due to the decrease in derivatives exposure, which is the results of the change in SCR interest rate risk. The SCR interest rate shock scenario Up is dominant per year-end 2022, while end of 2021 the opposite applied. If an IRS disappears because of a default, this results in a reduction of SCR interest Up. In 2021 the opposite was true, SCR interest Down increased.
The Counterparty default risk type 2 has decreased due to the decreased exposure of the mortgage portfolio. This is driven by the quarterly revaluation of the underlying property and the increase of interest rates. The total counterparty risk has decreased by \u20ac\u00a0155 million.
Mortgages are granted for the account and risk of third parties and for a.s.r.\u2019s own account. The a.s.r. portfolio consists only of Dutch mortgages with a limited counterparty default risk. The fair value of a.s.r.\u2019s mortgage portfolio was \u20ac\u00a09,534 million at year-end 2022 (2021: \u20ac\u00a011,181 million). The decrease in value is driven by a lower market value of the mortgages (due to the increase of interest rates) and positive revaluations of the underlying property.
The Loan-to-Value ratio is based on the value of the mortgage according to Solvency II principals with respect to the a.s.r. calculated collateral. The percentage of mortgages which are in arrears for over three months has increased from 0.02% in December 2021 to 0.03% in December 2022.
The counterparty default risk of the savings-linked mortgage loans ('Spaarlossen') depends on the counterparty. For 13% of the portfolio, the counterparties are Special Purpose Vehicles. The risk is limited due to the robust quality of the mortgages in the Special Purpose Vehicles in combination with the tranching. a.s.r. has a cession-retrocession agreement with the counterparty for 84% of the portfolio, for which the risk is limited. Effectively, a.s.r. recognises the underlying receivable from the counterparty (or in the case of insolvency of the counterparty the mortgage loans transfers as collateral), mitigating the counterparty default risk of the savings-linked mortgage loans.
On September 1, 2021 DNB issued the Q&A and Good Practices document on the treatment of saving mortgages and in December, the Dutch Association of Insurers shared its additional guidance on this subject. These documents provide further requirements and guidelines on the valuation, risk calculations and balance sheet classification. Saving deposits without collateral agreement are considered in the SCR Spread Risk Module. The saving deposits with collateral are treated in the Counterparty Risk Module. Furthermore the collaterised deposits are split in two: a) the outstanding part and corresponding interest are considered in the SCR Counterparty risk type 2 (zero risk); b) the future premiums and corresponding interest are treated as the uncollaterised derivative contract of SCR Counterparty Risk Type 1.
Please note that due to a methodology change, the composition of the savings-linked mortgage loans portfolio for 2021 has been adjusted.
Over the Counter (OTC) derivatives are primarily used by a.s.r. to manage the interest-rate risks incorporated into the insurance liabilities. Interest-rate derivatives are traded with a well-diversified and qualitative dealer panel with whom there is an established International Swaps and Derivatives Association (ISDA) contract and a Credit Support Annex (CSA) in place. These CSAs include specific agreements on the exchange of collateral limiting market and counterparty risk. The outstanding value of the interest rate derivative positions is matched by collateral received from eligible counterparties, minimising the net counterparty default risk.
a.s.r. collaborates with reinsurers for fire and catastrophe risk. When entering into reinsurance contracts for fire and catastrophe, a.s.r. requires the counterparty to be rated at least single A. With respect to long-tail business and other sectors, the minimum permitted rating is single A.
The table above shows the exposure to reinsurers per rating. The total exposure to reinsurers at year-end 2022 was \u20ac\u00a0309 million (2021: \u20ac\u00a0419 million).
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| AAA | 0% | 0% |
| AA | 86% | 93% |
| A | 14% | 6% |
| NR | 0% | 1% |
| Total | 100% | 100% |
The receivables decreased to \u20ac\u00a0632 million in 2022 (2021: \u20ac\u00a0853 million), mainly driven by lower other receivables and lower receivables from Health insurance fund. The receivables of Policyholders increased due to the new VVT-contract. The composition of the receivables is presented in the table below.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Policyholders | 133 | 75 |
| Intermediaries | 65 | 89 |
| Reinsurance receivables | 63 | 83 |
| Health insurance fund | 70 | 148 |
| Other | 301 | 459 |
| \u00a0 | \u00a0 | \u00a0 |
| Total | 632 | 853 |
The current accounts on the balance sheet amounted \u20ac\u00a01,756 million in 2022 (2021: \u20ac\u00a01,517 million).
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| AAA | 0 | 0 |
| AA | 0 | 0 |
| A | 1,744 | 1,489 |
| Lower than A | 11 | 28 |
| Total | 1,756 | 1,517 |
a.s.r. has no deposits in scope of counterparty default risk.
Liquidity risk is the risk that a.s.r. is not able to meet its financial obligations to policyholders and other creditors when they become due and payable, at a reasonable cost and in a timely manner. Liquidity risk is not quantified in the SCR of a.s.r. and is therefore separately discussed.
a.s.r. recognises different levels of liquidity management. First, short-term liquidity management which covers the day-to-day cash requirements and aims to meet short term liquidity risk targets. Second level covers the long-term liquidity management. This, among others, considers the strategic matching of liquidity & funding needs in different business conditions in which market liquidity risk could materialise. Finally stress liquidity management refers to the ability to respond to a potential crisis situation as a result of a market event and/or an a.s.r.-specific event.
Due to rising interest rates in 2022, a.s.r. experienced liquidity outflow as a result of cash variation margin outflow related to the ISDA/CSA- and Clearing agreements of derivatives. The cash outflow was financed by returning earlier received cash collateral to counterparties. As at 31 December 2022 a.s.r. remained a net receiver of cash collateral. Other sources of liquidity risk are (unexpected) lapses in the insurance portfolios and catastrophe risk. a.s.r. monitors its liquidity risk via different risk reporting and monitoring processes including cash management reports, cash flow forecasts and liquidity dashboards in which liquidity outflows are calculated for different stress scenarios. For long-term liquidity management purposes, liquidity is also taken into account in the asset allocation process.
a.s.r.\u2019s liquidity management principle consists of three components. First, a well-diversified funding base in order to provide liquidity for cash management purposes. A portion of assets must be held in cash and invested in unencumbered marketable securities so it can be used for collateralised borrowing or asset sales. In order to cover liquidity needs in stress events a.s.r. has committed repo-facilities in place to ensure liquidity under all market circumstances. Second, the strategic asset allocation should reflect the expected and contingent liquidity needs of liabilities. Finally, an adequate and up-to-date liquidity policy and contingency plan are in place to enable management to act effectively and efficiently in times of crisis.
In managing the liquidity risk from financial liabilities, a.s.r. relies on holding liquid assets comprising cash and cash equivalents and investment grade securities for which there is an active and liquid market. These assets can be readily sold or lend to meet liquidity requirements. As at 31 December 2022, a.s.r. had cash (\u20ac\u00a01,546 million), short-term secured deposits (\u20ac\u00a0700 million) and liquid government bonds (\u20ac\u00a09,309 million).
The following table shows the contractual undiscounted cash flows of the insurance liabilities based on Solvency II. All other line items as well as the total carrying value are based on IFRS principles.
The insurance liabilities include the impact of expected lapses and mortality as well as non profit sharing cash flows. Profit sharing cash flows of insurance liabilities are not taken into account, nor are equities, property and swaptions. Since the portfolio of a.s.r. PPI is fully consolidated, an extra line-item relating to liabilities arising from investment contracts, is included. Furthermore, cash flows of the pension benefit obligations are taken into account.
| \u00a0 | Payable on demand | < 1 years | 1-5 years | 5-10 years | > 10 years | Carrying value |
|---|---|---|---|---|---|---|
| 31 December 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Insurance liabilities | - | 5,234 | 10,236 | 9,845 | 34,294 | 42,639 |
| Liabilities arising from investment contracts | - | 11 | 95 | 225 | 1,669 | 2,000 |
| Pension Benefit Obligation | - | 64 | 540 | 725 | 3,594 | 2,722 |
| Derivatives liabilities | - | 360 | 2,608 | 2,006 | 1,310 | 5,523 |
| Financial liabilities | 2,219 | 1,064 | 215 | 74 | 2,088 | 5,639 |
| Future interest payments | - | 90 | 450 | 563 | 1,390 | - |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total | 2,219 | 6,822 | 14,144 | 13,438 | 44,345 | 58,523 |
| \u00a0 | Payable on demand | < 1 years | 1-5 years | 5-10 years | > 10 years | Carrying value |
|---|---|---|---|---|---|---|
| 31 December 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Insurance liabilities | - | 5,240 | 10,134 | 9,722 | 33,335 | 52,404 |
| Liabilities arising from investment contracts | - | 12 | 89 | 227 | 1,624 | 1,952 |
| Pension Benefit Obligation | - | 54 | 468 | 638 | 3,288 | 3,990 |
| Derivatives liabilities | - | 230 | 183 | 185 | 293 | 759 |
| Financial liabilities | 6,155 | 597 | 250 | 67 | 1,060 | 8,117 |
| Future interest payments | - | 27 | 177 | 218 | 664 | - |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total | 6,155 | 6,159 | 11,301 | 11,056 | 40,264 | 67,223 |
When the amount payable is not fixed the amount reported is determined by reference to the conditions existing at the reporting date.
Financial liabilities payable on demand include the liability recognised for cash collateral received under ISDAs, concluded with counterparties. The related cash collateral received is recognised as cash and cash equivalents, and not part of the liquidity risk exposure table.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCollateralExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-523": { "value": "See accounting policy E.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Available for sale | 20,900 | 30,333 |
| At fair value through profit or loss | 4,740 | 3,216 |
| \u00a0 | 25,640 | 33,550 |
For changes in investments available for sale and changes in investments at fair value through profit or loss see chapter 6.5.5.1 and chapter 6.5.5.2 respectively.
| \u00a0 | 31 December 2022 | 31 December 2021 | ||||
|---|---|---|---|---|---|---|
| \u00a0 | Available for sale | Fair value through profit or loss | Total | Available for sale | Fair value through profit or loss | Total |
| Fixed income investments | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Government bonds | 9,227 | - | 9,227 | 14,149 | - | 14,149 |
| Corporate bonds | 7,188 | - | 7,188 | 10,827 | - | 10,827 |
| Asset-backed securities | 416 | - | 416 | 530 | - | 530 |
| Preference shares | 289 | - | 289 | 311 | - | 311 |
| Rural property contracts | - | - | - | - | 215 | 215 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Equities and similar investments | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Equities | 3,471 | 82 | 3,553 | 4,111 | 18 | 4,129 |
| Real estate equity funds | - | 3,974 | 3,974 | - | 2,202 | 2,202 |
| Mortgage equity funds | 303 | 684 | 987 | 398 | 781 | 1,179 |
| Other participating interests | 6 | - | 6 | 7 | - | 7 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total investments | 20,900 | 4,740 | 25,640 | 30,333 | 3,216 | 33,550 |
In 2022, government bonds decreased to \u20ac\u00a09,227 million (2021: \u20ac\u00a014,149 million) mostly due to negative revaluations due to increasing interest rates and the disposal of government bonds. Cash collateral received on derivative instruments was reinvested into government bonds, cash collateral decreased due to increasing interest rates, therefore government bonds were sold. For more information regarding cash collateral received see chapter 6.5.21.
The equities consist primarily of listed equities and investments in investment funds. Equities decreased mainly as a result of negative revaluations.
Real estate equity funds increased mainly due to the addition of ASR DFLF. During 2022, a.s.r. lost control of ASR DFLF when external participants invested in ASR DFLF. The rural property contracts are held by ASR DFLF, and therefore transferred to real estate equity funds.
For the real estate equity funds and mortgage equity funds for which a.s.r. has significant influence, being ASR DMOF, ASR DPRF, ASR DCRF, ASR DFLF and ASR MF, the exemption of IAS 28 was used, thereby measuring the investments at fair value through profit or loss and presenting them as a separate category within the investments at fair value through profit or loss. For a breakdown of the real estate equity funds ASR DMOF, ASR DPRF, ASR DCRF and ASR DFLF and ASR MF see chapter 6.5.4.
All investments at fair value through profit or loss are designated as such by a.s.r. upon initial recognition. For more detailed information about the fair value valuation of the investments, see chapter 6.7.1.
Based on their contractual maturity, an amount of \u20ac\u00a013,868 million (2021: \u20ac\u00a021,400 million) of fixed income investments is expected to be recovered after more than one year after the balance sheet date. For assets without a contractual maturity date, it is expected that they will be recovered after more than one year after the balance sheet date.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 30,333 | 33,774 |
| Purchases | 10,583 | 13,516 |
| Repayments | -2,229 | -6,658 |
| Disposal | -12,614 | -9,805 |
| Realised gains and losses through profit or loss | -222 | 429 |
| Revaluation recognised in equity | -4,918 | -845 |
| (Reversals of) Impairments | -110 | -13 |
| Amortisation | 23 | -110 |
| Exchange rate differences | 54 | 46 |
| Other changes | -1 | - |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | 20,900 | 30,333 |
a.s.r. has bonds amounting to \u20ac\u00a03.237 million (2021: \u20ac\u00a03,524 million) and cash amounting to \u20ac\u00a0600 million (2021: \u20ac\u00a01,000 million) (see chapter 6.5.12) that have been transferred, but do not qualify for derecognition. The majority of these investments are part of a securities lending programme whereby the investments are lent in exchange for a fee with collateral obtained as a security. The collateral furnished as security representing a fair value of \u20ac\u00a04,914 million (2021: \u20ac\u00a05,383 million) consists of mortgage loans and corporate and government bonds. See accounting policy S about securities lending.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | -300 | -354 |
| Increase in impairments through profit or loss | -133 | -16 |
| Reversal of impairments through profit or loss | 23 | 3 |
| Reversal of impairments due to disposal | 43 | 68 |
| Other | -7 | - |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | -374 | -300 |
The increase in impairments through profit or loss is related to impairments on equities and investment funds. The reversal of impairments through profit or loss relates to government bonds. The reversal of impairments due to disposal is mainly related to equities.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 3,216 | 2,825 |
| Purchases | 455 | 336 |
| Disposal | -222 | -64 |
| Revaluation through profit or loss | -167 | 117 |
| Net transfer of real estate equity funds | 1,457 | - |
| Other changes | - | 2 |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | 4,740 | 3,216 |
The net transfer of real estate equity funds relates to ASR DFLF. During 2022, a.s.r. lost control of ASR DFLF as a result of the entry of third party participants in ASR DFLF.
See accounting policy F.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Government bonds | 1,526 | 1,954 |
| Corporate bonds | 1,386 | 1,100 |
| Equities | 6,504 | 7,950 |
| Real estate equity funds | 170 | 249 |
| Mortgage equity funds | 252 | 234 |
| Derivatives | - | 6 |
| Cash and cash equivalents | 9 | 18 |
| Other investments | 66 | 64 |
| \u00a0 | \u00a0 | \u00a0 |
| Total investments on behalf of policyholders at fair value through profit or loss | 9,912 | 11,574 |
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 11,574 | 10,154 |
| Purchases | 1,101 | 1,125 |
| Disposal | -805 | -1,237 |
| Revaluation through profit or loss | -1,946 | 1,629 |
| Other changes | -12 | -98 |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | 9,912 | 11,574 |
Investments on behalf of policyholders are managed on behalf of policyholders on a fair value basis. Although individual instruments may (or may not) have a maturity depending on their nature, this does not impact the liquidity position of a.s.r.
See accounting policy G.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Government bonds | 261 | - |
| Corporate bonds | 149 | - |
| Equities | 1,449 | 1,794 |
| Real estate equity funds | 97 | 119 |
| Cash and cash equivalents | 37 | 39 |
| Other investments | 6 | - |
| Total investments related to investment contracts | 2,000 | 1,952 |
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | 1,952 | - |
| Purchases | 2,419 | 355 |
| Disposal | -2,024 | -110 |
| Revaluation through profit or loss | -351 | 175 |
| Changes in the composition of the group | - | 1,524 |
| Other changes | 5 | 9 |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | 2,000 | 1,952 |
The purchases and disposals increased mainly due to the sale of \u20ac\u00a01.878 million of investment funds owed by a.s.r. PPI and managed by BND Vermogensbeheer N.V. and the purchase of \u20ac\u00a01.878 million investment funds owed by a.s.r. PPI and now managed by ASR Vermogensbeheer N.V.
Investments related to investment contracts are managed on behalf of contract holders on a fair value basis. Although individual instruments may (or may not) have a maturity depending on their nature, this does not impact the liquidity position of a.s.r.
See accounting policy H.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Government and public sector | 221 | 223 |
| Mortgage loans | 10,370 | 9,991 |
| Other loans | 1,723 | 1,253 |
| Total due from customers | 12,314 | 11,468 |
| \u00a0 | \u00a0 | \u00a0 |
| Impairments | \u00a0 | \u00a0 |
| Specific credit risks | -7 | -7 |
| Due from customers | 12,307 | 11,461 |
| \u00a0 | \u00a0 | \u00a0 |
| Due from credit institutions - Interest bearing deposits | 36 | 139 |
| Due from credit institutions - Loans and advances | 2,628 | 2,797 |
| Due from credit institutions - Other | 1,632 | 91 |
| Total due from credit institutions | 4,296 | 3,027 |
| \u00a0 | \u00a0 | \u00a0 |
| Impairments | \u00a0 | \u00a0 |
| Specific credit risks | -37 | -56 |
| Due from credit institutions | 4,259 | 2,971 |
| \u00a0 | \u00a0 | \u00a0 |
| Due from policyholders | 133 | 75 |
| Due from intermediaries | 65 | 89 |
| Reinsurance receivables | 63 | 83 |
| Due from Health Insurance Fund | 70 | 148 |
| Other receivables | 301 | 459 |
| Total trade and other receivables | 632 | 853 |
| \u00a0 | \u00a0 | \u00a0 |
| Impairments | \u00a0 | \u00a0 |
| Specific credit risks | -27 | -25 |
| IBNR | - | -1 |
| Trade and other receivables | 605 | 827 |
| \u00a0 | \u00a0 | \u00a0 |
| Total loans and receivables | 17,171 | 15,259 |
The total amount due from credit institutions of \u20ac\u00a04,296 million (2021: \u20ac\u00a03,027 million) mainly increased due to paid cash collateral. Total due from credit institutions consists for \u20ac\u00a02,233 million (2021: \u20ac\u00a02,462 million) of savings-linked mortgage loans.
The claim related to cash collateral paid on derivative instruments, included in total due from credit institutions, amounts to \u20ac\u00a01,632 million (2021: \u20ac\u00a091 million).
Based on their contractual maturity, an amount of \u20ac\u00a015,023 million (2021: \u20ac\u00a014,368 million) of the loans and receivables is expected to be recovered after more than one year after the balance sheet date.
For information regarding the fair value, see chapter 6.7.1.2.
| \u00a0 | 2022 | 2021 |
|---|---|---|
| At 1 January | -89 | -90 |
| Increase in impairment through profit and loss | -10 | -15 |
| Reversal of impairment through profit and loss | 27 | 14 |
| Reversal of impairment due to disposal | 1 | 2 |
| Other | - | 1 |
| \u00a0 | \u00a0 | \u00a0 |
| At 31 December | -71 | -89 |
See accounting policy I.
Derivatives consist primarily of derivatives used to hedge interest rate movements. Changes in the fair value of derivatives at fair value through profit or loss are recorded in \u2018fair value gains and losses\u2019, see chapter 6.6.4.
a.s.r. trades both cleared and non-cleared derivatives on the basis of standardised contracts and exchanges cash variation margin with its counterparties. The derivatives are valued daily and cash collateral is exchanged to reflect the change in mark-to-market of the derivatives. Because of this periodic margining process, counterparty risk on derivatives is negligible.
In addition to the above variation margin obligations, there is also an initial margin obligation for central cleared derivatives which further reduces the risk of a.s.r. and its counterparties that they cannot fulfil their obligations.
Notional amounts are not recognised as assets or liabilities in the balance sheet, however notional amounts are used in determining the fair value of the derivatives. Notional amounts do not reflect the potential gain or loss on a derivative transaction.
| \u00a0 | 31 December 2022 | 31 December 2021 | ||||
|---|---|---|---|---|---|---|
| \u00a0 | Asset | Liability | Notional amount | Asset | Liability | Notional amount |
| Foreign exchange contracts | 80 | 29 | 2,924 | 25 | 78 | 3,873 |
| Interest rate contracts | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| - Swaps | 4,782 | 5,494 | 72,854 | 5,870 | 678 | 62,006 |
| - Options | 275 | - | 2,781 | 237 | - | 2,867 |
| - Futures | 215 | - | 1,176 | 37 | 3 | 939 |
| Inflation linked swaps | 44 | - | 290 | 14 | - | 235 |
| Equity index contracts | 31 | - | 643 | 28 | - | 802 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total | 5,428 | 5,523 | 80,667 | 6,212 | 759 | 70,723 |
The derivatives do not include the derivatives on behalf of policyholders (2022: nil, 2021: \u20ac\u00a06 million).
Derivatives assets decreased and derivatives liabilities increased primarily as a result of negative revaluations due to increasing interest rates.
In addition to the use of swaps and options a.s.r. manages interest rate risk by using bond forwards, included in futures.
The notional amounts of both receiver and payer swaps are included in the total notional amounts of foreign exchange contracts.
The fair value of interest rate contracts is calculated by first determining the cash flows of the floating leg based on the Euribor-curve corresponding the interest reset period (3 months, 6 months or 12 months) of the swap. Then the net present value of the floating and fixed leg is determined by discounting the cash flows. As part of global industry efforts around benchmark reform, Central Clearing Counterparties (CCPs) have switched the overnight cost of funding collateral and discounting on all cleared EUR-denominated products to euro short-term (\u20acSTR) in July 2020, for USD-denominated derivatives to Secured Overnight Financing Rate in October 2020, and GBP-denominated derivatives to Sterling Overnight Index Average in December 2021. In the second half of 2021, all bilateral derivative agreements have been amended to reference the relevant Alternative Reference Rates.
The fair value of the interest rate contracts using the above valuation method form the basis for the amount of collateral that is exchanged between a.s.r. and its counterparties in accordance with the underlying contracts. For more information see chapter 6.8 on risk management.
Of the derivatives \u20ac\u00a05,237 million assets (2021: \u20ac\u00a06,121 million) and \u20ac\u00a05,485 million liabilities (2021: \u20ac\u00a0658 million) is expected to be recovered respectively settled more than one year after the balance sheet date.
Throughout the world, a transition is taking place from interbank offered rates (IBORs) to alternative benchmarks. In the EU, the transition to alternative interest-rate benchmarks is governed by the Benchmark Regulation (BMR). Pursuant to the BMR, IBOR based contracts need to be amended to reference alternative rates or to be provided with a fallback option.
The transition away from IBORs is mainly affecting a.s.r.\u2019s derivative book, which is measured at fair value through profit or loss. Although most references under these derivatives remain BMR compliant, the Cash Collateral Interest Rate, and consequently discount rates, have required amendments towards Alternative Reference Rates (ARRs).
During 2020 and 2021, all contracts referencing IBORs have been amended to reflect ARRs, with the exception of USD Libor Referenced Interest Rate Swaps, which are expected to remain BMR Compliant until June 2023. A project team has been formed in order to effectively manage the transition from IBORs to ARRs, and mitigating any adverse operational and/or financial impact. As at 31 December 2022, the transition from USD Libor References towards its respective ARRs is still outstanding and is expected to be finished well in advance of its cessation in June 2023. The following table provides details related to a.s.r.\u2019s exposure to USD Libor References at the end of 2022.
| 31 December 2022 | Non-derivative financial assets - carrying value | Non-derivative financial liabilities - carrying value | Derivatives - notional amount |
|---|---|---|---|
| USD LIBOR (3 months) | 28 | - | 258 |
| USD LIBOR (6 months) | 81 | - | - |
| \u00a0 | 109 | - | 258 |
See accounting policy X.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Accrued investment and interest income | 529 | 465 |
| Prepaid costs and other non-financial assets | 148 | 134 |
| Property developments | 30 | 31 |
| Taxes receivable | 120 | - |
| \u00a0 | \u00a0 | \u00a0 |
| Total other assets | 828 | 631 |
Prepaid costs and other non-financial assets includes prepaid commissions for non-life insurance.
An amount of \u20ac\u00a0778 million (2021: \u20ac\u00a0582 million) of other assets is expected to be recovered less than or equal to one year after the balance sheet date.
See accounting policy Y.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Due from banks | 1,645 | 1,306 |
| Due from banks falling due within three months | 600 | 1,000 |
| \u00a0 | \u00a0 | \u00a0 |
| Total cash and cash equivalents | 2,245 | 2,306 |
a.s.r. has cash amounting to \u20ac\u00a0600 million (2021: \u20ac\u00a01,000 million) that has been received as part of a securities lending programme, but does not qualify for derecognition. For more information see chapter 6.5.5.1. All other cash and cash equivalents are freely available.
The cash components include \u20ac\u00a0249 million (2021: \u20ac\u00a01,892 million) related to cash collateral received on derivative instruments and is managed separately from other cash equivalents. The decrease in these cash components was caused by the decrease in value of derivatives, as a result of which collateral was refunded.
The claim related to cash collateral paid on derivative instruments is included in the amount loans and receivables, see chapter 6.5.8. Debt related to cash collateral on derivatives instruments is included in the amount due to banks, see chapter 6.5.21.
Interest expenses on cash collateral is mainly based on \u20acSTR (2021: EONIA/\u20acSTR).
See accounting policy AA.
| \u00a0 | Nominal amount | Carrying value 2022 | Carrying value 2021 |
|---|---|---|---|
| Hybrid Tier 2 instrument 5.125% fixed interest | 500 | 499 | 498 |
| Hybrid Tier 2 instrument 3.375% fixed interest | 500 | 495 | 494 |
| Hybrid Tier 2 instrument 7.000% fixed interest | 1,000 | 987 | - |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total subordinated liabilities | 2,000 | 1,980 | 992 |
In 2015, a.s.r. issued \u20ac\u00a0500 million subordinated liabilities in the form of Tier 2 notes, first callable on 29 September 2025, and maturing on 29 September 2045. The coupon is fixed at 5.125% and paid annually on 29 September with a step up at the first call date.
In 2019 a.s.r. issued \u20ac\u00a0500 million subordinated liabilities in the form of Tier 2 notes. The Tier 2 notes have a maturity date of 2049 and are first callable 3 months before the first reset date of 2 May 2029. The coupon is fixed at 3.375% and paid annually on 2 May. After the reset date the interest is calculated based on the 5 Year Mid Swap Rate plus a margin of 4.00 per cent and updated once every five years.
On 22 November 2022 a.s.r. issued \u20ac\u00a01 billion subordinated liabilities to partially finance the intended business combination with Aegon Nederland N.V., see chapter 6.4.5. As of the moment the business combination is completed the subordinated liabilities will qualify as a Tier 2 instrument. These Tier 2 notes have an M&A call clause, which gives a.s.r. the option to redeem the Tier 2 notes early if the acquisition of Aegon Nederland N.V. does not take place within 12 months or will not take place at all. The Tier 2 notes have a maturity date of 2043 and are first callable on 7 December 2033. The coupon is fixed at 7.000% and paid annually on 7 December.
These Tier 2 notes are subordinated and ranking equally without any preference amongst themselves and (a) junior to the claims of all senior creditors of a.s.r., (b) equally with any parity obligations and (c) in priority to claims in respect of (i) any equity securities and (ii) any junior obligations.
The subordinated liabilities are classified as liabilities given the obligation to settle the loans and pay the coupon. The subordinated liabilities issued in 2015 and 2019 are considered Tier 2 own funds for regulatory purposes. The subordinated liabilities issued in 2022 will be considered Tier 2 own funds for regulatory purposes as of the moment the business combination with Aegon Nederland is completed.
See accounting policies AA and BB.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Loans | 152 | 137 |
| Lease liabilities | 62 | 55 |
| \u00a0 | \u00a0 | \u00a0 |
| Total Borrowings | 214 | 192 |
As at year-end, borrowings had the following terms to maturity:
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Maturity - Falling due within 1 year | 20 | 9 |
| Maturity - Falling due between 1 and 5 years | 61 | 58 |
| Maturity - Falling due after 5 years | 134 | 124 |
| \u00a0 | \u00a0 | \u00a0 |
| Maturity Borrowings | 214 | 192 |
Borrowings increased mainly due to the acquisition of wind farm Strekdammen, which was partially financed by a loan of \u20ac\u00a019 million. At year-end 2022, the fair value of borrowings was \u20ac\u00a0214 million (2021: \u20ac\u00a0192 million). For information regarding the fair value, see chapter 6.7.1.2. The average interest rate payable on loans was 1.40% (2021: 0.59%). The average incremental borrowing rate on the lease liabilities was 1.48% (2021: 1.63%).
See accounting policy AA.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Debts to policyholders, agents and intermediaries | 462 | 561 |
| Debt to reinsurers | 8 | 12 |
| \u00a0 | \u00a0 | \u00a0 |
| Total due to customers | 471 | 573 |
For information regarding the fair value, see chapter 6.7.1.2.
An amount of \u20ac\u00a020 million (2021: \u20ac\u00a044 million) of due to customers is expected to be settled more than twelve months after balance sheet date.
See accounting policy AA.
The amounts due to banks decreased from \u20ac\u00a05,741 million to \u20ac\u00a02,262 million primarily as a result of the decrease in liability recognised for cash collateral received under ISDAs (International Swaps and Derivatives Association) and Client Clearing Agreements (CCA) concluded with counterparties (see chapter 6.5.12). There is no significant difference between the carrying amount and the fair value of these liabilities (see chapter 6.7.1.2). The average interest rate for the cash collateral received in 2022 is -0.01% and based on \u20acSTR (2021: -0.48% (EONIA / \u20acSTR)).
\u20ac\u00a0450 million (2021 : nil) of cash on the balance sheet has been borrowed by entering into repurchase agreements. The asset recognised for cash collateral paid on repurchase agreements is presented under loans and receivables. The liability recognised for cash collateral received on repurchase agreements is presented under due to banks. The entire amount due to banks is expected to be settled less than or equal to twelve months after the balance sheet date.
a.s.r.\u2019s unsecured Revolving Credit Facility (RCF) amounts to \u20ac\u00a0400 million (2021: \u20ac\u00a0400 million). The RCF can be used for multiple purposes including investment purposes, balance sheet management and short-term cash flow management. As per the year-end 2022 the RCF is undrawn and fully available.
The entire amount of the due to banks is expected to be settled less than or equal to twelve months after the balance sheet date.
See accounting policy AA.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Financial liabilities | \u00a0 | \u00a0 |
| Accrued Interest | 188 | 93 |
| Trade payables | 12 | 15 |
| \u00a0 | \u00a0 | \u00a0 |
| Non-financial liabilities | \u00a0 | \u00a0 |
| Deferred income | 112 | 110 |
| Short-term employee benefits | 21 | 26 |
| Tax payable | - | 129 |
| Other non-financial liabilities | 605 | 605 |
| \u00a0 | \u00a0 | \u00a0 |
| Total other liabilities | 938 | 976 |
The other non-financial liabilities of \u20ac\u00a0605 million (2021: \u20ac\u00a0605 million) consist, amongst others, of payables, accruals related to investments and construction depots for housing mortgages.
There is no difference between the carrying value of other liabilities and their fair value (see chapter 6.7.1.2).
An amount of \u20ac\u00a020 million (2021: \u20ac\u00a024 million) of the other liabilities is expected to be settled more than one year after the balance sheet date.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-525": { "value": " 6.5.5 Investments See accounting policy E. Investments \u00a031 December 2022 31 December 2021 Available for sale 20,900 30,333 At fair value through profit or loss 4,740 3,216 \u00a025,640 33,550 For changes in investments available for sale and changes in investments at fair value through profit or loss see chapter 6.5.5.1 and chapter 6.5.5.2 respectively. Breakdown of investments \u00a031 December 2022 31 December 2021 \u00a0Available for sale Fair value through profit or loss Total Available for sale Fair value through profit or loss Total Fixed income investments \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Government bonds 9,227 - 9,227 14,149 - 14,149 Corporate bonds 7,188 - 7,188 10,827 - 10,827 Asset-backed securities 416 - 416 530 - 530 Preference shares 289 - 289 311 - 311 Rural property contracts - - - - 215 215 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Equities and similar investments \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Equities 3,471 82 3,553 4,111 18 4,129 Real estate equity funds - 3,974 3,974 - 2,202 2,202 Mortgage equity funds 303 684 987 398 781 1,179 Other participating interests 6 - 6 7 - 7 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total investments 20,900 4,740 25,640 30,333 3,216 33,550 In 2022, government bonds decreased to \u20ac\u00a09,227 million (2021: \u20ac\u00a014,149 million) mostly due to negative revaluations due to increasing interest rates and the disposal of government bonds. Cash collateral received on derivative instruments was reinvested into government bonds, cash collateral decreased due to increasing interest rates, therefore government bonds were sold. For more information regarding cash collateral received see chapter 6.5.21. The equities consist primarily of listed equities and investments in investment funds. Equities decreased mainly as a result of negative revaluations. Real estate equity funds increased mainly due to the addition of ASR DFLF. During 2022, a.s.r. lost control of ASR DFLF when external participants invested in ASR DFLF. The rural property contracts are held by ASR DFLF, and therefore transferred to real estate equity funds. For the real estate equity funds and mortgage equity funds for which a.s.r. has significant influence, being ASR DMOF, ASR DPRF, ASR DCRF, ASR DFLF and ASR MF, the exemption of IAS 28 was used, thereby measuring the investments at fair value through profit or loss and presenting them as a separate category within the investments at fair value through profit or loss. For a breakdown of the real estate equity funds ASR DMOF, ASR DPRF, ASR DCRF and ASR DFLF and ASR MF see chapter 6.5.4. All investments at fair value through profit or loss are designated as such by a.s.r. upon initial recognition. For more detailed information about the fair value valuation of the investments, see chapter 6.7.1. Based on their contractual maturity, an amount of \u20ac\u00a013,868 million (2021: \u20ac\u00a021,400 million) of fixed income investments is expected to be recovered after more than one year after the balance sheet date. For assets without a contractual maturity date, it is expected that they will be recovered after more than one year after the balance sheet date. 6.5.5.1 Investments available for sale Changes in investments available for sale \u00a02022 2021 At 1 January 30,333 33,774 Purchases 10,583 13,516 Repayments -2,229 -6,658 Disposal -12,614 -9,805 Realised gains and losses through profit or loss -222 429 Revaluation recognised in equity -4,918 -845 (Reversals of) Impairments -110 -13 Amortisation 23 -110 Exchange rate differences 54 46 Other changes -1 - \u00a0\u00a0\u00a0At 31 December 20,900 30,333 a.s.r. has bonds amounting to \u20ac\u00a03.237 million (2021: \u20ac\u00a03,524 million) and cash amounting to \u20ac\u00a0600 million (2021: \u20ac\u00a01,000 million) (see chapter 6.5.12) that have been transferred, but do not qualify for derecognition. The majority of these investments are part of a securities lending programme whereby the investments are lent in exchange for a fee with collateral obtained as a security. The collateral furnished as security representing a fair value of \u20ac\u00a04,914 million (2021: \u20ac\u00a05,383 million) consists of mortgage loans and corporate and government bonds. See accounting policy S about securities lending. Impairment of investments available for sale Changes in impairments of investments available for sale \u00a02022 2021 At 1 January -300 -354 Increase in impairments through profit or loss -133 -16 Reversal of impairments through profit or loss 23 3 Reversal of impairments due to disposal 43 68 Other -7 - \u00a0\u00a0\u00a0At 31 December -374 -300 The increase in impairments through profit or loss is related to impairments on equities and investment funds. The reversal of impairments through profit or loss relates to government bonds. The reversal of impairments due to disposal is mainly related to equities. 6.5.5.2 Investments at fair value through profit or loss Changes in investments at fair value through profit or loss \u00a02022 2021 At 1 January 3,216 2,825 Purchases 455 336 Disposal -222 -64 Revaluation through profit or loss -167 117 Net transfer of real estate equity funds 1,457 - Other changes - 2 \u00a0\u00a0\u00a0At 31 December 4,740 3,216 The net transfer of real estate equity funds relates to ASR DFLF. During 2022, a.s.r. lost control of ASR DFLF as a result of the entry of third party participants in ASR DFLF. 6.5.8 Loans and receivables See accounting policy H. Loans and receivables measured at amortised cost \u00a031 December 2022 31 December 2021 Government and public sector 221 223 Mortgage loans 10,370 9,991 Other loans 1,723 1,253 Total due from customers 12,314 11,468 \u00a0\u00a0\u00a0Impairments \u00a0\u00a0Specific credit risks -7 -7 Due from customers 12,307 11,461 \u00a0\u00a0\u00a0Due from credit institutions - Interest bearing deposits 36 139 Due from credit institutions - Loans and advances 2,628 2,797 Due from credit institutions - Other 1,632 91 Total due from credit institutions 4,296 3,027 \u00a0\u00a0\u00a0Impairments \u00a0\u00a0Specific credit risks -37 -56 Due from credit institutions 4,259 2,971 \u00a0\u00a0\u00a0Due from policyholders 133 75 Due from intermediaries 65 89 Reinsurance receivables 63 83 Due from Health Insurance Fund 70 148 Other receivables 301 459 Total trade and other receivables 632 853 \u00a0\u00a0\u00a0Impairments \u00a0\u00a0Specific credit risks -27 -25 IBNR - -1 Trade and other receivables 605 827 \u00a0\u00a0\u00a0Total loans and receivables 17,171 15,259 The total amount due from credit institutions of \u20ac\u00a04,296 million (2021: \u20ac\u00a03,027 million) mainly increased due to paid cash collateral. Total due from credit institutions consists for \u20ac\u00a02,233 million (2021: \u20ac\u00a02,462 million) of savings-linked mortgage loans. The claim related to cash collateral paid on derivative instruments, included in total due from credit institutions, amounts to \u20ac\u00a01,632 million (2021: \u20ac\u00a091 million). Based on their contractual maturity, an amount of \u20ac\u00a015,023 million (2021: \u20ac\u00a014,368 million) of the loans and receivables is expected to be recovered after more than one year after the balance sheet date. For information regarding the fair value, see chapter 6.7.1.2. Changes in impairments of loans and receivables \u00a02022 2021 At 1 January -89 -90 Increase in impairment through profit and loss -10 -15 Reversal of impairment through profit and loss 27 14 Reversal of impairment due to disposal 1 2 Other - 1 \u00a0\u00a0\u00a0At 31 December -71 -89 ", "dimensions": { "concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-526": { "value": "6.5.5.1 Investments available for sale Changes in investments available for sale \u00a02022 2021 At 1 January 30,333 33,774 Purchases 10,583 13,516 Repayments -2,229 -6,658 Disposal -12,614 -9,805 Realised gains and losses through profit or loss -222 429 Revaluation recognised in equity -4,918 -845 (Reversals of) Impairments -110 -13 Amortisation 23 -110 Exchange rate differences 54 46 Other changes -1 - \u00a0\u00a0\u00a0At 31 December 20,900 30,333 a.s.r. has bonds amounting to \u20ac\u00a03.237 million (2021: \u20ac\u00a03,524 million) and cash amounting to \u20ac\u00a0600 million (2021: \u20ac\u00a01,000 million) (see chapter 6.5.12) that have been transferred, but do not qualify for derecognition. The majority of these investments are part of a securities lending programme whereby the investments are lent in exchange for a fee with collateral obtained as a security. The collateral furnished as security representing a fair value of \u20ac\u00a04,914 million (2021: \u20ac\u00a05,383 million) consists of mortgage loans and corporate and government bonds. See accounting policy S about securities lending. Impairment of investments available for sale Changes in impairments of investments available for sale \u00a02022 2021 At 1 January -300 -354 Increase in impairments through profit or loss -133 -16 Reversal of impairments through profit or loss 23 3 Reversal of impairments due to disposal 43 68 Other -7 - \u00a0\u00a0\u00a0At 31 December -374 -300 The increase in impairments through profit or loss is related to impairments on equities and investment funds. The reversal of impairments through profit or loss relates to government bonds. The reversal of impairments due to disposal is mainly related to equities. 6.5.8 Loans and receivables See accounting policy H. Loans and receivables measured at amortised cost \u00a031 December 2022 31 December 2021 Government and public sector 221 223 Mortgage loans 10,370 9,991 Other loans 1,723 1,253 Total due from customers 12,314 11,468 \u00a0\u00a0\u00a0Impairments \u00a0\u00a0Specific credit risks -7 -7 Due from customers 12,307 11,461 \u00a0\u00a0\u00a0Due from credit institutions - Interest bearing deposits 36 139 Due from credit institutions - Loans and advances 2,628 2,797 Due from credit institutions - Other 1,632 91 Total due from credit institutions 4,296 3,027 \u00a0\u00a0\u00a0Impairments \u00a0\u00a0Specific credit risks -37 -56 Due from credit institutions 4,259 2,971 \u00a0\u00a0\u00a0Due from policyholders 133 75 Due from intermediaries 65 89 Reinsurance receivables 63 83 Due from Health Insurance Fund 70 148 Other receivables 301 459 Total trade and other receivables 632 853 \u00a0\u00a0\u00a0Impairments \u00a0\u00a0Specific credit risks -27 -25 IBNR - -1 Trade and other receivables 605 827 \u00a0\u00a0\u00a0Total loans and receivables 17,171 15,259 The total amount due from credit institutions of \u20ac\u00a04,296 million (2021: \u20ac\u00a03,027 million) mainly increased due to paid cash collateral. Total due from credit institutions consists for \u20ac\u00a02,233 million (2021: \u20ac\u00a02,462 million) of savings-linked mortgage loans. The claim related to cash collateral paid on derivative instruments, included in total due from credit institutions, amounts to \u20ac\u00a01,632 million (2021: \u20ac\u00a091 million). Based on their contractual maturity, an amount of \u20ac\u00a015,023 million (2021: \u20ac\u00a014,368 million) of the loans and receivables is expected to be recovered after more than one year after the balance sheet date. For information regarding the fair value, see chapter 6.7.1.2. Changes in impairments of loans and receivables \u00a02022 2021 At 1 January -89 -90 Increase in impairment through profit and loss -10 -15 Reversal of impairment through profit and loss 27 14 Reversal of impairment due to disposal 1 2 Other - 1 \u00a0\u00a0\u00a0At 31 December -71 -89 ", "dimensions": { "concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-527": { "value": "6.5.5.1 Investments available for sale Changes in investments available for sale \u00a02022 2021 At 1 January 30,333 33,774 Purchases 10,583 13,516 Repayments -2,229 -6,658 Disposal -12,614 -9,805 Realised gains and losses through profit or loss -222 429 Revaluation recognised in equity -4,918 -845 (Reversals of) Impairments -110 -13 Amortisation 23 -110 Exchange rate differences 54 46 Other changes -1 - \u00a0\u00a0\u00a0At 31 December 20,900 30,333 a.s.r. has bonds amounting to \u20ac\u00a03.237 million (2021: \u20ac\u00a03,524 million) and cash amounting to \u20ac\u00a0600 million (2021: \u20ac\u00a01,000 million) (see chapter 6.5.12) that have been transferred, but do not qualify for derecognition. The majority of these investments are part of a securities lending programme whereby the investments are lent in exchange for a fee with collateral obtained as a security. The collateral furnished as security representing a fair value of \u20ac\u00a04,914 million (2021: \u20ac\u00a05,383 million) consists of mortgage loans and corporate and government bonds. See accounting policy S about securities lending. Impairment of investments available for sale Changes in impairments of investments available for sale \u00a02022 2021 At 1 January -300 -354 Increase in impairments through profit or loss -133 -16 Reversal of impairments through profit or loss 23 3 Reversal of impairments due to disposal 43 68 Other -7 - \u00a0\u00a0\u00a0At 31 December -374 -300 The increase in impairments through profit or loss is related to impairments on equities and investment funds. The reversal of impairments through profit or loss relates to government bonds. The reversal of impairments due to disposal is mainly related to equities. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAvailableforsaleAssetsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-529": { "value": "6.5.5.2 Investments at fair value through profit or loss Changes in investments at fair value through profit or loss \u00a02022 2021 At 1 January 3,216 2,825 Purchases 455 336 Disposal -222 -64 Revaluation through profit or loss -167 117 Net transfer of real estate equity funds 1,457 - Other changes - 2 \u00a0\u00a0\u00a0At 31 December 4,740 3,216 The net transfer of real estate equity funds relates to ASR DFLF. During 2022, a.s.r. lost control of ASR DFLF as a result of the entry of third party participants in ASR DFLF. 6.5.6 Investments on behalf of policyholders See accounting policy F. Investments on behalf of policyholders at fair value through profit or loss \u00a031 December 2022 31 December 2021 Government bonds 1,526 1,954 Corporate bonds 1,386 1,100 Equities 6,504 7,950 Real estate equity funds 170 249 Mortgage equity funds 252 234 Derivatives - 6 Cash and cash equivalents 9 18 Other investments 66 64 \u00a0\u00a0\u00a0Total investments on behalf of policyholders at fair value through profit or loss 9,912 11,574 Changes in investments on behalf of policyholders at fair value through profit or loss \u00a02022 2021 At 1 January 11,574 10,154 Purchases 1,101 1,125 Disposal -805 -1,237 Revaluation through profit or loss -1,946 1,629 Other changes -12 -98 \u00a0\u00a0\u00a0At 31 December 9,912 11,574 Investments on behalf of policyholders are managed on behalf of policyholders on a fair value basis. Although individual instruments may (or may not) have a maturity depending on their nature, this does not impact the liquidity position of a.s.r. 6.5.7 Investments related to investment contracts See accounting policy G. Investments related to investment contracts \u00a031 December 2022 31 December 2021 Government bonds 261 - Corporate bonds 149 - Equities 1,449 1,794 Real estate equity funds 97 119 Cash and cash equivalents 37 39 Other investments 6 - Total investments related to investment contracts 2,000 1,952 Changes in investments related to investment contracts \u00a02022 2021 At 1 January 1,952 - Purchases 2,419 355 Disposal -2,024 -110 Revaluation through profit or loss -351 175 Changes in the composition of the group - 1,524 Other changes 5 9 \u00a0\u00a0\u00a0At 31 December 2,000 1,952 The purchases and disposals increased mainly due to the sale of \u20ac\u00a01.878 million of investment funds owed by a.s.r. PPI and managed by BND Vermogensbeheer N.V. and the purchase of \u20ac\u00a01.878 million investment funds owed by a.s.r. PPI and now managed by ASR Vermogensbeheer N.V. Investments related to investment contracts are managed on behalf of contract holders on a fair value basis. Although individual instruments may (or may not) have a maturity depending on their nature, this does not impact the liquidity position of a.s.r. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsDesignatedAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-542": { "value": " 6.5.8 Loans and receivables See accounting policy H. Loans and receivables measured at amortised cost \u00a031 December 2022 31 December 2021 Government and public sector 221 223 Mortgage loans 10,370 9,991 Other loans 1,723 1,253 Total due from customers 12,314 11,468 \u00a0\u00a0\u00a0Impairments \u00a0\u00a0Specific credit risks -7 -7 Due from customers 12,307 11,461 \u00a0\u00a0\u00a0Due from credit institutions - Interest bearing deposits 36 139 Due from credit institutions - Loans and advances 2,628 2,797 Due from credit institutions - Other 1,632 91 Total due from credit institutions 4,296 3,027 \u00a0\u00a0\u00a0Impairments \u00a0\u00a0Specific credit risks -37 -56 Due from credit institutions 4,259 2,971 \u00a0\u00a0\u00a0Due from policyholders 133 75 Due from intermediaries 65 89 Reinsurance receivables 63 83 Due from Health Insurance Fund 70 148 Other receivables 301 459 Total trade and other receivables 632 853 \u00a0\u00a0\u00a0Impairments \u00a0\u00a0Specific credit risks -27 -25 IBNR - -1 Trade and other receivables 605 827 \u00a0\u00a0\u00a0Total loans and receivables 17,171 15,259 The total amount due from credit institutions of \u20ac\u00a04,296 million (2021: \u20ac\u00a03,027 million) mainly increased due to paid cash collateral. Total due from credit institutions consists for \u20ac\u00a02,233 million (2021: \u20ac\u00a02,462 million) of savings-linked mortgage loans. The claim related to cash collateral paid on derivative instruments, included in total due from credit institutions, amounts to \u20ac\u00a01,632 million (2021: \u20ac\u00a091 million). Based on their contractual maturity, an amount of \u20ac\u00a015,023 million (2021: \u20ac\u00a014,368 million) of the loans and receivables is expected to be recovered after more than one year after the balance sheet date. For information regarding the fair value, see chapter 6.7.1.2. Changes in impairments of loans and receivables \u00a02022 2021 At 1 January -89 -90 Increase in impairment through profit and loss -10 -15 Reversal of impairment through profit and loss 27 14 Reversal of impairment due to disposal 1 2 Other - 1 \u00a0\u00a0\u00a0At 31 December -71 -89 ", "dimensions": { "concept": "ifrs-full:DisclosureOfDepositsFromBanksExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-543": { "value": " 6.5.8 Loans and receivables See accounting policy H. Loans and receivables measured at amortised cost \u00a031 December 2022 31 December 2021 Government and public sector 221 223 Mortgage loans 10,370 9,991 Other loans 1,723 1,253 Total due from customers 12,314 11,468 \u00a0\u00a0\u00a0Impairments \u00a0\u00a0Specific credit risks -7 -7 Due from customers 12,307 11,461 \u00a0\u00a0\u00a0Due from credit institutions - Interest bearing deposits 36 139 Due from credit institutions - Loans and advances 2,628 2,797 Due from credit institutions - Other 1,632 91 Total due from credit institutions 4,296 3,027 \u00a0\u00a0\u00a0Impairments \u00a0\u00a0Specific credit risks -37 -56 Due from credit institutions 4,259 2,971 \u00a0\u00a0\u00a0Due from policyholders 133 75 Due from intermediaries 65 89 Reinsurance receivables 63 83 Due from Health Insurance Fund 70 148 Other receivables 301 459 Total trade and other receivables 632 853 \u00a0\u00a0\u00a0Impairments \u00a0\u00a0Specific credit risks -27 -25 IBNR - -1 Trade and other receivables 605 827 \u00a0\u00a0\u00a0Total loans and receivables 17,171 15,259 The total amount due from credit institutions of \u20ac\u00a04,296 million (2021: \u20ac\u00a03,027 million) mainly increased due to paid cash collateral. Total due from credit institutions consists for \u20ac\u00a02,233 million (2021: \u20ac\u00a02,462 million) of savings-linked mortgage loans. The claim related to cash collateral paid on derivative instruments, included in total due from credit institutions, amounts to \u20ac\u00a01,632 million (2021: \u20ac\u00a091 million). Based on their contractual maturity, an amount of \u20ac\u00a015,023 million (2021: \u20ac\u00a014,368 million) of the loans and receivables is expected to be recovered after more than one year after the balance sheet date. For information regarding the fair value, see chapter 6.7.1.2. Changes in impairments of loans and receivables \u00a02022 2021 At 1 January -89 -90 Increase in impairment through profit and loss -10 -15 Reversal of impairment through profit and loss 27 14 Reversal of impairment due to disposal 1 2 Other - 1 \u00a0\u00a0\u00a0At 31 December -71 -89 ", "dimensions": { "concept": "ifrs-full:DisclosureOfDepositsFromCustomersExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-544": { "value": " 6.5.8 Loans and receivables See accounting policy H. Loans and receivables measured at amortised cost \u00a031 December 2022 31 December 2021 Government and public sector 221 223 Mortgage loans 10,370 9,991 Other loans 1,723 1,253 Total due from customers 12,314 11,468 \u00a0\u00a0\u00a0Impairments \u00a0\u00a0Specific credit risks -7 -7 Due from customers 12,307 11,461 \u00a0\u00a0\u00a0Due from credit institutions - Interest bearing deposits 36 139 Due from credit institutions - Loans and advances 2,628 2,797 Due from credit institutions - Other 1,632 91 Total due from credit institutions 4,296 3,027 \u00a0\u00a0\u00a0Impairments \u00a0\u00a0Specific credit risks -37 -56 Due from credit institutions 4,259 2,971 \u00a0\u00a0\u00a0Due from policyholders 133 75 Due from intermediaries 65 89 Reinsurance receivables 63 83 Due from Health Insurance Fund 70 148 Other receivables 301 459 Total trade and other receivables 632 853 \u00a0\u00a0\u00a0Impairments \u00a0\u00a0Specific credit risks -27 -25 IBNR - -1 Trade and other receivables 605 827 \u00a0\u00a0\u00a0Total loans and receivables 17,171 15,259 The total amount due from credit institutions of \u20ac\u00a04,296 million (2021: \u20ac\u00a03,027 million) mainly increased due to paid cash collateral. Total due from credit institutions consists for \u20ac\u00a02,233 million (2021: \u20ac\u00a02,462 million) of savings-linked mortgage loans. The claim related to cash collateral paid on derivative instruments, included in total due from credit institutions, amounts to \u20ac\u00a01,632 million (2021: \u20ac\u00a091 million). Based on their contractual maturity, an amount of \u20ac\u00a015,023 million (2021: \u20ac\u00a014,368 million) of the loans and receivables is expected to be recovered after more than one year after the balance sheet date. For information regarding the fair value, see chapter 6.7.1.2. Changes in impairments of loans and receivables \u00a02022 2021 At 1 January -89 -90 Increase in impairment through profit and loss -10 -15 Reversal of impairment through profit and loss 27 14 Reversal of impairment due to disposal 1 2 Other - 1 \u00a0\u00a0\u00a0At 31 December -71 -89 ", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-546": { "value": "6.5.9 Derivatives See accounting policy I. Derivatives consist primarily of derivatives used to hedge interest rate movements. Changes in the fair value of derivatives at fair value through profit or loss are recorded in \u2018fair value gains and losses\u2019, see chapter 6.6.4. a.s.r. trades both cleared and non-cleared derivatives on the basis of standardised contracts and exchanges cash variation margin with its counterparties. The derivatives are valued daily and cash collateral is exchanged to reflect the change in mark-to-market of the derivatives. Because of this periodic margining process, counterparty risk on derivatives is negligible. In addition to the above variation margin obligations, there is also an initial margin obligation for central cleared derivatives which further reduces the risk of a.s.r. and its counterparties that they cannot fulfil their obligations. Notional amounts are not recognised as assets or liabilities in the balance sheet, however notional amounts are used in determining the fair value of the derivatives. Notional amounts do not reflect the potential gain or loss on a derivative transaction. Derivatives \u00a031 December 2022 31 December 2021 \u00a0Asset Liability Notional amount Asset Liability Notional amount Foreign exchange contracts 80 29 2,924 25 78 3,873 Interest rate contracts \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0- Swaps 4,782 5,494 72,854 5,870 678 62,006 - Options 275 - 2,781 237 - 2,867 - Futures 215 - 1,176 37 3 939 Inflation linked swaps 44 - 290 14 - 235 Equity index contracts 31 - 643 28 - 802 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total 5,428 5,523 80,667 6,212 759 70,723 The derivatives do not include the derivatives on behalf of policyholders (2022: nil, 2021: \u20ac\u00a06 million). Derivatives assets decreased and derivatives liabilities increased primarily as a result of negative revaluations due to increasing interest rates. In addition to the use of swaps and options a.s.r. manages interest rate risk by using bond forwards, included in futures. The notional amounts of both receiver and payer swaps are included in the total notional amounts of foreign exchange contracts. The fair value of interest rate contracts is calculated by first determining the cash flows of the floating leg based on the Euribor-curve corresponding the interest reset period (3 months, 6 months or 12 months) of the swap. Then the net present value of the floating and fixed leg is determined by discounting the cash flows. As part of global industry efforts around benchmark reform, Central Clearing Counterparties (CCPs) have switched the overnight cost of funding collateral and discounting on all cleared EUR-denominated products to euro short-term (\u20acSTR) in July 2020, for USD-denominated derivatives to Secured Overnight Financing Rate in October 2020, and GBP-denominated derivatives to Sterling Overnight Index Average in December 2021. In the second half of 2021, all bilateral derivative agreements have been amended to reference the relevant Alternative Reference Rates. The fair value of the interest rate contracts using the above valuation method form the basis for the amount of collateral that is exchanged between a.s.r. and its counterparties in accordance with the underlying contracts. For more information see chapter 6.8 on risk management. Of the derivatives \u20ac\u00a05,237 million assets (2021: \u20ac\u00a06,121 million) and \u20ac\u00a05,485 million liabilities (2021: \u20ac\u00a0658 million) is expected to be recovered respectively settled more than one year after the balance sheet date. Transition Throughout the world, a transition is taking place from interbank offered rates (IBORs) to alternative benchmarks. In the EU, the transition to alternative interest-rate benchmarks is governed by the Benchmark Regulation (BMR). Pursuant to the BMR, IBOR based contracts need to be amended to reference alternative rates or to be provided with a fallback option. The transition away from IBORs is mainly affecting a.s.r.\u2019s derivative book, which is measured at fair value through profit or loss. Although most references under these derivatives remain BMR compliant, the Cash Collateral Interest Rate, and consequently discount rates, have required amendments towards Alternative Reference Rates (ARRs). During 2020 and 2021, all contracts referencing IBORs have been amended to reflect ARRs, with the exception of USD Libor Referenced Interest Rate Swaps, which are expected to remain BMR Compliant until June 2023. A project team has been formed in order to effectively manage the transition from IBORs to ARRs, and mitigating any adverse operational and/or financial impact. As at 31 December 2022, the transition from USD Libor References towards its respective ARRs is still outstanding and is expected to be finished well in advance of its cessation in June 2023. The following table provides details related to a.s.r.\u2019s exposure to USD Libor References at the end of 2022. Interest rate benchmark transition 31 December 2022 Non-derivative financial assets - carrying value Non-derivative financial liabilities - carrying value Derivatives - notional amount USD LIBOR (3 months) 28 - 258 USD LIBOR (6 months) 81 - - \u00a0109 - 258 6.7.2 Offsetting of financial assets and liabilities The following tables include information about rights to offset and the related arrangements. The amounts included consist of all recognised financial instruments that are presented net in the balance sheet under the IFRS-EU offsetting requirements (legal right to offset and intention to settle on a net basis) and amounts presented gross in the balance sheet but subject to enforceable master netting arrangements or similar arrangements. Offsetting financial instruments \u00a0Gross amounts of recognised financial assets Gross amounts of recognised financial liabilities set off in the statement of financial position Net amounts of financial assets presented in the statement of financial position Related amounts not set off in the statement of financial position Net amount Financial assets subject to offsetting, enforceable master netting arrangements and similar agreements \u00a0\u00a0\u00a0Financial instruments Cash Collateral received (excluding surplus) \u00a031 December 2022 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0- Derivatives 5,389 - 5,389 3,829 1,560 - Total financial assets 5,389 - 5,389 3,829 1,560 - \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a031 December 2021 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0- Derivatives 6,212 - 6,212 743 5,469 - Total financial assets 6,212 - 6,212 743 5,469 - \u00a0Gross amounts of recognised financial liabilities Gross amounts of recognised financial assets set off in the statement of financial position Net amounts of financial liabilities presented in the statement of financial position Related amounts not set off in the statement of financial position Net amount Financial liabilities subject to offsetting, enforceable master netting arrangements and similar agreements \u00a0\u00a0\u00a0Financial instruments Cash Collateral pledged (excluding surplus) \u00a031 December 2022 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0- Derivatives 5,523 - 5,523 3,829 1,632 62 Total financial liabilities 5,523 - 5,523 3,829 1,632 62 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a031 December 2021 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0- Derivatives 759 - 759 743 16 - Total financial liabilities 759 - 759 743 16 - ", "dimensions": { "concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-547": { "value": "6.5.9 Derivatives See accounting policy I. Derivatives consist primarily of derivatives used to hedge interest rate movements. Changes in the fair value of derivatives at fair value through profit or loss are recorded in \u2018fair value gains and losses\u2019, see chapter 6.6.4. a.s.r. trades both cleared and non-cleared derivatives on the basis of standardised contracts and exchanges cash variation margin with its counterparties. The derivatives are valued daily and cash collateral is exchanged to reflect the change in mark-to-market of the derivatives. Because of this periodic margining process, counterparty risk on derivatives is negligible. In addition to the above variation margin obligations, there is also an initial margin obligation for central cleared derivatives which further reduces the risk of a.s.r. and its counterparties that they cannot fulfil their obligations. Notional amounts are not recognised as assets or liabilities in the balance sheet, however notional amounts are used in determining the fair value of the derivatives. Notional amounts do not reflect the potential gain or loss on a derivative transaction. Derivatives \u00a031 December 2022 31 December 2021 \u00a0Asset Liability Notional amount Asset Liability Notional amount Foreign exchange contracts 80 29 2,924 25 78 3,873 Interest rate contracts \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0- Swaps 4,782 5,494 72,854 5,870 678 62,006 - Options 275 - 2,781 237 - 2,867 - Futures 215 - 1,176 37 3 939 Inflation linked swaps 44 - 290 14 - 235 Equity index contracts 31 - 643 28 - 802 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total 5,428 5,523 80,667 6,212 759 70,723 The derivatives do not include the derivatives on behalf of policyholders (2022: nil, 2021: \u20ac\u00a06 million). Derivatives assets decreased and derivatives liabilities increased primarily as a result of negative revaluations due to increasing interest rates. In addition to the use of swaps and options a.s.r. manages interest rate risk by using bond forwards, included in futures. The notional amounts of both receiver and payer swaps are included in the total notional amounts of foreign exchange contracts. The fair value of interest rate contracts is calculated by first determining the cash flows of the floating leg based on the Euribor-curve corresponding the interest reset period (3 months, 6 months or 12 months) of the swap. Then the net present value of the floating and fixed leg is determined by discounting the cash flows. As part of global industry efforts around benchmark reform, Central Clearing Counterparties (CCPs) have switched the overnight cost of funding collateral and discounting on all cleared EUR-denominated products to euro short-term (\u20acSTR) in July 2020, for USD-denominated derivatives to Secured Overnight Financing Rate in October 2020, and GBP-denominated derivatives to Sterling Overnight Index Average in December 2021. In the second half of 2021, all bilateral derivative agreements have been amended to reference the relevant Alternative Reference Rates. The fair value of the interest rate contracts using the above valuation method form the basis for the amount of collateral that is exchanged between a.s.r. and its counterparties in accordance with the underlying contracts. For more information see chapter 6.8 on risk management. Of the derivatives \u20ac\u00a05,237 million assets (2021: \u20ac\u00a06,121 million) and \u20ac\u00a05,485 million liabilities (2021: \u20ac\u00a0658 million) is expected to be recovered respectively settled more than one year after the balance sheet date. Transition Throughout the world, a transition is taking place from interbank offered rates (IBORs) to alternative benchmarks. In the EU, the transition to alternative interest-rate benchmarks is governed by the Benchmark Regulation (BMR). Pursuant to the BMR, IBOR based contracts need to be amended to reference alternative rates or to be provided with a fallback option. The transition away from IBORs is mainly affecting a.s.r.\u2019s derivative book, which is measured at fair value through profit or loss. Although most references under these derivatives remain BMR compliant, the Cash Collateral Interest Rate, and consequently discount rates, have required amendments towards Alternative Reference Rates (ARRs). During 2020 and 2021, all contracts referencing IBORs have been amended to reflect ARRs, with the exception of USD Libor Referenced Interest Rate Swaps, which are expected to remain BMR Compliant until June 2023. A project team has been formed in order to effectively manage the transition from IBORs to ARRs, and mitigating any adverse operational and/or financial impact. As at 31 December 2022, the transition from USD Libor References towards its respective ARRs is still outstanding and is expected to be finished well in advance of its cessation in June 2023. The following table provides details related to a.s.r.\u2019s exposure to USD Libor References at the end of 2022. Interest rate benchmark transition 31 December 2022 Non-derivative financial assets - carrying value Non-derivative financial liabilities - carrying value Derivatives - notional amount USD LIBOR (3 months) 28 - 258 USD LIBOR (6 months) 81 - - \u00a0109 - 258 ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialLiabilitiesHeldForTradingExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-548": { "value": "6.5.9 Derivatives See accounting policy I. Derivatives consist primarily of derivatives used to hedge interest rate movements. Changes in the fair value of derivatives at fair value through profit or loss are recorded in \u2018fair value gains and losses\u2019, see chapter 6.6.4. a.s.r. trades both cleared and non-cleared derivatives on the basis of standardised contracts and exchanges cash variation margin with its counterparties. The derivatives are valued daily and cash collateral is exchanged to reflect the change in mark-to-market of the derivatives. Because of this periodic margining process, counterparty risk on derivatives is negligible. In addition to the above variation margin obligations, there is also an initial margin obligation for central cleared derivatives which further reduces the risk of a.s.r. and its counterparties that they cannot fulfil their obligations. Notional amounts are not recognised as assets or liabilities in the balance sheet, however notional amounts are used in determining the fair value of the derivatives. Notional amounts do not reflect the potential gain or loss on a derivative transaction. Derivatives \u00a031 December 2022 31 December 2021 \u00a0Asset Liability Notional amount Asset Liability Notional amount Foreign exchange contracts 80 29 2,924 25 78 3,873 Interest rate contracts \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0- Swaps 4,782 5,494 72,854 5,870 678 62,006 - Options 275 - 2,781 237 - 2,867 - Futures 215 - 1,176 37 3 939 Inflation linked swaps 44 - 290 14 - 235 Equity index contracts 31 - 643 28 - 802 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total 5,428 5,523 80,667 6,212 759 70,723 The derivatives do not include the derivatives on behalf of policyholders (2022: nil, 2021: \u20ac\u00a06 million). Derivatives assets decreased and derivatives liabilities increased primarily as a result of negative revaluations due to increasing interest rates. In addition to the use of swaps and options a.s.r. manages interest rate risk by using bond forwards, included in futures. The notional amounts of both receiver and payer swaps are included in the total notional amounts of foreign exchange contracts. The fair value of interest rate contracts is calculated by first determining the cash flows of the floating leg based on the Euribor-curve corresponding the interest reset period (3 months, 6 months or 12 months) of the swap. Then the net present value of the floating and fixed leg is determined by discounting the cash flows. As part of global industry efforts around benchmark reform, Central Clearing Counterparties (CCPs) have switched the overnight cost of funding collateral and discounting on all cleared EUR-denominated products to euro short-term (\u20acSTR) in July 2020, for USD-denominated derivatives to Secured Overnight Financing Rate in October 2020, and GBP-denominated derivatives to Sterling Overnight Index Average in December 2021. In the second half of 2021, all bilateral derivative agreements have been amended to reference the relevant Alternative Reference Rates. The fair value of the interest rate contracts using the above valuation method form the basis for the amount of collateral that is exchanged between a.s.r. and its counterparties in accordance with the underlying contracts. For more information see chapter 6.8 on risk management. Of the derivatives \u20ac\u00a05,237 million assets (2021: \u20ac\u00a06,121 million) and \u20ac\u00a05,485 million liabilities (2021: \u20ac\u00a0658 million) is expected to be recovered respectively settled more than one year after the balance sheet date. Transition Throughout the world, a transition is taking place from interbank offered rates (IBORs) to alternative benchmarks. In the EU, the transition to alternative interest-rate benchmarks is governed by the Benchmark Regulation (BMR). Pursuant to the BMR, IBOR based contracts need to be amended to reference alternative rates or to be provided with a fallback option. The transition away from IBORs is mainly affecting a.s.r.\u2019s derivative book, which is measured at fair value through profit or loss. Although most references under these derivatives remain BMR compliant, the Cash Collateral Interest Rate, and consequently discount rates, have required amendments towards Alternative Reference Rates (ARRs). During 2020 and 2021, all contracts referencing IBORs have been amended to reflect ARRs, with the exception of USD Libor Referenced Interest Rate Swaps, which are expected to remain BMR Compliant until June 2023. A project team has been formed in order to effectively manage the transition from IBORs to ARRs, and mitigating any adverse operational and/or financial impact. As at 31 December 2022, the transition from USD Libor References towards its respective ARRs is still outstanding and is expected to be finished well in advance of its cessation in June 2023. The following table provides details related to a.s.r.\u2019s exposure to USD Libor References at the end of 2022. Interest rate benchmark transition 31 December 2022 Non-derivative financial assets - carrying value Non-derivative financial liabilities - carrying value Derivatives - notional amount USD LIBOR (3 months) 28 - 258 USD LIBOR (6 months) 81 - - \u00a0109 - 258 ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialAssetsHeldForTradingExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-553": { "value": "6.5.9 Derivatives See accounting policy I. Derivatives consist primarily of derivatives used to hedge interest rate movements. Changes in the fair value of derivatives at fair value through profit or loss are recorded in \u2018fair value gains and losses\u2019, see chapter 6.6.4. a.s.r. trades both cleared and non-cleared derivatives on the basis of standardised contracts and exchanges cash variation margin with its counterparties. The derivatives are valued daily and cash collateral is exchanged to reflect the change in mark-to-market of the derivatives. Because of this periodic margining process, counterparty risk on derivatives is negligible. In addition to the above variation margin obligations, there is also an initial margin obligation for central cleared derivatives which further reduces the risk of a.s.r. and its counterparties that they cannot fulfil their obligations. Notional amounts are not recognised as assets or liabilities in the balance sheet, however notional amounts are used in determining the fair value of the derivatives. Notional amounts do not reflect the potential gain or loss on a derivative transaction. Derivatives \u00a031 December 2022 31 December 2021 \u00a0Asset Liability Notional amount Asset Liability Notional amount Foreign exchange contracts 80 29 2,924 25 78 3,873 Interest rate contracts \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0- Swaps 4,782 5,494 72,854 5,870 678 62,006 - Options 275 - 2,781 237 - 2,867 - Futures 215 - 1,176 37 3 939 Inflation linked swaps 44 - 290 14 - 235 Equity index contracts 31 - 643 28 - 802 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total 5,428 5,523 80,667 6,212 759 70,723 The derivatives do not include the derivatives on behalf of policyholders (2022: nil, 2021: \u20ac\u00a06 million). Derivatives assets decreased and derivatives liabilities increased primarily as a result of negative revaluations due to increasing interest rates. In addition to the use of swaps and options a.s.r. manages interest rate risk by using bond forwards, included in futures. The notional amounts of both receiver and payer swaps are included in the total notional amounts of foreign exchange contracts. The fair value of interest rate contracts is calculated by first determining the cash flows of the floating leg based on the Euribor-curve corresponding the interest reset period (3 months, 6 months or 12 months) of the swap. Then the net present value of the floating and fixed leg is determined by discounting the cash flows. As part of global industry efforts around benchmark reform, Central Clearing Counterparties (CCPs) have switched the overnight cost of funding collateral and discounting on all cleared EUR-denominated products to euro short-term (\u20acSTR) in July 2020, for USD-denominated derivatives to Secured Overnight Financing Rate in October 2020, and GBP-denominated derivatives to Sterling Overnight Index Average in December 2021. In the second half of 2021, all bilateral derivative agreements have been amended to reference the relevant Alternative Reference Rates. The fair value of the interest rate contracts using the above valuation method form the basis for the amount of collateral that is exchanged between a.s.r. and its counterparties in accordance with the underlying contracts. For more information see chapter 6.8 on risk management. Of the derivatives \u20ac\u00a05,237 million assets (2021: \u20ac\u00a06,121 million) and \u20ac\u00a05,485 million liabilities (2021: \u20ac\u00a0658 million) is expected to be recovered respectively settled more than one year after the balance sheet date. Transition Throughout the world, a transition is taking place from interbank offered rates (IBORs) to alternative benchmarks. In the EU, the transition to alternative interest-rate benchmarks is governed by the Benchmark Regulation (BMR). Pursuant to the BMR, IBOR based contracts need to be amended to reference alternative rates or to be provided with a fallback option. The transition away from IBORs is mainly affecting a.s.r.\u2019s derivative book, which is measured at fair value through profit or loss. Although most references under these derivatives remain BMR compliant, the Cash Collateral Interest Rate, and consequently discount rates, have required amendments towards Alternative Reference Rates (ARRs). During 2020 and 2021, all contracts referencing IBORs have been amended to reflect ARRs, with the exception of USD Libor Referenced Interest Rate Swaps, which are expected to remain BMR Compliant until June 2023. A project team has been formed in order to effectively manage the transition from IBORs to ARRs, and mitigating any adverse operational and/or financial impact. As at 31 December 2022, the transition from USD Libor References towards its respective ARRs is still outstanding and is expected to be finished well in advance of its cessation in June 2023. The following table provides details related to a.s.r.\u2019s exposure to USD Libor References at the end of 2022. Interest rate benchmark transition 31 December 2022 Non-derivative financial assets - carrying value Non-derivative financial liabilities - carrying value Derivatives - notional amount USD LIBOR (3 months) 28 - 258 USD LIBOR (6 months) 81 - - \u00a0109 - 258 ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsHeldForTradingExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-554": { "value": "6.5.10 Deferred taxes Deferred taxes \u00a031 December 2022 31 December 2021 Deferred tax assets 119 - Deferred tax liabilities - 69 Net Deferred tax 119 -69 Deferred taxes are formed for differences between the carrying amount of assets and liabilities and their tax base at the enacted tax rate, taking into account tax-exempt components. The current tax rate is 25.8% (2021: 25.0%). The deferred taxes are calculated with the enacted tax rate for 2023 of 25.8%. Deferred tax assets and liabilities are expected to be recovered after more than one year after the balance sheet date. Changes in deferred taxes \u00a01 January 2022 Changes recognised in profit or loss Changes recognised in other comprehensive income Changes in composition of the group 31 December 2022 Derivatives -1,332 1,525 - - 193 Investments -861 -546 1,205 - -203 Investment property -400 324 -5 5 -76 Property, plant and equipment -16 1 2 - -13 Intangible assets -51 8 - - -44 Liabilities arising from insurance contracts 2,552 -1,693 -459 - 400 Employee benefits 171 11 -308 - -127 Amounts received in advance -1 -1 - - -3 Fiscal reserves -187 105 - - -82 Other 57 17 - - 74 Gross deferred tax -69 -251 434 6 119 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Write-down of deferred tax assets - - - - - \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Net deferred tax -69 -251 434 6 119 Changes in deferred taxes \u00a01 January 2021 Changes recognised in profit or loss Changes recognised in other comprehensive income Changes recognised other Changes in composition of the group 31 December 2021 Derivatives -1,893 561 - - - -1,332 Investments -1,031 -55 224 - - -861 Investment property -352 -45 - -3 - -400 Property, plant and equipment -10 1 2 -9 - -16 Intangible assets -48 6 - - -9 -51 Liabilities arising from insurance contracts 3,414 -559 -303 - - 2,552 Employee benefits 226 -5 -51 - - 171 Amounts received in advance 1 -2 - - - -1 Fiscal reserves -170 -17 - - - -187 Other 39 7 - 11 - 57 Gross deferred tax 177 -108 -128 -2 -9 -69 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Write-down of deferred tax assets - - - - - - \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Net deferred tax 177 -108 -128 -2 -9 -69 In 2021, changes recognised other related to the acquisition of wind farm Wieringermeer. ", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-555": { "value": "6.5.11 Other assets See accounting policy X. Composition of other assets \u00a031 December 2022 31 December 2021 Accrued investment and interest income 529 465 Prepaid costs and other non-financial assets 148 134 Property developments 30 31 Taxes receivable 120 - \u00a0\u00a0\u00a0Total other assets 828 631 Prepaid costs and other non-financial assets includes prepaid commissions for non-life insurance. An amount of \u20ac\u00a0778 million (2021: \u20ac\u00a0582 million) of other assets is expected to be recovered less than or equal to one year after the balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-556": { "value": "6.5.11 Other assets See accounting policy X. Composition of other assets \u00a031 December 2022 31 December 2021 Accrued investment and interest income 529 465 Prepaid costs and other non-financial assets 148 134 Property developments 30 31 Taxes receivable 120 - \u00a0\u00a0\u00a0Total other assets 828 631 Prepaid costs and other non-financial assets includes prepaid commissions for non-life insurance. An amount of \u20ac\u00a0778 million (2021: \u20ac\u00a0582 million) of other assets is expected to be recovered less than or equal to one year after the balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfPrepaymentsAndOtherAssetsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-557": { "value": "6.5.11 Other assets See accounting policy X. Composition of other assets \u00a031 December 2022 31 December 2021 Accrued investment and interest income 529 465 Prepaid costs and other non-financial assets 148 134 Property developments 30 31 Taxes receivable 120 - \u00a0\u00a0\u00a0Total other assets 828 631 Prepaid costs and other non-financial assets includes prepaid commissions for non-life insurance. An amount of \u20ac\u00a0778 million (2021: \u20ac\u00a0582 million) of other assets is expected to be recovered less than or equal to one year after the balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentAssetsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-558": { "value": "6.5.11 Other assets See accounting policy X. Composition of other assets \u00a031 December 2022 31 December 2021 Accrued investment and interest income 529 465 Prepaid costs and other non-financial assets 148 134 Property developments 30 31 Taxes receivable 120 - \u00a0\u00a0\u00a0Total other assets 828 631 Prepaid costs and other non-financial assets includes prepaid commissions for non-life insurance. An amount of \u20ac\u00a0778 million (2021: \u20ac\u00a0582 million) of other assets is expected to be recovered less than or equal to one year after the balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentAssetsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-560": { "value": "6.5.12 Cash and cash equivalents See accounting policy Y. Cash and cash equivalents \u00a031 December 2022 31 December 2021 Due from banks 1,645 1,306 Due from banks falling due within three months 600 1,000 \u00a0\u00a0\u00a0Total cash and cash equivalents 2,245 2,306 a.s.r. has cash amounting to \u20ac\u00a0600 million (2021: \u20ac\u00a01,000 million) that has been received as part of a securities lending programme, but does not qualify for derecognition. For more information see chapter 6.5.5.1. All other cash and cash equivalents are freely available. The cash components include \u20ac\u00a0249 million (2021: \u20ac\u00a01,892 million) related to cash collateral received on derivative instruments and is managed separately from other cash equivalents. The decrease in these cash components was caused by the decrease in value of derivatives, as a result of which collateral was refunded. The claim related to cash collateral paid on derivative instruments is included in the amount loans and receivables, see chapter 6.5.8. Debt related to cash collateral on derivatives instruments is included in the amount due to banks, see chapter 6.5.21. Interest expenses on cash collateral is mainly based on \u20acSTR (2021: EONIA/\u20acSTR). ", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-561": { "value": "6.5.12 Cash and cash equivalents See accounting policy Y. Cash and cash equivalents \u00a031 December 2022 31 December 2021 Due from banks 1,645 1,306 Due from banks falling due within three months 600 1,000 \u00a0\u00a0\u00a0Total cash and cash equivalents 2,245 2,306 a.s.r. has cash amounting to \u20ac\u00a0600 million (2021: \u20ac\u00a01,000 million) that has been received as part of a securities lending programme, but does not qualify for derecognition. For more information see chapter 6.5.5.1. All other cash and cash equivalents are freely available. The cash components include \u20ac\u00a0249 million (2021: \u20ac\u00a01,892 million) related to cash collateral received on derivative instruments and is managed separately from other cash equivalents. The decrease in these cash components was caused by the decrease in value of derivatives, as a result of which collateral was refunded. The claim related to cash collateral paid on derivative instruments is included in the amount loans and receivables, see chapter 6.5.8. Debt related to cash collateral on derivatives instruments is included in the amount due to banks, see chapter 6.5.21. Interest expenses on cash collateral is mainly based on \u20acSTR (2021: EONIA/\u20acSTR). ", "dimensions": { "concept": "ifrs-full:DisclosureOfRestrictedCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-564": { "value": "6.5.13 Equity See accounting policy Z. 6.5.13.1 Share capital Share capital \u00a031 December 2022 31 December 2021 \u00a0Number of Shares (in millions) Amounts (in \u20ac\u00a0millions) Number of Shares (in millions) Amounts (in \u20ac\u00a0millions) Ordinary shares \u00a0\u00a0\u00a0\u00a0- Authorised capital; par value of \u20ac\u00a00.16 325 52 325 52 - Of which unsubscribed 175 28 187 30 Subscribed and paid-up capital 150 24 138 22 \u00a0\u00a0\u00a0\u00a0\u00a0Preference shares \u00a0\u00a0\u00a0\u00a0- Authorised capital; par value of \u20ac\u00a00.16 325 52 325 52 - Of which unsubscribed 325 52 325 52 Subscribed and paid-up capital - - - - The share capital increased as a result of issued share capital to finance the intended business combination of a.s.r. and Aegon Nederland N.V. 6.5.13.2 Share premium reserve The share premium reserve increased by \u20ac\u00a0577 million due to issued share capital to finance the intended business combination of a.s.r. and Aegon Nederland N.V. (\u20ac\u00a0591 million) and the cancellation of 2,036 thousand treasury shares (\u20ac\u00a0-14 million), as approved at the AGM in May 2022, see chapter 6.5.13.5. 6.5.13.3 Unrealised gains and losses recorded in equity Unrealised gains and losses recorded in equity \u00a031 December 2022 31 December 2021 \u00a0Investments available for sale Revaluation of property in own use Total Investments available for sale Revaluation of property in own use Total Gross unrealised gains and losses -1,844 50 -1,794 3,074 38 3,112 Related tax 526 -13 513 -679 -10 -688 Shadow accounting 503 - 503 -1,257 - -1,257 Tax related to shadow accounting -130 - -130 324 - 324 Unrealised gains and losses related to segregated investment pools -19 - -19 -40 - -40 Tax related to segregated investment pool 5 - 5 10 - 10 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total unrealised gains and losses recorded in equity -959 37 -922 1,433 28 1,461 6.5.13.4 Actuarial gains and losses The balance of actuarial gains and losses related to the pension obligation increased by \u20ac\u00a0887 million after tax and \u20ac\u00a01195 million before tax (2021: increased by \u20ac\u00a0198 million after tax and \u20ac\u00a0249 million before tax). The increase is mainly due to an increase in the discount rate (see chapter 6.5.17). 6.5.13.5 Treasury shares As part of the employee share purchase plan a.s.r. sold 124 thousand shares for an amount of \u20ac\u00a04,06 million. The employee share purchase plan led to a decrease of \u20ac\u00a00.2 million in retained earnings. For more information on the employee share purchase plan, see chapter 6.7.6. In February 2022, a.s.r. announced the repurchase of ordinary shares as an additional capital distribution. a.s.r. repurchased 1,798 thousand shares under an open market share buyback (SBB) programme for an amount of \u20ac\u00a075 million (average share price \u20ac\u00a041.70). In the AGM in May 2022 the resolution was adopted to cancel the 2,036 thousand shares which were acquired in 2021. The cancellation was effected in August 2022. The amount of treasury shares held at year-end of \u20ac\u00a079 million (2021: \u20ac\u00a083 million) represents 1,903 thousand (2021: 2,264 thousand) treasury shares. 6.5.13.6 Other equity instruments Other equity instruments \u00a02022 2021 Coupon date First possible redemption date Hybrid Tier 2 instrument 5% fixed interest 497 497 Annually with effect from 30 September 2015 30 September 2024 Restricted Tier 1 instrument 4.625% fixed interest 507 507 Semi-annually with effect from 19 April 2018 19 October 2027 Total other equity instruments 1,004 1,004 \u00a0\u00a0The Tier 1 and Tier 2 instruments bear discretionary interest and have no maturity date, but can be redeemed at the option of a.s.r. on any coupon due date from the above mentioned possible redemption date. The Tier 1 and Tier 2 instruments have subordination provisions, rank junior to all other liabilities and senior to only shareholders' equity. The conditions of the securities contain certain provisions for optional and required coupon payment deferral and mandatory coupon payment events. The coupon payments in respect of the Tier 1 and Tier 2 instruments are deductible for tax purposes. Distributed amounts to holders of equity instruments as discretionary interest \u00a02022 2021 Hybrid Tier 2 instrument 5% fixed interest 25 25 Restricted Tier 1 instrument 4.625% fixed interest 23 23 \u00a0\u00a0\u00a0Total distributed amounts 48 48 The Tier 1 and Tier 2 instruments are classified as equity as there is no requirement to settle the obligation in cash or another financial asset or to exchange financial assets or financial liabilities under conditions that are potentially unfavourable for a.s.r. 6.5.13.7 Earnings per share Basic earnings per share at year end \u00a02022 2021 Net result attributable to holders of ordinary shares for calculating the earnings per ordinary share 685 894 Weighted average number of ordinary shares in issue 137,004,580 136,260,472 Basic earnings per ordinary share (in euros) 5.00 6.56 Diluted earnings per share at year end \u00a02022 2021 Net result 685 894 - effect of Restricted Tier 1 capital instrument 17 17 Adjusted net result attributable to holders of ordinary shares for calculating the diluted earnings per ordinary share 702 911 Weighted average number of ordinary shares in issue 137,004,580 136,260,472 Weighted average number of ordinary shares resulting from conversion of bonds Restricted Tier 1 21,645,022 21,645,022 Weighted average number of shares used to calculate the diluted earnings per ordinary share 158,649,601 157,905,493 Diluted earnings per ordinary share (in euros) 4.42 5.77 Net result in the table is after tax and non-controlling interests. For additional information related to net result, see chapter 6.2.2. ", "dimensions": { "concept": "ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-565": { "value": "6.5.13.1 Share capital Share capital \u00a031 December 2022 31 December 2021 \u00a0Number of Shares (in millions) Amounts (in \u20ac\u00a0millions) Number of Shares (in millions) Amounts (in \u20ac\u00a0millions) Ordinary shares \u00a0\u00a0\u00a0\u00a0- Authorised capital; par value of \u20ac\u00a00.16 325 52 325 52 - Of which unsubscribed 175 28 187 30 Subscribed and paid-up capital 150 24 138 22 \u00a0\u00a0\u00a0\u00a0\u00a0Preference shares \u00a0\u00a0\u00a0\u00a0- Authorised capital; par value of \u20ac\u00a00.16 325 52 325 52 - Of which unsubscribed 325 52 325 52 Subscribed and paid-up capital - - - - The share capital increased as a result of issued share capital to finance the intended business combination of a.s.r. and Aegon Nederland N.V. ", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-566": { "value": "6.5.13.1 Share capital Share capital \u00a031 December 2022 31 December 2021 \u00a0Number of Shares (in millions) Amounts (in \u20ac\u00a0millions) Number of Shares (in millions) Amounts (in \u20ac\u00a0millions) Ordinary shares \u00a0\u00a0\u00a0\u00a0- Authorised capital; par value of \u20ac\u00a00.16 325 52 325 52 - Of which unsubscribed 175 28 187 30 Subscribed and paid-up capital 150 24 138 22 \u00a0\u00a0\u00a0\u00a0\u00a0Preference shares \u00a0\u00a0\u00a0\u00a0- Authorised capital; par value of \u20ac\u00a00.16 325 52 325 52 - Of which unsubscribed 325 52 325 52 Subscribed and paid-up capital - - - - The share capital increased as a result of issued share capital to finance the intended business combination of a.s.r. and Aegon Nederland N.V. 6.5.13.2 Share premium reserve The share premium reserve increased by \u20ac\u00a0577 million due to issued share capital to finance the intended business combination of a.s.r. and Aegon Nederland N.V. (\u20ac\u00a0591 million) and the cancellation of 2,036 thousand treasury shares (\u20ac\u00a0-14 million), as approved at the AGM in May 2022, see chapter 6.5.13.5. 6.5.13.3 Unrealised gains and losses recorded in equity Unrealised gains and losses recorded in equity \u00a031 December 2022 31 December 2021 \u00a0Investments available for sale Revaluation of property in own use Total Investments available for sale Revaluation of property in own use Total Gross unrealised gains and losses -1,844 50 -1,794 3,074 38 3,112 Related tax 526 -13 513 -679 -10 -688 Shadow accounting 503 - 503 -1,257 - -1,257 Tax related to shadow accounting -130 - -130 324 - 324 Unrealised gains and losses related to segregated investment pools -19 - -19 -40 - -40 Tax related to segregated investment pool 5 - 5 10 - 10 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total unrealised gains and losses recorded in equity -959 37 -922 1,433 28 1,461 6.5.13.4 Actuarial gains and losses The balance of actuarial gains and losses related to the pension obligation increased by \u20ac\u00a0887 million after tax and \u20ac\u00a01195 million before tax (2021: increased by \u20ac\u00a0198 million after tax and \u20ac\u00a0249 million before tax). The increase is mainly due to an increase in the discount rate (see chapter 6.5.17). 6.5.13.5 Treasury shares As part of the employee share purchase plan a.s.r. sold 124 thousand shares for an amount of \u20ac\u00a04,06 million. The employee share purchase plan led to a decrease of \u20ac\u00a00.2 million in retained earnings. For more information on the employee share purchase plan, see chapter 6.7.6. In February 2022, a.s.r. announced the repurchase of ordinary shares as an additional capital distribution. a.s.r. repurchased 1,798 thousand shares under an open market share buyback (SBB) programme for an amount of \u20ac\u00a075 million (average share price \u20ac\u00a041.70). In the AGM in May 2022 the resolution was adopted to cancel the 2,036 thousand shares which were acquired in 2021. The cancellation was effected in August 2022. The amount of treasury shares held at year-end of \u20ac\u00a079 million (2021: \u20ac\u00a083 million) represents 1,903 thousand (2021: 2,264 thousand) treasury shares. 6.5.13.6 Other equity instruments Other equity instruments \u00a02022 2021 Coupon date First possible redemption date Hybrid Tier 2 instrument 5% fixed interest 497 497 Annually with effect from 30 September 2015 30 September 2024 Restricted Tier 1 instrument 4.625% fixed interest 507 507 Semi-annually with effect from 19 April 2018 19 October 2027 Total other equity instruments 1,004 1,004 \u00a0\u00a0The Tier 1 and Tier 2 instruments bear discretionary interest and have no maturity date, but can be redeemed at the option of a.s.r. on any coupon due date from the above mentioned possible redemption date. The Tier 1 and Tier 2 instruments have subordination provisions, rank junior to all other liabilities and senior to only shareholders' equity. The conditions of the securities contain certain provisions for optional and required coupon payment deferral and mandatory coupon payment events. The coupon payments in respect of the Tier 1 and Tier 2 instruments are deductible for tax purposes. Distributed amounts to holders of equity instruments as discretionary interest \u00a02022 2021 Hybrid Tier 2 instrument 5% fixed interest 25 25 Restricted Tier 1 instrument 4.625% fixed interest 23 23 \u00a0\u00a0\u00a0Total distributed amounts 48 48 The Tier 1 and Tier 2 instruments are classified as equity as there is no requirement to settle the obligation in cash or another financial asset or to exchange financial assets or financial liabilities under conditions that are potentially unfavourable for a.s.r. ", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-570": { "value": "6.5.13.5 Treasury shares As part of the employee share purchase plan a.s.r. sold 124 thousand shares for an amount of \u20ac\u00a04,06 million. The employee share purchase plan led to a decrease of \u20ac\u00a00.2 million in retained earnings. For more information on the employee share purchase plan, see chapter 6.7.6. In February 2022, a.s.r. announced the repurchase of ordinary shares as an additional capital distribution. a.s.r. repurchased 1,798 thousand shares under an open market share buyback (SBB) programme for an amount of \u20ac\u00a075 million (average share price \u20ac\u00a041.70). In the AGM in May 2022 the resolution was adopted to cancel the 2,036 thousand shares which were acquired in 2021. The cancellation was effected in August 2022. The amount of treasury shares held at year-end of \u20ac\u00a079 million (2021: \u20ac\u00a083 million) represents 1,903 thousand (2021: 2,264 thousand) treasury shares. ", "dimensions": { "concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-573": { "value": "6.5.13.7 Earnings per share Basic earnings per share at year end \u00a02022 2021 Net result attributable to holders of ordinary shares for calculating the earnings per ordinary share 685 894 Weighted average number of ordinary shares in issue 137,004,580 136,260,472 Basic earnings per ordinary share (in euros) 5.00 6.56 Diluted earnings per share at year end \u00a02022 2021 Net result 685 894 - effect of Restricted Tier 1 capital instrument 17 17 Adjusted net result attributable to holders of ordinary shares for calculating the diluted earnings per ordinary share 702 911 Weighted average number of ordinary shares in issue 137,004,580 136,260,472 Weighted average number of ordinary shares resulting from conversion of bonds Restricted Tier 1 21,645,022 21,645,022 Weighted average number of shares used to calculate the diluted earnings per ordinary share 158,649,601 157,905,493 Diluted earnings per ordinary share (in euros) 4.42 5.77 Net result in the table is after tax and non-controlling interests. For additional information related to net result, see chapter 6.2.2. ", "dimensions": { "concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-574": { "value": "See accounting policy AA.
| \u00a0 | Nominal amount | Carrying value 2022 | Carrying value 2021 |
|---|---|---|---|
| Hybrid Tier 2 instrument 5.125% fixed interest | 500 | 499 | 498 |
| Hybrid Tier 2 instrument 3.375% fixed interest | 500 | 495 | 494 |
| Hybrid Tier 2 instrument 7.000% fixed interest | 1,000 | 987 | - |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total subordinated liabilities | 2,000 | 1,980 | 992 |
In 2015, a.s.r. issued \u20ac\u00a0500 million subordinated liabilities in the form of Tier 2 notes, first callable on 29 September 2025, and maturing on 29 September 2045. The coupon is fixed at 5.125% and paid annually on 29 September with a step up at the first call date.
In 2019 a.s.r. issued \u20ac\u00a0500 million subordinated liabilities in the form of Tier 2 notes. The Tier 2 notes have a maturity date of 2049 and are first callable 3 months before the first reset date of 2 May 2029. The coupon is fixed at 3.375% and paid annually on 2 May. After the reset date the interest is calculated based on the 5 Year Mid Swap Rate plus a margin of 4.00 per cent and updated once every five years.
On 22 November 2022 a.s.r. issued \u20ac\u00a01 billion subordinated liabilities to partially finance the intended business combination with Aegon Nederland N.V., see chapter 6.4.5. As of the moment the business combination is completed the subordinated liabilities will qualify as a Tier 2 instrument. These Tier 2 notes have an M&A call clause, which gives a.s.r. the option to redeem the Tier 2 notes early if the acquisition of Aegon Nederland N.V. does not take place within 12 months or will not take place at all. The Tier 2 notes have a maturity date of 2043 and are first callable on 7 December 2033. The coupon is fixed at 7.000% and paid annually on 7 December.
These Tier 2 notes are subordinated and ranking equally without any preference amongst themselves and (a) junior to the claims of all senior creditors of a.s.r., (b) equally with any parity obligations and (c) in priority to claims in respect of (i) any equity securities and (ii) any junior obligations.
The subordinated liabilities are classified as liabilities given the obligation to settle the loans and pay the coupon. The subordinated liabilities issued in 2015 and 2019 are considered Tier 2 own funds for regulatory purposes. The subordinated liabilities issued in 2022 will be considered Tier 2 own funds for regulatory purposes as of the moment the business combination with Aegon Nederland is completed.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSubordinatedLiabilitiesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-576": { "value": "6.5.15 Insurance liabilities See accounting policies J, K, P and W. 6.5.15.1 Liabilities arising from insurance contracts Insurance contracts with retained exposure \u00a0Gross Of which reinsurance \u00a031 December 2022 31 December 2021 31 December 2022 31 December 2021 Provision for unearned premiums 310 307 4 8 Provision for claims (including IBNR) 6,716 6,744 208 256 \u00a0\u00a0\u00a0\u00a0\u00a0Non-life insurance contracts 7,027 7,050 212 263 \u00a0\u00a0\u00a0\u00a0\u00a0Life insurance contracts excluding own pension contracts 22,606 30,747 145 154 \u00a0\u00a0\u00a0\u00a0\u00a0Total liabilities arising from insurance contracts 29,633 37,797 357 417 Changes in liabilities arising from non-life insurance contracts \u00a0Gross Of which reinsurance \u00a02022 2021 2022 2021 Provision for unearned premiums \u00a0\u00a0\u00a0\u00a0At 1 January 307 323 8 19 Changes in provision for unearned premiums 4 -16 -3 -11 Provision for unearned premiums as at 31 December 310 307 4 8 \u00a0\u00a0\u00a0\u00a0\u00a0Provision for claims (including IBNR) \u00a0\u00a0\u00a0\u00a0At 1 January 6,744 6,522 256 307 Claims paid -2,866 -2,595 -112 -73 Changes in provision for claims 3,276 3,064 63 23 Changes in shadow accounting through equity -159 -179 0 0 Changes in shadow accounting through income -278 -67 0 0 Provision for claims (including IBNR) as at 31 December 6,716 6,744 208 256 \u00a0\u00a0\u00a0\u00a0\u00a0Non-life insurance contracts as at 31 December 7,027 7,050 212 263 Gross provisions for claims \u00a031 December 2022 31 December 2021 Claims reported 4,229 4,516 IBNR 2,487 2,228 \u00a0\u00a0\u00a0Total provisions for claims 6,716 6,744 Changes in liabilities arising from life insurance contracts \u00a0Gross Of which reinsurance \u00a02022 2021 2022 2021 At 1 January 30,748 34,614 156 160 Premiums received / paid 668 696 0 0 Regular interest added 566 566 3 3 Realised gains and losses -303 263 0 0 Amortisation of realised gains -279 -313 0 0 Benefits -1,475 -1,622 -9 -11 Technical result -96 -69 -3 3 Release of cost recovery -118 -124 0 0 Changes in shadow accounting through equity -1,600 -1,081 0 0 Changes in shadow accounting through income -5,489 -2,183 0 0 Other changes -13 0 0 0 At 31 December 22,610 30,748 147 156 \u00a0\u00a0\u00a0\u00a0\u00a0Interest margin participation to be written down \u00a0\u00a0\u00a0\u00a0At 1 January -13 -11 -2 -2 Write-down recognised in profit or loss 2 1 0 0 Other changes -2 -3 0 0 At 31 December -13 -13 -2 -2 \u00a0\u00a0\u00a0\u00a0\u00a0Provision for discretionary profit sharing, bonusses and discounts \u00a0\u00a0\u00a0\u00a0At 1 January 12 12 0 0 Profit sharing, bonuses and discounts granted in the financial year -2 0 0 0 At 31 December 10 12 0 0 \u00a0\u00a0\u00a0\u00a0\u00a0Total life insurance contracts at 31 December 22,606 30,747 145 154 In accordance with a.s.r.\u2019s accounting policy, the LAT is performed and the shadow accounting adjustments related to instruments with a revaluation reserve amount below cost that are made to the level that the LAT will not get triggered (i.e. shows a positive margin). The insurance liabilities are deemed to be adequate following the performance of the LAT taking into account the UFR of 3.45% for 2022 (2021: 3.60%). The changes in shadow accounting through equity in the amount of \u20ac\u00a0-1,600 million include a reversal of shadow accounting related to instruments with a revaluation reserve amount below cost for an amount of \u20ac\u00a01,433 million. See accounting policy A. In 2022, technical result increased, reflecting a positive impact of further optimisation of the strategic asset mix in the investment portfolio including renewable energy investments. Furthermore, mortality results increased compared to 2021, partly due to excess mortality in some portfolios. Disability result in pensions also improved, partly due to an improved estimation of claims. This was partly offset by a sharp decline in equity markets and considerably higher interest rates, resulting in strengthened provisions for unit linked liabilities with guarantees by \u20ac\u00a039 million. 6.5.15.2 Claims development table, Non-life The table below is a ten-year summary of movements in gross cumulative claims in connection with the Non-life portfolio for the period from 2013 to 2022. Ten-year summary of changes in gross cumulative claims \u00a0Claims year 31 December 2022 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Total At year end \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01st claim year 2,109 2,020 2,067 2,256 2,275 2,383 2,453 2,652 3,065 3,356 \u00a02014 2,061 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02015 2,047 1,962 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02016 2,043 1,965 2,026 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02017 2,057 1,955 2,057 2,271 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02018 2,051 1,948 2,066 2,315 2,322 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a02019 2,037 1,938 2,055 2,299 2,382 2,375 \u00a0\u00a0\u00a0\u00a0\u00a02020 2,019 1,913 2,050 2,318 2,387 2,452 2,471 \u00a0\u00a0\u00a0\u00a02021 2,002 1,898 2,030 2,297 2,354 2,513 2,536 2,628 \u00a0\u00a0\u00a02022 2,006 1,889 2,019 2,269 2,328 2,494 2,539 2,659 3,063 \u00a0\u00a0Gross claims as at 31 December 2022 2,006 1,889 2,019 2,269 2,328 2,494 2,539 2,659 3,063 3,356 \u00a0Cumulative gross paid claims 1,824 1,712 1,787 1,971 1,966 1,986 1,928 1,920 2,116 1,481 \u00a0Gross outstanding claims liabilities (including IBNR) 182 178 232 298 362 508 610 739 948 1,876 5,931 Claims liabilities prior years \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0839 Shadow accounting \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-54 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total claim liabilities \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a06,716 Ten-year summary of changes in gross cumulative claims \u00a0Claims year 31 December 2021 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total At year end: \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01st claims year 2,213 2,109 2,020 2,067 2,256 2,275 2,383 2,453 2,652 3,065 \u00a02013 2,121 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02014 2,127 2,061 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02015 2,110 2,047 1,962 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02016 2,111 2,043 1,965 2,026 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02017 2,124 2,057 1,955 2,057 2,271 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a02018 2,109 2,051 1,948 2,066 2,315 2,322 \u00a0\u00a0\u00a0\u00a0\u00a02019 2,091 2,037 1,938 2,055 2,299 2,382 2,375 \u00a0\u00a0\u00a0\u00a02020 2,088 2,019 1,913 2,050 2,318 2,387 2,452 2,471 \u00a0\u00a0\u00a02021 2,098 2,002 1,898 2,030 2,297 2,354 2,513 2,536 2,628 \u00a0\u00a0Gross claims as at 31 December 2021 2,098 2,002 1,898 2,030 2,297 2,354 2,513 2,536 2,628 3,065 \u00a0Cumulative gross paid claims 1,902 1,796 1,683 1,748 1,929 1,909 1,913 1,842 1,785 1,366 \u00a0Gross outstanding claims liabilities (including IBNR) 196 206 215 281 368 445 601 693 842 1,699 5,546 Claims liabilities prior years \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0803 Shadow accounting \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0394 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total claim liabilities \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a06,744 For the acquired entities gross claims in the claims development table includes claims from the original date of the claim. 6.5.15.3 Liabilities arising from insurance contracts on behalf of policyholders Changes in liabilities arising from insurance contracts on behalf of policyholders \u00a02022 2021 At 1 January 14,566 13,137 Premiums received 1,098 1,042 Interest added 85 85 Benefits -842 -1,362 Effect of fair value changes related to financial assets -1,939 1,636 Technical result 31 24 Release of cost recovery -69 -75 Other changes 76 80 At 31 December 13,007 14,566 At year-end 2022, the liabilities included a guarantee provision for a carrying amount of \u20ac\u00a084 million (2021: \u20ac\u00a046 million) and a provision related to unit-linked insurance contracts and pension contracts for a carrying amount of \u20ac\u00a042 million (2021: \u20ac\u00a043 million). These provisions relate to compensation for the cost of these contracts. An amount of \u20ac\u00a0119 million (2021: \u20ac\u00a089 million) of the liabilities arising from insurance contracts on behalf of policyholders is related to the a.s.r. DC pension plans. Other changes relates to the transfer of insurance contracts to insurance contracts on behalf of policyholders due to new product features provided. Liabilities arising from insurance contracts on behalf of policyholders also include liabilities where conversions and switches have occurred in the insurance contract administration. The insurance contract still meets the definition of and continues to be classified as an insurance contract on behalf of policyholders and therefore continues to be included in the insurance contracts on behalf of policyholders administration. However, as a result of the conversion and switches, liabilities arising from insurance contracts on behalf of policyholders amounting to \u20ac\u00a02,999 million (2021: \u20ac\u00a02,919 million) are, in the classification and subsequent presentation, not backed directly with investments on behalf of policyholders. The related investments are included and presented in investments (available for sale) and loans and receivables. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInsuranceContractsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-577": { "value": "6.5.15.1 Liabilities arising from insurance contracts Insurance contracts with retained exposure \u00a0Gross Of which reinsurance \u00a031 December 2022 31 December 2021 31 December 2022 31 December 2021 Provision for unearned premiums 310 307 4 8 Provision for claims (including IBNR) 6,716 6,744 208 256 \u00a0\u00a0\u00a0\u00a0\u00a0Non-life insurance contracts 7,027 7,050 212 263 \u00a0\u00a0\u00a0\u00a0\u00a0Life insurance contracts excluding own pension contracts 22,606 30,747 145 154 \u00a0\u00a0\u00a0\u00a0\u00a0Total liabilities arising from insurance contracts 29,633 37,797 357 417 Changes in liabilities arising from non-life insurance contracts \u00a0Gross Of which reinsurance \u00a02022 2021 2022 2021 Provision for unearned premiums \u00a0\u00a0\u00a0\u00a0At 1 January 307 323 8 19 Changes in provision for unearned premiums 4 -16 -3 -11 Provision for unearned premiums as at 31 December 310 307 4 8 \u00a0\u00a0\u00a0\u00a0\u00a0Provision for claims (including IBNR) \u00a0\u00a0\u00a0\u00a0At 1 January 6,744 6,522 256 307 Claims paid -2,866 -2,595 -112 -73 Changes in provision for claims 3,276 3,064 63 23 Changes in shadow accounting through equity -159 -179 0 0 Changes in shadow accounting through income -278 -67 0 0 Provision for claims (including IBNR) as at 31 December 6,716 6,744 208 256 \u00a0\u00a0\u00a0\u00a0\u00a0Non-life insurance contracts as at 31 December 7,027 7,050 212 263 Gross provisions for claims \u00a031 December 2022 31 December 2021 Claims reported 4,229 4,516 IBNR 2,487 2,228 \u00a0\u00a0\u00a0Total provisions for claims 6,716 6,744 Changes in liabilities arising from life insurance contracts \u00a0Gross Of which reinsurance \u00a02022 2021 2022 2021 At 1 January 30,748 34,614 156 160 Premiums received / paid 668 696 0 0 Regular interest added 566 566 3 3 Realised gains and losses -303 263 0 0 Amortisation of realised gains -279 -313 0 0 Benefits -1,475 -1,622 -9 -11 Technical result -96 -69 -3 3 Release of cost recovery -118 -124 0 0 Changes in shadow accounting through equity -1,600 -1,081 0 0 Changes in shadow accounting through income -5,489 -2,183 0 0 Other changes -13 0 0 0 At 31 December 22,610 30,748 147 156 \u00a0\u00a0\u00a0\u00a0\u00a0Interest margin participation to be written down \u00a0\u00a0\u00a0\u00a0At 1 January -13 -11 -2 -2 Write-down recognised in profit or loss 2 1 0 0 Other changes -2 -3 0 0 At 31 December -13 -13 -2 -2 \u00a0\u00a0\u00a0\u00a0\u00a0Provision for discretionary profit sharing, bonusses and discounts \u00a0\u00a0\u00a0\u00a0At 1 January 12 12 0 0 Profit sharing, bonuses and discounts granted in the financial year -2 0 0 0 At 31 December 10 12 0 0 \u00a0\u00a0\u00a0\u00a0\u00a0Total life insurance contracts at 31 December 22,606 30,747 145 154 In accordance with a.s.r.\u2019s accounting policy, the LAT is performed and the shadow accounting adjustments related to instruments with a revaluation reserve amount below cost that are made to the level that the LAT will not get triggered (i.e. shows a positive margin). The insurance liabilities are deemed to be adequate following the performance of the LAT taking into account the UFR of 3.45% for 2022 (2021: 3.60%). The changes in shadow accounting through equity in the amount of \u20ac\u00a0-1,600 million include a reversal of shadow accounting related to instruments with a revaluation reserve amount below cost for an amount of \u20ac\u00a01,433 million. See accounting policy A. In 2022, technical result increased, reflecting a positive impact of further optimisation of the strategic asset mix in the investment portfolio including renewable energy investments. Furthermore, mortality results increased compared to 2021, partly due to excess mortality in some portfolios. Disability result in pensions also improved, partly due to an improved estimation of claims. This was partly offset by a sharp decline in equity markets and considerably higher interest rates, resulting in strengthened provisions for unit linked liabilities with guarantees by \u20ac\u00a039 million. ", "dimensions": { "concept": "ifrs-full:DisclosureOfReinsuranceExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-578": { "value": "6.5.15.2 Claims development table, Non-life The table below is a ten-year summary of movements in gross cumulative claims in connection with the Non-life portfolio for the period from 2013 to 2022. Ten-year summary of changes in gross cumulative claims \u00a0Claims year 31 December 2022 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Total At year end \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01st claim year 2,109 2,020 2,067 2,256 2,275 2,383 2,453 2,652 3,065 3,356 \u00a02014 2,061 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02015 2,047 1,962 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02016 2,043 1,965 2,026 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02017 2,057 1,955 2,057 2,271 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02018 2,051 1,948 2,066 2,315 2,322 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a02019 2,037 1,938 2,055 2,299 2,382 2,375 \u00a0\u00a0\u00a0\u00a0\u00a02020 2,019 1,913 2,050 2,318 2,387 2,452 2,471 \u00a0\u00a0\u00a0\u00a02021 2,002 1,898 2,030 2,297 2,354 2,513 2,536 2,628 \u00a0\u00a0\u00a02022 2,006 1,889 2,019 2,269 2,328 2,494 2,539 2,659 3,063 \u00a0\u00a0Gross claims as at 31 December 2022 2,006 1,889 2,019 2,269 2,328 2,494 2,539 2,659 3,063 3,356 \u00a0Cumulative gross paid claims 1,824 1,712 1,787 1,971 1,966 1,986 1,928 1,920 2,116 1,481 \u00a0Gross outstanding claims liabilities (including IBNR) 182 178 232 298 362 508 610 739 948 1,876 5,931 Claims liabilities prior years \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0839 Shadow accounting \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0-54 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total claim liabilities \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a06,716 Ten-year summary of changes in gross cumulative claims \u00a0Claims year 31 December 2021 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total At year end: \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01st claims year 2,213 2,109 2,020 2,067 2,256 2,275 2,383 2,453 2,652 3,065 \u00a02013 2,121 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02014 2,127 2,061 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02015 2,110 2,047 1,962 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02016 2,111 2,043 1,965 2,026 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a02017 2,124 2,057 1,955 2,057 2,271 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a02018 2,109 2,051 1,948 2,066 2,315 2,322 \u00a0\u00a0\u00a0\u00a0\u00a02019 2,091 2,037 1,938 2,055 2,299 2,382 2,375 \u00a0\u00a0\u00a0\u00a02020 2,088 2,019 1,913 2,050 2,318 2,387 2,452 2,471 \u00a0\u00a0\u00a02021 2,098 2,002 1,898 2,030 2,297 2,354 2,513 2,536 2,628 \u00a0\u00a0Gross claims as at 31 December 2021 2,098 2,002 1,898 2,030 2,297 2,354 2,513 2,536 2,628 3,065 \u00a0Cumulative gross paid claims 1,902 1,796 1,683 1,748 1,929 1,909 1,913 1,842 1,785 1,366 \u00a0Gross outstanding claims liabilities (including IBNR) 196 206 215 281 368 445 601 693 842 1,699 5,546 Claims liabilities prior years \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0803 Shadow accounting \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0394 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total claim liabilities \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a06,744 For the acquired entities gross claims in the claims development table includes claims from the original date of the claim. 6.6.7 Net insurance claims and benefits See accounting policy JJ. Net insurance claims and benefits \u00a02022 2021 Total Non-life and Life \u00a0\u00a0Insurance claims and benefits -2,984 -6,846 Insurance claims and benefits recovered from reinsurers 64 29 \u00a0\u00a0\u00a0Net insurance claims and benefits -2,919 -6,817 \u00a0\u00a0\u00a0Non-life \u00a0\u00a0Claims paid -2,866 -2,595 Changes in provision for outstanding claims -410 -469 Amortisation of VOBA -14 -14 Insurance claims and benefits -3,290 -3,079 \u00a0\u00a0\u00a0Insurance claims and benefits recovered from reinsurers 63 23 \u00a0\u00a0\u00a0Net insurance claims and benefits, Non-life -3,227 -3,056 \u00a0\u00a0\u00a0Life \u00a0\u00a0Claims paid -2,317 -2,983 Changes in liabilities arising from insurance contracts 1,008 592 Changes in liabilities arising from insurance contracts on behalf of policyholders 1,624 -1,368 Amortisation of VOBA -9 -8 Insurance claims and benefits 306 -3,768 \u00a0\u00a0\u00a0Insurance claims and benefits recovered from reinsurers 1 7 \u00a0\u00a0\u00a0Net insurance claims and benefits, Life 307 -3,761 Non-life insurance claims and benefits increased roughly in line with the growth of premiums earned, excluding exceptional provision strengthening and weather related calamities. In 2022, disability provisions were strengthened (impact \u20ac\u00a091 million) due to the 10% increase in the legal minimum wage as at 1 January 2023 as a result of the exceptionally high level of inflation. In February 2022, the Netherlands were confronted with severe storms (Dudley, Eunice and Franklin) and heavy rainfalls which caused significant damage. The additional damage claimed was \u20ac\u00a039 million after reinsurance. In July 2021, floods in the southern part of the Netherlands had a \u20ac\u00a020 million impact. In Non-life there was an ongoing normalisation of claims following the abolishment of the COVID-19 restrictions. The decrease of life claims paid reflects fewer claims paid from expirations and redemptions. ", "dimensions": { "concept": "ifrs-full:DisclosureOfClaimsAndBenefitsPaidExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-580": { "value": " 6.5.17 Employee benefits See accounting policy M. Employee benefits \u00a031 December 2022 31 December 2021 Post-employment benefits pensions 2,722 3,990 Post-employment benefits other than pensions 7 9 Post-employment benefit obligation 2,730 3,999 \u00a0\u00a0\u00a0Other long-term employee benefits 12 14 \u00a0\u00a0\u00a0Total 2,742 4,013 Costs of post-employment and other long-term employee benefits \u00a02022 2021 Post-employment benefits pensions -97 -80 Post-employment benefits other than pensions - - Total -97 -80 \u00a0\u00a0\u00a0Other long term employee benefits -1 - \u00a0\u00a0\u00a0Cost of post-employment and other long-term employee benefits -99 -80 The costs of the post-employment benefits pensions relate to the current DC pension plan of a.s.r., the previous DB plans of a.s.r., plus the DC plans of the other group companies. An amount of \u20ac\u00a02,609 million (2021: \u20ac\u00a03,880 million) of the employee benefits is expected to be settled more than twelve months after the balance sheet date. 6.5.17.1 Post-employment benefits pensions a.s.r. has a number of DC and DB post-employment benefit plans for its employees and former employees. The majority of employees are formally employed by a.s.r. A limited amount of employees are employed by other group companies. The pension plans of other group companies are disclosed in a separate section in this chapter. a.s.r. life, an insurance company and a group entity, is the insurer of the majority of the post-employment benefit plans, being both the DC plans as well as the DB plans. As this company holds the separated investments that are meant to cover the employee benefit obligation for the DB plans, they do not qualify as plan assets in accordance with IAS 19 and are therefore included in financial assets. a.s.r. employees The costs of the post-employment benefits pensions relate to the DC pension plan of a.s.r., the previous DB plans of a.s.r., plus the DC plans of the other group companies. No regular annual premium contributions are paid to the previous DB plans. The DC plan has two components with defined benefit elements with a marginal impact: survivors' pension and the option to buy a guaranteed income. In 2022, a.s.r. and the labour unions came to an agreement to add additional funds to the old DB plan for indexation amounting to \u20ac\u00a0240 million, of which \u20ac\u00a0227 million has already been recognised as past service costs in reporting years 2020 and 2021. The additional \u20ac\u00a013 million, also used for profit sharing, impacted the remeasurements for \u20ac\u00a012 million and other expenses for \u20ac\u00a01 million respectively. With the agreement, the current profit sharing in the DB plan will be discontinued as from 31 December 2022. The recognised expenses for the DC plan in 2022 amounts to \u20ac\u00a054 million (2021: \u20ac\u00a050 million). All pension build up for existing and new employees as of 1 January 2021 are included in the post-employment DC plans. All employees who commenced service between 1 January 2006 and 31 December 2020 are included in one post-employment DB plan (\u2018Basic plan\u2019). All other employees remain active within the existing plan at the date of first employment. Previous plans for former employees are also still active. The post-employment DB en DC plans for employees that are employed by a.s.r. are insured by a.s.r. life. The methods and techniques used to calculate the DB obligations are based on IAS 19 requirements and calculated by an independent actuary. The benefits under these plans are dependent on factors such as years of service and compensation. Pension obligations are determined using mortality tables, the rate of employee turnover, wage drift and economic assumptions for factors such as inflation, and the discount rate. As no contributions are paid into the ended DB pension scheme no accrual rate and pensionable salary and minimum franchise is required for this scheme. The DB pension scheme had a retirement age of 68 years. The DB scheme was based on average-salary pension; and Future inflation indexation is conditional. Other group companies employees The other group companies, which are entities operating in the Distribution and Services segment, have DC plans, insured with a.s.r. life. The recognised expenses for these DC plans in 2022 amounts to \u20ac\u00a05 million (2021: \u20ac\u00a05 million). Net defined benefit liability Defined benefit obligation for all the above mentioned plans \u00a02022 2021 Net defined benefit liability at 1 January 3,990 4,228 \u00a0\u00a0\u00a0Included in income statement \u00a0\u00a0Interest cost 33 17 Past service cost 1 93 Other -1 - Total 33 111 \u00a0\u00a0\u00a0Remeasurement of liabilities included in OCI \u00a0\u00a0Discount rate change -1,222 -325 Other assumptions change 31 -12 Experience adjustments -3 88 Total -1,194 -249 \u00a0\u00a0\u00a0Benefits -107 -101 Transfer - 2 \u00a0\u00a0\u00a0Net defined benefit liability at 31 December 2,722 3,990 \u00a0\u00a0\u00a0At 31 December \u00a0\u00a0Defined benefit obligation 2,722 3,990 Fair value of plan assets - - Net defined benefit liability 2,722 3,990 Employees account for 20% (2021: 25%) of the DB obligation, 52% (2021: 41%) of the DB obligation relates to former employees currently receiving pension benefits, 25% (2021: 31%) of the DB obligation relates to deferred pensioners and 3% (2021: 3%) of the DB obligation relates to other members. The discount rate was 3.67% at 31 December 2022 (31 December 2021: 0.90%), resulting in a \u20ac\u00a01,259 million decrease (2021: \u20ac\u00a0338 million decrease) in the DB obligation. As per 31 December 2022 the duration of the DB obligation was 14 years (2021: 18 years). The past service cost of \u20ac\u00a01 million pre-tax (2021: \u20ac\u00a093 million) relates to developments in relation to the ended DB plan of a.s.r. The change in other assumptions amounts to \u20ac\u00a031 million (2021: \u20ac\u00a0-12 million) primarily due to a change in indexation percentage of former employees. Experience adjustments are actuarial gains and losses that have arisen due to differences between actuarial assumptions. The following table provides information about experience adjustments with respect to qualifying plan assets and the DB obligation: Experience adjustments (in \u20ac\u00a0thousands) 2022 2021 Experience adjustments to qualifying investments, gain (loss) - - As % of qualifying investments as at 31 December 0.0% 0.0% Experienced adjustments to defined benefit obligation, loss (gain) 3,020 -87,948 As a % of liabilities as at 31 December -0.1% 2.2% Assumptions The principal actuarial assumptions and parameters at year-end \u00a02022 2021 Discount rate 3.7% 0.9% Indexation % employees n.a. 2.2% Indexation % former employees n.a. 2.2% Mortality (years) 19.9 19.7 In the calculation of the DB obligation the: Discount rate is based on an internal curve for high quality corporate bonds; Most recent mortality table \u2018AG Prognosetafel 2022\u2019 is used, in combination with a.s.r. specific experience factors for the pension portfolio; As from 2022 the indexation amount in the DB obligation is no longer derived from the indexation parameter and estimated period of indexation; instead, the fair values of the separate accounts to fund future indexation are added to the DB obligation. The sensitivity of the above actuarial assumptions to feasible possible changes at the reporting date to one of the relevant actuarial assumptions whilst other assumption remain constant, would have affected the DB obligation by the amounts shown below: Sensitivity of actuarial assumptions \u00a0Increase Decrease Discount rate (1% movement) -287 360 Future mortality (1 year movement) -69 68 Non-qualifying plan assets The portfolio of global investments (non-qualifying assets) held by a.s.r. life to cover the employee benefit expense of the DB plans can be broken down as follows: Breakdown of global investments held by a.s.r. life \u00a031 December 2022 31 December 2021 Equities 18.0% 17.9% Fixed-interest securities 73.2% 74.4% Real estate 6.3% 5.3% Cash 0.3% 0.2% Other 2.1% 2.2% For the non-qualifying assets backing the post-employment benefit plans, a.s.r. has drawn up general guidelines for the asset mix based on criteria such as geographical location and ratings. To ensure the investment guidelines remain in line with the conditions of the post-employment benefit obligations, a.s.r. regularly performs Asset Liability Management studies. Transactions in the non-qualifying assets are done within the guidelines. As the post-employment benefit plans are a liability on group level, the underlying insurance and market risks are in scope of a.s.r.\u2019s risk policies (see chapter 6.8). The overall interest-rate risk of the group is managed using interest-rate swaps and swaptions. a.s.r. life manages the interest rate risk through an overlay interest hedging strategy using swaps and swaptions for the company as a whole (see chapter 6.8.3). The swaps and swaptions are not specifically allocated to the a.s.r. post-employment benefit plans. Therefore the (un)realised gains and losses from swaps and swaptions as a whole are accounted for in liabilities arising from insurance contracts, in accordance with the shadow accounting policy, whereas the impact of changes in interest rates on the provisioning for employee benefits based on IAS19 is part of actuarial gains and losses that are recognised in equity (see chapter 6.5.13.3). The non-qualifying assets, which are managed by a group company, are not presented as part of the net DB obligation. At year-end 2022, the fair value of these assets amounted to \u20ac\u00a02,424 million (2021: \u20ac\u00a02,651 million) including the separate accounts to fund future inflation indexation amounting to \u20ac\u00a0372 million (2021: \u20ac\u00a0192 million), which partly comprise the agreed additional funds in 2022. As mentioned above, the swaps and swaptions have not been allocated directly to the post-employment benefit obligations; neither are they included as part of the fair value of the non-qualifying assets managed by the group company. As of 1 January 2023, the non-qualifying plan assets also cease to be allocated to the a.s.r. DB plan as all profit sharing has ended and the assets will be included in the general account investments going forward. As the assets do not qualify as qualifying assets, investment income from these assets has therefore not been included in the above figures but is recognised as investment income separately. Actual investment returns for 2022 amounted to \u20ac\u00a033 million (2021: \u20ac\u00a081 million), which includes the investment income on the separate account to fund future inflation indexation amounting to \u20ac\u00a05 million (2021: \u20ac\u00a014 million). These returns have been recognised in investment income (see chapter 6.6.2). The separate account to fund future inflation indexation is utilised to fund the future inflation indexation for the employees and former employees included in the a.s.r. post-employment benefit plans. As such this has been included in the assumption used in calculating the DB obligation. 6.5.17.2 Post-employment benefits other than pensions The other post-employment benefits plans consist of personnel arrangements for financial products (such as mortgages and health insurance), which remain in place after retirement. Changes in the defined benefit obligation \u00a02022 2021 Defined benefit obligation at 1 january 9 10 \u00a0\u00a0\u00a0Included in income statement \u00a0\u00a0Other - - Total 0 0 \u00a0\u00a0\u00a0Remeasurement of liabilities included in OCI \u00a0\u00a0Discount rate change -1 - Other assumptions change - - Total -1 0 \u00a0\u00a0\u00a0Benefits -1 -1 \u00a0\u00a0\u00a0Defined benefit obligation at 31 December 7 9 Experience adjustments are actuarial gains and losses that have arisen due to differences between actuarial assumptions. The following table provides information about experience adjustments with respect to the DB obligation: Experience adjustments to defined benefit obligation (in \u20ac\u00a0thousands) 2022 2021 Experience adjustments to defined benefit obligation, loss (gain) 1,272 385 As a % of liabilities as at 31 December 17.8% 4.2% Principal actuarial assumptions and parameters at year-end \u00a02022 2021 Discount rate 3.7% 0.6% In accordance with a.s.r.\u2019s policy, discounts on employee mortgages have been fixated in amounts granted on the reference date December 2017. In the calculation of the DB obligation the: Discount rate is based on an internal curve for high quality corporate bonds; Most recent mortality table \u2018AG Prognosetafel 2022\u2019 is used, in combination with a.s.r. specific experience factors for the pension portfolio. The sensitivity of the above actuarial assumptions to feasible possible changes at the reporting date to one of the relevant actuarial assumptions whilst other assumption remain constant, would have affected the DB obligation by the amounts of \u20ac\u00a01 million increase (2021: \u20ac\u00a01 million increase) or \u20ac\u00a01 million decrease (2021: \u20ac\u00a01 million decrease) as a result of a movement of the discount rate by 1%. 6.5.17.3 Other long-term employee benefits Other long-term employee benefits consist of the employer\u2019s share of liabilities arising from long-term services, such as jubilee benefits. Changes in other long-term employee benefits \u00a02022 2021 Net liability as at 1 January 14 15 \u00a0\u00a0\u00a0Total expenses -2 - Actuarial gains and losses 1 - Other -1 -1 \u00a0\u00a0\u00a0Net liability as at 31 December 12 14 Underlying assumptions \u00a031 December 2022 31 December 2021 Discount rate 3.7% 0.5% Salary increases 3.4% 2.2% Expected remaining service years 8.2 8.1 6.7.6 Employee share purchase plan a.s.r. has an employee share purchase plan (ESPP or \u2018the plan\u2019) in place. a.s.r. employees are thereby given the opportunity to acquire a.s.r. shares at a discount. a.s.r. can suspend or withdraw the plan at any time. There is no option under the plan for either a.s.r. or the employee to settle in cash or other assets. Therefore the plan is an equity-settled share-based payments plan. The members of the EB are required to participate in the plan by investing a predetermined part of their renumeration in a.s.r. shares. Other employees participate voluntarily. Under the terms of the plan the granting and vesting is predefined. The grant date of the plan is the moment the employee registers to participate in the plan. The shares vest immediately on the transaction date when cash is received from the employee, unconditionally, subject only to a post-vesting transfer restriction of five years. Otherwise, there are no specific restrictions to the share (i.e. voting power, dividend restrictions). The employees purchase the shares at a discount of 18.5%. The fair value of the a.s.r. share with a lock-up of five years at the grant date equals the purchased price by the employee. The ESPP has an impact on equity through the adjustment in the treasury shares and retained earnings. See chapter 6.5.13.5 Treasury shares for more information. The number of shares purchased by employees during the reporting period was 124 thousand for an amount of \u20ac\u00a04.06 million (2021: 126 thousand for an amount of \u20ac\u00a03.77 million). ", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-581": { "value": "6.5.18 Provisions Changes in provisions \u00a02022 2021 At 1 January 24 24 Additional foreseen amounts 3 11 Reversal of unused amounts -3 -4 Usages in course of year -6 -14 Acquisitions from third parties 3 - Other -3 7 \u00a0\u00a0\u00a0At 31 December 18 24 The provisions were created for: VAT and legal issues; Dismantling costs wind turbines; Employee restructuring expenses; Retention of disability risk instead of insuring it with UWV (Employed Persons Insurance Administration Agency); and Other expenses. The provision for VAT and legal issues is based on best estimates available at year-end, making allowance for expert opinions. The provisions for employee restructuring are based on arrangements agreed in the Collective Bargaining Agreement, restructuring plans, and on decisions made by a.s.r.\u2019s management. The timing of the outflow of resources related to these provisions is uncertain because of the unpredictability of the outcome and the time required for the settlement of disputes. An amount of \u20ac\u00a07 million (2021: \u20ac\u00a011 million) of the provisions is expected to be settled within twelve months after the balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-582": { "value": "6.5.18 Provisions Changes in provisions \u00a02022 2021 At 1 January 24 24 Additional foreseen amounts 3 11 Reversal of unused amounts -3 -4 Usages in course of year -6 -14 Acquisitions from third parties 3 - Other -3 7 \u00a0\u00a0\u00a0At 31 December 18 24 The provisions were created for: VAT and legal issues; Dismantling costs wind turbines; Employee restructuring expenses; Retention of disability risk instead of insuring it with UWV (Employed Persons Insurance Administration Agency); and Other expenses. The provision for VAT and legal issues is based on best estimates available at year-end, making allowance for expert opinions. The provisions for employee restructuring are based on arrangements agreed in the Collective Bargaining Agreement, restructuring plans, and on decisions made by a.s.r.\u2019s management. The timing of the outflow of resources related to these provisions is uncertain because of the unpredictability of the outcome and the time required for the settlement of disputes. An amount of \u20ac\u00a07 million (2021: \u20ac\u00a011 million) of the provisions is expected to be settled within twelve months after the balance sheet date. 6.7.7 Contingent liabilities and assets 6.7.7.1 General claims and disputes The group is a respondent in a number of claims, disputes and legal proceedings arising from the normal conduct of business. Provisions are formed for such occurrences if, in management\u2019s opinion and after consultation with its legal advisors, a.s.r. is likely to have to make payments and the payable amount can be estimated with sufficient reliability. The costs of the compensation scheme for unit-linked insurance contracts have been fully recognised in the financial statements based on management\u2019s best knowledge of current facts, actions, claims, complaints and events. Provisions are recognised in the liabilities arising from insurance contracts (see chapter 6.5.15) and legal provisions (see chapter 6.5.18). Dutch insurers see an increase in insurance policies complaints / claims based on grounds other than the cost compensation. Current and possible future legal proceedings could have a substantial financial and reputational impact. However it is not possible at this time to make reliable estimates of the number of expected proceedings, possible future precedents and the financial impact of current and possible future proceedings. Currently there are no indications that such a provision would be necessary for a.s.r. As for other claims and legal proceedings, against a.s.r. known to management (and for which, in accordance with the defined principles, no provision has been formed), management believes, after having sought expert advice, that these claims have no chance of success, or that a.s.r. can successfully mount a defense against them, or that the outcome of the proceedings is unlikely to result in a significant loss for a.s.r. 6.7.7.2 Unit-Linked Products (beleggingsverzekeringen) Background Since the end of 2006, individual unit-linked life insurance products (beleggingsverzekeringen) have received negative attention in the Dutch media, from the Dutch Parliament, the AFM, consumers and consumer protection organisations. Elements of unit-linked policies are being challenged or may be challenged on multiple legal grounds. The criticism and scrutiny on unit-linked life insurance products led to the introduction of compensation schemes by Dutch insurance companies that have offered unit-linked products. In 2008, a.s.r. reached an outline agreement with two main consumer protection organisations to offer compensation to unit-linked policyholders in case the cost charge and/or risk premium charge exceeds a defined maximum. A full agreement on implementation of the compensation scheme was reached in 2012. The total recognised cumulative financial costs relating to the compensation scheme for Individual life in a.s.r.\u2019s income statement until 2022 was \u20ac\u00a01,026 million. This includes, amongst other things, compensation paid, amortisation of surrender penalties and costs relating to improved product offerings. The remaining provision in the balance sheet at 31 December 2022 is solely available to cover potential additional compensation (schrijnende gevallen) and costs relating to the compensation scheme. On the basis of this agreement, a.s.r. offered consumers additional measures such as alternative products and less costly investment funds. In addition to the compensation scheme, a.s.r. has implemented additional measures (flankerend beleid), including the ten best in class principles as formulated by the Dutch Minister of Finance. On 17 July 2015, the Dutch Ministry of Finance published an Order in Council (Algemene Maatregel van Bestuur), pursuant to which insurance companies can be sanctioned if they do not meet the compulsory targets set for approaching policyholders of unit-linked life insurances and prompting them to review their existing policies. The agreement with the two consumer protection organisations and additional measures are not binding for policyholders. Consequently, neither the implementation of the compensation schemes nor the additional measures offered by a.s.r. prevent individual policyholders from initiating legal proceedings against a.s.r. and making claims for damages. Legal proceedings a.s.r. is subject to a limited number of legal proceedings initiated by individual unit-linked policyholders, in most cases represented by claims organisations. While to date fewer than 10 cases are pending before Dutch courts and courts of appeal and fewer than 100 cases are pending before the Financial Services Complaints Board (\"FSCB\") (the Dispute Committee as well as the Committee of Appeal of the FSCB), there is no assurance that further proceedings will not be brought against a.s.r. in the future. Future legal proceedings regarding unit-linked life insurance policies might be brought upon a.s.r. by consumers individually, by consumer organisations acting on their behalf or in the form of a collective action. Furthermore, there is an ongoing lobby by consumer protection organisations, such as the Consumentenbond and Stichting Geldbelangen, to continuously gain media attention for unit-linked life insurance policies. These organisations argue, amongst other things, that consumers did not receive sufficient compensation based on the compensation scheme. a.s.r. is currently subject to three collective actions. The claims are all based on similar grounds and have been rejected by a.s.r. and a.s.r. defends itself in these legal proceedings. The timing and outcome of these collective actions is currently uncertain. In June 2016, Woekerpolis.nl initiated a collective action, requesting the Midden-Nederland District Court to declare that a.s.r. has sold products in the market which were defective in various respects (e.g. lack of transparency regarding cost charges and other product characteristics, and risks against which the insurer had failed to warn, such as substantial stock depreciations, inability to realise the projected final policy value, unrealistic capital projections due to the difference between geometric and arithmetic returns, and general terms and conditions governing costs which Woekerpolis.nl considered unfair). In its judgement of 6 February 2019, the court rejected all claims regarding transparency of costs and risks. Only with regard to the claim relating to administrative costs (\"administratiekosten\") that are calculated in ABC Spaarplan in case of high premiums, the court decided that this is unlawful. On 16 April 2019 a.s.r. received a notice of appeal from the Vereniging Woekerpolis.nl. Subsequently, the Vereniging Woekerpolis.nl has submitted its statement of appeal at the High Court of Arnhem Leeuwarden on 3 March 2020. The statement of response by a.s.r. has been deferred by the Court of Appeal. Main reason for this deferral lies with the developments regarding the preliminary questions from the High Court of the Hague towards the Supreme Court in the proceedings (Collective Action) between Woekerpolis.nl and another Dutch insurer. In March 2017, the Consumentenbond also initiated a collective action against a.s.r. based on similar grounds to that initiated by Woekerpolis.nl. In its judgement dated 11 March 2020 the Court dismissed all claims of ConsumentenBond against a.s.r. On 8 June 2020 a.s.r. received a notice of appeal from the Consumentenbond. In December 2019, claim organisation Wakkerpolis initiated a collective action against a.s.r. Although the claim from Wakkerpolis is largely based on similar grounds as the other two collective actions, it primarily concentrates on the lack of transparency of cost charges. In a decision on 23 November 2022 the Court rejected all claims regarding transparency of costs and risks and concluded that the products sold by a.s.r. cannot be considered as defective. Based on the contractual information provided by a.s.r., the Court is of the opinion that a.s.r. has complied with its information obligations. Risk profile and contingent liability unit-linked life insurance products The prolonged political, regulatory and public attention focused on unit-linked life insurance policies continues. Elements of unit-linked life insurance policies of a.s.r. are being challenged on multiple legal grounds in current, and may be challenged in future, legal proceedings. There is a risk that one or more of the current and/or future claims and/or allegations will succeed. To date, a number of rulings regarding unit-linked life insurance products in specific cases have been issued by the FSCB and courts (of appeal) in the Netherlands against a.s.r. and other insurers. In these proceedings, different (legal) approaches have been taken to come to a ruling. The outcomes of these rulings are diverse. Because the book of policies of a.s.r. dates back many years, contains of a variety of products with different features and conditions and because of the fact that rulings are diverse, no reliable estimation can be made regarding the timing and the outcome of the current and future legal proceedings brought against a.s.r. and other insurance companies. The total costs related to compensation for unit-linked insurance contracts as described above, have been fully recognised in the financial statements based on management\u2019s best knowledge of current facts, actions, claims, complaints and events. Provisions are recognised in the liabilities arising from insurance contracts (see chapter 6.5.15). Although the financial consequences of the legal developments could be substantial, a.s.r.\u2019s exposures cannot be reliably estimated or quantified at this point. If one or more of these legal proceedings should succeed, there is a risk a ruling, although legally only binding for the parties that are involved in the procedure, could be applied to or be relevant for other unit-linked life insurance policies sold by a.s.r. Consequently, the financial consequences of any of the current and/or future legal proceedings brought upon a.s.r. can be substantial for a.s.r.\u2019s Life insurance business and may have a material adverse effect on a.s.r.\u2019s financial position, business, reputation, revenues, results of operations, solvency, financial condition and prospects. 6.7.7.3 Obligations and guarantees Investment obligations for an amount of \u20ac\u00a0102 million (2021: \u20ac\u00a0128 million) have been assumed / issued for investment property. Investment obligations and guarantees for a total amount of \u20ac\u00a016 million (2021: \u20ac\u00a021 million) have been issued, for real estate development projects and the acquisition of property. Those guarantees were issued by principals for the execution of projects for the benefit of clients. The Dutch guarantee fund for motorised traffic has a latent claim on all insurers offering legal liability products. In line with the advise of the guarantee fund a.s.r.'s contingent liability is \u20ac\u00a010 million (2021: \u20ac\u00a010 million). a.s.r. also had irrevocable facilities of \u20ac\u00a0391 million (2021: \u20ac\u00a01,123 million) which mainly relate to mortgage offers issued. a.s.r. had no other guarantees at year-end 2022 (2021: \u20ac\u00a01 million). 6.7.7.4 Expected future lease payments The following table sets out the expected future lease payments for investment property and plant, showing the undiscounted lease payments to be received after the reporting date. Expected minimum future lease payments on non-cancellable investment property lease and plant \u00a031 December 2022 31 December 2021 To be received within 1 year 33 59 To be received between 1 and 2 years 29 44 To be received between 2 and 3 years 25 41 To be received between 3 and 4 years 21 38 To be received between 4 and 5 years 17 34 To be received after 5 years 89 396 \u00a0\u00a0\u00a0Total undiscounted lease payments 214 613 The investments properties, in retail, residential, offices and rural markets are leased to third parties, consisting of various lease terms in a range between shorter than one year and undetermined period with competitive rents mostly indexed to consumer prices. The plants are leased to third parties with lease terms longer than ten years. The strong decline in future lease payments is related to the reclassification of ASR DFLF to investments, see chapter 6.5.3. 6.7.7.5 Contingent considerations in acquisitions The consideration paid for Veherex by a.s.r. non-life includes a contingent consideration with a remaining fair value of \u20ac\u00a02,8 million to be paid over a remaining period of two years. Of this amount, \u20ac\u00a01,4 million is expected to be paid no later than one year after the balance sheet date, the remaining \u20ac\u00a01,4 million no later than two years after the balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-583": { "value": "6.5.19 Borrowings See accounting policies AA and BB. Borrowings \u00a031 December 2022 31 December 2021 Loans 152 137 Lease liabilities 62 55 \u00a0\u00a0\u00a0Total Borrowings 214 192 As at year-end, borrowings had the following terms to maturity: Maturity of borrowings \u00a031 December 2022 31 December 2021 Maturity - Falling due within 1 year 20 9 Maturity - Falling due between 1 and 5 years 61 58 Maturity - Falling due after 5 years 134 124 \u00a0\u00a0\u00a0Maturity Borrowings 214 192 Borrowings increased mainly due to the acquisition of wind farm Strekdammen, which was partially financed by a loan of \u20ac\u00a019 million. At year-end 2022, the fair value of borrowings was \u20ac\u00a0214 million (2021: \u20ac\u00a0192 million). For information regarding the fair value, see chapter 6.7.1.2. The average interest rate payable on loans was 1.40% (2021: 0.59%). The average incremental borrowing rate on the lease liabilities was 1.48% (2021: 1.63%). ", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-586": { "value": "6.5.20 Due to customers See accounting policy AA. Amounts due to customers \u00a031 December 2022 31 December 2021 Debts to policyholders, agents and intermediaries 462 561 Debt to reinsurers 8 12 \u00a0\u00a0\u00a0Total due to customers 471 573 For information regarding the fair value, see chapter 6.7.1.2. An amount of \u20ac\u00a020 million (2021: \u20ac\u00a044 million) of due to customers is expected to be settled more than twelve months after balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfLoansAndAdvancesToCustomersExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-588": { "value": "6.5.21 Due to banks See accounting policy AA. The amounts due to banks decreased from \u20ac\u00a05,741 million to \u20ac\u00a02,262 million primarily as a result of the decrease in liability recognised for cash collateral received under ISDAs (International Swaps and Derivatives Association) and Client Clearing Agreements (CCA) concluded with counterparties (see chapter 6.5.12). There is no significant difference between the carrying amount and the fair value of these liabilities (see chapter 6.7.1.2). The average interest rate for the cash collateral received in 2022 is -0.01% and based on \u20acSTR (2021: -0.48% (EONIA / \u20acSTR)). \u20ac\u00a0450 million (2021 : nil) of cash on the balance sheet has been borrowed by entering into repurchase agreements. The asset recognised for cash collateral paid on repurchase agreements is presented under loans and receivables. The liability recognised for cash collateral received on repurchase agreements is presented under due to banks. The entire amount due to banks is expected to be settled less than or equal to twelve months after the balance sheet date. a.s.r.\u2019s unsecured Revolving Credit Facility (RCF) amounts to \u20ac\u00a0400 million (2021: \u20ac\u00a0400 million). The RCF can be used for multiple purposes including investment purposes, balance sheet management and short-term cash flow management. As per the year-end 2022 the RCF is undrawn and fully available. The entire amount of the due to banks is expected to be settled less than or equal to twelve months after the balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfLoansAndAdvancesToBanksExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-589": { "value": "6.5.21 Due to banks See accounting policy AA. The amounts due to banks decreased from \u20ac\u00a05,741 million to \u20ac\u00a02,262 million primarily as a result of the decrease in liability recognised for cash collateral received under ISDAs (International Swaps and Derivatives Association) and Client Clearing Agreements (CCA) concluded with counterparties (see chapter 6.5.12). There is no significant difference between the carrying amount and the fair value of these liabilities (see chapter 6.7.1.2). The average interest rate for the cash collateral received in 2022 is -0.01% and based on \u20acSTR (2021: -0.48% (EONIA / \u20acSTR)). \u20ac\u00a0450 million (2021 : nil) of cash on the balance sheet has been borrowed by entering into repurchase agreements. The asset recognised for cash collateral paid on repurchase agreements is presented under loans and receivables. The liability recognised for cash collateral received on repurchase agreements is presented under due to banks. The entire amount due to banks is expected to be settled less than or equal to twelve months after the balance sheet date. a.s.r.\u2019s unsecured Revolving Credit Facility (RCF) amounts to \u20ac\u00a0400 million (2021: \u20ac\u00a0400 million). The RCF can be used for multiple purposes including investment purposes, balance sheet management and short-term cash flow management. As per the year-end 2022 the RCF is undrawn and fully available. The entire amount of the due to banks is expected to be settled less than or equal to twelve months after the balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfRepurchaseAndReverseRepurchaseAgreementsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-592": { "value": "6.5.22 Other liabilities See accounting policy AA. Other liabilities \u00a031 December 2022 31 December 2021 Financial liabilities \u00a0\u00a0Accrued Interest 188 93 Trade payables 12 15 \u00a0\u00a0\u00a0Non-financial liabilities \u00a0\u00a0Deferred income 112 110 Short-term employee benefits 21 26 Tax payable - 129 Other non-financial liabilities 605 605 \u00a0\u00a0\u00a0Total other liabilities 938 976 The other non-financial liabilities of \u20ac\u00a0605 million (2021: \u20ac\u00a0605 million) consist, amongst others, of payables, accruals related to investments and construction depots for housing mortgages. There is no difference between the carrying value of other liabilities and their fair value (see chapter 6.7.1.2). An amount of \u20ac\u00a020 million (2021: \u20ac\u00a024 million) of the other liabilities is expected to be settled more than one year after the balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-593": { "value": "6.5.22 Other liabilities See accounting policy AA. Other liabilities \u00a031 December 2022 31 December 2021 Financial liabilities \u00a0\u00a0Accrued Interest 188 93 Trade payables 12 15 \u00a0\u00a0\u00a0Non-financial liabilities \u00a0\u00a0Deferred income 112 110 Short-term employee benefits 21 26 Tax payable - 129 Other non-financial liabilities 605 605 \u00a0\u00a0\u00a0Total other liabilities 938 976 The other non-financial liabilities of \u20ac\u00a0605 million (2021: \u20ac\u00a0605 million) consist, amongst others, of payables, accruals related to investments and construction depots for housing mortgages. There is no difference between the carrying value of other liabilities and their fair value (see chapter 6.7.1.2). An amount of \u20ac\u00a020 million (2021: \u20ac\u00a024 million) of the other liabilities is expected to be settled more than one year after the balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfTaxReceivablesAndPayablesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-594": { "value": "6.5.22 Other liabilities See accounting policy AA. Other liabilities \u00a031 December 2022 31 December 2021 Financial liabilities \u00a0\u00a0Accrued Interest 188 93 Trade payables 12 15 \u00a0\u00a0\u00a0Non-financial liabilities \u00a0\u00a0Deferred income 112 110 Short-term employee benefits 21 26 Tax payable - 129 Other non-financial liabilities 605 605 \u00a0\u00a0\u00a0Total other liabilities 938 976 The other non-financial liabilities of \u20ac\u00a0605 million (2021: \u20ac\u00a0605 million) consist, amongst others, of payables, accruals related to investments and construction depots for housing mortgages. There is no difference between the carrying value of other liabilities and their fair value (see chapter 6.7.1.2). An amount of \u20ac\u00a020 million (2021: \u20ac\u00a024 million) of the other liabilities is expected to be settled more than one year after the balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-595": { "value": "6.5.22 Other liabilities See accounting policy AA. Other liabilities \u00a031 December 2022 31 December 2021 Financial liabilities \u00a0\u00a0Accrued Interest 188 93 Trade payables 12 15 \u00a0\u00a0\u00a0Non-financial liabilities \u00a0\u00a0Deferred income 112 110 Short-term employee benefits 21 26 Tax payable - 129 Other non-financial liabilities 605 605 \u00a0\u00a0\u00a0Total other liabilities 938 976 The other non-financial liabilities of \u20ac\u00a0605 million (2021: \u20ac\u00a0605 million) consist, amongst others, of payables, accruals related to investments and construction depots for housing mortgages. There is no difference between the carrying value of other liabilities and their fair value (see chapter 6.7.1.2). An amount of \u20ac\u00a020 million (2021: \u20ac\u00a024 million) of the other liabilities is expected to be settled more than one year after the balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-596": { "value": "6.5.22 Other liabilities See accounting policy AA. Other liabilities \u00a031 December 2022 31 December 2021 Financial liabilities \u00a0\u00a0Accrued Interest 188 93 Trade payables 12 15 \u00a0\u00a0\u00a0Non-financial liabilities \u00a0\u00a0Deferred income 112 110 Short-term employee benefits 21 26 Tax payable - 129 Other non-financial liabilities 605 605 \u00a0\u00a0\u00a0Total other liabilities 938 976 The other non-financial liabilities of \u20ac\u00a0605 million (2021: \u20ac\u00a0605 million) consist, amongst others, of payables, accruals related to investments and construction depots for housing mortgages. There is no difference between the carrying value of other liabilities and their fair value (see chapter 6.7.1.2). An amount of \u20ac\u00a020 million (2021: \u20ac\u00a024 million) of the other liabilities is expected to be settled more than one year after the balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredIncomeExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-597": { "value": "6.5.22 Other liabilities See accounting policy AA. Other liabilities \u00a031 December 2022 31 December 2021 Financial liabilities \u00a0\u00a0Accrued Interest 188 93 Trade payables 12 15 \u00a0\u00a0\u00a0Non-financial liabilities \u00a0\u00a0Deferred income 112 110 Short-term employee benefits 21 26 Tax payable - 129 Other non-financial liabilities 605 605 \u00a0\u00a0\u00a0Total other liabilities 938 976 The other non-financial liabilities of \u20ac\u00a0605 million (2021: \u20ac\u00a0605 million) consist, amongst others, of payables, accruals related to investments and construction depots for housing mortgages. There is no difference between the carrying value of other liabilities and their fair value (see chapter 6.7.1.2). An amount of \u20ac\u00a020 million (2021: \u20ac\u00a024 million) of the other liabilities is expected to be settled more than one year after the balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-598": { "value": "6.5.22 Other liabilities See accounting policy AA. Other liabilities \u00a031 December 2022 31 December 2021 Financial liabilities \u00a0\u00a0Accrued Interest 188 93 Trade payables 12 15 \u00a0\u00a0\u00a0Non-financial liabilities \u00a0\u00a0Deferred income 112 110 Short-term employee benefits 21 26 Tax payable - 129 Other non-financial liabilities 605 605 \u00a0\u00a0\u00a0Total other liabilities 938 976 The other non-financial liabilities of \u20ac\u00a0605 million (2021: \u20ac\u00a0605 million) consist, amongst others, of payables, accruals related to investments and construction depots for housing mortgages. There is no difference between the carrying value of other liabilities and their fair value (see chapter 6.7.1.2). An amount of \u20ac\u00a020 million (2021: \u20ac\u00a024 million) of the other liabilities is expected to be settled more than one year after the balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-601": { "value": "6.6.1 Gross insurance premiums See accounting policy CC. Composition of gross insurance premiums \u00a02022 2021 Non-life insurance contracts \u2013 gross earned premiums 4,270 4,138 \u00a0\u00a0\u00a0Life insurance contracts retained exposure 668 696 Life insurance contracts on behalf of policyholders 1,098 1,042 Total life insurance contracts 1,767 1,738 \u00a0\u00a0\u00a0Total gross insurance premiums 6,037 5,875 The table below provides an overview of total gross earned non-life insurance premiums. Gross insurance premiums Non-life \u00a02022 2021 Gross premiums written 4,274 4,121 Changes in provisions for unearned premiums -4 16 \u00a0\u00a0\u00a0Gross insurance premiums 4,270 4,138 Non-recurring and regular life insurance premiums \u00a02022 2021 Retained exposure Group \u00a0\u00a0Non-recurring premiums written 135 129 Periodic premiums written 104 112 Group total 239 242 \u00a0\u00a0\u00a0Retained exposure Individual \u00a0\u00a0Non-recurring premiums written 18 20 Periodic premiums written 411 434 Individual total 429 454 \u00a0\u00a0\u00a0Total contracts retained exposure 668 696 \u00a0\u00a0\u00a0On behalf of policyholders Group \u00a0\u00a0Non-recurring premiums written 214 194 Periodic premiums written 766 661 Group total 980 855 \u00a0\u00a0\u00a0On behalf of policyholders Individual \u00a0\u00a0Non-recurring premiums written 2 55 Periodic premiums written 116 133 Individual total 118 187 \u00a0\u00a0\u00a0Total contracts on behalf of policyholders 1,098 1,042 \u00a0\u00a0\u00a0Total life insurance contracts 1,767 1,738 A total amount of \u20ac\u00a0187 million (2021: \u20ac\u00a0157 million) has been eliminated in the consolidation process and is therefore not included in the gross insurance premiums. This relates to the a.s.r. post-employment benefit plans of \u20ac\u00a0174 million (2021: \u20ac\u00a0140 million), investment fees of \u20ac\u00a011 million (2021: \u20ac\u00a015 million) and disability premiums of \u20ac\u00a02 million (2021: \u20ac\u00a02 million). ", "dimensions": { "concept": "ifrs-full:DisclosureOfInsurancePremiumRevenueExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-602": { "value": "6.6.1 Gross insurance premiums See accounting policy CC. Composition of gross insurance premiums \u00a02022 2021 Non-life insurance contracts \u2013 gross earned premiums 4,270 4,138 \u00a0\u00a0\u00a0Life insurance contracts retained exposure 668 696 Life insurance contracts on behalf of policyholders 1,098 1,042 Total life insurance contracts 1,767 1,738 \u00a0\u00a0\u00a0Total gross insurance premiums 6,037 5,875 The table below provides an overview of total gross earned non-life insurance premiums. Gross insurance premiums Non-life \u00a02022 2021 Gross premiums written 4,274 4,121 Changes in provisions for unearned premiums -4 16 \u00a0\u00a0\u00a0Gross insurance premiums 4,270 4,138 Non-recurring and regular life insurance premiums \u00a02022 2021 Retained exposure Group \u00a0\u00a0Non-recurring premiums written 135 129 Periodic premiums written 104 112 Group total 239 242 \u00a0\u00a0\u00a0Retained exposure Individual \u00a0\u00a0Non-recurring premiums written 18 20 Periodic premiums written 411 434 Individual total 429 454 \u00a0\u00a0\u00a0Total contracts retained exposure 668 696 \u00a0\u00a0\u00a0On behalf of policyholders Group \u00a0\u00a0Non-recurring premiums written 214 194 Periodic premiums written 766 661 Group total 980 855 \u00a0\u00a0\u00a0On behalf of policyholders Individual \u00a0\u00a0Non-recurring premiums written 2 55 Periodic premiums written 116 133 Individual total 118 187 \u00a0\u00a0\u00a0Total contracts on behalf of policyholders 1,098 1,042 \u00a0\u00a0\u00a0Total life insurance contracts 1,767 1,738 A total amount of \u20ac\u00a0187 million (2021: \u20ac\u00a0157 million) has been eliminated in the consolidation process and is therefore not included in the gross insurance premiums. This relates to the a.s.r. post-employment benefit plans of \u20ac\u00a0174 million (2021: \u20ac\u00a0140 million), investment fees of \u20ac\u00a011 million (2021: \u20ac\u00a015 million) and disability premiums of \u20ac\u00a02 million (2021: \u20ac\u00a02 million). 6.6.2 Investment income See accounting policy DD. Breakdown of investment income per category \u00a02022 2021 Interest income from receivables due from credit institutions 99 110 Interest income from investments 371 331 Interest income from amounts due from customers 325 278 Interest income from derivatives 660 574 Other interest income 41 54 Interest income 1,497 1,347 \u00a0\u00a0\u00a0Dividend on equities 82 78 Dividend on real estate equity funds 71 58 Dividend on mortgage equity funds 22 21 Rentals from investment property 58 64 Other investment income 3 3 Dividend and other investment income 236 224 \u00a0\u00a0\u00a0Total Investment income 1,732 1,571 The effective interest method has been applied to an amount of \u20ac\u00a0789 million (2021: \u20ac\u00a0715 million) of the interest income from financial assets not classified at fair value through profit or loss. Included within interest income is \u20ac\u00a03 million (2021: \u20ac\u00a04 million) of interest received on impaired fixed-income securities. 6.6.3 Realised gains and losses See accounting policy EE. Realised gains and losses per category \u00a02022 2021 Associates and joint ventures at equity method \u00a0\u00a0- Realised gains - 33 \u00a0\u00a0\u00a0Investments available for sale \u00a0\u00a0Fixed-Income securities \u00a0\u00a0- Realised gains 173 261 - Realised losses -548 -10 Equities \u00a0\u00a0- Realised gains 223 186 - Realised losses -70 -9 \u00a0\u00a0\u00a0Loans and receivables \u00a0\u00a0- Realised gains 5 28 - Realised losses -71 - \u00a0\u00a0\u00a0Total realised gains and losses -288 490 The realised result on fixed-income securities is lower due to the sale of government bonds and other debt securities in an increasing interest rate environment. The realised result on loans and receivables are lower due to the sale of mortgages in an increasing interest rate environment. The disposal of fixed-income securities, including loans and receivables, results in a reversal of impairments of \u20ac\u00a01 million (2021: \u20ac\u00a057 million). 6.6.4 Fair value gains and losses See accounting policy FF. Fair value gains and losses per category \u00a02022 2021 Realised gains and losses on derivatives -185 -46 Unrealised gains and losses on derivatives -5,554 -2,358 Gains and losses on investment property and property for own use 117 91 Financial assets at fair value through profit or loss -106 172 Additions to insurance liabilities due to shadow accounting 5,767 2,250 \u00a0\u00a0\u00a0Total fair value gains and losses 38 110 All changes in fair value presented here are changes to the so-called \u2018clean fair value\u2019. This is the fair value net of accrued interest recognised in interest income and expense. The unrealised losses on derivatives are due to increasing interest rates, most of these are shadowed and added to insurance liabilities, see chapter 6.5.15. 6.6.5 Fee and commission income See accounting policy II. Fee and commission income \u00a02022 2021 Asset management for third parties 102 96 Commission on reinsurance 24 23 Other fee and commission income 122 84 \u00a0\u00a0\u00a0Total fee and commission income 247 204 Other fee and commission income increased mainly due to an increase in fees received from the real estate equity funds and a.s.r. PPI. 6.6.6 Other income Other income \u00a02022 2021 Proceeds from sales of property developments 11 32 Revenues generated by wind farms and solar parks 88 4 Other income 46 20 \u00a0\u00a0\u00a0Total other income 144 56 Revenues generated by wind farms and solar parks increased due to higher energy prices and the acquisitions of wind farms and solar parks in 2021 and 2022, see chapter 6.4.5. ", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-603": { "value": "6.6.2 Investment income See accounting policy DD. Breakdown of investment income per category \u00a02022 2021 Interest income from receivables due from credit institutions 99 110 Interest income from investments 371 331 Interest income from amounts due from customers 325 278 Interest income from derivatives 660 574 Other interest income 41 54 Interest income 1,497 1,347 \u00a0\u00a0\u00a0Dividend on equities 82 78 Dividend on real estate equity funds 71 58 Dividend on mortgage equity funds 22 21 Rentals from investment property 58 64 Other investment income 3 3 Dividend and other investment income 236 224 \u00a0\u00a0\u00a0Total Investment income 1,732 1,571 The effective interest method has been applied to an amount of \u20ac\u00a0789 million (2021: \u20ac\u00a0715 million) of the interest income from financial assets not classified at fair value through profit or loss. Included within interest income is \u20ac\u00a03 million (2021: \u20ac\u00a04 million) of interest received on impaired fixed-income securities. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-604": { "value": "6.6.2 Investment income See accounting policy DD. Breakdown of investment income per category \u00a02022 2021 Interest income from receivables due from credit institutions 99 110 Interest income from investments 371 331 Interest income from amounts due from customers 325 278 Interest income from derivatives 660 574 Other interest income 41 54 Interest income 1,497 1,347 \u00a0\u00a0\u00a0Dividend on equities 82 78 Dividend on real estate equity funds 71 58 Dividend on mortgage equity funds 22 21 Rentals from investment property 58 64 Other investment income 3 3 Dividend and other investment income 236 224 \u00a0\u00a0\u00a0Total Investment income 1,732 1,571 The effective interest method has been applied to an amount of \u20ac\u00a0789 million (2021: \u20ac\u00a0715 million) of the interest income from financial assets not classified at fair value through profit or loss. Included within interest income is \u20ac\u00a03 million (2021: \u20ac\u00a04 million) of interest received on impaired fixed-income securities. 6.6.10 Interest expense Breakdown of the interest expense \u00a02022 2021 Interest on employee benefits -36 -20 Interest on derivatives -315 -253 Interest owed to banks -36 -38 Interest on subordinated liabilities -51 -44 Interest on borrowings -3 -1 Other interest expenses -6 -6 \u00a0\u00a0\u00a0Total interest expense -447 -362 Included within interest owed to banks is an amount of \u20ac\u00a024 million (2021: \u20ac\u00a031 million) relating to negative interest paid on cash and cash equivalents. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-605": { "value": "6.6.2 Investment income See accounting policy DD. Breakdown of investment income per category \u00a02022 2021 Interest income from receivables due from credit institutions 99 110 Interest income from investments 371 331 Interest income from amounts due from customers 325 278 Interest income from derivatives 660 574 Other interest income 41 54 Interest income 1,497 1,347 \u00a0\u00a0\u00a0Dividend on equities 82 78 Dividend on real estate equity funds 71 58 Dividend on mortgage equity funds 22 21 Rentals from investment property 58 64 Other investment income 3 3 Dividend and other investment income 236 224 \u00a0\u00a0\u00a0Total Investment income 1,732 1,571 The effective interest method has been applied to an amount of \u20ac\u00a0789 million (2021: \u20ac\u00a0715 million) of the interest income from financial assets not classified at fair value through profit or loss. Included within interest income is \u20ac\u00a03 million (2021: \u20ac\u00a04 million) of interest received on impaired fixed-income securities. 6.6.3 Realised gains and losses See accounting policy EE. Realised gains and losses per category \u00a02022 2021 Associates and joint ventures at equity method \u00a0\u00a0- Realised gains - 33 \u00a0\u00a0\u00a0Investments available for sale \u00a0\u00a0Fixed-Income securities \u00a0\u00a0- Realised gains 173 261 - Realised losses -548 -10 Equities \u00a0\u00a0- Realised gains 223 186 - Realised losses -70 -9 \u00a0\u00a0\u00a0Loans and receivables \u00a0\u00a0- Realised gains 5 28 - Realised losses -71 - \u00a0\u00a0\u00a0Total realised gains and losses -288 490 The realised result on fixed-income securities is lower due to the sale of government bonds and other debt securities in an increasing interest rate environment. The realised result on loans and receivables are lower due to the sale of mortgages in an increasing interest rate environment. The disposal of fixed-income securities, including loans and receivables, results in a reversal of impairments of \u20ac\u00a01 million (2021: \u20ac\u00a057 million). 6.6.4 Fair value gains and losses See accounting policy FF. Fair value gains and losses per category \u00a02022 2021 Realised gains and losses on derivatives -185 -46 Unrealised gains and losses on derivatives -5,554 -2,358 Gains and losses on investment property and property for own use 117 91 Financial assets at fair value through profit or loss -106 172 Additions to insurance liabilities due to shadow accounting 5,767 2,250 \u00a0\u00a0\u00a0Total fair value gains and losses 38 110 All changes in fair value presented here are changes to the so-called \u2018clean fair value\u2019. This is the fair value net of accrued interest recognised in interest income and expense. The unrealised losses on derivatives are due to increasing interest rates, most of these are shadowed and added to insurance liabilities, see chapter 6.5.15. 6.6.10 Interest expense Breakdown of the interest expense \u00a02022 2021 Interest on employee benefits -36 -20 Interest on derivatives -315 -253 Interest owed to banks -36 -38 Interest on subordinated liabilities -51 -44 Interest on borrowings -3 -1 Other interest expenses -6 -6 \u00a0\u00a0\u00a0Total interest expense -447 -362 Included within interest owed to banks is an amount of \u20ac\u00a024 million (2021: \u20ac\u00a031 million) relating to negative interest paid on cash and cash equivalents. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-606": { "value": "6.6.2 Investment income See accounting policy DD. Breakdown of investment income per category \u00a02022 2021 Interest income from receivables due from credit institutions 99 110 Interest income from investments 371 331 Interest income from amounts due from customers 325 278 Interest income from derivatives 660 574 Other interest income 41 54 Interest income 1,497 1,347 \u00a0\u00a0\u00a0Dividend on equities 82 78 Dividend on real estate equity funds 71 58 Dividend on mortgage equity funds 22 21 Rentals from investment property 58 64 Other investment income 3 3 Dividend and other investment income 236 224 \u00a0\u00a0\u00a0Total Investment income 1,732 1,571 The effective interest method has been applied to an amount of \u20ac\u00a0789 million (2021: \u20ac\u00a0715 million) of the interest income from financial assets not classified at fair value through profit or loss. Included within interest income is \u20ac\u00a03 million (2021: \u20ac\u00a04 million) of interest received on impaired fixed-income securities. 6.6.3 Realised gains and losses See accounting policy EE. Realised gains and losses per category \u00a02022 2021 Associates and joint ventures at equity method \u00a0\u00a0- Realised gains - 33 \u00a0\u00a0\u00a0Investments available for sale \u00a0\u00a0Fixed-Income securities \u00a0\u00a0- Realised gains 173 261 - Realised losses -548 -10 Equities \u00a0\u00a0- Realised gains 223 186 - Realised losses -70 -9 \u00a0\u00a0\u00a0Loans and receivables \u00a0\u00a0- Realised gains 5 28 - Realised losses -71 - \u00a0\u00a0\u00a0Total realised gains and losses -288 490 The realised result on fixed-income securities is lower due to the sale of government bonds and other debt securities in an increasing interest rate environment. The realised result on loans and receivables are lower due to the sale of mortgages in an increasing interest rate environment. The disposal of fixed-income securities, including loans and receivables, results in a reversal of impairments of \u20ac\u00a01 million (2021: \u20ac\u00a057 million). 6.6.4 Fair value gains and losses See accounting policy FF. Fair value gains and losses per category \u00a02022 2021 Realised gains and losses on derivatives -185 -46 Unrealised gains and losses on derivatives -5,554 -2,358 Gains and losses on investment property and property for own use 117 91 Financial assets at fair value through profit or loss -106 172 Additions to insurance liabilities due to shadow accounting 5,767 2,250 \u00a0\u00a0\u00a0Total fair value gains and losses 38 110 All changes in fair value presented here are changes to the so-called \u2018clean fair value\u2019. This is the fair value net of accrued interest recognised in interest income and expense. The unrealised losses on derivatives are due to increasing interest rates, most of these are shadowed and added to insurance liabilities, see chapter 6.5.15. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-607": { "value": "6.6.2 Investment income See accounting policy DD. Breakdown of investment income per category \u00a02022 2021 Interest income from receivables due from credit institutions 99 110 Interest income from investments 371 331 Interest income from amounts due from customers 325 278 Interest income from derivatives 660 574 Other interest income 41 54 Interest income 1,497 1,347 \u00a0\u00a0\u00a0Dividend on equities 82 78 Dividend on real estate equity funds 71 58 Dividend on mortgage equity funds 22 21 Rentals from investment property 58 64 Other investment income 3 3 Dividend and other investment income 236 224 \u00a0\u00a0\u00a0Total Investment income 1,732 1,571 The effective interest method has been applied to an amount of \u20ac\u00a0789 million (2021: \u20ac\u00a0715 million) of the interest income from financial assets not classified at fair value through profit or loss. Included within interest income is \u20ac\u00a03 million (2021: \u20ac\u00a04 million) of interest received on impaired fixed-income securities. 6.7.10 Profit appropriation The EB will propose to the AGM to distribute a final dividend of \u20ac\u00a0254 million in dividend on ordinary shares for 2022. Including the interim dividend of \u20ac\u00a0131 million the total dividends to shareholder amounted to \u20ac\u00a0386 million. The remaining result will be transferred to retained earnings in accordance with Article 37 of the Articles of Association of a.s.r. ", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-616": { "value": "6.6.5 Fee and commission income See accounting policy II. Fee and commission income \u00a02022 2021 Asset management for third parties 102 96 Commission on reinsurance 24 23 Other fee and commission income 122 84 \u00a0\u00a0\u00a0Total fee and commission income 247 204 Other fee and commission income increased mainly due to an increase in fees received from the real estate equity funds and a.s.r. PPI. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFeeAndCommissionIncomeExpenseExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-617": { "value": "6.6.5 Fee and commission income See accounting policy II. Fee and commission income \u00a02022 2021 Asset management for third parties 102 96 Commission on reinsurance 24 23 Other fee and commission income 122 84 \u00a0\u00a0\u00a0Total fee and commission income 247 204 Other fee and commission income increased mainly due to an increase in fees received from the real estate equity funds and a.s.r. PPI. ", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueFromContractsWithCustomersExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-618": { "value": "6.6.6 Other income Other income \u00a02022 2021 Proceeds from sales of property developments 11 32 Revenues generated by wind farms and solar parks 88 4 Other income 46 20 \u00a0\u00a0\u00a0Total other income 144 56 Revenues generated by wind farms and solar parks increased due to higher energy prices and the acquisitions of wind farms and solar parks in 2021 and 2022, see chapter 6.4.5. ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-619": { "value": "6.6.6 Other income Other income \u00a02022 2021 Proceeds from sales of property developments 11 32 Revenues generated by wind farms and solar parks 88 4 Other income 46 20 \u00a0\u00a0\u00a0Total other income 144 56 Revenues generated by wind farms and solar parks increased due to higher energy prices and the acquisitions of wind farms and solar parks in 2021 and 2022, see chapter 6.4.5. 6.6.8 Operating expenses See accounting policy KK. Operating expenses \u00a02022 2021 Salaries and wages -316 -292 Social security contributions -41 -37 Employee benefit charges -61 -58 Employee discounts -3 -3 Other short-term employee benefits -11 -6 Total cost of internal staff -432 -396 \u00a0\u00a0\u00a0Cost of external staff -98 -83 Consultancy costs and fees -111 -110 Marketing, advertising and public relations expenses -22 -20 Technology and system costs -71 -63 Amortisation of other intangible assets -11 -10 Depreciation of property, plant and equipment -17 -19 Other operating expenses -17 -24 Total other operating expenses -347 -329 \u00a0\u00a0\u00a0Total operating expenses -779 -725 The increase in total operating expenses is primarily a result of various acquisitions (see chapter 6.4.5), organic growth, and a one-off payment to employees originating from the new collective labor agreement. Other operating expenses include travel and subsistence, telephone and personnel training expenses. Segmentation of a.s.r.'s internal workforce Segments 2022 2021 Non-life 1,541 1,508 Life 488 493 Asset Management 409 373 Distribution and Services 745 706 Holding and Other 1,130 1,075 \u00a0\u00a0\u00a0Total workforce in FTE 4,313 4,155 The increase of a.s.r.'s total internal work force is mainly the result of organic growth. Employees related to administrative activities and overhead are allocated to segment Holding and Other. ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExpenseExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-622": { "value": "6.6.8 Operating expenses See accounting policy KK. Operating expenses \u00a02022 2021 Salaries and wages -316 -292 Social security contributions -41 -37 Employee benefit charges -61 -58 Employee discounts -3 -3 Other short-term employee benefits -11 -6 Total cost of internal staff -432 -396 \u00a0\u00a0\u00a0Cost of external staff -98 -83 Consultancy costs and fees -111 -110 Marketing, advertising and public relations expenses -22 -20 Technology and system costs -71 -63 Amortisation of other intangible assets -11 -10 Depreciation of property, plant and equipment -17 -19 Other operating expenses -17 -24 Total other operating expenses -347 -329 \u00a0\u00a0\u00a0Total operating expenses -779 -725 The increase in total operating expenses is primarily a result of various acquisitions (see chapter 6.4.5), organic growth, and a one-off payment to employees originating from the new collective labor agreement. Other operating expenses include travel and subsistence, telephone and personnel training expenses. Segmentation of a.s.r.'s internal workforce Segments 2022 2021 Non-life 1,541 1,508 Life 488 493 Asset Management 409 373 Distribution and Services 745 706 Holding and Other 1,130 1,075 \u00a0\u00a0\u00a0Total workforce in FTE 4,313 4,155 The increase of a.s.r.'s total internal work force is mainly the result of organic growth. Employees related to administrative activities and overhead are allocated to segment Holding and Other. ", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralAndAdministrativeExpenseExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-625": { "value": "6.6.8 Operating expenses See accounting policy KK. Operating expenses \u00a02022 2021 Salaries and wages -316 -292 Social security contributions -41 -37 Employee benefit charges -61 -58 Employee discounts -3 -3 Other short-term employee benefits -11 -6 Total cost of internal staff -432 -396 \u00a0\u00a0\u00a0Cost of external staff -98 -83 Consultancy costs and fees -111 -110 Marketing, advertising and public relations expenses -22 -20 Technology and system costs -71 -63 Amortisation of other intangible assets -11 -10 Depreciation of property, plant and equipment -17 -19 Other operating expenses -17 -24 Total other operating expenses -347 -329 \u00a0\u00a0\u00a0Total operating expenses -779 -725 The increase in total operating expenses is primarily a result of various acquisitions (see chapter 6.4.5), organic growth, and a one-off payment to employees originating from the new collective labor agreement. Other operating expenses include travel and subsistence, telephone and personnel training expenses. Segmentation of a.s.r.'s internal workforce Segments 2022 2021 Non-life 1,541 1,508 Life 488 493 Asset Management 409 373 Distribution and Services 745 706 Holding and Other 1,130 1,075 \u00a0\u00a0\u00a0Total workforce in FTE 4,313 4,155 The increase of a.s.r.'s total internal work force is mainly the result of organic growth. Employees related to administrative activities and overhead are allocated to segment Holding and Other. ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-626": { "value": "6.6.8 Operating expenses See accounting policy KK. Operating expenses \u00a02022 2021 Salaries and wages -316 -292 Social security contributions -41 -37 Employee benefit charges -61 -58 Employee discounts -3 -3 Other short-term employee benefits -11 -6 Total cost of internal staff -432 -396 \u00a0\u00a0\u00a0Cost of external staff -98 -83 Consultancy costs and fees -111 -110 Marketing, advertising and public relations expenses -22 -20 Technology and system costs -71 -63 Amortisation of other intangible assets -11 -10 Depreciation of property, plant and equipment -17 -19 Other operating expenses -17 -24 Total other operating expenses -347 -329 \u00a0\u00a0\u00a0Total operating expenses -779 -725 The increase in total operating expenses is primarily a result of various acquisitions (see chapter 6.4.5), organic growth, and a one-off payment to employees originating from the new collective labor agreement. Other operating expenses include travel and subsistence, telephone and personnel training expenses. Segmentation of a.s.r.'s internal workforce Segments 2022 2021 Non-life 1,541 1,508 Life 488 493 Asset Management 409 373 Distribution and Services 745 706 Holding and Other 1,130 1,075 \u00a0\u00a0\u00a0Total workforce in FTE 4,313 4,155 The increase of a.s.r.'s total internal work force is mainly the result of organic growth. Employees related to administrative activities and overhead are allocated to segment Holding and Other. 6.6.11 Other expenses Other expenses \u00a02022 2021 Costs associated with sale of development property -33 -26 Operation expenses of investment property -9 -10 Operation expenses of wind and solar farms -24 - Other expenses -23 -149 \u00a0\u00a0\u00a0Total other expenses -90 -186 The costs associated with sale of development property of \u20ac\u00a033 million (2021: \u20ac\u00a026 million) mainly concerns the cost price of residential property sold. The decrease of \u20ac\u00a0126 million in other expenses relates for \u20ac\u00a090 million to the reassessment of the past service costs related to the defined benefit obligation in 2021 (2022: nil), see chapter 6.5.17.1, and the change in the provision for irrecoverable claims relating to negative interest surplus on pension portfolio in 2021 of \u20ac\u00a024 million (2022: nil). ", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-627": { "value": "6.6.8 Operating expenses See accounting policy KK. Operating expenses \u00a02022 2021 Salaries and wages -316 -292 Social security contributions -41 -37 Employee benefit charges -61 -58 Employee discounts -3 -3 Other short-term employee benefits -11 -6 Total cost of internal staff -432 -396 \u00a0\u00a0\u00a0Cost of external staff -98 -83 Consultancy costs and fees -111 -110 Marketing, advertising and public relations expenses -22 -20 Technology and system costs -71 -63 Amortisation of other intangible assets -11 -10 Depreciation of property, plant and equipment -17 -19 Other operating expenses -17 -24 Total other operating expenses -347 -329 \u00a0\u00a0\u00a0Total operating expenses -779 -725 The increase in total operating expenses is primarily a result of various acquisitions (see chapter 6.4.5), organic growth, and a one-off payment to employees originating from the new collective labor agreement. Other operating expenses include travel and subsistence, telephone and personnel training expenses. Segmentation of a.s.r.'s internal workforce Segments 2022 2021 Non-life 1,541 1,508 Life 488 493 Asset Management 409 373 Distribution and Services 745 706 Holding and Other 1,130 1,075 \u00a0\u00a0\u00a0Total workforce in FTE 4,313 4,155 The increase of a.s.r.'s total internal work force is mainly the result of organic growth. Employees related to administrative activities and overhead are allocated to segment Holding and Other. ", "dimensions": { "concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-628": { "value": "6.6.9 Impairments See accounting policy MM. Summary of impairments \u00a02022 2021 Intangible assets - -9 Associates and joint ventures -1 - Investments available for sale -110 -13 Loans and receivables 17 -1 \u00a0\u00a0\u00a0Total impairments -95 -22 Changes in impairments of investments available for sale \u00a02022 2021 Equities -133 -16 Reversal of impairments on bonds 23 - Reversal of impairments on collateralised debt obligations - 3 \u00a0\u00a0\u00a0Total changes in impairments of investments available for sale -110 -13 The impairment on intangible assets in 2021 is related to the partial impairment of goodwill in the Distribution and Services segment (\u20ac\u00a0-9 million). The increase of impairments on equities available for sale is partly due to a decrease of share prices on the stock market, partly due to revaluations of participations in fixed income and mortgage funds driven by increasing market interest rates. ", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-629": { "value": "6.6.10 Interest expense Breakdown of the interest expense \u00a02022 2021 Interest on employee benefits -36 -20 Interest on derivatives -315 -253 Interest owed to banks -36 -38 Interest on subordinated liabilities -51 -44 Interest on borrowings -3 -1 Other interest expenses -6 -6 \u00a0\u00a0\u00a0Total interest expense -447 -362 Included within interest owed to banks is an amount of \u20ac\u00a024 million (2021: \u20ac\u00a031 million) relating to negative interest paid on cash and cash equivalents. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceCostExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-630": { "value": "6.6.10 Interest expense Breakdown of the interest expense \u00a02022 2021 Interest on employee benefits -36 -20 Interest on derivatives -315 -253 Interest owed to banks -36 -38 Interest on subordinated liabilities -51 -44 Interest on borrowings -3 -1 Other interest expenses -6 -6 \u00a0\u00a0\u00a0Total interest expense -447 -362 Included within interest owed to banks is an amount of \u20ac\u00a024 million (2021: \u20ac\u00a031 million) relating to negative interest paid on cash and cash equivalents. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-631": { "value": "6.6.10 Interest expense Breakdown of the interest expense \u00a02022 2021 Interest on employee benefits -36 -20 Interest on derivatives -315 -253 Interest owed to banks -36 -38 Interest on subordinated liabilities -51 -44 Interest on borrowings -3 -1 Other interest expenses -6 -6 \u00a0\u00a0\u00a0Total interest expense -447 -362 Included within interest owed to banks is an amount of \u20ac\u00a024 million (2021: \u20ac\u00a031 million) relating to negative interest paid on cash and cash equivalents. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingCostsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-635": { "value": "6.6.12 Income tax (expense) / gain See accounting policy NN. Income tax (expense) / gain \u00a02022 2021 Current taxes for the current period 39 -188 Current taxes referring to previous periods 9 26 Total current tax 47 -162 \u00a0\u00a0\u00a0Deferred taxes arising from current period -251 -105 Deferred taxes arising from changes in tax rates - -3 Total deferred tax -251 -108 \u00a0\u00a0\u00a0Income tax (expense) / gain -204 -270 The expected income tax expense is determined by applying the tax rate in the Netherlands to the result before tax. In 2022, this rate was 25.8% (2021: 25.0%). The enacted tax rate for 2023 will be 25.8%. The table below shows a reconciliation of the expected income tax expense with the actual income tax expense. Reconciliation of expected income tax (expense) / gain with the actual income tax (expense) / gain \u00a02022 2021 Result before tax 929 1,209 Current tax rates -25.8% -25.0% Expected income tax (expense) / gain -240 -302 \u00a0\u00a0\u00a0Effects of: \u00a0\u00a0Tax-exempt interest 3 3 Tax on interest on other equity instruments 12 12 Tax-exempt dividends 5 5 Tax-exempt capital gains 24 12 Changes in impairments -3 -2 Adjustments for taxes due on previous financial years - 5 Other effects -6 -3 \u00a0\u00a0\u00a0Total Income tax (expense) / gain -204 -270 The result is almost entirely earned and taxable in the Netherlands. The effective income tax rate is 22.0% (2021: 22.4%). ", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-637": { "value": "6.7.1 Fair value of assets and liabilities See accounting policy B. 6.7.1.1 Financial assets and liabilities measured at fair value Breakdown of financial assets measured at fair value \u00a0Fair value based on quoted prices in an active market Fair value based on observable market data Fair value not based on observable market data \u00a031 December 2022 Level 1 Level 2 Level 3 Total fair value Financial assets \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Investments available for sale \u00a0\u00a0\u00a0\u00a0Government bonds 9,002 203 22 9,227 Corporate bonds 7,067 115 6 7,188 Asset-backed securities 6 - 409 416 Preference shares - 284 5 289 Equities 2,434 705 333 3,471 Mortgage equity funds - - 303 303 Other participating interests 6 - - 6 \u00a018,515 1,308 1,077 20,900 \u00a0\u00a0\u00a0\u00a0\u00a0Investments at fair value through profit or loss \u00a0\u00a0\u00a0\u00a0Equities 75 - 7 82 Real estate equity funds - - 3,974 3,974 Mortgage equity funds - - 684 684 \u00a075 - 4,665 4,740 \u00a0\u00a0\u00a0\u00a0\u00a0Investments on behalf of policyholders \u00a0\u00a0\u00a0\u00a0Government bonds 1,526 - - 1,526 Corporate bonds 1,386 - - 1,386 Equities 6,504 - - 6,504 Real estate equity funds 170 - - 170 Mortgage equity funds - - 252 252 Cash and cash equivalents 9 - - 9 Other investments 62 4 - 66 \u00a09,657 3 252 9,912 \u00a0\u00a0\u00a0\u00a0\u00a0Investments related to investment contracts \u00a0\u00a0\u00a0\u00a0Government bonds 261 - - 261 Corporate bonds 149 - - 149 Equities 1,449 - - 1,449 Real estate equity funds 97 - - 97 Cash and cash equivalents 37 - - 37 Other investments 6 - - 6 \u00a02,000 - - 2,000 \u00a0\u00a0\u00a0\u00a0\u00a0Derivatives \u00a0\u00a0\u00a0\u00a0Foreign exchange contracts - 80 - 80 Interest rate contracts \u00a0\u00a0\u00a0\u00a0- Swaps - 4,782 - 4,782 - Options - 275 - 275 - Futures 102 113 - 215 Inflation linked swaps - 44 - 44 Equity index contracts 31 - - 31 \u00a0133 5,294 - 5,428 \u00a0\u00a0\u00a0\u00a0\u00a0Cash and cash equivalents 2,245 - - 2,245 \u00a0\u00a0\u00a0\u00a0\u00a0Total financial assets 32,626 6,605 5,993 45,224 Breakdown of financial liabilities measured at fair value \u00a0Fair value based on quoted prices in an active market Fair value based on observable market data Fair value not based on observable market data \u00a031 December 2022 Level 1 Level 2 Level 3 Total fair value Financial liabilities \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Liabilities arising from investment contracts 2,000 - - 2,000 \u00a0\u00a0\u00a0\u00a0\u00a0Derivatives \u00a0\u00a0\u00a0\u00a0Foreign exchange contracts - 29 - 29 Interest rate contracts \u00a0\u00a0\u00a0\u00a0- Swaps - 5,494 - 5,494 \u00a0- 5,523 - 5,523 \u00a0\u00a0\u00a0\u00a0\u00a0Total financial liabilities 2,000 5,523 - 7,523 Breakdown of financial assets measured at fair value \u00a0Fair value based on quoted prices in an active market Fair value based on observable market data Fair value not based on observable market data \u00a031 December 2021 Level 1 Level 2 Level 3 Total fair value Financial assets \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Investments available for sale \u00a0\u00a0\u00a0\u00a0Government bonds 13,889 260 - 14,149 Corporate bonds 10,762 53 12 10,827 Asset-backed securities 17 5 508 530 Preference shares - 307 4 311 Equities 3,110 679 321 4,111 Mortgage equity funds - - 398 398 Other participating interests 7 - - 7 \u00a027,786 1,304 1,243 30,333 \u00a0\u00a0\u00a0\u00a0\u00a0Investments at fair value through profit or loss \u00a0\u00a0\u00a0\u00a0Equities 12 - 6 18 Real estate equity funds - - 2,202 2,202 Mortgage equity funds - - 781 781 Rural property contracts - - 215 215 \u00a012 - 3,205 3,216 \u00a0\u00a0\u00a0\u00a0\u00a0Investments on behalf of policyholders \u00a0\u00a0\u00a0\u00a0Government bonds 1,954 - - 1,954 Corporate bonds 1,100 - - 1,100 Derivatives - 6 - 6 Equities 7,950 - - 7,950 Real estate equity funds 249 - - 249 Mortgage equity funds - - 234 234 Cash and cash equivalents 18 - - 18 Other investments 60 4 - 64 \u00a011,331 9 234 11,574 \u00a0\u00a0\u00a0\u00a0\u00a0Investments related to investment contracts \u00a0\u00a0\u00a0\u00a0Equities 1,794 - - 1,794 Real estate equity funds 119 - - 119 Cash and cash equivalents 39 - - 39 \u00a01,952 - - 1,952 \u00a0\u00a0\u00a0\u00a0\u00a0Derivatives \u00a0\u00a0\u00a0\u00a0Foreign exchange contracts - 25 - 25 Interest rate contracts \u00a0\u00a0\u00a0\u00a0- Swaps - 5,870 - 5,870 - Options - 237 - 237 - Futures 37 - - 37 Inflation linked swaps - 14 - 14 Equity index contracts 28 - - 28 \u00a065 6,147 - 6,212 \u00a0\u00a0\u00a0\u00a0\u00a0Cash and cash equivalents 2,306 - - 2,306 \u00a0\u00a0\u00a0\u00a0\u00a0Total financial assets 43,452 7,460 4,682 55,593 Breakdown of financial liabilities measured at fair value \u00a0Fair value based on quoted prices in an active market Fair value based on observable market data Fair value not based on observable market data \u00a031 December 2021 Level 1 Level 2 Level 3 Total fair value Financial liabilities \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Liabilities arising from investment contracts 1,952 - - 1,952 \u00a0\u00a0\u00a0\u00a0\u00a0Derivatives \u00a0\u00a0\u00a0\u00a0Foreign exchange contracts - 78 - 78 Interest rate contracts \u00a0\u00a0\u00a0\u00a0- Swaps - 678 - 678 - Futures - 3 - 3 \u00a0- 759 - 759 \u00a0\u00a0\u00a0\u00a0\u00a0Total financial liabilities 1,952 759 - 2,711 Cash and cash equivalents are classified as level 1 when not subject to restrictions. Reclassification between categories 2022 To level 1 To level 2 To level 3 Total From: \u00a0\u00a0\u00a0\u00a0Level 1: Fair value based on quoted prices in an active market - 50 35 85 Level 2: Fair value based on observable market data - - - - Level 3: Fair value not based on observable market data - - - - Fixed income funds are adjusted from level 1 to level 2 (\u20ac\u00a050 million) and from level 1 to level 3 (\u20ac\u00a035 million). Those movements are based on decreased observability of the inputs during the period. Reclassification between categories 2021 To level 1 To level 2 To level 3 Total From: \u00a0\u00a0\u00a0\u00a0Level 1: Fair value based on quoted prices in an active market - 205 - 205 Level 2: Fair value based on observable market data 171 - - 171 Level 3: Fair value not based on observable market data 38 - - 38 Fixed income funds are adjusted from level 2 to level 1 (\u20ac\u00a0171 million), from level 3 to level 1 (\u20ac\u00a038 million) and from level 1 to level 2 (\u20ac\u00a0205 million). Those movements are based respectively on increased and decreased observability of the inputs during the period. The following two tables show the movement in financial assets measured at fair value including investment on behalf of policyholders and investment property that are categorised within level 3. Changes in financial assets classified as available for sale categorised within level 3 \u00a02022 2021 At 1 January 1,243 1,085 \u00a0\u00a0\u00a0Changes in value of investments, realised/unrealised gains and losses: \u00a0\u00a0- Realised gains and losses -2 37 - Recognised in Other comprehensive income (unrealised gains and losses) -83 20 \u00a0\u00a0\u00a0Purchases 129 407 Repayments -53 -80 Disposal -206 -190 Amortisation - -1 Impairments 13 1 Reclassification of investments from/to level 3 valuation technique 35 -36 \u00a0\u00a0\u00a0At 31 December 1,077 1,243 Changes in financial assets at fair value through profit or loss categorised within level 3 \u00a02022 2021 At 1 January 3,439 2,772 \u00a0\u00a0\u00a0Changes in value of investments, realised/unrealised gains and losses: \u00a0\u00a0- Fair value gains and losses -216 121 \u00a0\u00a0\u00a0Purchases 420 565 Disposal -184 -21 \u00a0\u00a0\u00a0Reclassification of investments from/to level 3 valuation technique - -2 Net transfer of real estate equity funds 1,457 - Other - 2 \u00a0\u00a0\u00a0At 31 December 4,916 3,439 \u00a0\u00a0\u00a0Total revaluations of investments, held at end of period, recognised in the income statement -189 122 The net transfer of real estate equity funds relates to ASR DFLF. During 2022, a.s.r. lost control of ASR DFLF as a result of the entry of third party participants in ASR DFLF. The net transferred amount consists of \u20ac\u00a01,703 million reclassification of investment property and rural property contracts included in ASR DFLF, minus \u20ac\u00a0246 million rural property contracts already included in financial assets Level 3. Unobservable inputs used in determining the fair value for financial assets measured at fair value (recurring basis) that are categorised within level 3 Available for sale investments The main non-observable market input for the asset-backed securities and mortgage equity funds available for sale are based on quotes published by an independent data vendor. If the quote of the data vendor is not available, values or quotes from other pricing services are obtained, including a check on the validity of the value or quote by an independent third party, to base the fair value on. There is no material difference in the fair value of the asset-backed securities and mortgage equity funds if a quote was used from an alternative data vendor. The main non-observable market input for the equities, including unlisted equities classified as level 3, is the net asset value as published by the investee. It is estimated that a 10% increase in valuation of these equities would have no significant impact on net result but would increase equity by \u20ac\u00a033 million (2021: \u20ac\u00a032 million), being approximately 0.5% (before tax) (2021: 0.4% (before tax)) of total equity. A decrease would have the opposite effect unless the impairment criteria are met. Investments at fair value through profit or loss The method of determining the fair value of the mortgage equity funds is similar to that of mortgage loans, however it excludes assumptions for originating cost and is determined within the funds structure. See chapter 6.7.1.2 for the main non-observable inputs. The main non-observable market input for the real estate equity funds third parties is the net asset value as published by the investee. An increase or decrease in the net asset value of equities classified as level 3 will have a direct proportional impact on the fair value of the investment. Unobservable and observable inputs used in determination of fair value 31 December 2022 Change in theoretical rental value \u00a0Fair value Valuation technique Gross Gross theoretical rental value (\u20ac) Gross Gross yield (%) Change in yield -5% 0% 5% Investments at fair value through profit or loss \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Real estate equity funds associates 3,557 DCF \u00a0110,918,322 \u00a03.1% -5% - 187 374 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a00% -178 - 178 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a05% -339 -169 - Real estate equity funds third parties 417 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total real estate equity funds 3,974 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Unobservable and observable inputs used in determination of fair value 31 December 2021 Change in theoretical rental value \u00a0Fair value Valuation technique Gross Gross theoretical rental value (\u20ac) Gross Gross yield (%) Change in yield -5% 0% 5% Investments at fair value through profit or loss \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Rural property contracts 215 DCF total 4,378,039 mean 2.0% -5% - 11 23 \u00a0\u00a0\u00a0max 147,419 max 3.0% 0% -11 - 11 \u00a0\u00a0\u00a0min 466 min 0.6% 5% -21 -10 - Total rural property contracts 215 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Real estate equity funds associates 1,817 DCF \u00a076,670,413 \u00a04.2% -5% - 96 191 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a00% -91 - 91 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a05% -173 -87 - Real estate equity funds third parties 385 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total real estate equity funds 2,202 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a06.7.1.2 Financial assets and liabilities not measured at fair value The breakdown of the fair values of financial assets and liabilities not measured at fair value, and for which the fair value is disclosed in accordance with the level of fair value hierarchy, as explained in accounting policy B, is as follows: Breakdown of financial assets and liabilities not measured at fair value \u00a0Fair value based on quoted prices in an active market Fair value based on observable market data Fair value not based on observable market data \u00a0\u00a031 December 2022 Level 1 Level 2 Level 3 Total fair value Total carrying value Financial assets \u00a0\u00a0\u00a0\u00a0\u00a0Due from customers - 1,904 9,053 10,957 12,307 Due from credit institutions 1,659 2,667 - 4,327 4,259 Trade and other receivables - 605 - 605 605 Total financial assets 1,659 5,176 9,053 15,889 17,171 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Financial liabilities \u00a0\u00a0\u00a0\u00a0\u00a0Subordinated liabilities - 1,925 - 1,925 1,980 Borrowings - 152 62 214 214 Due to customers - 471 - 471 471 Due to banks 2,187 75 - 2,262 2,262 Other financial liabilities 188 12 - 200 200 Total financial liabilities 2,375 2,634 62 5,071 5,127 Breakdown of financial assets and liabilities not measured at fair value \u00a0Fair value based on quoted prices in an active market Fair value based on observable market data Fair value not based on observable market data \u00a0\u00a031 December 2021 Level 1 Level 2 Level 3 Total fair value Total carrying value Financial assets \u00a0\u00a0\u00a0\u00a0\u00a0Due from customers - 1,513 10,696 12,209 11,461 Due from credit institutions 124 3,558 - 3,682 2,971 Trade and other receivables - 827 - 827 827 Total financial assets 124 5,898 10,696 16,718 15,259 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Financial liabilities \u00a0\u00a0\u00a0\u00a0\u00a0Subordinated liabilities - 1,132 - 1,132 992 Borrowings - 137 55 192 192 Due to customers - 573 - 573 573 Due to banks 5,636 105 - 5,741 5,741 Other financial liabilities 92 16 - 108 108 Total financial liabilities 5,728 1,963 55 7,745 7,605 The amounts due from credit institutions and amounts due to banks that are classified as level 1 primarily comprise of respectively cash collateral paid on derivative instruments and cash collateral received. The accrued interest included in other financial liabilities follows the classification of the underlying assets. Level 2 category financial assets relates primarily to the receivable due from credit institutions for savings-linked mortgage loans amounting to a fair value of \u20ac\u00a02,319 million (2021: \u20ac\u00a03,124 million). The mortgage loan portfolio is classified as level 3 \u2018not measured on the basis of market observable market data\u2019. Non-observable market inputs are used in the valuation methods, in addition to the observable market inputs. The valuation method used to determine the fair value of the mortgage loan portfolio is based on the spread on the interest rate curve for discounting the mortgage portfolio cash flows on consumer rates and includes assumptions for originating cost, proposal risk, and the options related to early redemption and moving. The mortgage loan portfolio consists of high quality mortgages with a relatively fixed return, limited impairments and arrears (see chapter 6.5.8). The mortgage loan portfolio consists only of Dutch mortgages with a limited counterparty default risk in line with the strategic investment plan (see chapter 6.8.4). 6.7.1.3 Property (including land and buildings for own use and plant) The breakdown of the investment property, land and buildings for own use and plant in accordance with the fair value hierarchy, as explained in accounting policy B, is as follows: Breakdown of the fair value of the investment property, land and buildings for own use and plant \u00a0Fair value based on quoted prices in an active market Fair value based on observable market data Fair value not based on observable market data \u00a031 December 2022 Level 1 Level 2 Level 3 Total fair value Investment property - - 664 664 Land and buildings for own use - - 115 115 Plant - - 480 480 \u00a0\u00a0\u00a0\u00a0\u00a0Total - - 1,259 1,259 \u00a0Fair value based on quoted prices in an active market Fair value based on observable market data Fair value not based on observable market data \u00a031 December 2021 Level 1 Level 2 Level 3 Total fair value Investment property - - 2,052 2,052 Land and buildings for own use - - 145 145 Plant - - 332 332 \u00a0\u00a0\u00a0\u00a0\u00a0Total - - 2,530 2,530 The property portfolio is classified as level 3 \u2018not measured on the basis of market observable market data\u2019. Non-observable market inputs are used in the valuation methods, in addition to the observable market inputs. The fair value measurement is based on valuations by independent professional appraisers. These valuations have been performed for the entire portfolio of investment property, buildings for own use and plants. Independent professional appraisers use reference transactions of comparable properties, in combination with the DCF and income capitalisation method, to determine the fair value of the property or plant. The reference transactions of comparable objects of the property portfolio are generally based on observable data consisting of the land register \u2018Kadaster\u2019 and the rural land price monitor as published by the Dutch Government \u2018Grondprijsmonitor\u2019 in an active property market. The significant unobservable and observable inputs to the Level 3 values of plant are the energy prices and the discount rate. An increase (decrease) of the discount rate will lead to a lower (higher) fair value measurement. The property has a relatively fixed return. The property portfolio is well diversified and consists of residential, retail, offices and rural property, throughout the Netherlands. The retail portfolio focusses on high street locations with relative low vacancy rates. The following table shows a breakdown of the fair value and vacancy rates of the portfolio of investment property. Breakdown of investment property \u00a0Fair value Vacancy rate \u00a031 December 2022 31 December 2021 2022 2021 Retail 159 161 3.1% 5.0% Residential 1 1 - - Rural 202 1,625 - - Offices 290 241 8.4% 8.2% Property under development - 12 - 100.0% Parking 13 12 - - Total 664 2,052 3.5% 2.9% In 2022, \u20ac\u00a01,430 million of rural investment property included in ASR DFLF was transferred to investments in real estate equity funds, see chapter 6.5.5.2. During 2022, a.s.r. lost control of ASR DFLF as a result of the entry of third party participants in ASR DFLF. The movements in investment property and plant measured at fair value (recurring basis) that are categorised within level 3 are presented in chapter 6.5.2 and 6.5.3. Significant inputs to the Level 3 values of investment property are the net initial yield and market rental value. These inputs are verified with the following market observable data: Market rent per square meter for renewals and their respective re-letting rates; Reviewed rent per square meter; Investment transaction of comparable objects; The 10 year Dutch Government Bond Yield (%) rate as published by the DNB. Unobservable and observable inputs used in determination of fair value 31 December 2022 Change in theoretical rental value \u00a0Fair value Valuation technique Gross Gross theoretical rental value (\u20ac) Gross Gross yield (%) Change in yield -5% 0% 5% Investment property - Fair value model \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Retail 159 DCF total 11,340,229 mean 7.1% -5% - 8 17 \u00a0\u00a0\u00a0max 1,641,470 max 9.6% 0% -8 - 8 \u00a0\u00a0\u00a0min 14,940 min 3.7% 5% -15 -8 - Residential 1 DCF total 76,600 mean 7.9% -5% - - - \u00a0\u00a0\u00a0max 76,600 max 7.9% 0% - - - \u00a0\u00a0\u00a0min 76,600 min 7.9% 5% - - - Rural 202 DCF total 4,754,747 mean 2.4% -5% - 11 21 \u00a0\u00a0\u00a0max 1,776,687 max 3.8% 0% -10 - 10 \u00a0\u00a0\u00a0min 500 min 0.5% 5% -19 -10 - Offices 290 DCF total 19,406,800 mean 6.7% -5% - 15 30 \u00a0\u00a0\u00a0max 5,280,212 max 9.8% 0% -14 - 14 \u00a0\u00a0\u00a0min 52,513 min 4.4% 5% -28 -14 - Property under development - \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Parking 13 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Land and buildings for own use 115 DCF total 8,273,071 mean 7.5% -5% - 6 12 \u00a0\u00a0\u00a0max 8,273,071 max 7.5% 0% -5 - 5 \u00a0\u00a0\u00a0min 8,273,071 min 7.5% 5% -10 -5 - \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Plant 480 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total 1,259 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Unobservable and observable inputs used in determination of fair value 31 December 2021 Change in theoretical rental value \u00a0Fair value Valuation technique Gross Gross theoretical rental value (\u20ac) Gross Gross yield (%) Change in yield -5% 0% 5% Investment property - Fair value model \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Retail 161 DCF total 11,096,858 mean 6.9% -5% - 8 17 \u00a0\u00a0\u00a0max 1,617,540 max 12.9% 0% -8 - 8 \u00a0\u00a0\u00a0min 41,519 min 2.4% 5% -15 -8 - Residential 1 DCF total 75,501 mean 7.5% -5% - - - \u00a0\u00a0\u00a0max 75,501 max 7.5% 0% - - - \u00a0\u00a0\u00a0min 75,501 min 7.5% 5% - - - Rural 1,625 DCF total 36,171,938 mean 2.2% -5% - 86 171 \u00a0\u00a0\u00a0max 1,865,893 max 7.3% 0% -81 - 81 \u00a0\u00a0\u00a0min 308 min 0.4% 5% -155 -77 - Offices 241 DCF total 14,271,731 mean 5.9% -5% - 13 25 \u00a0\u00a0\u00a0max 5,015,714 max 9.2% 0% -12 - 12 \u00a0\u00a0\u00a0min 38,656 min 3.4% 5% -23 -11 - Property under development 12 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Parking 12 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Land and buildings for own use 145 DCF total 9,607,224 mean 6.9% -5% - 7 15 \u00a0\u00a0\u00a0max 9,607,224 max 6.9% 0% -7 - 7 \u00a0\u00a0\u00a0min 9,607,224 min 6.9% 5% -13 -7 - \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Plant 332 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total 2,530 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 6.7.3 Fair value of financial assets categorised into two groups based on business model and SPPI test results In compliance with the deferral option IFRS 9 under IFRS 4, a.s.r. conducted a solely payments of principal and interest (SPPI) test on the financial assets. For the purpose of this assessment, principal is defined as the fair value of the financial asset on initial recognition. However, the principal may change over time \u2013 e.g. if there are repayments of principal. Interest is defined as consideration for the time value of money, for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks (e.g. liquidity risk) and costs (e.g. administrative costs), as well as a profit margin that is consistent with a basic lending arrangement. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are SPPI. In assessing whether the contractual cash flows are solely payments of principal and interest, a.s.r. considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, a.s.r. considers the following: Variable interest rates; Prepayment features; Term extension features; Contingent events; and Terms that limit a.s.r.\u2019s claim to cash flows from specified assets \u2013 e.g. non-recourse asset arrangements. Fair value of financial assets based on SPPI test results Amounts in \u20ac\u00a0millions Fair value at 31 December 20221 Carrying amount at 31 December 2022 Fair value movement 2022 Fair value at 31 December 20211 Carrying amount at 31 December 2021 Fair value movement 2021 Financial assets with contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest: \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Trade and other receivables 605 605 -222 827 827 -3 Other financial assets 142 142 18 124 124 -24 \u00a0747 747 -204 952 952 -26 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Other financial assets2 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Government bonds 9,227 9,227 -4,922 14,149 14,149 -3,241 Corporate bonds 7,188 7,188 -3,639 10,827 10,827 -990 Rural property contracts - - -215 215 215 72 Asset-backed securities 416 416 -115 530 530 126 Preference shares 289 289 -22 311 311 -5 Derivatives 5,428 5,428 -784 6,212 6,212 -2,956 Equities and other participating interest 3,560 3,560 -576 4,136 4,136 620 Real estate equity funds 3,974 3,974 1,772 2,202 2,202 173 Mortgage equity funds 987 987 -192 1,179 1,179 196 Other financial assets 527 527 63 464 464 -50 Investments on behalf of policyholders 9,912 9,912 -1,662 11,574 11,574 1,420 Investments related to investment contracts 2,000 2,000 48 1,952 1,952 1,952 Due from customers 10,957 12,307 -1,252 12,209 11,461 2,722 Due from credit institutions 4,327 4,259 645 3,682 2,971 -2,100 Cash and cash equivalents 2,245 2,245 -61 2,306 2,306 -557 \u00a061,034 62,317 -10,914 71,948 70,489 -2,618 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total financial assets 61,781 63,064 -11,118 72,900 71,441 -2,644 The carrying value of the trade and other receivables is regarded as a good approximation of the fair value, as these assets have a short-term nature. Other financial assets include the financial assets that fall into the business model held for trading and managed on a fair value basis or those financial assets with contractual terms that do not give rise on specified dates to cash flows that are solely payments of principal and interest. The fair value movement relates to the revaluations during the year of the financial assets; total movement less the net additions. Credit risk exposure for financial assets with contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest \u00a0Gross carrying amount at 31 December 2022 Gross carrying amount at 31 December 2021 Credit risk rating \u00a0\u00a0AA 54 89 A 9 6 Not rated 712 883 \u00a0\u00a0\u00a0Total financial assets with contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest 775 978 The credit risk of the assets not rated (trade and other receivables and other financial assets), is considered low. For more detailed information about the credit risks of a.s.r., see chapter 6.8.3 and chapter 6.8.4. Fair value of financial assets with contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest without low credit risk \u00a0Fair value at 31 December 2022 Gross carrying amount at 31 December 2022 Fair value at 31 December 2021 Gross carrying amount at 31 December 2021 Financial assets with contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest: \u00a0\u00a0\u00a0\u00a0Trade and other receivables 472 500 585 611 \u00a0\u00a0\u00a0\u00a0\u00a0Total fair value of financial assets with contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest without low credit risk 472 500 585 611 ", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-641": { "value": "6.7.4 Related party transactions A related party is a person or entity that has significant influence over another entity, or has the ability to affect the financial and operating policies of the other party. Parties related to a.s.r. include associates, joint ventures, key management personnel, close family members of any person referred to above, entities controlled or significantly influenced by any person referred to above and any other affiliated entity. The group regularly enters into transactions with related parties during the conduct of its business. These transactions mainly involve loans, deposits and commissions, and are conducted on terms equivalent to those that prevail in arm\u2019s length transactions. The remuneration of the key personnel is disclosed in chapter 6.7.5. Positions and transactions between a.s.r., associates, joint ventures and other related parties The table below shows the financial scope of a.s.r.\u2019s related party transactions: Associates; Joint ventures. Financial scope of a.s.r.\u2019s related party transactions \u00a0Associates Joint ventures Total 2022 \u00a0\u00a0\u00a0Balance sheet items with related parties as at 31 December \u00a0\u00a0\u00a0Loans and receivables 37 8 45 Other liabilities 176 - 176 \u00a0\u00a0\u00a0\u00a0Transactions in the income statement for the financial year \u00a0\u00a0\u00a0Fee and commission income 74 - 74 Fee and commission expenses 1 - 1 Financial scope of a.s.r.\u2019s related party transactions \u00a0Associates Joint ventures Total 2021 \u00a0\u00a0\u00a0Balance sheet items with related parties as at 31 December \u00a0\u00a0\u00a0Loans and receivables 21 12 33 Other liabilities 177 - 177 \u00a0\u00a0\u00a0\u00a0Transactions in the income statement for the financial year \u00a0\u00a0\u00a0Fee and commission income 57 - 57 Fee and commission expenses 1 - 1 No provisions for impairments have been recognised on the loans and receivables for the years 2022 and 2021. The members of the EB and the Business Executive Committee (BEC) have mortgage loans with a.s.r. amounting to respectively \u20ac\u00a0435 thousand (2021: \u20ac\u00a0495 thousand) and \u20ac\u00a01,099 thousand (2021: \u20ac\u00a0596 thousand). The mortgages have been issued subject to normal employee conditions. The employee conditions include limits and thresholds to the amounts that qualify for a personnel interest-rate discount. For mortgage loans higher than \u20ac\u00a0340 thousand arm\u2019s length conditions apply. The average interest rate on the mortgage loans (for members EB and BEC) is 2.6% (2021: 2.4%). In 2022, the mortgage loans of EB members were settled for an amount of \u20ac\u00a061 thousand (2021: \u20ac\u00a061 thousand) and for BEC members for an amount of \u20ac\u00a013 thousand (2021: \u20ac\u00a079 thousand). ", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-787": { "value": "6.7.4 Related party transactions A related party is a person or entity that has significant influence over another entity, or has the ability to affect the financial and operating policies of the other party. Parties related to a.s.r. include associates, joint ventures, key management personnel, close family members of any person referred to above, entities controlled or significantly influenced by any person referred to above and any other affiliated entity. The group regularly enters into transactions with related parties during the conduct of its business. These transactions mainly involve loans, deposits and commissions, and are conducted on terms equivalent to those that prevail in arm\u2019s length transactions. The remuneration of the key personnel is disclosed in chapter 6.7.5. Positions and transactions between a.s.r., associates, joint ventures and other related parties The table below shows the financial scope of a.s.r.\u2019s related party transactions: Associates; Joint ventures. Financial scope of a.s.r.\u2019s related party transactions \u00a0Associates Joint ventures Total 2022 \u00a0\u00a0\u00a0Balance sheet items with related parties as at 31 December \u00a0\u00a0\u00a0Loans and receivables 37 8 45 Other liabilities 176 - 176 \u00a0\u00a0\u00a0\u00a0Transactions in the income statement for the financial year \u00a0\u00a0\u00a0Fee and commission income 74 - 74 Fee and commission expenses 1 - 1 Financial scope of a.s.r.\u2019s related party transactions \u00a0Associates Joint ventures Total 2021 \u00a0\u00a0\u00a0Balance sheet items with related parties as at 31 December \u00a0\u00a0\u00a0Loans and receivables 21 12 33 Other liabilities 177 - 177 \u00a0\u00a0\u00a0\u00a0Transactions in the income statement for the financial year \u00a0\u00a0\u00a0Fee and commission income 57 - 57 Fee and commission expenses 1 - 1 No provisions for impairments have been recognised on the loans and receivables for the years 2022 and 2021. The members of the EB and the Business Executive Committee (BEC) have mortgage loans with a.s.r. amounting to respectively \u20ac\u00a0435 thousand (2021: \u20ac\u00a0495 thousand) and \u20ac\u00a01,099 thousand (2021: \u20ac\u00a0596 thousand). The mortgages have been issued subject to normal employee conditions. The employee conditions include limits and thresholds to the amounts that qualify for a personnel interest-rate discount. For mortgage loans higher than \u20ac\u00a0340 thousand arm\u2019s length conditions apply. The average interest rate on the mortgage loans (for members EB and BEC) is 2.6% (2021: 2.4%). In 2022, the mortgage loans of EB members were settled for an amount of \u20ac\u00a061 thousand (2021: \u20ac\u00a061 thousand) and for BEC members for an amount of \u20ac\u00a013 thousand (2021: \u20ac\u00a079 thousand). ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithRelatedPartiesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-642": { "value": "6.7.5 Key management personnel remuneration Transactions with key management personnel (EB, BEC members and SB) are transactions with related parties. Additional information on the remuneration of members of the EB and SB is disclosed in the remuneration report; see chapter 5.3. Annual remuneration key management personnel Amounts in \u20ac\u00a0thousands Executive board BEC members1 Supervisory board Total 2022 Executive board2 BEC members1 Supervisory board3 Total 2021 Fixed compensation \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Base salary 2,388 3,080 190 5,658 2,279 2,247 205 4,730 Fees - - 88 88 - - 88 88 Fringe benefits4 55 177 - 232 44 128 - 172 Variable compensation \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0One-year variable - - - - - - - - Multi-year variable - - - - - - - - Other \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Extraordinary items - - - - - - - - Pension expense5 489 677 - 1,165 473 486 - 959 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total remuneration 2,932 3,933 278 7,143 2,796 2,861 292 5,949 Four directors joined the BEC and three directors left the BEC in 2022. In 2021 four directors joined the BEC. The remuneration figures reflect a partial year as a member of the BEC. Ewout Hollegien was appointed as CFO and member of the EB of a.s.r. on 1 December 2021. Annemiek van Melick stepped down as member of the EB of a.s.r. on 12 October 2021. The remuneration figures for 2021 reflect a partial year as a member of the EB Remuneration as a SB member of a.s.r. and remuneration as a committee chair or member of the SB of a.s.r. PPI or SB of ASR Basis / Aanvullende Ziektekostenverzekeringen N.V. J.G. Wijn was appointed as chair of the SB on 19 May 2021. C. van der Pol left the SB as of 19 May 2021. The remuneration figures for 2021 reflect a partial year as a member of the SB. Variations arise as a result of the fiscal treatment of lease vehicles depending on the price and private use of the car, personal allowance and social security. The annual pension expenditure is based on a premium table. Further changes in the cost of pension benefits are mainly due to the impact of age. The pension costs include DC pensions based on maximum pensionable salary cap, compensation for the maximum pensionable salary cap (to be used for pensions at the employees\u2019 discretion), and VPL. In the table above, \u2018Executive Board\u2019 refers to the three members of the EB as at 31 December 2022. The three members of the EB are also members of the BEC. In the table above, \u2018BEC\u2019 refers to the nine (2021: eight) members of the BEC as at 31 December 2022, i.e. those members that are not also member of the EB in the table above. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-644": { "value": "6.7.7 Contingent liabilities and assets 6.7.7.1 General claims and disputes The group is a respondent in a number of claims, disputes and legal proceedings arising from the normal conduct of business. Provisions are formed for such occurrences if, in management\u2019s opinion and after consultation with its legal advisors, a.s.r. is likely to have to make payments and the payable amount can be estimated with sufficient reliability. The costs of the compensation scheme for unit-linked insurance contracts have been fully recognised in the financial statements based on management\u2019s best knowledge of current facts, actions, claims, complaints and events. Provisions are recognised in the liabilities arising from insurance contracts (see chapter 6.5.15) and legal provisions (see chapter 6.5.18). Dutch insurers see an increase in insurance policies complaints / claims based on grounds other than the cost compensation. Current and possible future legal proceedings could have a substantial financial and reputational impact. However it is not possible at this time to make reliable estimates of the number of expected proceedings, possible future precedents and the financial impact of current and possible future proceedings. Currently there are no indications that such a provision would be necessary for a.s.r. As for other claims and legal proceedings, against a.s.r. known to management (and for which, in accordance with the defined principles, no provision has been formed), management believes, after having sought expert advice, that these claims have no chance of success, or that a.s.r. can successfully mount a defense against them, or that the outcome of the proceedings is unlikely to result in a significant loss for a.s.r. 6.7.7.2 Unit-Linked Products (beleggingsverzekeringen) Background Since the end of 2006, individual unit-linked life insurance products (beleggingsverzekeringen) have received negative attention in the Dutch media, from the Dutch Parliament, the AFM, consumers and consumer protection organisations. Elements of unit-linked policies are being challenged or may be challenged on multiple legal grounds. The criticism and scrutiny on unit-linked life insurance products led to the introduction of compensation schemes by Dutch insurance companies that have offered unit-linked products. In 2008, a.s.r. reached an outline agreement with two main consumer protection organisations to offer compensation to unit-linked policyholders in case the cost charge and/or risk premium charge exceeds a defined maximum. A full agreement on implementation of the compensation scheme was reached in 2012. The total recognised cumulative financial costs relating to the compensation scheme for Individual life in a.s.r.\u2019s income statement until 2022 was \u20ac\u00a01,026 million. This includes, amongst other things, compensation paid, amortisation of surrender penalties and costs relating to improved product offerings. The remaining provision in the balance sheet at 31 December 2022 is solely available to cover potential additional compensation (schrijnende gevallen) and costs relating to the compensation scheme. On the basis of this agreement, a.s.r. offered consumers additional measures such as alternative products and less costly investment funds. In addition to the compensation scheme, a.s.r. has implemented additional measures (flankerend beleid), including the ten best in class principles as formulated by the Dutch Minister of Finance. On 17 July 2015, the Dutch Ministry of Finance published an Order in Council (Algemene Maatregel van Bestuur), pursuant to which insurance companies can be sanctioned if they do not meet the compulsory targets set for approaching policyholders of unit-linked life insurances and prompting them to review their existing policies. The agreement with the two consumer protection organisations and additional measures are not binding for policyholders. Consequently, neither the implementation of the compensation schemes nor the additional measures offered by a.s.r. prevent individual policyholders from initiating legal proceedings against a.s.r. and making claims for damages. Legal proceedings a.s.r. is subject to a limited number of legal proceedings initiated by individual unit-linked policyholders, in most cases represented by claims organisations. While to date fewer than 10 cases are pending before Dutch courts and courts of appeal and fewer than 100 cases are pending before the Financial Services Complaints Board (\"FSCB\") (the Dispute Committee as well as the Committee of Appeal of the FSCB), there is no assurance that further proceedings will not be brought against a.s.r. in the future. Future legal proceedings regarding unit-linked life insurance policies might be brought upon a.s.r. by consumers individually, by consumer organisations acting on their behalf or in the form of a collective action. Furthermore, there is an ongoing lobby by consumer protection organisations, such as the Consumentenbond and Stichting Geldbelangen, to continuously gain media attention for unit-linked life insurance policies. These organisations argue, amongst other things, that consumers did not receive sufficient compensation based on the compensation scheme. a.s.r. is currently subject to three collective actions. The claims are all based on similar grounds and have been rejected by a.s.r. and a.s.r. defends itself in these legal proceedings. The timing and outcome of these collective actions is currently uncertain. In June 2016, Woekerpolis.nl initiated a collective action, requesting the Midden-Nederland District Court to declare that a.s.r. has sold products in the market which were defective in various respects (e.g. lack of transparency regarding cost charges and other product characteristics, and risks against which the insurer had failed to warn, such as substantial stock depreciations, inability to realise the projected final policy value, unrealistic capital projections due to the difference between geometric and arithmetic returns, and general terms and conditions governing costs which Woekerpolis.nl considered unfair). In its judgement of 6 February 2019, the court rejected all claims regarding transparency of costs and risks. Only with regard to the claim relating to administrative costs (\"administratiekosten\") that are calculated in ABC Spaarplan in case of high premiums, the court decided that this is unlawful. On 16 April 2019 a.s.r. received a notice of appeal from the Vereniging Woekerpolis.nl. Subsequently, the Vereniging Woekerpolis.nl has submitted its statement of appeal at the High Court of Arnhem Leeuwarden on 3 March 2020. The statement of response by a.s.r. has been deferred by the Court of Appeal. Main reason for this deferral lies with the developments regarding the preliminary questions from the High Court of the Hague towards the Supreme Court in the proceedings (Collective Action) between Woekerpolis.nl and another Dutch insurer. In March 2017, the Consumentenbond also initiated a collective action against a.s.r. based on similar grounds to that initiated by Woekerpolis.nl. In its judgement dated 11 March 2020 the Court dismissed all claims of ConsumentenBond against a.s.r. On 8 June 2020 a.s.r. received a notice of appeal from the Consumentenbond. In December 2019, claim organisation Wakkerpolis initiated a collective action against a.s.r. Although the claim from Wakkerpolis is largely based on similar grounds as the other two collective actions, it primarily concentrates on the lack of transparency of cost charges. In a decision on 23 November 2022 the Court rejected all claims regarding transparency of costs and risks and concluded that the products sold by a.s.r. cannot be considered as defective. Based on the contractual information provided by a.s.r., the Court is of the opinion that a.s.r. has complied with its information obligations. Risk profile and contingent liability unit-linked life insurance products The prolonged political, regulatory and public attention focused on unit-linked life insurance policies continues. Elements of unit-linked life insurance policies of a.s.r. are being challenged on multiple legal grounds in current, and may be challenged in future, legal proceedings. There is a risk that one or more of the current and/or future claims and/or allegations will succeed. To date, a number of rulings regarding unit-linked life insurance products in specific cases have been issued by the FSCB and courts (of appeal) in the Netherlands against a.s.r. and other insurers. In these proceedings, different (legal) approaches have been taken to come to a ruling. The outcomes of these rulings are diverse. Because the book of policies of a.s.r. dates back many years, contains of a variety of products with different features and conditions and because of the fact that rulings are diverse, no reliable estimation can be made regarding the timing and the outcome of the current and future legal proceedings brought against a.s.r. and other insurance companies. The total costs related to compensation for unit-linked insurance contracts as described above, have been fully recognised in the financial statements based on management\u2019s best knowledge of current facts, actions, claims, complaints and events. Provisions are recognised in the liabilities arising from insurance contracts (see chapter 6.5.15). Although the financial consequences of the legal developments could be substantial, a.s.r.\u2019s exposures cannot be reliably estimated or quantified at this point. If one or more of these legal proceedings should succeed, there is a risk a ruling, although legally only binding for the parties that are involved in the procedure, could be applied to or be relevant for other unit-linked life insurance policies sold by a.s.r. Consequently, the financial consequences of any of the current and/or future legal proceedings brought upon a.s.r. can be substantial for a.s.r.\u2019s Life insurance business and may have a material adverse effect on a.s.r.\u2019s financial position, business, reputation, revenues, results of operations, solvency, financial condition and prospects. 6.7.7.3 Obligations and guarantees Investment obligations for an amount of \u20ac\u00a0102 million (2021: \u20ac\u00a0128 million) have been assumed / issued for investment property. Investment obligations and guarantees for a total amount of \u20ac\u00a016 million (2021: \u20ac\u00a021 million) have been issued, for real estate development projects and the acquisition of property. Those guarantees were issued by principals for the execution of projects for the benefit of clients. The Dutch guarantee fund for motorised traffic has a latent claim on all insurers offering legal liability products. In line with the advise of the guarantee fund a.s.r.'s contingent liability is \u20ac\u00a010 million (2021: \u20ac\u00a010 million). a.s.r. also had irrevocable facilities of \u20ac\u00a0391 million (2021: \u20ac\u00a01,123 million) which mainly relate to mortgage offers issued. a.s.r. had no other guarantees at year-end 2022 (2021: \u20ac\u00a01 million). 6.7.7.4 Expected future lease payments The following table sets out the expected future lease payments for investment property and plant, showing the undiscounted lease payments to be received after the reporting date. Expected minimum future lease payments on non-cancellable investment property lease and plant \u00a031 December 2022 31 December 2021 To be received within 1 year 33 59 To be received between 1 and 2 years 29 44 To be received between 2 and 3 years 25 41 To be received between 3 and 4 years 21 38 To be received between 4 and 5 years 17 34 To be received after 5 years 89 396 \u00a0\u00a0\u00a0Total undiscounted lease payments 214 613 The investments properties, in retail, residential, offices and rural markets are leased to third parties, consisting of various lease terms in a range between shorter than one year and undetermined period with competitive rents mostly indexed to consumer prices. The plants are leased to third parties with lease terms longer than ten years. The strong decline in future lease payments is related to the reclassification of ASR DFLF to investments, see chapter 6.5.3. 6.7.7.5 Contingent considerations in acquisitions The consideration paid for Veherex by a.s.r. non-life includes a contingent consideration with a remaining fair value of \u20ac\u00a02,8 million to be paid over a remaining period of two years. Of this amount, \u20ac\u00a01,4 million is expected to be paid no later than one year after the balance sheet date, the remaining \u20ac\u00a01,4 million no later than two years after the balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-645": { "value": "6.7.7 Contingent liabilities and assets 6.7.7.1 General claims and disputes The group is a respondent in a number of claims, disputes and legal proceedings arising from the normal conduct of business. Provisions are formed for such occurrences if, in management\u2019s opinion and after consultation with its legal advisors, a.s.r. is likely to have to make payments and the payable amount can be estimated with sufficient reliability. The costs of the compensation scheme for unit-linked insurance contracts have been fully recognised in the financial statements based on management\u2019s best knowledge of current facts, actions, claims, complaints and events. Provisions are recognised in the liabilities arising from insurance contracts (see chapter 6.5.15) and legal provisions (see chapter 6.5.18). Dutch insurers see an increase in insurance policies complaints / claims based on grounds other than the cost compensation. Current and possible future legal proceedings could have a substantial financial and reputational impact. However it is not possible at this time to make reliable estimates of the number of expected proceedings, possible future precedents and the financial impact of current and possible future proceedings. Currently there are no indications that such a provision would be necessary for a.s.r. As for other claims and legal proceedings, against a.s.r. known to management (and for which, in accordance with the defined principles, no provision has been formed), management believes, after having sought expert advice, that these claims have no chance of success, or that a.s.r. can successfully mount a defense against them, or that the outcome of the proceedings is unlikely to result in a significant loss for a.s.r. 6.7.7.2 Unit-Linked Products (beleggingsverzekeringen) Background Since the end of 2006, individual unit-linked life insurance products (beleggingsverzekeringen) have received negative attention in the Dutch media, from the Dutch Parliament, the AFM, consumers and consumer protection organisations. Elements of unit-linked policies are being challenged or may be challenged on multiple legal grounds. The criticism and scrutiny on unit-linked life insurance products led to the introduction of compensation schemes by Dutch insurance companies that have offered unit-linked products. In 2008, a.s.r. reached an outline agreement with two main consumer protection organisations to offer compensation to unit-linked policyholders in case the cost charge and/or risk premium charge exceeds a defined maximum. A full agreement on implementation of the compensation scheme was reached in 2012. The total recognised cumulative financial costs relating to the compensation scheme for Individual life in a.s.r.\u2019s income statement until 2022 was \u20ac\u00a01,026 million. This includes, amongst other things, compensation paid, amortisation of surrender penalties and costs relating to improved product offerings. The remaining provision in the balance sheet at 31 December 2022 is solely available to cover potential additional compensation (schrijnende gevallen) and costs relating to the compensation scheme. On the basis of this agreement, a.s.r. offered consumers additional measures such as alternative products and less costly investment funds. In addition to the compensation scheme, a.s.r. has implemented additional measures (flankerend beleid), including the ten best in class principles as formulated by the Dutch Minister of Finance. On 17 July 2015, the Dutch Ministry of Finance published an Order in Council (Algemene Maatregel van Bestuur), pursuant to which insurance companies can be sanctioned if they do not meet the compulsory targets set for approaching policyholders of unit-linked life insurances and prompting them to review their existing policies. The agreement with the two consumer protection organisations and additional measures are not binding for policyholders. Consequently, neither the implementation of the compensation schemes nor the additional measures offered by a.s.r. prevent individual policyholders from initiating legal proceedings against a.s.r. and making claims for damages. Legal proceedings a.s.r. is subject to a limited number of legal proceedings initiated by individual unit-linked policyholders, in most cases represented by claims organisations. While to date fewer than 10 cases are pending before Dutch courts and courts of appeal and fewer than 100 cases are pending before the Financial Services Complaints Board (\"FSCB\") (the Dispute Committee as well as the Committee of Appeal of the FSCB), there is no assurance that further proceedings will not be brought against a.s.r. in the future. Future legal proceedings regarding unit-linked life insurance policies might be brought upon a.s.r. by consumers individually, by consumer organisations acting on their behalf or in the form of a collective action. Furthermore, there is an ongoing lobby by consumer protection organisations, such as the Consumentenbond and Stichting Geldbelangen, to continuously gain media attention for unit-linked life insurance policies. These organisations argue, amongst other things, that consumers did not receive sufficient compensation based on the compensation scheme. a.s.r. is currently subject to three collective actions. The claims are all based on similar grounds and have been rejected by a.s.r. and a.s.r. defends itself in these legal proceedings. The timing and outcome of these collective actions is currently uncertain. In June 2016, Woekerpolis.nl initiated a collective action, requesting the Midden-Nederland District Court to declare that a.s.r. has sold products in the market which were defective in various respects (e.g. lack of transparency regarding cost charges and other product characteristics, and risks against which the insurer had failed to warn, such as substantial stock depreciations, inability to realise the projected final policy value, unrealistic capital projections due to the difference between geometric and arithmetic returns, and general terms and conditions governing costs which Woekerpolis.nl considered unfair). In its judgement of 6 February 2019, the court rejected all claims regarding transparency of costs and risks. Only with regard to the claim relating to administrative costs (\"administratiekosten\") that are calculated in ABC Spaarplan in case of high premiums, the court decided that this is unlawful. On 16 April 2019 a.s.r. received a notice of appeal from the Vereniging Woekerpolis.nl. Subsequently, the Vereniging Woekerpolis.nl has submitted its statement of appeal at the High Court of Arnhem Leeuwarden on 3 March 2020. The statement of response by a.s.r. has been deferred by the Court of Appeal. Main reason for this deferral lies with the developments regarding the preliminary questions from the High Court of the Hague towards the Supreme Court in the proceedings (Collective Action) between Woekerpolis.nl and another Dutch insurer. In March 2017, the Consumentenbond also initiated a collective action against a.s.r. based on similar grounds to that initiated by Woekerpolis.nl. In its judgement dated 11 March 2020 the Court dismissed all claims of ConsumentenBond against a.s.r. On 8 June 2020 a.s.r. received a notice of appeal from the Consumentenbond. In December 2019, claim organisation Wakkerpolis initiated a collective action against a.s.r. Although the claim from Wakkerpolis is largely based on similar grounds as the other two collective actions, it primarily concentrates on the lack of transparency of cost charges. In a decision on 23 November 2022 the Court rejected all claims regarding transparency of costs and risks and concluded that the products sold by a.s.r. cannot be considered as defective. Based on the contractual information provided by a.s.r., the Court is of the opinion that a.s.r. has complied with its information obligations. Risk profile and contingent liability unit-linked life insurance products The prolonged political, regulatory and public attention focused on unit-linked life insurance policies continues. Elements of unit-linked life insurance policies of a.s.r. are being challenged on multiple legal grounds in current, and may be challenged in future, legal proceedings. There is a risk that one or more of the current and/or future claims and/or allegations will succeed. To date, a number of rulings regarding unit-linked life insurance products in specific cases have been issued by the FSCB and courts (of appeal) in the Netherlands against a.s.r. and other insurers. In these proceedings, different (legal) approaches have been taken to come to a ruling. The outcomes of these rulings are diverse. Because the book of policies of a.s.r. dates back many years, contains of a variety of products with different features and conditions and because of the fact that rulings are diverse, no reliable estimation can be made regarding the timing and the outcome of the current and future legal proceedings brought against a.s.r. and other insurance companies. The total costs related to compensation for unit-linked insurance contracts as described above, have been fully recognised in the financial statements based on management\u2019s best knowledge of current facts, actions, claims, complaints and events. Provisions are recognised in the liabilities arising from insurance contracts (see chapter 6.5.15). Although the financial consequences of the legal developments could be substantial, a.s.r.\u2019s exposures cannot be reliably estimated or quantified at this point. If one or more of these legal proceedings should succeed, there is a risk a ruling, although legally only binding for the parties that are involved in the procedure, could be applied to or be relevant for other unit-linked life insurance policies sold by a.s.r. Consequently, the financial consequences of any of the current and/or future legal proceedings brought upon a.s.r. can be substantial for a.s.r.\u2019s Life insurance business and may have a material adverse effect on a.s.r.\u2019s financial position, business, reputation, revenues, results of operations, solvency, financial condition and prospects. 6.7.7.3 Obligations and guarantees Investment obligations for an amount of \u20ac\u00a0102 million (2021: \u20ac\u00a0128 million) have been assumed / issued for investment property. Investment obligations and guarantees for a total amount of \u20ac\u00a016 million (2021: \u20ac\u00a021 million) have been issued, for real estate development projects and the acquisition of property. Those guarantees were issued by principals for the execution of projects for the benefit of clients. The Dutch guarantee fund for motorised traffic has a latent claim on all insurers offering legal liability products. In line with the advise of the guarantee fund a.s.r.'s contingent liability is \u20ac\u00a010 million (2021: \u20ac\u00a010 million). a.s.r. also had irrevocable facilities of \u20ac\u00a0391 million (2021: \u20ac\u00a01,123 million) which mainly relate to mortgage offers issued. a.s.r. had no other guarantees at year-end 2022 (2021: \u20ac\u00a01 million). 6.7.7.4 Expected future lease payments The following table sets out the expected future lease payments for investment property and plant, showing the undiscounted lease payments to be received after the reporting date. Expected minimum future lease payments on non-cancellable investment property lease and plant \u00a031 December 2022 31 December 2021 To be received within 1 year 33 59 To be received between 1 and 2 years 29 44 To be received between 2 and 3 years 25 41 To be received between 3 and 4 years 21 38 To be received between 4 and 5 years 17 34 To be received after 5 years 89 396 \u00a0\u00a0\u00a0Total undiscounted lease payments 214 613 The investments properties, in retail, residential, offices and rural markets are leased to third parties, consisting of various lease terms in a range between shorter than one year and undetermined period with competitive rents mostly indexed to consumer prices. The plants are leased to third parties with lease terms longer than ten years. The strong decline in future lease payments is related to the reclassification of ASR DFLF to investments, see chapter 6.5.3. 6.7.7.5 Contingent considerations in acquisitions The consideration paid for Veherex by a.s.r. non-life includes a contingent consideration with a remaining fair value of \u20ac\u00a02,8 million to be paid over a remaining period of two years. Of this amount, \u20ac\u00a01,4 million is expected to be paid no later than one year after the balance sheet date, the remaining \u20ac\u00a01,4 million no later than two years after the balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-646": { "value": "6.7.7 Contingent liabilities and assets 6.7.7.1 General claims and disputes The group is a respondent in a number of claims, disputes and legal proceedings arising from the normal conduct of business. Provisions are formed for such occurrences if, in management\u2019s opinion and after consultation with its legal advisors, a.s.r. is likely to have to make payments and the payable amount can be estimated with sufficient reliability. The costs of the compensation scheme for unit-linked insurance contracts have been fully recognised in the financial statements based on management\u2019s best knowledge of current facts, actions, claims, complaints and events. Provisions are recognised in the liabilities arising from insurance contracts (see chapter 6.5.15) and legal provisions (see chapter 6.5.18). Dutch insurers see an increase in insurance policies complaints / claims based on grounds other than the cost compensation. Current and possible future legal proceedings could have a substantial financial and reputational impact. However it is not possible at this time to make reliable estimates of the number of expected proceedings, possible future precedents and the financial impact of current and possible future proceedings. Currently there are no indications that such a provision would be necessary for a.s.r. As for other claims and legal proceedings, against a.s.r. known to management (and for which, in accordance with the defined principles, no provision has been formed), management believes, after having sought expert advice, that these claims have no chance of success, or that a.s.r. can successfully mount a defense against them, or that the outcome of the proceedings is unlikely to result in a significant loss for a.s.r. 6.7.7.2 Unit-Linked Products (beleggingsverzekeringen) Background Since the end of 2006, individual unit-linked life insurance products (beleggingsverzekeringen) have received negative attention in the Dutch media, from the Dutch Parliament, the AFM, consumers and consumer protection organisations. Elements of unit-linked policies are being challenged or may be challenged on multiple legal grounds. The criticism and scrutiny on unit-linked life insurance products led to the introduction of compensation schemes by Dutch insurance companies that have offered unit-linked products. In 2008, a.s.r. reached an outline agreement with two main consumer protection organisations to offer compensation to unit-linked policyholders in case the cost charge and/or risk premium charge exceeds a defined maximum. A full agreement on implementation of the compensation scheme was reached in 2012. The total recognised cumulative financial costs relating to the compensation scheme for Individual life in a.s.r.\u2019s income statement until 2022 was \u20ac\u00a01,026 million. This includes, amongst other things, compensation paid, amortisation of surrender penalties and costs relating to improved product offerings. The remaining provision in the balance sheet at 31 December 2022 is solely available to cover potential additional compensation (schrijnende gevallen) and costs relating to the compensation scheme. On the basis of this agreement, a.s.r. offered consumers additional measures such as alternative products and less costly investment funds. In addition to the compensation scheme, a.s.r. has implemented additional measures (flankerend beleid), including the ten best in class principles as formulated by the Dutch Minister of Finance. On 17 July 2015, the Dutch Ministry of Finance published an Order in Council (Algemene Maatregel van Bestuur), pursuant to which insurance companies can be sanctioned if they do not meet the compulsory targets set for approaching policyholders of unit-linked life insurances and prompting them to review their existing policies. The agreement with the two consumer protection organisations and additional measures are not binding for policyholders. Consequently, neither the implementation of the compensation schemes nor the additional measures offered by a.s.r. prevent individual policyholders from initiating legal proceedings against a.s.r. and making claims for damages. Legal proceedings a.s.r. is subject to a limited number of legal proceedings initiated by individual unit-linked policyholders, in most cases represented by claims organisations. While to date fewer than 10 cases are pending before Dutch courts and courts of appeal and fewer than 100 cases are pending before the Financial Services Complaints Board (\"FSCB\") (the Dispute Committee as well as the Committee of Appeal of the FSCB), there is no assurance that further proceedings will not be brought against a.s.r. in the future. Future legal proceedings regarding unit-linked life insurance policies might be brought upon a.s.r. by consumers individually, by consumer organisations acting on their behalf or in the form of a collective action. Furthermore, there is an ongoing lobby by consumer protection organisations, such as the Consumentenbond and Stichting Geldbelangen, to continuously gain media attention for unit-linked life insurance policies. These organisations argue, amongst other things, that consumers did not receive sufficient compensation based on the compensation scheme. a.s.r. is currently subject to three collective actions. The claims are all based on similar grounds and have been rejected by a.s.r. and a.s.r. defends itself in these legal proceedings. The timing and outcome of these collective actions is currently uncertain. In June 2016, Woekerpolis.nl initiated a collective action, requesting the Midden-Nederland District Court to declare that a.s.r. has sold products in the market which were defective in various respects (e.g. lack of transparency regarding cost charges and other product characteristics, and risks against which the insurer had failed to warn, such as substantial stock depreciations, inability to realise the projected final policy value, unrealistic capital projections due to the difference between geometric and arithmetic returns, and general terms and conditions governing costs which Woekerpolis.nl considered unfair). In its judgement of 6 February 2019, the court rejected all claims regarding transparency of costs and risks. Only with regard to the claim relating to administrative costs (\"administratiekosten\") that are calculated in ABC Spaarplan in case of high premiums, the court decided that this is unlawful. On 16 April 2019 a.s.r. received a notice of appeal from the Vereniging Woekerpolis.nl. Subsequently, the Vereniging Woekerpolis.nl has submitted its statement of appeal at the High Court of Arnhem Leeuwarden on 3 March 2020. The statement of response by a.s.r. has been deferred by the Court of Appeal. Main reason for this deferral lies with the developments regarding the preliminary questions from the High Court of the Hague towards the Supreme Court in the proceedings (Collective Action) between Woekerpolis.nl and another Dutch insurer. In March 2017, the Consumentenbond also initiated a collective action against a.s.r. based on similar grounds to that initiated by Woekerpolis.nl. In its judgement dated 11 March 2020 the Court dismissed all claims of ConsumentenBond against a.s.r. On 8 June 2020 a.s.r. received a notice of appeal from the Consumentenbond. In December 2019, claim organisation Wakkerpolis initiated a collective action against a.s.r. Although the claim from Wakkerpolis is largely based on similar grounds as the other two collective actions, it primarily concentrates on the lack of transparency of cost charges. In a decision on 23 November 2022 the Court rejected all claims regarding transparency of costs and risks and concluded that the products sold by a.s.r. cannot be considered as defective. Based on the contractual information provided by a.s.r., the Court is of the opinion that a.s.r. has complied with its information obligations. Risk profile and contingent liability unit-linked life insurance products The prolonged political, regulatory and public attention focused on unit-linked life insurance policies continues. Elements of unit-linked life insurance policies of a.s.r. are being challenged on multiple legal grounds in current, and may be challenged in future, legal proceedings. There is a risk that one or more of the current and/or future claims and/or allegations will succeed. To date, a number of rulings regarding unit-linked life insurance products in specific cases have been issued by the FSCB and courts (of appeal) in the Netherlands against a.s.r. and other insurers. In these proceedings, different (legal) approaches have been taken to come to a ruling. The outcomes of these rulings are diverse. Because the book of policies of a.s.r. dates back many years, contains of a variety of products with different features and conditions and because of the fact that rulings are diverse, no reliable estimation can be made regarding the timing and the outcome of the current and future legal proceedings brought against a.s.r. and other insurance companies. The total costs related to compensation for unit-linked insurance contracts as described above, have been fully recognised in the financial statements based on management\u2019s best knowledge of current facts, actions, claims, complaints and events. Provisions are recognised in the liabilities arising from insurance contracts (see chapter 6.5.15). Although the financial consequences of the legal developments could be substantial, a.s.r.\u2019s exposures cannot be reliably estimated or quantified at this point. If one or more of these legal proceedings should succeed, there is a risk a ruling, although legally only binding for the parties that are involved in the procedure, could be applied to or be relevant for other unit-linked life insurance policies sold by a.s.r. Consequently, the financial consequences of any of the current and/or future legal proceedings brought upon a.s.r. can be substantial for a.s.r.\u2019s Life insurance business and may have a material adverse effect on a.s.r.\u2019s financial position, business, reputation, revenues, results of operations, solvency, financial condition and prospects. 6.7.7.3 Obligations and guarantees Investment obligations for an amount of \u20ac\u00a0102 million (2021: \u20ac\u00a0128 million) have been assumed / issued for investment property. Investment obligations and guarantees for a total amount of \u20ac\u00a016 million (2021: \u20ac\u00a021 million) have been issued, for real estate development projects and the acquisition of property. Those guarantees were issued by principals for the execution of projects for the benefit of clients. The Dutch guarantee fund for motorised traffic has a latent claim on all insurers offering legal liability products. In line with the advise of the guarantee fund a.s.r.'s contingent liability is \u20ac\u00a010 million (2021: \u20ac\u00a010 million). a.s.r. also had irrevocable facilities of \u20ac\u00a0391 million (2021: \u20ac\u00a01,123 million) which mainly relate to mortgage offers issued. a.s.r. had no other guarantees at year-end 2022 (2021: \u20ac\u00a01 million). 6.7.7.4 Expected future lease payments The following table sets out the expected future lease payments for investment property and plant, showing the undiscounted lease payments to be received after the reporting date. Expected minimum future lease payments on non-cancellable investment property lease and plant \u00a031 December 2022 31 December 2021 To be received within 1 year 33 59 To be received between 1 and 2 years 29 44 To be received between 2 and 3 years 25 41 To be received between 3 and 4 years 21 38 To be received between 4 and 5 years 17 34 To be received after 5 years 89 396 \u00a0\u00a0\u00a0Total undiscounted lease payments 214 613 The investments properties, in retail, residential, offices and rural markets are leased to third parties, consisting of various lease terms in a range between shorter than one year and undetermined period with competitive rents mostly indexed to consumer prices. The plants are leased to third parties with lease terms longer than ten years. The strong decline in future lease payments is related to the reclassification of ASR DFLF to investments, see chapter 6.5.3. 6.7.7.5 Contingent considerations in acquisitions The consideration paid for Veherex by a.s.r. non-life includes a contingent consideration with a remaining fair value of \u20ac\u00a02,8 million to be paid over a remaining period of two years. Of this amount, \u20ac\u00a01,4 million is expected to be paid no later than one year after the balance sheet date, the remaining \u20ac\u00a01,4 million no later than two years after the balance sheet date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-649": { "value": "6.7.8 Events after the balance sheet date At the Extraordinary General Meeting of Shareholders held at 17 January 2023, a.s.r.\u2019s shareholders approved the acquisition by a.s.r. of the shares of Aegon Nederland and thereby the combination of the two businesses. For more information about the acquisition see chapter 6.4.5. ", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-480": { "value": "254000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwners", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "ixv-655": { "value": "6.8.3 Market risk Market risk is the risk of potential losses due to adverse movements in financial market variables. Exposure to market risk is measured by the impact of movements in financial variables such as equity prices, interest rates and property prices. The various types of market risk which are discussed in this chapter, are: interest rate risk equity risk property risk currency risk spread risk concentration risk Market risk reports are submitted to the FRC at least once a month. Key reports on market risk include the Solvency II and economic capital report, the interest rate risk report and the report on risk budgets related to the strategic asset mix. A summary of sensitivities to market risks for the regulatory solvency, total equity and profit for the year is presented in the tables below. The first table summarises the required capital for market risks based on the standard model: Market risk - required capital \u00a031 December 2022 31 December 2021 Interest rate 155 550 Equity 821 1,194 Property 1,068 1,125 Currency 135 120 Spread 876 1,118 Concentration - - Diversification (negative) -575 -692 \u00a0\u00a0\u00a0Total 2,481 3,416 The main market risks of a.s.r. are equity, property and spread risk. The market risks are within the bandwidth of the risk budgets, which are based on the strategic asset allocation study. Market risk decreased mainly driven by higher interest rates, decreasing equity and spread risk. The value of investment funds at year-end 2022 was \u20ac\u00a06,823 million (2021: \u20ac\u00a05,307 million). a.s.r. applies the look through approach for investment funds to assess the market risk. The interest rate risk is the maximum loss of (i) an upward shock or (ii) a downward shock of the yield curve. Per 2022 the upward shock is dominant, whereas per 2021 the downward shock was dominant. The diversification effect shows the effect of having a well-diversified investment portfolio. Solvency II sensitivities The Solvency II SCR is a Value at Risk-measure. Therefore, Solvency II ratio sensitivities are disclosed as the alternative analysis, instead of IFRS sensitivities, as permitted by IFRS. The sensitivities of the solvency ratio as at 31 December 2022, expressed as the impact on the group solvency ratio (in percentage points) are as presented in the table below. The total impact is split between the impact on the solvency ratio related to movement in the available capital and the required capital. The sensitivities are based on the situation per 31 December 2022. Solvency II sensitivities - market risks Effect on: Available capital Required capital Ratio Scenario (%-point) 31 December 2022 31 December 2021 31 December 2022 31 December 2021 31 December 2022 31 December 2021 UFR 3.2% -4 -8 - -1 -4 -9 Interest rate +1% (2022 incl. UFR 3.45% / 2021 incl. UFR 3.6%) -5 -7 -3 +18 -8 +10 Interest rate -1% (2022 incl. UFR 3.45% / 2021 incl. UFR 3.6%) +1 +7 -15 -13 -13 -7 Interest steepening +10 bps -1 -3 - - -1 -3 Volatility Adjustment -10bp -7 -9 -3 -2 -11 -10 Government spread + 50 bps / VA +10 bps (2021: VA: +11 bps) -3 -2 - - -3 -2 Mortgage spread +50 bps -8 -7 - +1 -8 -7 Equity prices -20% -11 -11 +15 +18 +3 +6 Property values -10% -10 -9 +4 +4 -6 -6 Spread +75bps/ VA +18bps (2021: VA +19bps) +10 +15 +1 +5 +11 +20 Inflation +30 bps -2 -2 - -1 -2 -2 Solvency II sensitivities - explanation Risk Scenario Interest rate risk - UFR 3.2% Measured as the impact of a lower UFR. For the valuation of liabilities, the extrapolation to the UFR of 3.2% after the last liquid point of 20 years remained unchanged. The impact on available capital, required capital and ratio relates to a comparison with a solvency ratio measured at a UFR of 3.45% for 2022 (3.6% for 2021). Interest rate risk (incl. UFR 3.45%/3.6%) Measured as the impact of a parallel 1% upward and downward movement of the interest rates. For the liabilities, the extrapolation to the UFR (3.45% for 2022 and 3.6% for 2021) after the last liquid point of 20 years remained unchanged. Interest steepening Measured as the impact of a linear steepening of the interest rate curve between 20Y and 30Y of 1 bps to 10 bps. Volatility Adjustment Measured as the impact of a 10 bps decrease in the Volatility Adjustment. Government spread Measured as the impact of an increase of spread on Government bonds of 50 bps. At the same it is assumed that the Volatility Adjustment will increase by 10 bps (2021: +11 bps). Mortgage spread Measured as the impact of a 50 bps increase of spreads on mortgages. Equity risk Measured as the impact of a 20% downward movement in equity prices. Property risk Measured as the impact of a 10% downward movement in the market value of real estate. Spread risk (including impact of spread movement on VA) Measured as the impact of an increase of spread on loans and corporate bonds of 75 bps. At the same time, it is assumed that the Volatility Adjustment will increase by 18 bps (2021: +19bps) based on reference portfolio. Inflation risk Measured as the impact of a 30 bps parallel increase of the inflation rates (EUSWI-curve). The extrapolation of the UFI remains unchanged. 6.8.3.1 Interest rate risk Interest rate risk is the risk that the value of assets, liabilities or financial instruments will change due to fluctuations in interest rates. Many insurance products are exposed to interest rate risk; the value of the products is closely related to the applicable interest rate curve. The interest rate risk of insurance products depends on the term to maturity, interest rate guarantees and profit-sharing features. Life insurance contracts are particularly sensitive to interest rate risk. The required capital for interest rate risk is determined by calculating the impact on the available capital due to changes in the yield curve. Both assets and liabilities are taken into account. The interest rate risk is the maximum loss of (i) an upward shock or (ii) a downward shock of the yield curve according to the prescribed methodology. a.s.r. applies a look through approach for investment funds to assess the interest rate risk. The interest rate risk is calculated by a relative shock up- and downward shock of the risk-free (basis) yield curve. All adjustments (credit spread, volatility adjustment) on this yield curve are considered constant. The yield curve is extrapolated to the UFR. The yield curve after shock is not extrapolated again to the UFR. The used shocks vary by maturity and the absolute shocks are higher for shorter maturities (descending: 75% to 20% and ascending: -70% to -20%): the yield curve up shock contains a minimum shock of 100bps; the yield curve after the downward shock is limited to zero (no negative interest rates); the yield curves of all currencies are shocked simultaneously. Interest rate risk - required capital \u00a031 December 2022 31 December 2021 SCR interest rate risk up -155 -239 SCR interest rate risk down -46 -550 \u00a0\u00a0\u00a0SCR interest rate risk 155 550 In 2022 the interest rate risk decreased due to the increase in interest rates. a.s.r. has assessed various scenarios to determine the sensitivity to interest rate risk. The impact on the solvency ratio is calculated by determining the difference in the change in available and required capital. Solvency II sensitivities - interest rate Effect on: Available capital Required capital Ratio Scenario (%-point) 31 December 2022 31 December 2021 31 December 2022 31 December 2021 31 December 2022 31 December 2021 UFR 3.2% -4 -8 - -1 -4 -9 Interest rate +1% (2022 incl. UFR 3.45% / 2021 incl. UFR 3.6%) -5 -7 -3 +18 -8 +10 Interest rate -1% (2022 incl. UFR 3.45% / 2021 incl. UFR 3.6%) +1 +7 -15 -13 -13 -7 Interest steepening +10 bps -1 -3 - - -1 -3 Volatility Adjustment -10bp -7 -9 -3 -2 -11 -10 Interest rate risk is managed by aligning fixed-income investments to the profile of the liabilities. Among other instruments, swaptions and interest rate swaps are used for hedging the specific interest rate risk arising from interest rate guarantees and profitsharing features in life insurance products. An interest rate risk policy is in place for a.s.r. Group as well as for the registered insurance companies. All interest rate- sensitive balance sheet items are in scope, including the employee benefit obligations of the Group. The interest rate sensitivity of solvency ratio should not exceed the pre-defined limit. In addition, the exposure to interest rate risk or various term buckets is subject to maximum amounts. 6.8.3.2 Equity risk The equity risk depends on the total exposure to equities. Both assets and liabilities are taken into account, as well as the put options on equities. In order to maintain a good understanding of the actual equity risk, a.s.r. applies the look-through approach for investment funds to assess the equity risk. The required capital for equity risk is determined by calculating the impact on the available capital due to an immediate drop in share prices. Both assets and liabilities are taken into account. Stocks listed in regulated markets in countries in the EEA or OECD are shocked by 39% together with the symmetric adjustment of the equity capital charge (type I). Stocks in countries that are not members of the EEA or OECD, unlisted equities, alternative investments, or investment funds in which the look-through principle is not possible, are shocked by 49% together with the symmetric adjustment of the equity capital charge (type II). Investments of a strategic nature are shocked by 22%. The equity capital of the renewable investments qualifying as an infrastructure investment (e.g. wind farm Wieringermeer) is shocked by the 30% infrastructure equity charge. a.s.r. applied the transitional measure for equity risk for shares, which came to an end at 31 December 2022. Equity risk - required capital \u00a031 December 2022 31 December 2021 SCR equity risk - required capital 821 1,194 In 2022 the equity risk decreased with \u20ac\u00a0373 million, mainly due to lower share prices which leads to a lower SCR equity risk, both driven by a decreased exposure to equities and a lower risk charge as a result of the symmetric adjustment. Furthermore, the SCR equity risk slightly increased due to the run-off of the transitional measure of equity risk. Solvency II sensitivities - equity prices Effect on: Available capital Required capital Ratio Scenario (%-point) 31 December 2022 31 December 2021 31 December 2022 31 December 2021 31 December 2022 31 December 2021 Equity prices -20% -11 -11 +15 +18 +3 +6 Composition of equity portfolio The fair value of equities and similar investments at year-end 2022 was \u20ac\u00a02,604 million (2021: \u20ac\u00a03,259 million). The decrease in 2022 was mainly due to the negative returns on the equity markets. The equities are diversified across the Netherlands (including participating interests), other European countries and the United States. A limited part of the portfolio consists of investments in emerging markets and alternatives. A portfolio of put options with a value of \u20ac\u00a031 million is in place to mitigate the equity risk. The table below shows the exposure of the equity portfolio to different categories. The total value is including the equities in externally managed funds. The category Other contains the investments of ASR infrastructure Renewables (AIR) in windmill - and solarparks which are in scope of 'Qualifying infrastructure equities other than corporate' (\u20ac\u00a0251 million). In 2022 the investments in renewables increased, however the exposure in 'Qualifying infrastructures equities other than corporate' decreased due to methodology change. In 2022 the net asset value of AIR is in scope of SCR equity risk instead of the underlying investments. Composition equity portfolio 6.8.3.3 Property risk The property risk depends on the total exposure to real estate. In order to maintain a good understanding of the actual property risk, a.s.r. applies the look through approach for investment funds to assess the property risk. The required capital for property risk is determined by calculating the impact on the available capital due to an immediate drop in property prices by 25%. Both assets and liabilities are taken into account. The product Agrarische Impact Erfpacht (AIE) has effectively a lower charge (average of 6.5%) due to the underlying risk mitigating characteristics of this product. Property risk - required capital \u00a031 December 2022 31 December 2021 SCR property risk - required capital 1,068 1,125 a.s.r. applies look through approach for participations which activities are primarily real estate investments. The SCR real estate risk decreased with \u20ac\u00a057 million in 2022. The real estate exposure decreased due to (i) transactions and improved look through data of property funds and (ii) higher property prices. Futhermore, the average SCR charge of AIE decreased from 10.8% to 6.5%. As a result of these effects, the required capital for property risk decreased with \u20ac\u00a035 million. The increased impact of LAC TP caused a decrease of \u20ac\u00a022 million. The sensitivity of the solvency ratio to changes in property value is monitored on a monthly basis. Sensitivity of regulatory solvency (Solvency II) to changes in property prices is shown in the following table. Solvency II sensitivities - property values Effect on: Available capital Required capital Ratio Scenario (%-point) 31 December 2022 31 December 2021 31 December 2022 31 December 2021 31 December 2022 31 December 2021 Property values -10% -10 -9 +4 +4 -6 -6 The property risk depends on the total exposure to property, which includes both property investments and property held for own use. The fair value of property was \u20ac\u00a05,001 million at year-end 2022 (2021: \u20ac\u00a05,031 million). The decrease in 2022 (approximately \u20ac\u00a030 million) was a result of both transactions (approximately \u20ac\u00a0-50 million) improved look through data of property funds (approximately \u20ac\u00a0-115 million) and increases in property prices (approximately \u20ac\u00a0135 million). Composition property portfolio 6.8.3.4 Currency risk Currency risk measures the impact of losses related to changes in currency exchange rates. The table below provides an overview of all currencies with exposure on liabilities and the currencies with the largest exposures. a.s.r. has currency risk to insurance products in American dollars (USD), Australian dollars (AUD) and Great British Pound (GBP). In 2021 a.s.r. implemented a new hedge policy for currency risk. For different investment categories a.s.r. has defined a target hedge ratio. The required capital for currency risk is determined by calculating the impact on the available capital due to a change in exchange rates. Both assets and liabilities are taken into account and a look-through approach is applied for investment funds. For each currency the maximum loss due to an upward and a downward shock of 25% is determined except for a small number of currencies where lower shocks are applied (a.o. Danish crown). Currency risk - required capital \u00a031 December 2022 31 December 2021 SCR currency risk - required capital 135 120 In 2022 the SCR currency risk has increased with \u20ac\u00a015 million. The main reason for this increase is the reduction of the target hedge ratio for USD credits and Emerging Market Debt. Specification currencies with largest exposure The exposure to USD has increased due to the reduction of the target hedge ratio for USD credits and Emerging Market Debt. Composition currency portfolio The total foreign exchange exposure at year-end 2022 was \u20ac\u00a0573 million (2021: \u20ac\u00a0506 million). 6.8.3.5 Spread risk Spread risk arises from the sensitivity of the value of assets and liabilities to changes in the level of credit spreads on the relevant risk-free interest rates. a.s.r. has a policy of maintaining a well-diversified high-quality investment grade portfolio while avoiding large risk concentrations. Going forward, the volatility in spreads will continue to have possible short-term effects on the market value of the fixed income portfolio. In the long run, the credit spreads are expected to be realised and to contribute to the growth of the own funds. The required capital for spread risk is determined by calculating the impact on the available capital due to the volatility of credit spreads over the term structure of the risk-free rate. The required capital for spread risk is equal to the sum of the capital requirements for bonds, structured products and credit derivatives. The capital requirement depends on (i) the market value, (ii) the modified duration and (iii) the credit quality category. Spread risk - required capital \u00a031 December 2022 31 December 2021 SCR spread risk - required capital 876 1,118 The SCR spread risk decreased in 2022 due to (i) the increased interest rates, which results in lower bond values and (ii) the run off of the bond portfolio, which resulted in lower durations and therefore lower spread risk. The sensitivity to spread risk is measured as the impact of an increase of spread on loans and corporate bonds of 75 bps. The VA is based on a reference portfolio. An increase of 75 bps of the spreads on loans and corporate bonds within the reference portfolio leads to an increase of the VA with 18 bps in 2022 (2021: 19 bps). The credit spread sensitivity decreased from +20 to +11. Solvency II sensitivities - spread risk Effect on: Available capital Required capital Ratio Scenario (%-point) 31 December 2022 31 December 2021 31 December 2022 31 December 2021 31 December 2022 31 December 2021 Spread +75bps/(2022: VA +18bps/2021: VA +19bps) +10 +15 +1 +5 +11 +20 Composition of fixed income portfolio Spread risk is managed on a portfolio basis within limits and risk budgets established by the relevant risk committees. Where relevant, credit ratings provided by the external rating agencies are used to determine risk budgets and monitor limits. A limited number of fixed-income investments do not have an external rating. These investments are generally assigned an internal rating. Internal ratings are based on methodologies and rating classifications similar to those used by external agencies. The following tables provide a detailed breakdown of the fixed-income exposure by (i) rating class and (ii) sector. Assets in scope of spread risk are, by definition, not in scope of counterparty default risk. The total exposure of assets in scope of spread risk is \u20ac\u00a020,653 million (2021: \u20ac\u00a028,562 million). The portfolio composition is similar to 2021. Composition fixed income portfolio by sector Composition fixed income portfolio by rating 6.8.3.6 Market risk concentrations Concentrations of market risk constitute an additional risk to an insurer. Concentration risk is the concentration of exposures to the same counterparty. Other possible concentrations (region, country, etc.) are not in scope. The capital requirement for concentration risk is determined in three steps: determine the exposure above threshold. The threshold depends on the credit quality of the counterparty; calculation of the capital requirement for each counterparty, based on a specified factor depending on the credit quality; aggregation of individual capital requirements for the various counterparties. According to the spread risk module, bonds and loans guaranteed by a certain government or international organisation are not in scope of concentration risk. Bank deposits can be excluded from concentration risk if they fulfil certain conditions. a.s.r. continuously monitors exposures in order to avoid concentrations in a single obligor outside of the risk appetite and has an overall limit on the total level of the required capital for market risk concentrations. The calculation of the market risk concentrations applies to the total investment portfolio, where, in line with Solvency II, government bonds are not included. The required capital for market risk concentrations is nil as per year-end 2022 (2021: nil). ", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-656": { "value": "Market risk is the risk of potential losses due to adverse movements in financial market variables. Exposure to market risk is measured by the impact of movements in financial variables such as equity prices, interest rates and property prices. The various types of market risk which are discussed in this chapter, are:
interest rate risk
equity risk
property risk
currency risk
spread risk
concentration risk
Market risk reports are submitted to the FRC at least once a month. Key reports on market risk include the Solvency II and economic capital report, the interest rate risk report and the report on risk budgets related to the strategic asset mix.
A summary of sensitivities to market risks for the regulatory solvency, total equity and profit for the year is presented in the tables below. The first table summarises the required capital for market risks based on the standard model:
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Interest rate | 155 | 550 |
| Equity | 821 | 1,194 |
| Property | 1,068 | 1,125 |
| Currency | 135 | 120 |
| Spread | 876 | 1,118 |
| Concentration | - | - |
| Diversification (negative) | -575 | -692 |
| \u00a0 | \u00a0 | \u00a0 |
| Total | 2,481 | 3,416 |
The main market risks of a.s.r. are equity, property and spread risk. The market risks are within the bandwidth of the risk budgets, which are based on the strategic asset allocation study. Market risk decreased mainly driven by higher interest rates, decreasing equity and spread risk.
The value of investment funds at year-end 2022 was \u20ac\u00a06,823 million (2021: \u20ac\u00a05,307 million). a.s.r. applies the look through approach for investment funds to assess the market risk.
The interest rate risk is the maximum loss of (i) an upward shock or (ii) a downward shock of the yield curve. Per 2022 the upward shock is dominant, whereas per 2021 the downward shock was dominant.
The diversification effect shows the effect of having a well-diversified investment portfolio.
The Solvency II SCR is a Value at Risk-measure. Therefore, Solvency II ratio sensitivities are disclosed as the alternative analysis, instead of IFRS sensitivities, as permitted by IFRS. The sensitivities of the solvency ratio as at 31 December 2022, expressed as the impact on the group solvency ratio (in percentage points) are as presented in the table below. The total impact is split between the impact on the solvency ratio related to movement in the available capital and the required capital. The sensitivities are based on the situation per 31 December 2022.
| Effect on: | Available capital | Required capital | Ratio | |||
|---|---|---|---|---|---|---|
| Scenario (%-point) | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 |
| UFR 3.2% | -4 | -8 | - | -1 | -4 | -9 |
| Interest rate +1% (2022 incl. UFR 3.45% / 2021 incl. UFR 3.6%) | -5 | -7 | -3 | +18 | -8 | +10 |
| Interest rate -1% (2022 incl. UFR 3.45% / 2021 incl. UFR 3.6%) | +1 | +7 | -15 | -13 | -13 | -7 |
| Interest steepening +10 bps | -1 | -3 | - | - | -1 | -3 |
| Volatility Adjustment -10bp | -7 | -9 | -3 | -2 | -11 | -10 |
| Government spread + 50 bps / VA +10 bps (2021: VA: +11 bps) | -3 | -2 | - | - | -3 | -2 |
| Mortgage spread +50 bps | -8 | -7 | - | +1 | -8 | -7 |
| Equity prices -20% | -11 | -11 | +15 | +18 | +3 | +6 |
| Property values -10% | -10 | -9 | +4 | +4 | -6 | -6 |
| Spread +75bps/ VA +18bps (2021: VA +19bps) | +10 | +15 | +1 | +5 | +11 | +20 |
| Inflation +30 bps | -2 | -2 | - | -1 | -2 | -2 |
| Risk | Scenario |
|---|---|
| Interest rate risk - UFR 3.2% | Measured as the impact of a lower UFR. For the valuation of liabilities, the extrapolation to the UFR of 3.2% after the last liquid point of 20 years remained unchanged. The impact on available capital, required capital and ratio relates to a comparison with a solvency ratio measured at a UFR of 3.45% for 2022 (3.6% for 2021). |
| Interest rate risk (incl. UFR 3.45%/3.6%) | Measured as the impact of a parallel 1% upward and downward movement of the interest rates. For the liabilities, the extrapolation to the UFR (3.45% for 2022 and 3.6% for 2021) after the last liquid point of 20 years remained unchanged. |
| Interest steepening | Measured as the impact of a linear steepening of the interest rate curve between 20Y and 30Y of 1 bps to 10 bps. |
| Volatility Adjustment | Measured as the impact of a 10 bps decrease in the Volatility Adjustment. |
| Government spread | Measured as the impact of an increase of spread on Government bonds of 50 bps. At the same it is assumed that the Volatility Adjustment will increase by 10 bps (2021: +11 bps). |
| Mortgage spread | Measured as the impact of a 50 bps increase of spreads on mortgages. |
| Equity risk | Measured as the impact of a 20% downward movement in equity prices. |
| Property risk | Measured as the impact of a 10% downward movement in the market value of real estate. |
| Spread risk (including impact of spread movement on VA) | Measured as the impact of an increase of spread on loans and corporate bonds of 75 bps. At the same time, it is assumed that the Volatility Adjustment will increase by 18 bps (2021: +19bps) based on reference portfolio. |
| Inflation risk | Measured as the impact of a 30 bps parallel increase of the inflation rates (EUSWI-curve). The extrapolation of the UFI remains unchanged. |
Interest rate risk is the risk that the value of assets, liabilities or financial instruments will change due to fluctuations in interest rates. Many insurance products are exposed to interest rate risk; the value of the products is closely related to the applicable interest rate curve. The interest rate risk of insurance products depends on the term to maturity, interest rate guarantees and profit-sharing features. Life insurance contracts are particularly sensitive to interest rate risk. The required capital for interest rate risk is determined by calculating the impact on the available capital due to changes in the yield curve. Both assets and liabilities are taken into account. The interest rate risk is the maximum loss of (i) an upward shock or (ii) a downward shock of the yield curve according to the prescribed methodology. a.s.r. applies a look through approach for investment funds to assess the interest rate risk.
The interest rate risk is calculated by a relative shock up- and downward shock of the risk-free (basis) yield curve.
All adjustments (credit spread, volatility adjustment) on this yield curve are considered constant. The yield curve is extrapolated to the UFR. The yield curve after shock is not extrapolated again to the UFR.
The used shocks vary by maturity and the absolute shocks are higher for shorter maturities (descending: 75% to 20% and ascending: -70% to -20%):
the yield curve up shock contains a minimum shock of 100bps;
the yield curve after the downward shock is limited to zero (no negative interest rates);
the yield curves of all currencies are shocked simultaneously.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| SCR interest rate risk up | -155 | -239 |
| SCR interest rate risk down | -46 | -550 |
| \u00a0 | \u00a0 | \u00a0 |
| SCR interest rate risk | 155 | 550 |
In 2022 the interest rate risk decreased due to the increase in interest rates.
a.s.r. has assessed various scenarios to determine the sensitivity to interest rate risk. The impact on the solvency ratio is calculated by determining the difference in the change in available and required capital.
| Effect on: | Available capital | Required capital | Ratio | |||
|---|---|---|---|---|---|---|
| Scenario (%-point) | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 |
| UFR 3.2% | -4 | -8 | - | -1 | -4 | -9 |
| Interest rate +1% (2022 incl. UFR 3.45% / 2021 incl. UFR 3.6%) | -5 | -7 | -3 | +18 | -8 | +10 |
| Interest rate -1% (2022 incl. UFR 3.45% / 2021 incl. UFR 3.6%) | +1 | +7 | -15 | -13 | -13 | -7 |
| Interest steepening +10 bps | -1 | -3 | - | - | -1 | -3 |
| Volatility Adjustment -10bp | -7 | -9 | -3 | -2 | -11 | -10 |
Interest rate risk is managed by aligning fixed-income investments to the profile of the liabilities. Among other instruments, swaptions and interest rate swaps are used for hedging the specific interest rate risk arising from interest rate guarantees and profitsharing features in life insurance products.
An interest rate risk policy is in place for a.s.r. Group as well as for the registered insurance companies. All interest rate- sensitive balance sheet items are in scope, including the employee benefit obligations of the Group. The interest rate sensitivity of solvency ratio should not exceed the pre-defined limit. In addition, the exposure to interest rate risk or various term buckets is subject to maximum amounts.
The equity risk depends on the total exposure to equities. Both assets and liabilities are taken into account, as well as the put options on equities. In order to maintain a good understanding of the actual equity risk, a.s.r. applies the look-through approach for investment funds to assess the equity risk. The required capital for equity risk is determined by calculating the impact on the available capital due to an immediate drop in share prices. Both assets and liabilities are taken into account. Stocks listed in regulated markets in countries in the EEA or OECD are shocked by 39% together with the symmetric adjustment of the equity capital charge (type I). Stocks in countries that are not members of the EEA or OECD, unlisted equities, alternative investments, or investment funds in which the look-through principle is not possible, are shocked by 49% together with the symmetric adjustment of the equity capital charge (type II). Investments of a strategic nature are shocked by 22%. The equity capital of the renewable investments qualifying as an infrastructure investment (e.g. wind farm Wieringermeer) is shocked by the 30% infrastructure equity charge.
a.s.r. applied the transitional measure for equity risk for shares, which came to an end at 31 December 2022.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| SCR equity risk - required capital | 821 | 1,194 |
In 2022 the equity risk decreased with \u20ac\u00a0373 million, mainly due to lower share prices which leads to a lower SCR equity risk, both driven by a decreased exposure to equities and a lower risk charge as a result of the symmetric adjustment. Furthermore, the SCR equity risk slightly increased due to the run-off of the transitional measure of equity risk.
| Effect on: | Available capital | Required capital | Ratio | |||
|---|---|---|---|---|---|---|
| Scenario (%-point) | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 |
| Equity prices -20% | -11 | -11 | +15 | +18 | +3 | +6 |
The fair value of equities and similar investments at year-end 2022 was \u20ac\u00a02,604 million (2021: \u20ac\u00a03,259 million). The decrease in 2022 was mainly due to the negative returns on the equity markets.
The equities are diversified across the Netherlands (including participating interests), other European countries and the United States. A limited part of the portfolio consists of investments in emerging markets and alternatives. A portfolio of put options with a value of \u20ac\u00a031 million is in place to mitigate the equity risk.
The table below shows the exposure of the equity portfolio to different categories. The total value is including the equities in externally managed funds. The category Other contains the investments of ASR infrastructure Renewables (AIR) in windmill - and solarparks which are in scope of 'Qualifying infrastructure equities other than corporate' (\u20ac\u00a0251 million). In 2022 the investments in renewables increased, however the exposure in 'Qualifying infrastructures equities other than corporate' decreased due to methodology change. In 2022 the net asset value of AIR is in scope of SCR equity risk instead of the underlying investments.
The property risk depends on the total exposure to real estate. In order to maintain a good understanding of the actual property risk, a.s.r. applies the look through approach for investment funds to assess the property risk.
The required capital for property risk is determined by calculating the impact on the available capital due to an immediate drop in property prices by 25%. Both assets and liabilities are taken into account. The product Agrarische Impact Erfpacht (AIE) has effectively a lower charge (average of 6.5%) due to the underlying risk mitigating characteristics of this product.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| SCR property risk - required capital | 1,068 | 1,125 |
a.s.r. applies look through approach for participations which activities are primarily real estate investments.
The SCR real estate risk decreased with \u20ac\u00a057 million in 2022. The real estate exposure decreased due to (i) transactions and improved look through data of property funds and (ii) higher property prices. Futhermore, the average SCR charge of AIE decreased from 10.8% to 6.5%. As a result of these effects, the required capital for property risk decreased with \u20ac\u00a035 million. The increased impact of LAC TP caused a decrease of \u20ac\u00a022 million.
The sensitivity of the solvency ratio to changes in property value is monitored on a monthly basis. Sensitivity of regulatory solvency (Solvency II) to changes in property prices is shown in the following table.
| Effect on: | Available capital | Required capital | Ratio | |||
|---|---|---|---|---|---|---|
| Scenario (%-point) | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 |
| Property values -10% | -10 | -9 | +4 | +4 | -6 | -6 |
The property risk depends on the total exposure to property, which includes both property investments and property held for own use. The fair value of property was \u20ac\u00a05,001 million at year-end 2022 (2021: \u20ac\u00a05,031 million). The decrease in 2022 (approximately \u20ac\u00a030 million) was a result of both transactions (approximately \u20ac\u00a0-50 million) improved look through data of property funds (approximately \u20ac\u00a0-115 million) and increases in property prices (approximately \u20ac\u00a0135 million).
Currency risk measures the impact of losses related to changes in currency exchange rates. The table below provides an overview of all currencies with exposure on liabilities and the currencies with the largest exposures. a.s.r. has currency risk to insurance products in American dollars (USD), Australian dollars (AUD) and Great British Pound (GBP).
In 2021 a.s.r. implemented a new hedge policy for currency risk. For different investment categories a.s.r. has defined a target hedge ratio. The required capital for currency risk is determined by calculating the impact on the available capital due to a change in exchange rates. Both assets and liabilities are taken into account and a look-through approach is applied for investment funds. For each currency the maximum loss due to an upward and a downward shock of 25% is determined except for a small number of currencies where lower shocks are applied (a.o. Danish crown).
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| SCR currency risk - required capital | 135 | 120 |
In 2022 the SCR currency risk has increased with \u20ac\u00a015 million. The main reason for this increase is the reduction of the target hedge ratio for USD credits and Emerging Market Debt.
The exposure to USD has increased due to the reduction of the target hedge ratio for USD credits and Emerging Market Debt.
The total foreign exchange exposure at year-end 2022 was \u20ac\u00a0573 million (2021: \u20ac\u00a0506 million).
Spread risk arises from the sensitivity of the value of assets and liabilities to changes in the level of credit spreads on the relevant risk-free interest rates. a.s.r. has a policy of maintaining a well-diversified high-quality investment grade portfolio while avoiding large risk concentrations. Going forward, the volatility in spreads will continue to have possible short-term effects on the market value of the fixed income portfolio. In the long run, the credit spreads are expected to be realised and to contribute to the growth of the own funds. The required capital for spread risk is determined by calculating the impact on the available capital due to the volatility of credit spreads over the term structure of the risk-free rate.
The required capital for spread risk is equal to the sum of the capital requirements for bonds, structured products and credit derivatives. The capital requirement depends on (i) the market value, (ii) the modified duration and (iii) the credit quality category.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| SCR spread risk - required capital | 876 | 1,118 |
The SCR spread risk decreased in 2022 due to (i) the increased interest rates, which results in lower bond values and (ii) the run off of the bond portfolio, which resulted in lower durations and therefore lower spread risk.
The sensitivity to spread risk is measured as the impact of an increase of spread on loans and corporate bonds of 75 bps. The VA is based on a reference portfolio. An increase of 75 bps of the spreads on loans and corporate bonds within the reference portfolio leads to an increase of the VA with 18 bps in 2022 (2021: 19 bps). The credit spread sensitivity decreased from +20 to +11.
| Effect on: | Available capital | Required capital | Ratio | |||
|---|---|---|---|---|---|---|
| Scenario (%-point) | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 |
| Spread +75bps/(2022: VA +18bps/2021: VA +19bps) | +10 | +15 | +1 | +5 | +11 | +20 |
Spread risk is managed on a portfolio basis within limits and risk budgets established by the relevant risk committees. Where relevant, credit ratings provided by the external rating agencies are used to determine risk budgets and monitor limits. A limited number of fixed-income investments do not have an external rating. These investments are generally assigned an internal rating. Internal ratings are based on methodologies and rating classifications similar to those used by external agencies.
The following tables provide a detailed breakdown of the fixed-income exposure by (i) rating class and (ii) sector. Assets in scope of spread risk are, by definition, not in scope of counterparty default risk. The total exposure of assets in scope of spread risk is \u20ac\u00a020,653 million (2021: \u20ac\u00a028,562 million). The portfolio composition is similar to 2021.
Concentrations of market risk constitute an additional risk to an insurer. Concentration risk is the concentration of exposures to the same counterparty. Other possible concentrations (region, country, etc.) are not in scope. The capital requirement for concentration risk is determined in three steps:
determine the exposure above threshold. The threshold depends on the credit quality of the counterparty;
calculation of the capital requirement for each counterparty, based on a specified factor depending on the credit quality;
aggregation of individual capital requirements for the various counterparties.
According to the spread risk module, bonds and loans guaranteed by a certain government or international organisation are not in scope of concentration risk. Bank deposits can be excluded from concentration risk if they fulfil certain conditions.
a.s.r. continuously monitors exposures in order to avoid concentrations in a single obligor outside of the risk appetite and has an overall limit on the total level of the required capital for market risk concentrations. The calculation of the market risk concentrations applies to the total investment portfolio, where, in line with Solvency II, government bonds are not included.
The required capital for market risk concentrations is nil as per year-end 2022 (2021: nil).
Counterparty default risk reflects possible losses due to unexpected default or deterioration in the credit standing of counterparties and debtors. Counterparty default risk affects several types of assets:
mortgages
savings-linked mortgage loans
derivatives
reinsurance
receivables
cash and deposits
Assets that are in scope of spread risk are, by definition, not in scope of counterparty default risk and vice versa. The Solvency II regime makes a distinction between two types of exposures:
Type 1: These counterparties generally have a rating (reinsurance, derivatives, current account balances, deposits with ceding companies and issued guarantee (letter of credit). The exposures are not diversified.
Type 2: These counterparties are normally unrated (receivables from intermediaries and policyholders, mortgages with private individuals or SMEs). The exposures are generally diversified.
The total capital requirement for counterparty risk is an aggregation of the capital requirement for type 1 exposure and the capital requirement for type 2 exposure by taking 75% correlation.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Type 1 | 103 | 113 |
| Type 2 | 138 | 289 |
| Diversification (negative) | -15 | -21 |
| \u00a0 | \u00a0 | \u00a0 |
| Total | 226 | 381 |
The Counterparty default risk type 1 has decreased due to the decrease in derivatives exposure, which is the results of the change in SCR interest rate risk. The SCR interest rate shock scenario Up is dominant per year-end 2022, while end of 2021 the opposite applied. If an IRS disappears because of a default, this results in a reduction of SCR interest Up. In 2021 the opposite was true, SCR interest Down increased.
The Counterparty default risk type 2 has decreased due to the decreased exposure of the mortgage portfolio. This is driven by the quarterly revaluation of the underlying property and the increase of interest rates. The total counterparty risk has decreased by \u20ac\u00a0155 million.
Mortgages are granted for the account and risk of third parties and for a.s.r.\u2019s own account. The a.s.r. portfolio consists only of Dutch mortgages with a limited counterparty default risk. The fair value of a.s.r.\u2019s mortgage portfolio was \u20ac\u00a09,534 million at year-end 2022 (2021: \u20ac\u00a011,181 million). The decrease in value is driven by a lower market value of the mortgages (due to the increase of interest rates) and positive revaluations of the underlying property.
The Loan-to-Value ratio is based on the value of the mortgage according to Solvency II principals with respect to the a.s.r. calculated collateral. The percentage of mortgages which are in arrears for over three months has increased from 0.02% in December 2021 to 0.03% in December 2022.
The counterparty default risk of the savings-linked mortgage loans ('Spaarlossen') depends on the counterparty. For 13% of the portfolio, the counterparties are Special Purpose Vehicles. The risk is limited due to the robust quality of the mortgages in the Special Purpose Vehicles in combination with the tranching. a.s.r. has a cession-retrocession agreement with the counterparty for 84% of the portfolio, for which the risk is limited. Effectively, a.s.r. recognises the underlying receivable from the counterparty (or in the case of insolvency of the counterparty the mortgage loans transfers as collateral), mitigating the counterparty default risk of the savings-linked mortgage loans.
On September 1, 2021 DNB issued the Q&A and Good Practices document on the treatment of saving mortgages and in December, the Dutch Association of Insurers shared its additional guidance on this subject. These documents provide further requirements and guidelines on the valuation, risk calculations and balance sheet classification. Saving deposits without collateral agreement are considered in the SCR Spread Risk Module. The saving deposits with collateral are treated in the Counterparty Risk Module. Furthermore the collaterised deposits are split in two: a) the outstanding part and corresponding interest are considered in the SCR Counterparty risk type 2 (zero risk); b) the future premiums and corresponding interest are treated as the uncollaterised derivative contract of SCR Counterparty Risk Type 1.
Please note that due to a methodology change, the composition of the savings-linked mortgage loans portfolio for 2021 has been adjusted.
Over the Counter (OTC) derivatives are primarily used by a.s.r. to manage the interest-rate risks incorporated into the insurance liabilities. Interest-rate derivatives are traded with a well-diversified and qualitative dealer panel with whom there is an established International Swaps and Derivatives Association (ISDA) contract and a Credit Support Annex (CSA) in place. These CSAs include specific agreements on the exchange of collateral limiting market and counterparty risk. The outstanding value of the interest rate derivative positions is matched by collateral received from eligible counterparties, minimising the net counterparty default risk.
a.s.r. collaborates with reinsurers for fire and catastrophe risk. When entering into reinsurance contracts for fire and catastrophe, a.s.r. requires the counterparty to be rated at least single A. With respect to long-tail business and other sectors, the minimum permitted rating is single A.
The table above shows the exposure to reinsurers per rating. The total exposure to reinsurers at year-end 2022 was \u20ac\u00a0309 million (2021: \u20ac\u00a0419 million).
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| AAA | 0% | 0% |
| AA | 86% | 93% |
| A | 14% | 6% |
| NR | 0% | 1% |
| Total | 100% | 100% |
The receivables decreased to \u20ac\u00a0632 million in 2022 (2021: \u20ac\u00a0853 million), mainly driven by lower other receivables and lower receivables from Health insurance fund. The receivables of Policyholders increased due to the new VVT-contract. The composition of the receivables is presented in the table below.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Policyholders | 133 | 75 |
| Intermediaries | 65 | 89 |
| Reinsurance receivables | 63 | 83 |
| Health insurance fund | 70 | 148 |
| Other | 301 | 459 |
| \u00a0 | \u00a0 | \u00a0 |
| Total | 632 | 853 |
The current accounts on the balance sheet amounted \u20ac\u00a01,756 million in 2022 (2021: \u20ac\u00a01,517 million).
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| AAA | 0 | 0 |
| AA | 0 | 0 |
| A | 1,744 | 1,489 |
| Lower than A | 11 | 28 |
| Total | 1,756 | 1,517 |
a.s.r. has no deposits in scope of counterparty default risk.
Liquidity risk is the risk that a.s.r. is not able to meet its financial obligations to policyholders and other creditors when they become due and payable, at a reasonable cost and in a timely manner. Liquidity risk is not quantified in the SCR of a.s.r. and is therefore separately discussed.
a.s.r. recognises different levels of liquidity management. First, short-term liquidity management which covers the day-to-day cash requirements and aims to meet short term liquidity risk targets. Second level covers the long-term liquidity management. This, among others, considers the strategic matching of liquidity & funding needs in different business conditions in which market liquidity risk could materialise. Finally stress liquidity management refers to the ability to respond to a potential crisis situation as a result of a market event and/or an a.s.r.-specific event.
Due to rising interest rates in 2022, a.s.r. experienced liquidity outflow as a result of cash variation margin outflow related to the ISDA/CSA- and Clearing agreements of derivatives. The cash outflow was financed by returning earlier received cash collateral to counterparties. As at 31 December 2022 a.s.r. remained a net receiver of cash collateral. Other sources of liquidity risk are (unexpected) lapses in the insurance portfolios and catastrophe risk. a.s.r. monitors its liquidity risk via different risk reporting and monitoring processes including cash management reports, cash flow forecasts and liquidity dashboards in which liquidity outflows are calculated for different stress scenarios. For long-term liquidity management purposes, liquidity is also taken into account in the asset allocation process.
a.s.r.\u2019s liquidity management principle consists of three components. First, a well-diversified funding base in order to provide liquidity for cash management purposes. A portion of assets must be held in cash and invested in unencumbered marketable securities so it can be used for collateralised borrowing or asset sales. In order to cover liquidity needs in stress events a.s.r. has committed repo-facilities in place to ensure liquidity under all market circumstances. Second, the strategic asset allocation should reflect the expected and contingent liquidity needs of liabilities. Finally, an adequate and up-to-date liquidity policy and contingency plan are in place to enable management to act effectively and efficiently in times of crisis.
In managing the liquidity risk from financial liabilities, a.s.r. relies on holding liquid assets comprising cash and cash equivalents and investment grade securities for which there is an active and liquid market. These assets can be readily sold or lend to meet liquidity requirements. As at 31 December 2022, a.s.r. had cash (\u20ac\u00a01,546 million), short-term secured deposits (\u20ac\u00a0700 million) and liquid government bonds (\u20ac\u00a09,309 million).
The following table shows the contractual undiscounted cash flows of the insurance liabilities based on Solvency II. All other line items as well as the total carrying value are based on IFRS principles.
The insurance liabilities include the impact of expected lapses and mortality as well as non profit sharing cash flows. Profit sharing cash flows of insurance liabilities are not taken into account, nor are equities, property and swaptions. Since the portfolio of a.s.r. PPI is fully consolidated, an extra line-item relating to liabilities arising from investment contracts, is included. Furthermore, cash flows of the pension benefit obligations are taken into account.
| \u00a0 | Payable on demand | < 1 years | 1-5 years | 5-10 years | > 10 years | Carrying value |
|---|---|---|---|---|---|---|
| 31 December 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Insurance liabilities | - | 5,234 | 10,236 | 9,845 | 34,294 | 42,639 |
| Liabilities arising from investment contracts | - | 11 | 95 | 225 | 1,669 | 2,000 |
| Pension Benefit Obligation | - | 64 | 540 | 725 | 3,594 | 2,722 |
| Derivatives liabilities | - | 360 | 2,608 | 2,006 | 1,310 | 5,523 |
| Financial liabilities | 2,219 | 1,064 | 215 | 74 | 2,088 | 5,639 |
| Future interest payments | - | 90 | 450 | 563 | 1,390 | - |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total | 2,219 | 6,822 | 14,144 | 13,438 | 44,345 | 58,523 |
| \u00a0 | Payable on demand | < 1 years | 1-5 years | 5-10 years | > 10 years | Carrying value |
|---|---|---|---|---|---|---|
| 31 December 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Insurance liabilities | - | 5,240 | 10,134 | 9,722 | 33,335 | 52,404 |
| Liabilities arising from investment contracts | - | 12 | 89 | 227 | 1,624 | 1,952 |
| Pension Benefit Obligation | - | 54 | 468 | 638 | 3,288 | 3,990 |
| Derivatives liabilities | - | 230 | 183 | 185 | 293 | 759 |
| Financial liabilities | 6,155 | 597 | 250 | 67 | 1,060 | 8,117 |
| Future interest payments | - | 27 | 177 | 218 | 664 | - |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total | 6,155 | 6,159 | 11,301 | 11,056 | 40,264 | 67,223 |
When the amount payable is not fixed the amount reported is determined by reference to the conditions existing at the reporting date.
Financial liabilities payable on demand include the liability recognised for cash collateral received under ISDAs, concluded with counterparties. The related cash collateral received is recognised as cash and cash equivalents, and not part of the liquidity risk exposure table.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-657": { "value": "6.8.3.4 Currency risk Currency risk measures the impact of losses related to changes in currency exchange rates. The table below provides an overview of all currencies with exposure on liabilities and the currencies with the largest exposures. a.s.r. has currency risk to insurance products in American dollars (USD), Australian dollars (AUD) and Great British Pound (GBP). In 2021 a.s.r. implemented a new hedge policy for currency risk. For different investment categories a.s.r. has defined a target hedge ratio. The required capital for currency risk is determined by calculating the impact on the available capital due to a change in exchange rates. Both assets and liabilities are taken into account and a look-through approach is applied for investment funds. For each currency the maximum loss due to an upward and a downward shock of 25% is determined except for a small number of currencies where lower shocks are applied (a.o. Danish crown). Currency risk - required capital \u00a031 December 2022 31 December 2021 SCR currency risk - required capital 135 120 In 2022 the SCR currency risk has increased with \u20ac\u00a015 million. The main reason for this increase is the reduction of the target hedge ratio for USD credits and Emerging Market Debt. Specification currencies with largest exposure The exposure to USD has increased due to the reduction of the target hedge ratio for USD credits and Emerging Market Debt. Composition currency portfolio The total foreign exchange exposure at year-end 2022 was \u20ac\u00a0573 million (2021: \u20ac\u00a0506 million). ", "dimensions": { "concept": "ifrs-full:DisclosureOfEffectOfChangesInForeignExchangeRatesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-658": { "value": "Spread risk arises from the sensitivity of the value of assets and liabilities to changes in the level of credit spreads on the relevant risk-free interest rates. a.s.r. has a policy of maintaining a well-diversified high-quality investment grade portfolio while avoiding large risk concentrations. Going forward, the volatility in spreads will continue to have possible short-term effects on the market value of the fixed income portfolio. In the long run, the credit spreads are expected to be realised and to contribute to the growth of the own funds. The required capital for spread risk is determined by calculating the impact on the available capital due to the volatility of credit spreads over the term structure of the risk-free rate.
The required capital for spread risk is equal to the sum of the capital requirements for bonds, structured products and credit derivatives. The capital requirement depends on (i) the market value, (ii) the modified duration and (iii) the credit quality category.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| SCR spread risk - required capital | 876 | 1,118 |
The SCR spread risk decreased in 2022 due to (i) the increased interest rates, which results in lower bond values and (ii) the run off of the bond portfolio, which resulted in lower durations and therefore lower spread risk.
The sensitivity to spread risk is measured as the impact of an increase of spread on loans and corporate bonds of 75 bps. The VA is based on a reference portfolio. An increase of 75 bps of the spreads on loans and corporate bonds within the reference portfolio leads to an increase of the VA with 18 bps in 2022 (2021: 19 bps). The credit spread sensitivity decreased from +20 to +11.
| Effect on: | Available capital | Required capital | Ratio | |||
|---|---|---|---|---|---|---|
| Scenario (%-point) | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 | 31 December 2022 | 31 December 2021 |
| Spread +75bps/(2022: VA +18bps/2021: VA +19bps) | +10 | +15 | +1 | +5 | +11 | +20 |
Spread risk is managed on a portfolio basis within limits and risk budgets established by the relevant risk committees. Where relevant, credit ratings provided by the external rating agencies are used to determine risk budgets and monitor limits. A limited number of fixed-income investments do not have an external rating. These investments are generally assigned an internal rating. Internal ratings are based on methodologies and rating classifications similar to those used by external agencies.
The following tables provide a detailed breakdown of the fixed-income exposure by (i) rating class and (ii) sector. Assets in scope of spread risk are, by definition, not in scope of counterparty default risk. The total exposure of assets in scope of spread risk is \u20ac\u00a020,653 million (2021: \u20ac\u00a028,562 million). The portfolio composition is similar to 2021.
Counterparty default risk reflects possible losses due to unexpected default or deterioration in the credit standing of counterparties and debtors. Counterparty default risk affects several types of assets:
mortgages
savings-linked mortgage loans
derivatives
reinsurance
receivables
cash and deposits
Assets that are in scope of spread risk are, by definition, not in scope of counterparty default risk and vice versa. The Solvency II regime makes a distinction between two types of exposures:
Type 1: These counterparties generally have a rating (reinsurance, derivatives, current account balances, deposits with ceding companies and issued guarantee (letter of credit). The exposures are not diversified.
Type 2: These counterparties are normally unrated (receivables from intermediaries and policyholders, mortgages with private individuals or SMEs). The exposures are generally diversified.
The total capital requirement for counterparty risk is an aggregation of the capital requirement for type 1 exposure and the capital requirement for type 2 exposure by taking 75% correlation.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Type 1 | 103 | 113 |
| Type 2 | 138 | 289 |
| Diversification (negative) | -15 | -21 |
| \u00a0 | \u00a0 | \u00a0 |
| Total | 226 | 381 |
The Counterparty default risk type 1 has decreased due to the decrease in derivatives exposure, which is the results of the change in SCR interest rate risk. The SCR interest rate shock scenario Up is dominant per year-end 2022, while end of 2021 the opposite applied. If an IRS disappears because of a default, this results in a reduction of SCR interest Up. In 2021 the opposite was true, SCR interest Down increased.
The Counterparty default risk type 2 has decreased due to the decreased exposure of the mortgage portfolio. This is driven by the quarterly revaluation of the underlying property and the increase of interest rates. The total counterparty risk has decreased by \u20ac\u00a0155 million.
Mortgages are granted for the account and risk of third parties and for a.s.r.\u2019s own account. The a.s.r. portfolio consists only of Dutch mortgages with a limited counterparty default risk. The fair value of a.s.r.\u2019s mortgage portfolio was \u20ac\u00a09,534 million at year-end 2022 (2021: \u20ac\u00a011,181 million). The decrease in value is driven by a lower market value of the mortgages (due to the increase of interest rates) and positive revaluations of the underlying property.
The Loan-to-Value ratio is based on the value of the mortgage according to Solvency II principals with respect to the a.s.r. calculated collateral. The percentage of mortgages which are in arrears for over three months has increased from 0.02% in December 2021 to 0.03% in December 2022.
The counterparty default risk of the savings-linked mortgage loans ('Spaarlossen') depends on the counterparty. For 13% of the portfolio, the counterparties are Special Purpose Vehicles. The risk is limited due to the robust quality of the mortgages in the Special Purpose Vehicles in combination with the tranching. a.s.r. has a cession-retrocession agreement with the counterparty for 84% of the portfolio, for which the risk is limited. Effectively, a.s.r. recognises the underlying receivable from the counterparty (or in the case of insolvency of the counterparty the mortgage loans transfers as collateral), mitigating the counterparty default risk of the savings-linked mortgage loans.
On September 1, 2021 DNB issued the Q&A and Good Practices document on the treatment of saving mortgages and in December, the Dutch Association of Insurers shared its additional guidance on this subject. These documents provide further requirements and guidelines on the valuation, risk calculations and balance sheet classification. Saving deposits without collateral agreement are considered in the SCR Spread Risk Module. The saving deposits with collateral are treated in the Counterparty Risk Module. Furthermore the collaterised deposits are split in two: a) the outstanding part and corresponding interest are considered in the SCR Counterparty risk type 2 (zero risk); b) the future premiums and corresponding interest are treated as the uncollaterised derivative contract of SCR Counterparty Risk Type 1.
Please note that due to a methodology change, the composition of the savings-linked mortgage loans portfolio for 2021 has been adjusted.
Over the Counter (OTC) derivatives are primarily used by a.s.r. to manage the interest-rate risks incorporated into the insurance liabilities. Interest-rate derivatives are traded with a well-diversified and qualitative dealer panel with whom there is an established International Swaps and Derivatives Association (ISDA) contract and a Credit Support Annex (CSA) in place. These CSAs include specific agreements on the exchange of collateral limiting market and counterparty risk. The outstanding value of the interest rate derivative positions is matched by collateral received from eligible counterparties, minimising the net counterparty default risk.
a.s.r. collaborates with reinsurers for fire and catastrophe risk. When entering into reinsurance contracts for fire and catastrophe, a.s.r. requires the counterparty to be rated at least single A. With respect to long-tail business and other sectors, the minimum permitted rating is single A.
The table above shows the exposure to reinsurers per rating. The total exposure to reinsurers at year-end 2022 was \u20ac\u00a0309 million (2021: \u20ac\u00a0419 million).
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| AAA | 0% | 0% |
| AA | 86% | 93% |
| A | 14% | 6% |
| NR | 0% | 1% |
| Total | 100% | 100% |
The receivables decreased to \u20ac\u00a0632 million in 2022 (2021: \u20ac\u00a0853 million), mainly driven by lower other receivables and lower receivables from Health insurance fund. The receivables of Policyholders increased due to the new VVT-contract. The composition of the receivables is presented in the table below.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Policyholders | 133 | 75 |
| Intermediaries | 65 | 89 |
| Reinsurance receivables | 63 | 83 |
| Health insurance fund | 70 | 148 |
| Other | 301 | 459 |
| \u00a0 | \u00a0 | \u00a0 |
| Total | 632 | 853 |
The current accounts on the balance sheet amounted \u20ac\u00a01,756 million in 2022 (2021: \u20ac\u00a01,517 million).
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| AAA | 0 | 0 |
| AA | 0 | 0 |
| A | 1,744 | 1,489 |
| Lower than A | 11 | 28 |
| Total | 1,756 | 1,517 |
a.s.r. has no deposits in scope of counterparty default risk.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-662": { "value": "Liquidity risk is the risk that a.s.r. is not able to meet its financial obligations to policyholders and other creditors when they become due and payable, at a reasonable cost and in a timely manner. Liquidity risk is not quantified in the SCR of a.s.r. and is therefore separately discussed.
a.s.r. recognises different levels of liquidity management. First, short-term liquidity management which covers the day-to-day cash requirements and aims to meet short term liquidity risk targets. Second level covers the long-term liquidity management. This, among others, considers the strategic matching of liquidity & funding needs in different business conditions in which market liquidity risk could materialise. Finally stress liquidity management refers to the ability to respond to a potential crisis situation as a result of a market event and/or an a.s.r.-specific event.
Due to rising interest rates in 2022, a.s.r. experienced liquidity outflow as a result of cash variation margin outflow related to the ISDA/CSA- and Clearing agreements of derivatives. The cash outflow was financed by returning earlier received cash collateral to counterparties. As at 31 December 2022 a.s.r. remained a net receiver of cash collateral. Other sources of liquidity risk are (unexpected) lapses in the insurance portfolios and catastrophe risk. a.s.r. monitors its liquidity risk via different risk reporting and monitoring processes including cash management reports, cash flow forecasts and liquidity dashboards in which liquidity outflows are calculated for different stress scenarios. For long-term liquidity management purposes, liquidity is also taken into account in the asset allocation process.
a.s.r.\u2019s liquidity management principle consists of three components. First, a well-diversified funding base in order to provide liquidity for cash management purposes. A portion of assets must be held in cash and invested in unencumbered marketable securities so it can be used for collateralised borrowing or asset sales. In order to cover liquidity needs in stress events a.s.r. has committed repo-facilities in place to ensure liquidity under all market circumstances. Second, the strategic asset allocation should reflect the expected and contingent liquidity needs of liabilities. Finally, an adequate and up-to-date liquidity policy and contingency plan are in place to enable management to act effectively and efficiently in times of crisis.
In managing the liquidity risk from financial liabilities, a.s.r. relies on holding liquid assets comprising cash and cash equivalents and investment grade securities for which there is an active and liquid market. These assets can be readily sold or lend to meet liquidity requirements. As at 31 December 2022, a.s.r. had cash (\u20ac\u00a01,546 million), short-term secured deposits (\u20ac\u00a0700 million) and liquid government bonds (\u20ac\u00a09,309 million).
The following table shows the contractual undiscounted cash flows of the insurance liabilities based on Solvency II. All other line items as well as the total carrying value are based on IFRS principles.
The insurance liabilities include the impact of expected lapses and mortality as well as non profit sharing cash flows. Profit sharing cash flows of insurance liabilities are not taken into account, nor are equities, property and swaptions. Since the portfolio of a.s.r. PPI is fully consolidated, an extra line-item relating to liabilities arising from investment contracts, is included. Furthermore, cash flows of the pension benefit obligations are taken into account.
| \u00a0 | Payable on demand | < 1 years | 1-5 years | 5-10 years | > 10 years | Carrying value |
|---|---|---|---|---|---|---|
| 31 December 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Insurance liabilities | - | 5,234 | 10,236 | 9,845 | 34,294 | 42,639 |
| Liabilities arising from investment contracts | - | 11 | 95 | 225 | 1,669 | 2,000 |
| Pension Benefit Obligation | - | 64 | 540 | 725 | 3,594 | 2,722 |
| Derivatives liabilities | - | 360 | 2,608 | 2,006 | 1,310 | 5,523 |
| Financial liabilities | 2,219 | 1,064 | 215 | 74 | 2,088 | 5,639 |
| Future interest payments | - | 90 | 450 | 563 | 1,390 | - |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total | 2,219 | 6,822 | 14,144 | 13,438 | 44,345 | 58,523 |
| \u00a0 | Payable on demand | < 1 years | 1-5 years | 5-10 years | > 10 years | Carrying value |
|---|---|---|---|---|---|---|
| 31 December 2021 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Insurance liabilities | - | 5,240 | 10,134 | 9,722 | 33,335 | 52,404 |
| Liabilities arising from investment contracts | - | 12 | 89 | 227 | 1,624 | 1,952 |
| Pension Benefit Obligation | - | 54 | 468 | 638 | 3,288 | 3,990 |
| Derivatives liabilities | - | 230 | 183 | 185 | 293 | 759 |
| Financial liabilities | 6,155 | 597 | 250 | 67 | 1,060 | 8,117 |
| Future interest payments | - | 27 | 177 | 218 | 664 | - |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Total | 6,155 | 6,159 | 11,301 | 11,056 | 40,264 | 67,223 |
When the amount payable is not fixed the amount reported is determined by reference to the conditions existing at the reporting date.
Financial liabilities payable on demand include the liability recognised for cash collateral received under ISDAs, concluded with counterparties. The related cash collateral received is recognised as cash and cash equivalents, and not part of the liquidity risk exposure table.
", "dimensions": { "concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-665": { "value": "The solvency ratio stood at 222% as at 31 December 2022 after distribution of the proposed dividend and the proceeds of the \u20ac\u00a00.6 billion share issue and is based on the standard formula as a result of \u20ac\u00a07,346 million EOF and \u20ac\u00a03,307 million SCR.
The decrease of EOF was mainly driven by interest and spread developments and decreasing stock markets partially offset by organic capital creation and an increasing VA. The decrease of required was mainly the result of the development of market risks (interest, equity and spread).
The table above presents the reconciliation of IFRS equity to the solvency II as per 31 December 2022. The main differences between the IFRS equity and EOF Solvency II are:
Adjustment of other equity instruments (the other equity instruments excludes any discretionary interest);
Total net revaluation of assets, such as loans and mortgages, and revaluation of the technical provisions;
Other revaluations mainly elimination of goodwill;
Own fund items, for example addition of subordinated liabilities, other equity instruments (excluding any discretionary interest), foreseeable dividend and valuation difference of financial institutions.
Overall capital management is administered at group level. a.s.r. currently intends to consider investing capital above the management target Solvency II ratio (calculated based on the standard formula) of 160% with the objective of creating value for its shareholders. If and when a.s.r. operates at a certain level (which may change over time) that is considerably above the management target, and it assesses that it cannot invest this capital in value-creating opportunities for a prolonged period of time, a.s.r. may decide, but is not obliged, to return (part of this) capital to its shareholders.
If a.s.r. chooses to return capital, it plans to do so in a form that is efficient for shareholders at that time. a.s.r. actively manages its in-force business, which is expected to result in free capital generation over time. Additionally, business improvement and balance sheet restructuring should improve the capital generation capacity while advancing the risk profile of the company. The legal entities are individually capitalised and excess capital over management\u2019s targets for the legal entities is intended to be upstreamed to the holding company as far as is needed for amongst others covering external dividend, coupon payments on hybrids / senior financing instruments and holding costs and in so far the local regulations and the internal risk appetite statement allow. Excess capital that is upstreamed to the holding company is added to and managed in the holding cash buffer until it is further distributed and used to cover dividends, coupons and other holding expenses. The capital and cash attribution to the holding is closely monitored and managed on a continuous basis.
The group is committed to maintain a strong capital position in order to be a robust and sustainable insurer for its policyholders and other stakeholders. The objective is to maintain a solvency ratio well above the minimum levels as defined in the risk appetite statements and above the relevant management threshold levels. Sensitivities are periodically performed for principal risks and annual stress tests are performed to test a.s.r.\u2019s robustness to withstand moderate to severe scenarios. An additional objective is to achieve a combination of a capital position and a risk profile that is at least in line with a 'single A' rating by Standard & Poor\u2019s.
The SCR is reported on a quarterly basis and proxies are made on both a monthly and weekly basis. The internal minimum solvency ratio for a.s.r. as formulated in the risk appetite statement is 120%. The lower limit solvency target is 140%. The management threshold level for the solvency ratio is above 160%. The solvency ratio stood at 222% at 31 December 2022 after final dividend and proceeds of the share issue, which was comfortably above the internal requirement of 120% and the management threshold level of 160%.
In accordance with a.s.r.\u2019s dividend policy, the liquidity of the underlying entities is not taken into account for the liquidity position of the group. However, the capital is recognised in the capital position of the group, since a.s.r. has the ability to realise the capital of this OTSO, for example by selling the entity. Specifically regarding a.s.r. health basic in 2022, no dividend or capital withdrawals have taken place.
The table below shows how the eligible own funds of a.s.r. relate to the different capital targets.
The required capital stood at \u20ac\u00a03,307 million per 31 December 2022 (2021: \u20ac\u00a04,185 million). The required capital (before diversification) consists for 2022 \u20ac\u00a02,481 million out of market risk and the insurance risk amounted to \u20ac\u00a03,166 million.
a.s.r.'s Solvency II ratio, including financial institutions, complied during 2022 with the applicable externally imposed capital requirement. The capital requirements of the financial institutions fall under a different sectoral supervision regime.
The table below presents the solvency ratio at group level as at the date indicated.
| \u00a0 | 31 December 2022 | 31 December 2021 |
|---|---|---|
| Eligible Own Funds Solvency II | 7,346 | 8,189 |
| Required capital | 3,307 | 4,185 |
| \u00a0 | \u00a0 | \u00a0 |
| Solvency II ratio excluding Financial Institutions | 222% | 196% |
| \u00a0 | \u00a0 | \u00a0 |
| Eligible Own Funds Solvency II | 7,441 | 8,270 |
| Required capital | 3,360 | 4,233 |
| \u00a0 | \u00a0 | \u00a0 |
| Solvency II ratio including Financial Institutions | 221% | 195% |
The Solvency II ratio stood at 222% (excluding financial institutions) as at 31 December 2022 (2021: 196%). The Solvency II ratio including financial institutions stood at 221% as at 31 December 2022 (2021: 195%). The Solvency II ratios presented are not final until filed with the regulators.
Under Solvency II it is permitted to reduce the required capital with the mitigating tax effects resulting from a 1-in-200-year loss (Shock loss). There is a mitigating tax effect to the extent that the Shock loss (BSCR + Operational risk) is deductible for tax purposes and can be compensated with taxable profits. This positive tax effect can only be taken into account when sufficiently substantiated (\u2018more likely than not\u2019). a.s.r. included a beneficial effect on its solvency ratio(s) due to the application of the LAC DT. The LAC DT benefit was \u20ac\u00a0804 million at year-end 2022.
Relevant regulation and current guidance (Delegated Regulation, Level 3 guidelines, Dutch Central Bank Q&A\u2019s and IAS12) is taken into account in the development of the LAC DT methodology.
a.s.r. uses an advanced model for the LAC DT of both a.s.r. life and a.s.r. non-life and a \u2018basic\u2019 model for a.s.r. health basic and supplementary. In the advanced model future fiscal profits are used to underpin the LAC DT, while in the basic model no future profits are used. Both models are and will be updated in case constrained by additional guidance or legislation provided.
The a.s.r. solvency ratio does not include any contingent liability potentially arising from any of the current and / or future legal proceedings in relation to unit-linked insurance contracts or for other products sold, issued or advised on by a.s.r.\u2019s insurance subsidiaries in the past, the reason being that it is impossible at this time to make reliable estimates because the book of policies of a.s.r. dates back many years, contains of a variety of products with different features and conditions and because of the fact that rulings are diverse.
On 22 September 2021 the European Commission published its proposal for the revision of Solvency II. It consists of various changes to the Solvency II framework, affecting most notably the liability discount curve, the risk margin and the volatility adjustment (VA). In July 2022, the Council reached an agreement on their common position. The Parliament has tabled many amendments and will vote on their final position in early 2023. The next step then is for the European Parliament, the Council to negotiate the final legislative texts of the revision of Solvency II. It is expected that the changes will come into effect in 2025 at the earliest and that some measures will include a phase-in period. Quantitative impact of the EC proposal has been analysed and appears to be more favourable compared to the earlier EIOPA advice, but a conclusion is only possible after specifications have been finalised.
Standard & Poor\u2019s confirmed the single A rating of a.s.r., a.s.r. Life and a.s.r. Non-life on 9 September 2022 and on 27 October 2022 for a.s.r. including Aegon Nederland.
| Ratings Standard & Poor's | Type | Rating | Outlook | Rating & outlook since |
|---|---|---|---|---|
| ASR Nederland N.V. | CCR | BBB+ | Stable | 15 May 2014 |
| ASR Levensverzekering N.V. | FSR | A | Stable | 23 August 2012 |
| ASR Levensverzekering N.V. | CCR | A | Stable | 23 August 2012 |
| ASR Schadeverzekering N.V. | FSR | A | Stable | 23 August 2012 |
| ASR Schadeverzekering N.V. | CCR | A | Stable | 23 August 2012 |
CCR: counterparty credit rating
FSR: financial strength rating
Rating reports can be found on the corporate website: www.asrnl.com
On 31 March 2022, a.s.r. announced the acquisition of Sweco Capital Consultants, to be effective from 1 May 2022. With the acquisition, a.s.r.\u2019s Real Estate Investment Manager strengthens is position in real estate and infrastructure investments. The acquisition will add to a.s.r.\u2019s ambition to develop into a full-service real estate investment manager.
As part of the funding for the Aegon transaction, on 22 November 2022 a.s.r. issued a \u20ac\u00a01 billion subordinated Tier 2 capital instrument (\u201cTier 2 Notes\u201d). The Tier 2 Notes are priced at 430 basis points over the 11 year EUR mid-swap rate, with a fixed rate coupon of 7%. The Tier 2 Notes have a scheduled maturity date in 2043 and are first callable at a.s.r.\u2019s discretion in 2033. As the issue is specifically earmarked to fund the Aegon transaction, the Tier 2 Notes are not included in the Solvency position.
On 27 October 2022, the date of the announcement of the Aegon transaction, a.s.r. issued \u20ac\u00a0593.6 million capital by way of an accelerated bookbuild offering of 13,805,720 new ordinary shares in the Company with a nominal value of \u20ac\u00a00.16 per ordinary share. The new shares have been placed at a price of \u20ac\u00a043.00 per new share.
Following the additional capital distributions of \u20ac\u00a075 million per annum in 2020 and 2021, a.s.r. made a further capital distribution of \u20ac\u00a075 million in 2022 between 24 February 2022 and 24 May 2022. In total, 1.798.472 ordinary shares a.s.r. were repurchased at an average price of \u20ac\u00a041.70 per share.\u00a0
Upon announcement of the Aegon transaction, a.s.r. announced that the share buy back programme would be halted, in line with policy. a.s.r.\u2019s capital management states that any additional capital distribution shall be considered in the light of opportunities for larger acquisitions and will be conditional upon our Solvency II ratio (based on the standard formula) to remain above 175% (lowered from 180%), as a.s.r. aims to maintain a robust balance sheet. Any additional distribution will be financed from the available OCC, taking into account the regular dividend, room for potential bolt-on acquisitions and re-risking.
a.s.r. has proposed a total dividend per share of \u20ac\u00a02.70 over the full year 2022 (2021: \u20ac\u00a02.42 per share). Taking into account the interim dividend of \u20ac\u00a00.98 per share, the final dividend amounts to \u20ac\u00a01.72 per share. The final dividend amounts to \u20ac\u00a0254.4 million based on the number of shares per 31 December 2022. Upon announcement of the Aegon transaction, a.s.r. communicated that the progressive dividend policy will be increased to mid to high single digit annual growth until 2025.
In accordance with the Delegated Regulation and the recommendations of DNB, netting on de balance sheet is only allowed with same tax authority and with same timing. Based on this netting principles, a.s.r. group contains a DTA and a DTL on the balance sheet. For tiering principles the split in DTA and DTL is not applicable.
", "dimensions": { "concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-481": { "value": "980000", "decimals": -4, "dimensions": { "concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR/xbrli:shares" } }, "ixv-482": { "value": "1720000", "decimals": -4, "dimensions": { "concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersPerShare", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR/xbrli:shares" } }, "ixv-668": { "value": "a.s.r. manages its business primarily using operational key performance indicators (KPIs). The operating result is the KPI covering the overall profitability of the business. Furthermore, a.s.r. uses other operational measures such as the COR, the life operating expenses as well as the availability and creation of capital, based on the Solvency II standard formula, as key figures in business decision making (see chapter 6.9).
The operating result is managed and presented at the consolidated a.s.r. and at a segment level (see chapter 6.4.3) and is also the key profitability indicator at business line level. The operating result is an inclusive measure covering all result components that can be influenced by the regular business. As such the operating result is the single bottom line performance indicator covering the performance of the business.
As a.s.r. applies shadow accounting and realised gains and loss accounting under IFRS 4, to ensure that insurance liabilities are adequate and to ensure that capital gains or losses on assets backing the insurance liabilities are allocated to the insurance liabilities, the operating result only differentiates from the IFRS result on items which are not directly related to its business. The capital gains on assets backing the insurance liabilities are allocated to the technical provisions and are released into the (operating) result over time. The operating result therefore reflects all investment related components that can be influenced by the business, as included in the IFRS result, but does not include any impairments on financial instruments, nor capital gains and fair value changes on the assets not backing the insurance liabilities (mostly equity and real estate investments).
It is current market practice for insurers to use an operating result to measure the underlying business performance, however the various current operating result definitions in the market seem to diverge. The a.s.r. operating result definition has limited deviations from the IFRS result. Following the implementation of IFRS 17 the operating result definitions need to be revised which may provide the opportunity to enhance the comparability of the operating result definition in the market.
Operating result is calculated by adjusting result before tax for continuing operations reported in accordance with IFRS, as adjusted for the changes in accounting policies and for the following:
Investment related: investment income of an incidental nature (including capital gains and losses, impairments, fair value changes and inflation linked value changes of bonds) on financial instruments for own account, net of applicable shadow accounting and net of additional provisions recognised for realised gains and losses on financial assets backing the insurance liabilities (\u2018compensation of realised capital gains\u2019) impact;
Incidental items:
Model- and methodological changes of a fundamental nature;
Results of non-core operations;
Non-recurring or one-off items related to the ongoing business; and
Other non-recurring or one-off items, which are not directly related to the core business and/or ongoing business of the group, restructuring costs, regulatory costs not related to business activities, changes in the own pension arrangements and expenses related to M&A activities and start-ups.
Starting from 2022 the inflation linked value changes of bonds are classified as non-operating result. These are added under the header 'investment related'. Also in line with the a.s.r. accounting manual, the non-recurring or one-off items related to the ongoing business are included in the definition above; since 2022, this includes the impact of the increase of minimum wages due to government intervention as a result of high inflation.
The RoE, which is based on the operating result, is defined as:
The operating result adjusted for hybrid expenses and the applicable tax divided by
The IFRS equity adjusted for unrealised capital gains reserve and equity components of non-core activities.
a.s.r. introduced the operating result in 2015 prior to the IPO. The operating result has since been the KPI for managing the profitability of the business. The eight-year comparison of the IFRS result and the operating result shows that the IFRS result for the year is more prone to volatility. In every year except 2020 and 2022 the IFRS result has exceeded the operating result. In 2020 and 2022, the operating result was higher than the IFRS result.
In 2022, indirect investment income decreased (\u20ac\u00a0-226 million), mostly driven by lower, but still positive, revaluations on real estate and lower realised results on fixed income securities. Impairments on investments increased by \u20ac\u00a067 million, related to decreasing equity prices on the stock markets and negative revaluations of participations in fixed income and mortgage funds driven by increasing market interest rates, see chapter 6.5.5 and 6.6.9.
In addition, the impact of incidentals was more negative in 2022 compared to 2021, see below.
The development of the operating results shows a steady increase as the business has grown.
The reconciliation of the IFRS result for the year to the operating result is presented as follows:
| \u00a0 | 2022 | 2021 |
|---|---|---|
| Result before tax | 929 | 1,209 |
| minus: investment related | 78 | 303 |
| minus: incidentals | -188 | -104 |
| \u00a0 | \u00a0 | \u00a0 |
| Operating result | 1,039 | 1,009 |
Starting from 2022 the inflation linked value changes are classified as non-operating result. The comparative figures 'investment related' in 2021 have been adjusted accordingly for an amount of \u20ac\u00a012 million.
Indirect investment income amounted to \u20ac\u00a078 million, a decrease of \u20ac\u00a0226 million compared to 2021. The decrease is due to market developments as outlined above. Indirect investment income consists of \u20ac\u00a0-288 million realised gains and losses (2021: \u20ac\u00a0490 million), \u20ac\u00a038 million fair value gains and losses (2021: \u20ac\u00a0110 million), \u20ac\u00a0-95 million impairments (2021: \u20ac\u00a0-22 million), \u20ac\u00a0303 million realised gains and losses release from insurance liabilities (2021: \u20ac\u00a0-263 million addition), \u20ac\u00a058 million inflation linked value changes included in investment income (2021: \u20ac\u00a012 million) and \u20ac\u00a061 million other adjustments mainly to prevent doublecounting with own pension scheme results under incidentals (2021: \u20ac\u00a0-23 million). See respective notes for further information on the movements between 2021 and 2022.
Incidentals decreased by \u20ac\u00a084 million to \u20ac\u00a0-188 million. This was primarily driven by strengthening of Disability provisions related to the 10% increase of the legal minimum wage as of 1 January 2023 (\u20ac\u00a0-91 million). In 2022, incidentals also comprise results of the employee benefit pension scheme, revaluations of property development operations, regulatory project implementation costs (IFRS 17 and IFRS 9), amortisation of intangibles identified in business combinations (VOBA, other intangible assets), M&A costs related to the business combination of a.s.r. and Aegon Nederland N.V. and start-up costs for innovations.
", "dimensions": { "concept": "ifrs-full:DisclosureOfProfitLossFromOperatingActivitiesExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-669": { "value": " 6.11 Company financial statements 6.11.1 Company balance sheet Company balance sheet (in \u20ac\u00a0millions and before profit appropriation) Note 31 December 2022 31 December 2021 Non-current assets \u00a0\u00a0\u00a0Intangible assets 6.11.3.2 35 38 Property and equipment 6.11.3.3 219 229 Subsidiaries 6.11.3.4 6,265 8,293 Investments 6.11.3.5 2,039 502 Loans to group companies 6.11.3.6 71 45 Loans and deposits 6.11.3.7 - 20 Derivatives \u00a03 - Deferred tax assets 6.11.3.8 - 62 Total non-current assets \u00a08,633 9,191 \u00a0\u00a0\u00a0\u00a0Current assets \u00a0\u00a0\u00a0Other receivables 6.11.3.9 3,363 3,587 Cash and cash equivalents 6.11.3.10 104 18 Total current assets \u00a03,468 3,605 \u00a0\u00a0\u00a0\u00a0Total assets \u00a012,101 12,796 \u00a0\u00a0\u00a0\u00a0Equity \u00a0\u00a0\u00a0Share capital 6.11.3.11 24 22 Share premium reserve 6.11.3.11 1,533 956 Legal reserves 6.11.3.11 27 2,445 Actuarial gains and losses 6.11.3.11 -168 -1,055 Retained earnings 6.11.3.11 3,783 3,247 Treasury shares 6.11.3.11 -79 -83 \u00a0\u00a0\u00a0\u00a0Net result for the year \u00a0732 942 Less: interim dividend \u00a0-131 -111 Unappropriated result 6.11.3.11 601 830 Equity attributable to shareholders \u00a05,722 6,363 Other equity instruments 6.11.3.11 1,004 1,004 Equity attributable to holders of equity instruments \u00a06,726 7,367 \u00a0\u00a0\u00a0\u00a0Provisions \u00a0\u00a0\u00a0Employee benefits 6.11.3.12 2,742 4,013 Other provisions 6.11.3.13 3 8 Total provisions \u00a02,745 4,021 \u00a0\u00a0\u00a0\u00a0Long-term liabilities \u00a0\u00a0\u00a0Subordinated liabilities 6.11.3.14 1,980 992 Borrowings 6.11.3.15 226 234 Deferred tax liabilities 6.11.3.8 130 - Total long-term liabilities \u00a02,336 1,226 \u00a0\u00a0\u00a0\u00a0Current liabilities \u00a0\u00a0\u00a0Due to banks 6.11.3.16 78 105 Other liabilities 6.11.3.17 216 77 Total current liabilities \u00a0294 182 \u00a0\u00a0\u00a0\u00a0Total equity and liabilities \u00a012,101 12,796 The numbers following the line items refer to the relevant chapters in the notes to the company financial statements. 6.11.2 Company income statement Company income statement (in \u20ac\u00a0millions) Note 2022 2021 Operating expenses 6.11.3.18 -141 -135 Impairments 6.11.3.7 19 - Other expenses 6.11.3.19 -1 -99 Restructuring provision expenses \u00a0-1 - Other income \u00a04 - \u00a0\u00a0\u00a0\u00a0Income from subsidiaries and investments \u00a0\u00a0\u00a0Share of result in subsidiaries 6.11.3.4 777 1,109 Investment income 6.11.3.20 106 51 Realised gains and losses \u00a03 - Fair value gains and losses \u00a0-3 -2 \u00a0\u00a0\u00a0\u00a0Interest expense 6.11.3.21 -61 -51 \u00a0\u00a0\u00a0\u00a0Result before tax \u00a0702 874 \u00a0\u00a0\u00a0\u00a0Income tax (expense) / gain \u00a030 68 Net result \u00a0732 942 The share of result in subsidiaries is non-taxable as a result of the participation exemption under Dutch tax law. 6.11.3 Notes to the company financial statements 6.11.3.1 Accounting policies The company financial statements are prepared in accordance with Title 9, Book 2 of the Dutch Civil Code. The consolidated financial statements of a.s.r. for 2022 have been prepared in accordance with IFRS \u2013 including the IAS and Interpretations \u2013 as adopted by the EU (EU-IFRS), and with part 9 of the book of the Dutch Civil Code. In accordance with Section 362(8), Book 2 of the Dutch Civil Code, the same accounting policies for the recognition and measurement of assets and liabilities and determination of results applied to the company financial statements are applied to the consolidated financial statements. Investments in group companies are recognised, using the equity method, in accordance with the accounting policies used in a.s.r.\u2019s consolidated financial statements whereby the goodwill, if any, is presented separately. The share of profit of group companies is reported in conformity with the accounting policies used in a.s.r.\u2019s consolidated financial statements. Lease contracts are disclosed using IFRS 16 based on the option under RJ 292.1. Unless stated otherwise, all amounts presented in these financial statements are in millions of \u20ac. Calculations in the tables are made using unrounded figures. As a result rounding differences can occur. 6.11.3.2 Intangible assets Intangible assets \u00a02022 2021 Goodwill 17 17 Intangible assets 17 21 \u00a0\u00a0\u00a0Total intangible assets 35 38 The goodwill relates to the acquisition of BNG Vermogensbeheer in 2016 (\u20ac\u00a04 million) and to the acquisition of Generali in 2018 (\u20ac\u00a013 million). No impairments were deemed necessary. For more information see chapter 6.5.1. The change in the amount of intangible assets relates to amortisation which is presented in the operating expenses. 6.11.3.3 Property and equipment Property and equipment \u00a02022 2021 Right-of-use assets: \u00a0\u00a0Land and buildings owned by subsidiary 209 216 Vehicles 7 10 Other 3 3 \u00a0\u00a0\u00a0Total property and equipment 219 229 The right-of-use assets includes property and equipment that is leased by a.s.r. Land and buildings owned by subsidiary relates mainly to the a.s.r. head office, which is owned by a.s.r. life. Changes in property and equipment \u00a02022 2021 At 1 January 229 272 Additions 2 3 Depreciation -11 -12 Remeasurement - -33 Impairments - - Other changes - -1 \u00a0\u00a0\u00a0At 31 December 219 229 \u00a0\u00a0\u00a0Gross carrying amount as at 31 December 259 260 Accumulated depreciation as at 31 December -40 -31 Accumulated impairments as at 31 December - - \u00a0\u00a0\u00a0Net carrying value as at 31 December 219 229 Depreciation of property and equipment is recorded in the operating expenses (see chapter 6.11.3.19). 6.11.3.4 Subsidiaries Subsidiaries \u00a02022 2021 At 1 January 8,293 7,572 Additions 39 4 Share of result 777 1,109 Dividend received -753 -683 Revaluations -2,091 318 Other changes - -27 \u00a0\u00a0\u00a0At 31 December 6,265 8,293 The decrease in revaluations is mainly due to unrealised losses in a.s.r. life and a.s.r. non-life. 6.11.3.5 Investments The investments consists of cash invested in government bonds with a maturity of less than one year to optimise the Solvency II ratio, see chapter 6.11.3.10. 6.11.3.6 Loans to group companies Loans to group companies \u00a02022 2021 At 1 January 45 41 Issues 26 9 Repayments - -5 \u00a0\u00a0\u00a0At 31 December 71 45 The loans to group companies are \u20ac\u00a071 million (2021: \u20ac\u00a045 million) which are expected to be settled more than one year after the balance sheet date and an average interest rate of 5.90% (2021: 5.14%). Interest income on loans to group companies amounts to \u20ac\u00a02 million (2021: \u20ac\u00a02 million). 6.11.3.7 Loans and deposits Loans and deposits \u00a02022 2021 At 1 January 20 18 Issues - 1 Repayments -1 - Impairments 19 - Other changes -38 1 \u00a0\u00a0\u00a0At 31 December - 20 An impairment in due from banks was reversed. Other changes mainly relates to the sale of a loan to a.s.r. life. 6.11.3.8 Deferred tax assets The deferred tax assets mainly arises from the difference in commercial and fiscal valuation of employee benefits (including the assets resulting from the insurance contracts, which are administrated by a.s.r. life) amounting to \u20ac\u00a0-130 million (2021: \u20ac\u00a0170 million). The deferred tax of the equalisation reserve amounts nil, due to the release of the equalisation reserve in 2022 (2021: \u20ac\u00a0108 million). 6.11.3.9 Other receivables The other receivables includes receivables from group companies, which include the receivable with respect to non-qualifying plan assets (see chapter 6.5.17) administered by a.s.r. life amounting to \u20ac\u00a03,193 million (2021: \u20ac\u00a03,308 million). The plan assets administered by a.s.r. life include the separate account to fund future inflation indexation amounting to \u20ac\u00a0372 million as at 31 December 2022 (2021: \u20ac\u00a0192 million). The remaining portion of the receivables from group companies is payable on demand. 6.11.3.10 Cash and cash equivalents In 2022, cash is invested in short-term government bonds, see chapter 6.11.3.5. Cash and cash equivalents are fully and freely available. 6.11.3.11 Equity Equity \u00a0Share capital Share premium reserve Legal reserves Actuarial gains and losses Retained earnings Treasury shares Unappropriated result Other equity instruments Equity At 1 January 2022 22 956 2,445 -1,055 3,247 -83 830 1,004 7,366 Appropriation of the result previous year - - - - 830 - -830 - - Net result for the year - - - - - - 732 - 732 Dividend paid - - - - -214 - -131 - -346 Remeasurement of post-employment benefit obligation - - - 887 - - - - 887 Unrealised change in value - - -2,091 - -292 - - - -2,383 Change in reserves required by law - - -327 - 327 - - - - Discretionary interest on other equity instruments - - - - -48 - - - -48 Treasury shares acquired (-) / sold - - - - -0 -71 - - -71 Increase (decrease) in capital 2 577 - - -68 75 - - 586 Other movements - - - - 1 - - - 1 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0At 31 December 2022 24 1,533 27 -168 3,783 -79 601 1,004 6,725 \u00a0Share capital Share premium reserve Legal reserves Actuarial gains and losses Retained earnings Treasury shares Unappropriated result Other equity instruments Equity At 1 January 2021 23 976 1,995 -1,253 3,099 -82 552 1,004 6,313 Appropriation of the result previous year - - - - 552 - -552 - - Net result for the year - - - - - - 942 - 942 Dividend paid - - - - -174 - -111 - -285 Remeasurement of post-employment benefit obligation - - - 198 - - - - 198 Unrealised change in value - - 318 - 7 - - - 325 Change in reserves required by law - - 133 - -133 - - - - Discretionary interest on other equity instruments - - - - -48 - - - -48 Treasury shares acquired (-) / sold - - - - -1 -78 - - -79 Increase (decrease) in capital - -20 - - -57 78 - - - Other movements - - - - 1 - - - 1 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0At 31 December 2021 22 956 2,445 -1,055 3,247 -83 830 1,004 7,366 Share capital For a breakdown of the share capital, see chapter 6.5.13.1. Legal reserves The legal reserves relate to the revaluation of investments in group companies. The legal reserves are maintained in relation to the (not yet received as dividend) share in the result (and other additions to equity) of group companies accounted for using the equity method since initial recognition reduced with the amount of dividend that a.s.r. is able to distribute without restrictions. The legal reserves are not freely distributable. See chapter 6.9 for more information on the regulatory restrictions. Other equity instruments The other equity instruments relate to two (2021: two) different hybrid Tier 1 and Tier 2 instruments classified as equity, see chapter 6.5.13.6. Freely distributable items The part of equity attributable to shareholders that is available for dividend distributions is limited by the Dutch Civil Code and the Dutch Supervisory Rules and Regulations (Solvency II requirements). The distribution of capital is restricted in accordance with the Dutch Civil Code for share capital and statutory reserves. The Solvency II requirements stipulate that a.s.r. must maintain a minimum amount of capital. The freely distributable items is based on the lowest outcome of the restrictions from the Dutch Civil Code and the Solvency II requirements. This is further explained in the table below: Distributable items \u00a02022 2021 Equity attributable to shareholders 5,722 6,363 Non distributable items \u00a0\u00a0- Share capital1 24 22 - Legal reserves 27 2,445 Distributable items based on the Dutch Civil Code 5,671 3,896 \u00a0\u00a0\u00a0Reserves available for financial supervision purposes 7,441 8,270 Solvency II requirement under the Financial Supervision Act 3,360 4,233 Distributable items based on the Solvency II requirements 4,081 4,037 \u00a0\u00a0\u00a0Freely distributable items (lower of the values above) 4,081 3,896 Less the nominal value of treasury shares if applicable For more information on Solvency II capital management objectives see chapter 6.9.1. 6.11.3.12 Employee benefits Employee benefits can be broken down as follows (see chapter 6.5.17 for further details): Employee benefits \u00a02022 2021 Post-employment benefits pensions 2,722 3,990 Post-employment benefits other than pensions 7 9 Post-employment benefit obligation 2,730 3,999 \u00a0\u00a0\u00a0Other long-term employee benefits 12 14 \u00a0\u00a0\u00a0Total 2,742 4,013 6.11.3.13 Other provisions Changes in provisions \u00a02022 2021 At 1 January 8 18 Additional provisions 4 4 Reversal of unused amounts -2 -1 Utilised in course of year -6 -13 \u00a0\u00a0\u00a0At 31 December 3 8 Provisions primarily relate to provisions for employee restructuring and retained disability risk. The timing of the outflow of resources related to these provisions is uncertain because of the unpredictability of the outcome and time required for the settlement of disputes. An amount of \u20ac\u00a03 million (2021: \u20ac\u00a08 million) of the provisions is expected to be settled within twelve months after the balance sheet date. 6.11.3.14 Subordinated liabilities For information regarding the subordinated liabilities see chapter 6.5.14. 6.11.3.15 Borrowings Borrowings \u00a02022 2021 Lease liabilities 226 234 \u00a0\u00a0\u00a0Total borrowings 226 234 The lease liabilities consist primarily (\u20ac\u00a0216 million, 2021: \u20ac\u00a0221 million) of the lease of the a.s.r. head office from a.s.r. life. The interest rate for the lease of the head office is 1.5% (2021: 1.5%). The maturity of this contract is 33 years, which includes the total of five extension options of five years each. An amount of \u20ac\u00a012 million (2021: \u20ac\u00a013 million) of the lease liabilities is expected to be settled within twelve months after the balance sheet date. 6.11.3.16 Due to banks In 2022 due to banks amounted to \u20ac\u00a078 million (2021: \u20ac\u00a0105 million). The entire amount of due to banks is expected to be settled less than or equal to one year after the balance sheet date. 6.11.3.17 Other liabilities Other liabilities \u00a02022 2021 Accrued interest 26 19 Short-term employee benefits 16 20 Tax payables 131 - Other liabilities 44 38 \u00a0\u00a0\u00a0Total other liabilities 216 77 The carrying amount of other liabilities is a good approximation of their fair value. 6.11.3.18 Operating expenses The operating expenses of \u20ac\u00a0141 million (2021: \u20ac\u00a0135 million) are operating expenses relating to holding activities. The increase in the operating expenses is mainly a result of an increase in staff expenses. See chapter 6.6.8 for the total operating expenses of the group. Operating expenses also include depreciation of the right-of-use assets owned by subsidiaries of \u20ac\u00a011 million (2021: \u20ac\u00a012 million). 6.11.3.19 Other expenses The decrease of \u20ac\u00a098 million relates for \u20ac\u00a090 million to the reassessment of the past service costs related to the defined benefit obligation in 2021 (2022: \u20ac\u00a0nil), see chapter 6.5.17.1. 6.11.3.20 Investment income The investment income of \u20ac\u00a0106 million (2021: \u20ac\u00a051 million) mainly increased as a result from an increase in interest income relating to the employee benefits obligation allocated to the Holding. 6.11.3.21 Interest expense The interest expense relates primarily to the interest on subordinated liabilities, interest on employee benefits, interest owed to credit institutions and to the interest on the lease liabilities. 6.11.3.22 Auditor\u2019s fees The following fees for the financial years have been charged by KPMG Accountants N.V. to a.s.r., its subsidiaries and other consolidated entities, on an accrual basis. Auditor\u2019s fee Amounts in \u20ac\u00a0thousands 2022 2021 Audit of the financial statements 6,548 5,635 Other audit engagements 1,324 829 \u00a0\u00a0\u00a0Total audit fees 7,872 6,464 Fees for audit engagements include fees paid for the audit of the consolidated and company financial statements, quarterly reports and other reports. In the above mentioned years no fees were paid for tax-related advisory services to KPMG Accountants N.V. and no fees were paid to other KPMG networks, other than KPMG Accountants N.V. 6.11.3.23 Related parties A related party is a person or entity that has significant influence over another entity, or has the ability to affect the financial and operating policies of the other party. Parties related to a.s.r. include associates, joint ventures, members of the EB, members of the SB, close family members of any person referred to above, entities controlled or significantly influenced by any person referred to above and any other affiliated entity. The group regularly enters into transactions with related parties during the conduct of its business. These transactions mainly involve loans, deposits and commissions, and are conducted on terms equivalent to those that prevail in arm\u2019s length transactions. These disclosures related to these transactions are included in the relevant note in the company financial statements and in the consolidated financial statements (see primarily chapters 6.7.4 and 6.7.9). The remuneration of the EB and SB members of a.s.r. is disclosed in chapter 6.7.5. 6.11.3.24 Contingent liabilities Joint and several liability a.s.r. forms a fiscal unity for corporate income tax and VAT with nearly all of its subsidiaries. The company and its subsidiaries that form part of the fiscal unity are jointly and separately liable for taxation payable by the fiscal entity. A statement of joint and several liability under section 403, Book 2 of the Dutch Civil Code has been issued by a.s.r. for the companies identified in chapter 6.7.9. Investment obligations and guarantees As in 2021, a.s.r. has issued no investment obligations or guarantees to third parties. Utrecht, 21 March 2023 Executive Board Jos Baeten Ewout Hollegien Ingrid de Swart Supervisory Board Joop Wijn Herman Hintzen Sonja Barendregt Gisella van Vollenhoven Gerard van Olphen ", "dimensions": { "concept": "ifrs-full:DisclosureOfConsolidatedAndSeparateFinancialStatementsExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "ixv-672": { "value": "6.11.3.22 Auditor\u2019s fees The following fees for the financial years have been charged by KPMG Accountants N.V. to a.s.r., its subsidiaries and other consolidated entities, on an accrual basis. Auditor\u2019s fee Amounts in \u20ac\u00a0thousands 2022 2021 Audit of the financial statements 6,548 5,635 Other audit engagements 1,324 829 \u00a0\u00a0\u00a0Total audit fees 7,872 6,464 Fees for audit engagements include fees paid for the audit of the consolidated and company financial statements, quarterly reports and other reports. In the above mentioned years no fees were paid for tax-related advisory services to KPMG Accountants N.V. and no fees were paid to other KPMG networks, other than KPMG Accountants N.V. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:7245000G0HS48PZWUD53", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } } } }