VIVAT Publishes Interim Results 2020
9 September 2020
VIVAT Will Focus on Pensions
Stable Financial Performance in a Challenging Environment
- Net Underlying Result decreased slightly to EUR 141 million (1H19: EUR 151 million), driven by a lower investment income as a result of rebalancing of investments in the fourth quarter of 2019, followed by substantial asset repositioning in 1H20. Limited impact of Covid-19
- Gross premium income robust at EUR 937 million (1H19: EUR 955 million), the lower premium income as a result of the shrinking individual life market was almost fully compensated by a 6% increase of premium income at Life Corporate
- Total operating costs 7% lower as a result of the ongoing cost saving efforts
- Net Result IFRS decreased to -/- EUR 138 million (1H19: EUR 252 million), mainly driven by an addition in the LAT shortfall in 1H20 of EUR 200 million (1H19: release of EUR 135 million)
- VIVAT received a capital injection of EUR 400 million from its new shareholder Athora of which EUR 300 million was down streamed to SRLEV to enable substantial asset repositioning
- Solvency II ratio of VIVAT NV at 160% (YE19: 170%) being resilient among market volatility and change in ownership, fully absorbing higher capital charges following the asset repositioning
- Solvency II ratio of SRLEV NV stable at 159% (YE19: 163%)
- Athora has completed its acquisition of VIVAT by acquiring 100% of the shares in VIVAT from Anbang and has sold 100% of the shares of VIVAT Non-Life to NN Group
- New management team in place
- Strategy review concluded: VIVAT will focus on pension solutions, operating under one brand (Zwitserleven). A substantial investment will be made to boost new initiatives. The refocused organisation will be targeting a 30% reduction of the total cost base within three years
- VIVAT to be rebranded as Athora Netherlands in the fourth quarter of 2020
Tom Kliphuis, Chairman of VIVAT’s Executive Board:
“Right from the first day after the closing of the acquisition of VIVAT by Athora, we have worked very hard to develop a new strategy for the company. The key word of this new strategy is ‘focus’. VIVAT will focus on becoming the number one pension provider in the Netherlands. We will build on our knowledge of the Dutch market, use specific investments skills from Athora and will grow the business under the strong and well known Zwitserleven brand. This enables us to offer best value for money to our customers. Our focus on pensions will create a much simpler organisation. The migration of VIVAT Non-Life to NN requires an adjustment of the organisation, resulting in a lower cost base and a reduction of the number of jobs. At the same time we plan to invest a considerable amount over the next three years in our people, products and systems. Our existing and future customers can expect higher returns and also enjoy an improved service level following the implementation of a fully dedicated service organisation. It is our ambition, together with our distribution partners and our colleagues from Athora to become the champion in pensions.
We will align the VIVAT organisation with the revised strategy and significantly reduce overhead costs through a reduction of support functions and automation initiatives. In addition to the 575 FTE, including 110 external FTE, transferring to NN in the coming 18 months the revised strategy will enable a further reduction of 400 to 500 FTE over the coming 3 years. In total we expect to reduce cost by 30% within 3 years. After close consultation with the works council, VIVAT will start to execute on the new plans as of the fourth quarter of 2020.
VIVAT’s financial results were solid despite the Covid-19 pandemic. Our key priorities throughout the pandemic have been to support and ensure the best care for our customers, our employees and other stakeholders while protecting the long-term value of VIVAT.
Our solvency remained stable at 160%. Following the sale of VIVAT Schade and the capital injection by Athora, VIVAT was able to make use of the challenging market conditions to further optimise its investment portfolio while fully absorbing the higher capital charges.
VIVAT showed a stable financial performance. The Net Underlying Result was comparable to the first half of 2019, costs came in lower and we kept strong commercial momentum in Pensions. This was supported by a high retention rate of 84% at Life Corporate, a 30% of new inflow in the Zwitserleven PPI and a steep increase in the sale of direct annuities.
On the 2nd of April it was announced that Athora completed its acquisition of VIVAT by acquiring 100% of the shares in VIVAT from Anbang and has sold 100% of the shares of VIVAT Non-Life to NN Group. With the combined capabilities of VIVAT and Athora, we will be best placed to fulfil our customers’ needs and to build further upon our strong market position in pensions. The additional financial resources provided to VIVAT by Athora are highly beneficial to our customers, business partners and employees. Going forward, we will make use of the best practices within Athora Group and create synergies. Simultaneously, together with NN Group, VIVAT is working towards a smooth migration of VIVAT Non-Life into NN.
Finally I wish to thank all of our employees and business partners for their incredible effort and commitment in supporting our business and providing an undisrupted service to our customers during these challenging times.”