Caring for what
matters most
NN Group N.V.
Annual Report 2023
1 About NN
About this report 1
NN at a glance 2
How we create value 4
A conversation with our CEO 6
2 Our operating environment
The world around us 9
Determining our material matters 11
Connectivity matrix 13
Definitions material topics 14
Stakeholder engagement and international commitments 16
3 Our strategy and performance
Our strategy 20
Progress on our commitments 21
Our performance 26
4 Creating value for our stakeholders
Our values 32
Adding value for our customers 34
Empowering our people to be their best 37
Creating value for investors and beyond 41
Creating a positive impact on society 44
Our Code of Conduct and other policies 60
5 Managing our risks
Managing our risks 64
Sustainability and climate change risk management 73
6 Corporate governance
A conversation with our Supervisory Board chair 80
Our Management Board 82
Our Supervisory Board 84
Report of the Supervisory Board 86
Corporate governance 95
Remuneration at a glance 111
Remuneration Report 112
Conformity statement 125
7 Facts and figures
Key strategic and financial indicators 127
Carbon footprint proprietary assets 133
EU Taxonomy disclosures 140
Assurance report of the independent auditors 164
8 Annual accounts
Consolidated balance sheet 170
Consolidated profit and loss account 171
Consolidated statement of comprehensive income 173
Consolidated statement of cash flows 174
Consolidated statement of changes in equity 176
Notes to the Consolidated annual accounts 178
Risk management (Note 50) 291
Capital and liquidity management (Note 51) 317
Authorisation of the Consolidated annual accounts 333
Parent company balance sheet 334
Parent company profit and loss account 335
Parent company statement of changes in equity 336
Notes to the Parent company annual accounts 338
Authorisation of the Parent company annual accounts 344
Independent auditor’s report 345
Appropriation of result 362
9 Other information
Our response to the Task Force on Climate-related
Financial Disclosures (TCFD) 364
Glossary 365
Contact and legal information 373
Contents
NN Group N.V.
2023 Annual Report
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
NN Group N.V.
2023 Annual Report
3 Our strategy and
performance
1 About NN
Other reports
We aim to tailor our reporting for different stakeholders
by publishing additional reports on specific topics on the
NN Group website in the Investors/Annual Report section.
In 2023, NN Group published its first Active Ownership report
and the Climate Action Plan 2023 Update. Alongside this
Annual Report, NN Group publishes a Solvency and Financial
Condition Report, a Total Tax Contribution Report and reports
our community investment contributions in line with the B4SI
standards in the NN Community Investment: Overview 2023.
The GRI Index table shows the indicators NN Group reports
against, and where this information is in this Annual Report
and/or the NN Group website. The index table is published
alongside the Progress reports for the UN Principles for
Sustainable Insurance and the UN Global Compact.
Scope of the data in this report
This report covers NN and its subsidiaries. All quantitative
and qualitative information relates to NN as a whole, unless
a specific business unit is explicitly mentioned. The list of
principal subsidiaries is in Note 32 of the annual accounts.
The consolidated annual report is presented in euros (EUR),
the functional currency of NN Group. All amounts quoted in the
Annual Report 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.
The consolidation scope of the reported data is aligned with
the consolidation scope of the annual accounts. This applies to
all material items, unless otherwise stated. The consolidation
scope of our non-financial information is included alongside
the numbers in our facts and figures chapter. The information
is sourced from both inside (primary data) and outside
(secondary data) the organisation. There is an inherent level of
uncertainty and estimation in our calculations. The definitions
and calculation methods of indicators are shared in the relevant
chapters, including the glossary.
External assurance
The consolidated annual accounts and the parent company
annual accounts of NN Group are audited by KPMG N.V. (KPMG).
Read more in the independent auditor’s report on page 345.
KPMG also provided limited assurance on the non-financial
information included in this Annual Report. The scope of
KPMG’s review is About NN, Our operating environment, Our
strategy and performance, Creating value for our stakeholders,
Managing our risks, Facts and figures (with the exclusion of
the section EU Taxonomy Disclosures) and other information.
The assurance engagement is described in its assurance
report on page 164. KPMG issued a limited assurance report
on NN Group's Total Tax Contribution Report. Read more in the
Assurance report of the independent auditor on pages 31–33 of
the Total Tax Contribution Report.
The Integrated Annual Report 2023 of NN Group N.V.
(NN) provides an overview of NN’s strategic and financial
performance over the past year in a way that is concise,
accurate and balanced. This report is intended to inform our
stakeholder groups: customers, shareholders, employees,
business partners, regulators and society at large. We aim to
show how we create sustainable long-term value.
Purpose
This report brings together relevant information about our
strategy, governance and performance in a way that reflects
the current economic, environmental and social contexts.
We share information about our company, our strategy and our
business performance, including our value creation model and
double materiality assessment in the sections About NN, Our
operating environment, and Our strategy and performance.
We show how we create sustainable long-term value and our
approach to combating climate change in the sections Creating
value for our stakeholders and Managing our risks. Our financial
statements are included in the section Annual Accounts.
This report is published on 21 March 2024 and covers the year
from 1 January to 31 December 2023.
Relevant topics and materiality
We take into account the sustainability matters (refer to page
14 and 15 for the definition) that have a material impact on our
stakeholders and that are financially material on our business.
Our material sustainability matters were selected as part of our
double materiality assessment process to advance our reporting
in the Annual Report 2023 and help us prepare for Corporate
Sustainability Reporting Directive (CSRD) implementation for
2024. Our double materiality assessment uses internal and
external input, including a survey with internal and external
stakeholders and several expert sessions. Read more on page 11.
Preparation
This Integrated Annual Report is prepared in accordance
with applicable Dutch law and the International Financial
Reporting Standards as endorsed by the European Union
(IFRS-EU). The non-financial information and data is prepared in
accordance with relevant non-financial disclosure regulations,
such as Non-financial Reporting Directive NFRD and EU
Taxonomy, and the Global Reporting Initiative (GRI). Refer to
the GRI index table on the NN Group website. Since 2017, NN
Group has externally disclosed that it is aligning its climate action
approach to the Task Force on Climate-related Financial Disclosures
(TCFD). Our approach to addressing net-zero is described on
page 49, and included in a TCFD reference table on page 364.
We aim to strengthen our integrated way of reporting every
year and are preparing for the implementation of the CSRD for
2024. This report contains various elements from the Value
Reporting Foundation framework and the CSRD.
About this report
1
NN Group N.V.
2023 Annual Report
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
people to live life to the fullest by providing sound financial products and
services, by being a trusted advisor, and by contributing to the well-being of
society. We are committed to helping people care for what matters most to
them. Because what matters to you, matters to us.
NN at a glance
Japan
Insurance
Our presence
Belgium
Czech Republic
Greece
Hungary
Japan
The Netherlands
Poland
Romania
Slovak Republic
Spain
Turkey
+/-
16k
Our employees
1845
Year founded in
the Netherlands
19m
Our customers
11
Countries we
operate in
NN Group
Netherlands
Life
Netherlands
Non-life
Insurance
Europe
Japan
Life
Banking Other
Our main brands
Our reporting segments
3
NN Group N.V.
2023 Annual Report
NN Group N.V.
2023 Annual Report
2
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
NN at a glance continued
Our performance is recognised in indices and ratings
People Sustainability and ESG ratings Credit ratings
A+
Financial strength Stable
A-
Credit rating Stable
S&P
AA-
Financial strength Stable
A+
Credit rating Stable
Fitch
Key Financial figures
Society
EUR 10.8bn
Investments in climate solutions
401k
Contribution to our communities
(cumulative number of people supported since 2022)
EUR 1,902m
Operating capital generation
197%
Solvency II ratio
EUR 2,528m
Operating result
People
7.8
Employee engagement
40%
Women in senior management positions
Customers
On Par*
NPS-r Netherlands businesses
Above*
NPS-r International businesses
*compared to market average
Our strategic and financial highlights
3
NN Group N.V.
2023 Annual Report
NN Group N.V.
2023 Annual Report
2
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
NN Group N.V.
2023 Annual Report
4
How we create value
term value for all our stakeholders.
Inputs
Including debt, equity, revenue and
assets invested by clients
• Shareholders’ equity: EUR 19.6bn
• Gross premium income:
EUR 13.2bn
Use of natural resources
• Total energy used:
33 GWh (of which 69% of the
electricity used was renewable)
Internal processes, systems
and controls
Employees’ skills, time and resources
• Total number of employees: +/- 16k
• Amount spent on training and
development: EUR 15.8m
• Applying our values of care, clear,
commit
Relations with customers and
other stakeholders
• Customers: around 19m
• Business partners and suppliers
• Other key stakeholders
(e.g. regulators)
Company’s products, offices and
other physical assets
Life insurance
Netherlands Life
Insurance Europe
Japan Life
Non-life insurance
Netherlands
Non-life
Banking
Banking
Income
We generate
income through
insurance premiums and
fees paid for our products
and services. We also
generate returns on the
investments which
we make.
Profit
Our profit is what
remains after expenses.
These include claim pay-
outs, pension benefits,
interest on customer
deposits, impairments and
operating costs (e.g.
wages).
Product development
and pricing
We develop products and services
to meet societal and customer
needs. Our experience and strong
understanding of risk means that
we are able to offer attractive
insurance solutions at a fair price.
Claims and benefits
We use our digital capabilities
to achieve a seamless customer
experience, including a
simpler, personalised claims
handling process.
Distribution
We distribute our products
through a range of channels,
including directly to customers,
and through agents and brokers.
We leverage our scale and
diverse business footprint for
cross-selling opportunities.
Investments
We invest the insurance premiums
and fees which we receive.
We have a well-diversified risk
profile for our investments, and
are guided by our Responsible
Investment Framework.
What we do
Financial
capital
Human
capital
Intellectual
capital
Manufactured
capital
Natural
capital
Social and
relationship capital
Our role as an employer
We want to foster an open, safe and
inclusive working environment.
Our role as a business partner
We want to be a strategic and
responsible business partner.
CommitClearCare
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
5
NN Group N.V.
2023 Annual Report
Outputs
Disciplined capital deployment
• Total dividend and interest
payments to investors:
EUR 880m
• Share buyback programme:
EUR 250m
• Solvency II ratio:
197%
Environmental impact
from own operations
• GHG emissions: 10 kilotonnes
CO
2
compensated by
carbon credits
Environmental impact from
investments
• Carbon footprint relating to
proprietary investment portfolio:
39 tCO
2
e/EURm invested
• Investments in climate
solutions: EUR 10.8bn
• Estimated avoided emissions from
climate solutions 770 KtCO
2
e
Availability of services
• Digitalising and automating
processes for customers
and intermediaries
Efficient operating model
• Total administrative expenses:
EUR 2,206m
Wages and benefits
• Total wages, benefits and
pension contributions:
EUR 1,663.8bn
Inclusive and inspiring working
environment
• Women in senior management
positions: 40%
• Employee engagement score:
7.8
Customers
To our customers, we offer peace of
mind; our products help protect their
families, health, income, companies
and property. We also safeguard their
personal data, provide mortgages
and a stable source of income
in retirement.
See pages 34–36
Our people
To our employees, we provide wages
and other benefits. We also contribute
to their pensions. In addition, we offer
skills training and opportunities for
career development. We provide an
inspiring and inclusive place to work.
See pages 37–40
Investors
To our investors, we are committed
to deliver resilient and growing long-
term capital generation. To do so,
we maintain a strong balance sheet
and create solid financial returns by
using our financial strength, scale and
international footprint.
See pages 41–43
Society
We contribute to the well-being
of people and the planet. We take a
long-term and responsible approach to
investments and underwriting, work to
reduce our direct and indirect impact
on the environment. We contribute
to our communities and support
the economy through taxes and
payments to intermediaries and other
business partners.
See pages 44–59
Returns to customers
• Pension benefits and claims
paid: EUR 13.3bn
Responsible tax
• Total tax contribution:
EUR 2.578m
Positive contribution to
communities
• Total contributions:
EUR 20.1m
• Total number of people
supported: 401k (cumulative
2022-2023)
High-performing products &
services
• Relational Net Promoter Score:
• Netherlands businesses
on par
• International
businesses above
(compared with market average)
Outcome for our stakeholders SDGs
How we create value continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
1 Read more
on how we
contribute
to the SDGs
on pages
57-59.
Our CEO David Knibbe reflects
on 2023, a year where NN
Group made good progress
on our strategy focused on
customers, people and our
contribution to society, resulting
in a strong commercial and
financial performance.
How do you look back on the year 2023?
In 2023, macroeconomic and geopolitical
uncertainties continued, which is
having an impact on the lives of many.
The insurance industry has an important
role to play in providing protection and
supporting customers and communities in
their financial well-being. Therefore I am
pleased how we continued to fulfill this
role in 2023 by providing financial security
for our customers during those moments
when it matters most: during illness,
retirement or when a home is damaged
by a storm.
Turning to our own results, NN
performed well in 2023. We made
continued progress on our strategy
focused on customers, people and our
contribution to society. What makes me
particularly proud is the progress we
made in customer satisfaction scores.
We saw underlying improvements in
our Dutch business and especially in our
International businesses which for the
first time scored an above market average
relational Net Promotor Score. It shows
our efforts in customer engagement and
digitalisation are starting to bear fruit,
although there is always more work to do.
The engagement of our people
remains high with a score of 7.8, which
demonstrates our success in building
an attractive and inclusive workplace.
Looking at our efforts in support of the
environment, we took some important
steps in our climate ambition with new
targets and investments. With our group-
wide community investment programme,
we supported the financial, physical and/
or mental well-being of 172,000 people
in 2023.
The strategic progress also resulted
in a strong commercial and financial
performance. Operating capital
generation (OCG), our main financial
performance metric, rose 13% (excluding
the asset management business sold
in 2022) to EUR 1.9 billion. With this
result, we exceeded our 2025 target of
EUR 1.8 billion ahead of plan. This result
reflects increased contributions from
Netherlands Non-life, Banking, the
segment Other and Insurance Europe.
Netherlands Non-life reported a
continued strong and favourable business
performance, while Insurance Europe saw
higher sales and Banking benefitted from
higher interest rates. This helped to offset
a lower contribution from Netherlands
Life which was mainly driven by the
financial markets.
While business growth is expected to
return to normalised levels, we continue
to expect underlying growth in the coming
years. We have therefore increased our
OCG target for 2025 to EUR 1.9 billion.
Our strong business performance and
balance sheet give us confidence in further
What makes me
particularly proud
is the progress we
made in customer
satisfaction scores.
We saw underlying
improvements in
our Dutch business
and especially in
our International
businesses.
David Knibbe
Chief Executive Officer
A conversation with our CEO
7
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2023 Annual Report
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2023 Annual Report
6
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
growing our free cash flow (FCF), resulting
in an FCF target of EUR 1.6 billion by 2025.
At the start of 2024, NN Group reached a
final settlement with interest groups on
unit-linked insurance products. Why was
this important?
The settlement was an important result
for everyone involved in this long-standing
issue. Primarily for our customers but
also for other stakeholders, including
shareholders. We have taken the criticism
that certain products did not meet our
customers’ expectations seriously, and
we were pleased to announce a final
settlement with all interest groups.
With this settlement, we provide clarity to
our customers and we can finally resolve
this issue.
We recognised a provision of
approximately EUR 360 million in the
fourth quarter of 2023, which included
EUR 60 million for hardship cases and
customers unaffiliated with one of the
interest groups who have not previously
received compensation. In addition,
approximately EUR 20 million is available
for these customers through the
remainder of a provision recognised as
part of the 2008 settlement.
The year was characterised by significant
technological developments, particularly
in artificial intelligence (AI). How did this
impact NN?
In 2023 we saw generative AI quickly
becoming a bigger part of our daily
work, also at NN. We were one of the
first companies to work with ChatGPT in
our own secure environment. In our call
centres in the Netherlands, we introduced
automated call logging in 2023 to provide
our agents with an automatic summary of
their customer conversations, replacing a
manual process.
We are looking at further opportunities
for application across our business, for
example in claims handling. With the
financial industry being so data-intensive,
there are many opportunities to further
improve the customer experience
and increase operational efficiencies.
Of course, alongside these opportunities
also come potential risks, so we have an
ethical framework and a clear governance
in place for all AI applications used by NN.
Large companies are facing increased
scrutiny on their climate strategies. How is
NN dealing with this?
The world is clearly not on track to meet
the targets of the Paris Agreement, so it
is understandable that companies also
receive questions on their plans and
targets. At NN, we have had a Climate
Action Plan since 2022, which describes
how we aim to reduce greenhouse
gas (GHG) emissions to net-zero in our
operations by 2040 and in our proprietary
investments and insurance underwriting
by 2050.
In July 2023, we published an update
of the plan, with additional measures
such as a further tightening our stance
on proprietary investments in the oil and
gas sector to also include conventional
oil and gas activities. We also announced
our first interim net-zero targets for our
residential mortgages and insurance
underwriting portfolios.
Next to these long-term goals, we are
taking actions with a shorter timeline.
On the investment side, we invested
a total amount of EUR 10.8 billion in
climate solutions, such as certified
green buildings and renewable energy.
We also reported a 10% reduction of GHG
emissions in our corporate investment
portfolio, moving us towards our goal of
a 25% reduction by 2025 versus 2021
levels. On the insurance side, our Dutch
Non-life business increasingly focuses
on offering sustainable damage repair to
our customers.
Of course, collaboration with peers, other
industries, and governments remains
crucial, as we can only address climate
change together.
Looking ahead, what are the focus areas for
2024?
Led by our ambition to be an industry
leader, known for our customer
engagement, talented people, and
contribution to society, we have made
significant progress since the launch of
our strategy in 2020. At the same time,
there are areas where we need to step up.
We will therefore put even more emphasis
on further improving the digital customer
experience and increasing operational
efficiencies, with the aim to grow our
business and stay financially healthy in
the future.
Ultimately, it is our purpose to help people
care for what matters most to them, and
support them in their financial well-being.
It is our role to help safeguard the financial
stability of households and companies
by insuring their risks. By investing
the insurance premiums from our
policyholders, with a long-term horizon,
we play an important role in society and
the economy, as well as in the sustainable
investment landscape. This is something
we take very seriously and it is deeply
rooted in our values and culture.
Our people play a key part in this. I would
like to take this opportunity to express
my gratitude for their excellent work over
the past year. Also, I thank my colleagues
on the Management Board for the
collaboration, and the Supervisory Board
for their continued guidance and support.
Finally, I want to thank our customers,
shareholders and other stakeholders for
their trust in our company.
7
NN Group N.V.
2023 Annual Report
NN Group N.V.
2023 Annual Report
6
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
A conversation with our CEO continued
Throughout our more than 175-
year history, our company has
merged, grown and changed,
but the core of who we are has
remained the same. We use
our resources, expertise and
networks to respond to the
changing world around us.
2 Our operating
environment
9
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2023 Annual Report
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2023 Annual Report
8
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
Geopolitical instability
Geopolitically, the world is increasingly
becoming more complex, for example with
the Russia-Ukraine war, and continuing
tensions between the US and China both
military and economically. Additionally,
in October 2023, the Israel-Hamas
conflict added significantly to geopolitical
instability, further complicating
international political relations and
increasing economic uncertainty.
NN does not have direct business
activities in Ukraine, Russia, China and
Israel and has limited direct financial
exposure to these countries. However, the
impact on our operating environment and
on NN itself depends on the continuation
of geopolitical instability, which may
coincide with other economic (inflationary
or recessionary) developments.
Read more on the mitigating measures
that we have at hand in the Risk chapter
on page 71.
Political developments in Europe and
the Netherlands
The European political landscape is facing
increased polarisation and fragmentation.
We witness this trend in many of our
key markets, such as the Netherlands,
Spain and Poland. While the magnitude
of political developments varies per
country, in general these pose challenges
to achieving agreements on various
systematic changes that create clarity on
the future course of much-needed reforms
in pensions, healthcare and climate
solutions. For market participants with
a longer-term perspective this creates
additional unclarity.
On 7 July, the Dutch government
coalition fell, and elections took place on
22 November. After the elections, it may
take some time before a new coalition
government is formed. It cannot be ruled
out that progress on several items may
be slow and further pushed forward,
such as on climate change mitigation and
the housing market. There is also some
uncertainty about pensions; although
the new pension reforms were approved
in summer 2023, some parties have
expressed the intention to scale back
several reforms.
During 2023, new budget plans
were adopted, such as an increase in
minimum wages. To compensate for the
budget increases, several measures
were taken, such as a tax on share
buybacks as of 2025 and a scaling down
of remuneration tax benefits for new
expats as of 2024. These measures
potentially have a negative impact on
the attractiveness of companies in the
Netherlands from an investment and
employability perspective.
In June 2024, elections will be held in
the European Union. It is expected that
the negotiations on the 2020 Solvency
II review will be finalised before that
date. However, negotiations on the Retail
Investment Strategy and the Regulation
on Financial Data Access will be
postponed until after the European Union
elections (see below).
Economic developments
Geopolitical tensions, commodity
shortages and overheating markets
impact the economy. Steep increases in
energy and commodity prices in 2022
were followed in 2023 by economy-
wide price increases and wage inflation.
Central banks worldwide continued
increasing interest rates to combat
inflation, to over 5% in the US and to 4.5%
in the eurozone. Such interest rate levels
have not been seen since the 1980s.
In the US, a ‘soft landing’ is expected
with a slowdown in economic growth
avoiding a recession, but the high debt
level is creating uncertainty about the
sustainability of government finances.
In Europe, in the second half of the year,
inflation was on a downward trend, with
core inflation (excluding food and energy)
still at relatively high levels, which impacts
the timing of generally expected interest
rates cuts by the European Central Bank
in 2024. Growth of the eurozone economy
has been adjusted downwards throughout
2023 to 0.5%, and expectations for 2024
are for growth just below 1%, slower
than previously expected. Growth in the
Netherlands was flat this year, with an
outlook for very modest growth in 2024.
Growth in other countries where NN is
active was low in 2023 but generally
expected to pick up to above the
European average in 2024.
NN has experienced a relatively modest
impact of these adverse developments.
Higher volatility of financial markets,
increased inflationary pressure and lower
economic growth led to a somewhat more
volatile Solvency II ratio. In the short
term, however, NN has been able to deal
with the adversity of these developments,
given the strong solvency and liquidity
positions and current asset exposures.
We will remain vigilant as the impact of
high inflation, high interest rates and
lower growth is challenging for financial
service providers. Our aim is to navigate
these turbulent economic developments
and manage the accompanying risk.
Read more in the Risk chapter on page 72.
Technological developments
We live in times of technological
revolutions, exemplified by the quick
rise of new features such as large
language models, including ChatGPT.
These have made a strong impact on
market developments, showing the
continuously growing potential of
technology and artificial intelligence
(AI). Going forward, technological
developments in virtual and augmented
In 2023, the environment we operate in as an international financial services
provider continues to be dynamic and complex. There has been a wide range of
geopolitical, economic, social, environmental and technological developments
that impact our business model and strategy. We provide an overview of key
developments in the world around us and how we are addressing them.
The world around us
9
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2023 Annual Report
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2023 Annual Report
8
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
The world around us continued
reality, blockchain and quantum
computing will continue changing the
marketplace. These impacts could range
from redesigned customer experiences,
efficiency gains and strengthened
cybersecurity measures. Where new
technologies arise, there will also be new
risks and opportunities. Companies have
to be prepared to implement and get the
most out of these developments, making
sure their processes and employees
are able to adopt them. Consumers and
society are wary about what could
happen with their data, some fearing
that automation could lead to unfair or
even discriminatory decision-making.
As these technological advances are
widely available, the risk of cyber-attacks
is also growing. We closely follow these
developments and adopt these new
ways of working in a prudent way, by
further investing in security measures,
the education of our employees and
transparency towards our stakeholders.
Sustainability
Climate change represents one of the
biggest challenges of our time, as seen in
the increased frequency and severity of
extreme weather events such as floods,
hurricanes and droughts. As an insurer
and bank, climate change represents a
key risk through which we are exposed via
both sides of our balance sheet: through
our investments on the asset side and
our underwriting on the liability side.
We continue to focus on further aligning
our strategy and business activities with
the challenges posed by climate change.
We have set clear targets to reduce
greenhouse gas emissions to net-zero
in our own operations by 2040, as well
as in our investments and insurance
underwriting by 2050. We updated
our Climate Action Plan in July 2023.
Through our products and services, we
also aim to support our customers as they
navigate the transition to a low-carbon
economy. In addition, we are taking initial
steps to assess how we can positively
contribute to biodiversity.
Companies are also facing regulations
around sustainability, with authorities and
regulators increasingly demanding greater
transparency and clarity on potential
risks and opportunities. Examples include
the Corporate Sustainability Reporting
Directive, the EU Taxonomy and
the Sustainable Finance Disclosure
Regulation. We are preparing for the
implementation of CSRD for 2024.
In our non-life business, we focus on
sustainability in various ways. We help
customers protect themselves against
damage due to climate change and to
take action against climate change by
insuring sustainability risks, monitoring
and insight, and sustainable restoration
and repair. We focus on health aspects
for sustainable living, such as helping
customers in shortening and preventing
(long-term) absenteeism via prevention
and reintegration. Read more on page 22.
Regulatory developments
Ongoing regulatory changes and topics
subject to additional supervisory
scrutiny might affect our solvency
position. Such regulatory developments
include new pension regulations in the
Netherlands, changes to the Solvency
II framework, the implementation of
IFRS 9 and 17, and new regulations
regarding sustainability.
On 30 May 2023, the Dutch parliament
approved the Future of Pensions Act
(Wet toekomst pensioen (WTP)).
The law became effective as from
1 July 2023, with a transition period until
1 January 2028. At that date all pension
contracts will have to be adjusted. NN is
well-positioned to play an important role
in the Dutch pension system and started
preparations early. At the beginning
of 2024, the first WTP contracts were
concluded and administered.
In December 2023, the European
Commission, the European Parliament
and the Council of Ministers reached a
trialogue agreement about the 2020
Solvency II Review. The full impact
cannot be assessed as details need to
be established in secondary legislation.
Actual implementation of the new rules is
not expected before 2026.
In 2023, the new requirements of IFRS 9
and 17 became effective and were applied
by NN Group. Read more on page 26.
Other relevant legislative discussions for
the insurance industry are, for example,
the Retail Investment Strategy and the
Regulation on Financial Data Access
(FIDA). The European Commission aims
to ban inducements on certain features
of insurance-based investment products,
for instance when it concerns non-advised
sales and execution only sales; and new
‘independent advice’. The European
Parliament and the European Council of
Ministers are discussing their positions,
and the outcome of the trilogue
negotiations is not clear.
FIDA aims to create a framework through
which data holders (e.g. insurers, banks,
credit institutions) share the financial data
they hold with other players in the finance
industry (e.g. fintech companies), based
on the consent of customers. This could
provide opportunities but also risks; the
perceived implementation costs could
for instance be substantial, with the risk
that only a limited number of customers
will make use of the option to share their
personal data, like with the Payment
Service Directive (PSD3).
11
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10
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
Our approach
As the basis for the DMA, we used the
sustainability matters overview from
the European Sustainability Reporting
Standards (ESRS). In line with previous
years, our materiality assessment was
conducted in accordance with the Global
Reporting Initiative (GRI). In the 2023
assessment, we applied GRI for the last
time. For our internal assessment we
validated the list from the ESRS with our
desk research and analysis of internal
sources, external standards, peer reports
and sector trends.
Examples of sources include civil
society organisations, insurance sector
reports, internal policies and plans on
environmental, social and governance
(ESG) impacts and peer analysis.
We took into account actual and potential
impacts, positive and negative impacts,
and financial risks and opportunities
across our value chain. For the purpose
of our assessment, we defined our value
chain, looking at the different roles of
NN and how they link to the applicable
sustainability matters. We divided
our value chain into four categories
concerning own operations, investments,
products and services, and business
partners. This way we can identify
the most material impacts, risks and
opportunities in our value chain.
After consulting with internal experts,
we consolidated the long list to create a
condensed sustainability matters list for
the purpose of performing our DMA.
Stakeholder engagement
We used an internal survey to assess the
impact and financial materiality of these
consolidated sustainability matters.
Stakeholders were asked to select the
ten sustainability matters they found
most likely to be material for NN Group
and rated the material matters on the
impact and financial materiality criteria.
In 2023, the perspective of the value
chain was included in the survey for the
first time. This meant we could extract the
scoring from the perspectives of the four
categories of our value chain and compare
the differences in scoring with the overall
response on the sustainability matters.
Based on this scoring in accordance
with CSRD, we came up with a result
per category, concerning positive and
negative impacts and financial risks and
opportunities. The survey was completed
by members of NN Group's Management
Board, Supervisory Board and Works
Council, and senior managers, internal
experts and employees.
We performed a social impact assessment
to receive more detailed input on what
our (internal and external) stakeholders
expect from us. We asked external
stakeholders to score NN’s actual or
potential negative impact on a variety of
social matters covering our value chain.
We integrated this engagement into our
double materiality results. The following
external stakeholders completed the
survey: NGOs, human rights experts,
industry organisations, regulators,
ESG rating agencies, and peer experts.
Read more on the outcome of this process
on page 54.
The survey results were analysed and
provided the basis for further identifying
the most material sustainability matters
for NN Group.
Identifying of impacts, risks and
opportunities
To validate the survey scoring, we held
internal expert sessions with Legal,
Risk, Finance, Corporate Citizenship,
Investment office, HR, Procurement,
Facility Management, Life and Non-
life. The results from NN Bank were
consolidated into the NN DMA.
We identified which sustainability matters
are most material from our value chain
categories. The scoring and consolidation
process resulted in an overview of the
most material sustainability matters
for 2023.
We acknowledge that currently the
scoring is mostly done on a qualitative
basis and validated in expert sessions.
The goal is to include more quantitative
analysis going forward to substantiate the
impacts, risks and opportunities we have
as NN Group. This materiality assessment
forms a basis of directing our efforts on
data collection going forward and is part
of CSRD implementation.
Approval process DMA
The material sustainability matters are
included in the connectivity matrix (page
13) to show the relationship between
NN’s strategic commitments, trends and
developments, material sustainability
matters, impacts, risks and opportunities.
Looking ahead, we strive to enhance
our impact assessment through a more
detailed sustainability due diligence
process, value chain insights, and further
exploration of the use of internal and
external databases.
During the set-up and assessment phase
of the process, we involved the second
line for the correct application of the
CSRD requirements. The outcome of the
materiality assessment was presented to
the Management Board for discussion and
approval. The Supervisory Board approved
the connectivity matrix, including the
material sustainability matters and the
related impacts, risks and opportunities,
as part of the Annual Report approval
process. Read our material matters
definitions in the Material matters index
on pages 14 and 15.
This year we updated our approach for the double materiality assessment
(DMA) to be prepared for the upcoming Corporate Sustainability Reporting
Directive (CSRD) requirements. In doing so, this year’s materiality assessment
combines both impact materiality perspective (inside-out) and financial
materiality perspective (outside-in) to create a DMA.
Determining our material matters
11
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2023 Annual Report
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2023 Annual Report
10
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
In the Annual Report, the management
of material topics is shown on a
consolidated level within our connectivity
matrix. Disclosure on impacts, risks and
opportunities identified is included for
those material topics where we have
the data and/or information available.
The same holds for our material topics
with regard to policies or commitments,
actions taken, procedures and
indicators. Based on new insights from
our materiality assessment, we are
developing and improving policies,
procedures, action plans and indicators
for the purpose of reporting and to
provide stakeholders with a more detailed
overview and effectiveness. With CSRD
on the horizon, we strive to include
this data in our first Annual Report with
sustainability information based on CSRD
as from 2024. For now, we report the
omissions in our GRI index on some of our
newly identified material topics as we do
not show the level of detail that is required
by GRI, but feel we have given a high-level
understanding of our process of assessing
our impacts, risks and opportunities.
Main changes in process and results
The main changes, compared to
the materiality process and the
outcome in 2022 to identify material
sustainability matters:
• New set-up of the materiality process
in anticipation of CSRD (double
materiality) instead of single materiality
• Integrated CSRD criteria into our survey
and validating the survey results with
expert validation sessions
• Consolidation of the results with
local double materiality assessments
from NN Bank and our social
impact assessment
• Focus on E, S and G sustainability
matters and aligning with the strategic
risk assessment
• Used ESRS-prescribed sustainability
matters compared to NN’s definitions
of sustainability matters
• Consolidation of ESRS-prescribed
sustainability matters
• Integrated concept of value chain in
our double materiality assessment
to further specify where we have
identified the impacts, risks
and opportunities
• Excluded financial topics from the
sustainability double materiality
assessment, which are covered in the
Strategic Risk Assessment
• New material topics identified; refer to
the overview on the next page
Determining our material matters continued
13
NN Group N.V.
2023 Annual Report
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2023 Annual Report
12
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
NN Group material sustainability matters
NN Group selected most material topics – relevant to all roles
• Climate change adaptation
• Climate change mitigation
• Customer needs and satisfaction
Additional material topics per role
• Working conditions
at NN – secure
employment, social
dialogue, workers rights &
collective agreements
• Working conditions at
NN – work-life balance and
health and well-being
• Diversity and inclusion
• Human Capital
Development
and attraction
• Community investment
• Corporate conduct
• Water (water
consumption, withdrawal
and discharge and use
of marine resources and
extraction into ocean)
• Direct impact drivers of
biodiversity loss
• Working conditions in our
value chain (secure and
fair employment)
• Other work-related rights
(child labour, forced
labour, adequate housing
and privacy)
• Human rights in our
value chain
• Circular economy for our
products and services
• Social (financial) inclusion
of consumers and/or end-
users
• Working conditions in our
value chain (secure and
fair employment)
• Other work-related rights
(child labour, forced
labour, adequate housing
and privacy)
Our own operations Our investments Our products and
services
Our business partners
Our strategic
commitments
Trends and
developments
Impact materiality
(Positive (P) and Negative (N))
Financial materiality
(Risk (R) and Opportunities (O))
Risks for our business
and society
Customers and
distribution
We see our
customers as the
starting point of
everything we do
Adding value for
customers on
pages 34–36
• Geopolitical instability
• Economic developments
• Regulatory
developments
• Digitalisation
• Customer needs and
satisfaction (P)
• Circular economy for
our products and
services (P)
• Social (financial)
inclusion of
customers (N)
• Customer needs and
satisfaction (O)
• Circular economy
for our products and
services (O)
1 Cyber (security) risk
4 Sustainable cost levels
6 Regulatory
environments
7 Geopolitical instability
8 Recession
9 Inflation
See pages 63–78
Products and
services
We develop
and provide
attractive products
and services
Adding value for
customers on
pages 34–36
• Geopolitical instability
• Economic developments
• Regulatory
developments
• Digitalisation
• Sustainability
• Climate change
adaptation (P)
• Climate change
mitigation (P/N)
• Circular economy for
our products and
services (P)
• Social (financial)
inclusion of customers
(N)
• Climate change
adaptation (O)
• Climate change
mitigation (R(M/L*)/O)
• Circular economy for
our products and
services (O)
2 Climate change
– physical risks
for liabilities
3 Climate change –
transition risk
4 Sustainable cost levels
6 Regulatory environment
10 Product suitability
See page 63–78
People and
organisation
We empower our
colleagues to be
their best
Empowering
our people to
be their best on
pages 37–40
• Human capital
• Digitalisation
• Technological
developments
• Working conditions
• at NN (P)
• Diversity and inclusion
(P/N)
• Human Capital
development and
attraction (P)
• Community
Investments (P)
• Corporate conduct (P/N)
• Working conditions
• in our value chain (N)
• Other work-related
rights (N)
1 Cyber (security) risk
See pages 63–78
Financial
strength
We are financially
strong and
seek solid long-
term returns
for shareholders
Creating value
for investors on
pages 41–43
• Geopolitical instability
• Economic developments
• Sustainability
• Climate change
mitigation (P/N)
• Customer needs and
satisfaction (P/N)
• Corporate Conduct
(P/N)
• Climate change
mitigation (R(M/L*)/O)
• Customer needs and
satisfaction (O)
4 Sustainable cost levels
5 Model risk
6 Regulatory
environment
7 Geopolitical instability
8 Recession
9 Inflation
See pages 63–78
Society
We contribute to
the well-being
of people and
the planet
Creating a
positive impact
on society on
pages 44–59
• Geopolitical instability
• Economic developments
• Sustainability
• Regulatory
developments
• Climate change
adaptation (P)
• Climate change
mitigation (P/N)
• Water (N)
• Direct impact drivers of
biodiversity loss (N)
• Working conditions in
our value chain (N)
• Other work-related
rights (N)
• Human rights in our value
chain (N)
• Community investment (P)
• Climate change
adaptation (O)
• Climate change
mitigation (R(M/L*)/O)
2 Climate change
– physical risks
for liabilities
3 Climate change –
transition risk
6 Regulatory
environment
7 Geopolitical instability
8 Recession
9 Inflation
See pages 63–78
* We have assessed the results of the DMA on the short and medium time horizon. Climate change (physical and transitional) risks that may potentially impact assets or liabilities are considered
material based on the strategic risk assessment, assuming a medium- to long-term horizon.
Connectivity matrix
13
NN Group N.V.
2023 Annual Report
NN Group N.V.
2023 Annual Report
12
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
Environmental topics Definition
Climate change adaptation Process of adjustment to actual and expected climate change and its impacts. Ways of how an
organisation adjusts to current and anticipated climate change-related physical & transitional
risks, as well as how it contributes to the ability of societies and economies to withstand impacts
from climate change.
This matter also covers an organisation’s strategy in relation to the transition to a low-carbon
economy and the impacts of that transition on workers and local communities.
Climate change mitigation Process of reducing GHG emissions and holding the increase in the global average temperature
to well below 2°C and pursuing efforts to limit it to 1.5°C above pre-industrial levels, as laid out in
the Paris Agreement.
Water – water consumption,
withdrawal and discharge and
use of marine resources and
extraction into the ocean
The extraction and use of biological and non-biological resources found in the seas and oceans
(e.g. deep sea minerals, gravels and seafood products). This also includes the sum of effluents
and other water leaving the boundaries of the organisation and released to ocean water over the
course of the reporting period.
Direct impact drivers of
biodiversity loss – land use
changes and the management
of natural resources
The human use, or management of a natural resource, of a specific area for a certain purpose
(such as residential, agricultural, recreational, industrial, etc.). Influenced by, but not synonymous
with, land cover. Land use change refers to a change in the use or management of land by
humans, which may lead to a change in land cover. Examples of these direct impacts are
exploitation by harvesting and abstraction, land degradation, desertification and soil sealing.
The latter means covering up the original soil, for example by roads or the construction of homes.
Circular economy for our
products and services
Resources that leave the organisation’s infrastructure (in the form of products and services).
Social topics Definition
Working conditions – secure
employment, social dialogue,
workers rights and collective
agreements
Increasing the percentage of workforce with employment contracts (especially permanent
contracts) and social protection. This also includes the freedom of expression, which is the
right to seek, receive and impart information and ideas of your choice without interference and
regardless of frontiers.
Extending social dialogue to more establishments and/or countries. This also includes increasing
the percentage of own workers covered by collective bargaining, negotiating collective bargaining
agreements over sustainability issues. This also includes privacy rights of NN Group employees,
where these rights protect them from unlawful and unnecessary surveillance.
Working conditions – work-life
balance and health and safety
Extending work-life measures to a greater percentage of own workers and reducing the rate of
injuries and worktime lost due to physical and mental injuries.
Diversity and inclusion Refers to a workforce that is representative and inclusive. This includes promoting gender
equality and equal pay, increasing the presence of women in the workforce and top management,
reducing the wage gap, the employment and inclusion of persons with disabilities, as well as
increasing the representation of under-represented groups in the workforce and top management
to foster a diverse and inclusive organisational culture.
Human Capital Development
and attraction
Human capital can be broadly defined as the stock of knowledge, skills and other personal
characteristics embodied in people that helps them to be productive. Pursuing formal education
(early childhood, formal school system, adult training programmes) but also informal and on-the-
job learning and work experience all represent investment in human capital. This is the impact
NN Group has on its own workforce by nurturing a culture that supports continuous learning and
collaboration and investing in personal and professional development, as well as the impact on
NN Group and our ability to execute our business strategy by attracting, retaining and developing
talent needed and fostering employee satisfaction. This includes reskilling our workforce towards
changing ways of working and insurance business models.
Working conditions in our
value chain – secure and fair
employment
Increasing the percentage of workers in the value chain (e.g. employees working in organisations
that are linked to NN Group as part of our value chain activities such as procurement activities or
service organisations) with employment contracts (especially permanent contracts) and social
protection. Increasing the percentage of workers in the value chain with flexible working time
arrangements, while paying them adequate wages. This matter also covers the establishment of
the social dialogue to more countries.
Definitions material topics
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
NN Group N.V.
2023 Annual Report
14
Other work-related rights –
child labour, forced labour,
adequate housing and privacy
Extending measures for preventing exposure of young persons to hazardous work to a greater
percent of operations in the value chain. Extending measures for preventing child labour to a
greater number of operations. Having secure tenure – not having to worry about being evicted or
having home or land taken away. It means living somewhere that is in keeping with their culture,
and having access to appropriate services, schools and employment. Privacy rights protect the
workers in the value chain from unlawful and unnecessary surveillance.
Human rights in our value chain Security concerns linked to climate change include impacts on food, water and energy supplies,
increased competition over natural resources, loss of livelihoods, climate-related disasters, and
forced migration and displacement.
Right to seek, receive and impart information and ideas of their choice without interference and
regardless of frontiers. Including the right to freedom of association which involves the right of
individuals to interact and organise among themselves to collectively express, promote, pursue
and defend common interests. This includes the right to form trade unions. Freedom of peaceful
assembly and of association serve as a vehicle for the exercise of many other rights guaranteed
under international law, including the rights to freedom of expression and to take part in the
conduct of public affairs. The right to freedom of peaceful assembly and association is protected
by article 20 of the Universal Declaration of Human Rights.
Free, Prior and Informed Consent (FPIC) is a manifestation of indigenous peoples’ right to self-
determine their political, social, economic and cultural priorities. It constitutes three interrelated
and cumulative rights of indigenous peoples: the right to be consulted; the right to participate;
and the right to their lands, territories and resources. Cultural rights protect the rights for each
person, individually and in community with others, as well as groups of people, to develop and
express their humanity, their world view and the meanings they give to their existence and their
development through, inter alia, values, beliefs, convictions, languages, knowledge and the arts,
institutions and ways of life.
Community investment The impact NN Group has on the communities around us by investing our resources, expertise
and networks to maximise positive change in our communities, specifically around financial,
mental and physical well-being (together with non-profit organisations and research institutes).
Customer needs and
satisfaction
Satisfying the needs of our customers by offering them suitable products and services as well as
living up to our duty of care. Including safeguarding (informational) safety of individuals who make
use of our products and services, either for themselves or for others.
Social (financial) inclusion of
customers
The process and actions taken to ensure that all individuals, regardless of their background or
characteristics, have equal opportunities and access to products, services and information.
It involves promoting non-discrimination, eliminating barriers that hinder access, and
implementing responsible marketing practices that prioritise transparency, fairness and the well-
being of consumers.
Governance topics Definition
Corporate conduct Corporate conduct expresses goals through values and beliefs. It guides the undertaking’s
activities through shared assumptions and group norms such as values or mission statements or
a code of conduct.
Definitions material topics continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
15
NN Group N.V.
2023 Annual Report
16
NN Group N.V.
2023 Annual Report
Stakeholder engagement and
international commitments
Stakeholder engagement
Engagement is a vital part of our efforts
to earn and maintain the trust and
support of our stakeholders, and to fulfil
our duty as a responsible and engaged
company. We identify stakeholders
based on their potential to influence or
be affected by our business. We share
an overview of important stakeholder
groups, the key topics that matter to
them and that we seek their feedback
on, and the forms our dialogue takes
on page 18.
Stakeholder policy
In 2023, we formulated a Stakeholder
Engagement Policy, describing our
principles and approach regarding our
relations with stakeholders and how
we carefully balance their interests.
The policy covers engagement on
sustainability aspects of NN’s strategy,
and is based on our purpose and three
values: care, clear, commit. Read more
in the policy on our website.
Engaging with public
decision‑makers
NN is committed to being transparent
on the core topics on which it
formulates positions, and ensuring
that public decision-makers are
provided with reliable and updated
information. NN Group is registered
as number 493416718971-18 at the
EU Transparency Register, europa.eu.
To ensure compliance, and to discuss
policy developments and implications
of relevant regulation, we are a member
of various national and international
organisations, including:
• In the Netherlands: Dutch Association
of Insurers (Verbond van Verzekeraars),
Dutch Banking Association (NVB) and
Confederation of Netherlands Industry
and Employers (VNO-NCW)
• In Europe: the national insurance
and pension associations in the
countries where NN Group is active;
Pan-European Insurance Forum
(PEIF), European Financial Services
Roundtable (EFR), European Insurance
CFO Forum and CRO Forum
• International: World Economic Forum
(WEF) and Geneva Association
NN’s annual total monetary contribution
and expenditure to trade associations
in 2023 was EUR 5.7 million. The three
largest contributions were to the Dutch
Association of Insurers, the Dutch
Banking Association and the World
Economic Forum.
NN engages directly with authorities and
public decision-makers on regulatory and
financial market-related issues, providing
them with relevant information when
appropriate. We do not make financial
contributions to political parties in the
Netherlands or elsewhere, and focus on
EU and Dutch legislative proposals or
policies, including:
• Prudential regulation – Solvency II,
Recovery and Resolution
• International Financial Reporting
Standards (IFRS)
• Sustainable finance policies –
Taxonomy, SFDR, CSRD
• Corporate Sustainability Due Diligence
Directive (CSDDD)
• Retail Investment Strategy (RIS)
• Insurance Distribution Directive (IDD)
• Digital strategy – Financial Data
Access (FIDA) Framework, Artificial
Intelligence Act, Open Finance and
Open Insurance, Data Protection
• Anti-money laundering (AML)
• Pension reforms in various countries
• Labour market reforms
NN Group engages in ongoing dialogue with stakeholders on a variety of
topics, ranging from products, services and business performance to our role
in society. By endorsing national and international sustainability initiatives,
we underline our ambitions and join forces with other organisations to increase
leverage of the topic at hand.
Stakeholder dialogue on pipeline projects
NN Group is involved in a dialogue with
TotalEnergies due to human rights
violations and oil pollution around
the East African Crude Oil Pipeline
(EACOP), a pipeline in Uganda and
Tanzania. The dialogue is ongoing and
TotalEnergies has responded to our
requests for information.
NN Group met with several NGOs, both
Mozambican and Dutch, and other
Dutch financial institutions to discuss
an issue in Mozambique. The NGOs
provided context on the situation in
Cabo Delgado (a province in northern
Mozambique) and explained the human
rights, climate and environmental
effects related to a gas pipeline project
involving the French energy company
TotalEnergies. The gas pipeline
consortium includes TotalEnergies
and several Chinese, Indian and
Mozambican oil & gas companies.
After attacks by a rebel armed group
that killed more than 1,200 people
in April 2021, TotalEnergies declared
force majeure and suspended its
operations in Mozambique. This not
only impacted the subcontractors’
employees but also affected the local
population displaced by the gas project
and attacks. The NGOs have asked
investors, including NN, to engage
with TotalEnergies on this issue.
For more details, read our Active
Ownership Report on the NN website.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
17
NN Group N.V.
2023 Annual Report
National and international
commitments
As a company headquartered in the
Netherlands, we are subject to Dutch law
and the Dutch Corporate Governance
Code. We observe the relevant laws
and regulations of all markets in which
we operate. We are also subject to
relevant international standards and
guidelines, including the UN Global
Compact and the OECD Guidelines for
Multinational Enterprises and the UN
Guiding Principles on Business and
Human Rights (UNGP). To underline our
sustainability ambitions, NN and/or our
respective businesses have endorsed
various national and international
sustainability initiatives, and we are a
member of various relevant international
organisations. By taking an active role
in these partnerships we can increase
the impact of the capital we put to work
and thus help create a better world.
Read more on the NN Group website.
Commitment of the financial sector to the
Dutch Climate Agreement
In July 2019, NN signed the commitment
of the financial sector to the Dutch
Climate Agreement. We thereby commit
to contributing to the financing of
the energy transition, to disclosing
the carbon footprint of our relevant
investments and to publishing a Climate
Action Plan, which we updated and
published in July 2023.
We began disclosing the carbon
footprint of our proprietary assets
in 2017. Our 2023 measurement
covers approximately 80% of our
total proprietary asset portfolio,
which comprises the general account
investment portfolio of the insurance
entities, the assets of NN Bank and the
holding assets of NN Group. We are
continuously evolving how we address
climate change, and this is reflected
in our strategy, policies and activities.
Read more on pages 49–54 and pages
133–139.
International Responsible Business Conduct
insurance sector agreement
The International Responsible Business
Conduct (RBC) Agreement for the Dutch
insurance sector aimed to further align
the insurance sector’s investment
activities with international standards
and guidelines on responsible business
conduct. The covenant’s signatories,
which included the Dutch government,
pool their knowledge and experience;
identified environmental, social and
governance (ESG) risks; and initiated
steps to mitigate them. The five-year
term of this agreement ended in 2023
and NN is participating in talks with other
insurers to ensure a follow-up.
Net‑Zero Insurance Alliance
In 2021, NN Group joined the Net-Zero
Insurance Alliance (NZIA), which brings
together insurers and reinsurers to play
their part in accelerating the transition
to net-zero emission economies.
We are committed to transitioning
our underwriting portfolio to net-zero
greenhouse gas (GHG) emissions by
2050. The NZIA announced in July 2023
that the NZIA Target-Setting Protocol
would transition to serve as a voluntary
global best practice guide to aid in the
accurate measurement, standardisation
and comparability of science-based
decarbonisation targets for insurance
and reinsurance underwriting portfolios.
Members of the NZIA, including NN,
remain committed to the net-zero
transition and are engaging with a
broader community of stakeholders on
the future evolution of the NZIA.
Task Force on Climate‑related Financial
Disclosures (TCFD)
Since the financial year 2017,
NN has reported on climate change
in accordance with the Financial
Stability Board’s Task Force on Climate-
related Financial Disclosures (TCFD).
In the reference table on page 364, we
show where we have included TCFD
recommendations, structured along
the four TCFD pillars of governance,
strategy, risk management, and metrics
and targets.
Nature Action 100
In 2023, NN Group joined Nature Action
100, a global investor-led initiative
working to drive corporate action to
reverse nature and biodiversity loss
by 2050. Through the initiative, 190
investor participants will engage directly
with 100 companies in key sectors
around the world to advance the investor
expectations identified by Nature
Action 100.
Stakeholder engagement continued
NN Group’s investment stance on tobacco control
NN Group has excluded tobacco
producers from its proprietary
investments since 2018 due to
concerns regarding public health and
the economic burden smoking places
on society. In 2023, we joined 56 other
financial institutions as a signatory
of the Financial Sector Statement on
Tobacco Control, urging governments
to accelerate implementation of the
World Health Organization Framework
Convention on Tobacco Control
(WHO FTC) to achieve the health and
economic benefits of tobacco control.
In 2023, we evaluated our exclusion
criteria for tobacco production and
decided to expand our policy by explicitly
adding e-cigarettes. We also lowered the
exclusion threshold for revenues from
tobacco production from 50% to 5%
for our proprietary assets. We believe
engaging with the tobacco industry
would not lead to fundamental changes
and that the sector is associated with
human rights violations and negative
environmental impacts. The supply chain
for tobacco farming, which engages
over 17 million people, is particularly
susceptible to such violations.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
18
NN Group N.V.
2023 Annual Report
Customers
We aim to support our customers in dealing
with expected and unforeseen changes
in the key moments in their lives through
offering products and services that are
easy to understand and use.
Engagement:
Survey
Topics discussed:
Customer experience
Outcome:
Increase customer engagement
Colleagues
Our NN colleagues together create a
culture that is based on our values and
purpose, and that supports a flexible and
open mindset.
Engagement:
Leadership and other (digital)
conferences, surveys, works councils,
unions
Topics discussed:
Values, Code of Conduct, hybrid working,
engagement, climate change, Climate
Action Plan
Outcome:
Inform and engage employees,
values-driven culture
Societal and
network organisations
We strive to contribute to the well‑being
of people and the planet through, for
example, integrating sustainability
factors into our underwriting
activities and managing our direct
environmental footprint.
Engagement:
Correspondence, meetings, reports
and surveys
Topics discussed:
Climate change, biodiversity, human
rights, net-zero commitments,
international business conduct
Outcome:
Exchange views, insights, next steps
and benchmarking methods
Agents and intermediaries
We have relationships with many partners
in our value chain, including intermediaries
and other entities linked to our operations,
products and services.
Engagement:
Surveys, roundtables, webinars and
(digital) visits
Topics discussed:
Market topics in general, co-creation
Outcome:
Improved cooperations with
intermediaries, increased intermediary
satisfaction, well-informed brokers
Society: Expert groups and
Industry associations
We want to contribute to a world where
people can thrive for generations to come,
for example, by investing our assets
responsibly, by being a fair taxpayer, and
through our activities in the communities
where we live and work.
Engagement:
Correspondence, meetings, reports,
surveys and knowledge sessions
Topics discussed:
Solvency and capital, pension reform,
climate-related insurance, digitalisation,
general economic outlook, investors’
role in climate transition, social
impact assessment
Outcome:
Stimulate sector-wide cooperation, align
methodologies and pool knowledge
and experience
Investors, analysts
We are committed to delivering strong
and sustainable returns for the capital
that investors provide and are clear and
transparent in how we communicate.
Engagement:
Annual shareholders meeting, analyst
calls, investor meetings, survey
Topics discussed:
Strategy, financial and operational
developments, capital position,
approach to sustainability
Outcome:
Inform and engage with analysts,
shareholders and other investors
Regulators and
government agencies
We have direct engagements with
public decision‑makers and regulators
concerning regulatory and financial
market‑related issues.
Engagement:
Meetings and working visits
Topics discussed:
Economic and financial market
developments, risk assessments,
insurance regulations, pension and
labour market regulations, sustainable
finance, ESG, digitalisation
Outcome:
Engagement with these stakeholders;
exchange views and insights
Our
stakeholders
Stakeholders, engagement, topics and outcomes
Stakeholder engagement continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
19
NN Group N.V.
2023 Annual Report
Our financial strength, scale and
footprint give us the adaptability
and resilience to compete in
fast-changing environments,
to create solid returns for our
shareholders, and to contribute
to the communities in which we
live and work.
3 Our strategy and
performance
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
NN Group N.V.
2023 Annual Report
20
You matter
Our purpose
Our ambition
Our brand promise
Our strategic commitments
Customers and distribution
We see our customers as the
starting point of everything
we do
Products and services
We develop and provide
attractive products and
services
People and organisation
We empower our colleagues
to be their best
Financial strength
We are financially strong and
seek solid long-term returns
for shareholders
Society
We contribute to the well-being
of people and the planet
We help people care for what matters most to them
We want to be an industry leader, known for our customer
engagement, talented people, and contribution to society
Our values
CommitClearCare
Our strategy
Our ambition is to be an industry leader, known for our customer engagement,
talented people, and contribution to society. Our strategy aims to help us
achieve our ambition in the coming years and to create sustainable long-term
value for our stakeholders.
Today’s world is characterised by
continued (geo)political turmoil,
macroeconomic uncertainties, volatile
markets, and the impact of climate
change. These trends are impacting
our communities and the lives of
our customers, creating demand for
protection during those key moments in
life, whether it is retirement, illness or
extreme weather.
Our strategy remains well-aligned with
these long-term trends. For example,
increased risk awareness among
consumers is creating additional demand
for protection products across our
international markets, where insurance
penetration rates are still relatively low.
We also see growing demand for
personalised pension products and
financial planning tools in many of
our markets where governments and
employers are encouraging employees to
commit additional funds to their pension
scheme. Finally, we see growing awareness
among customers on climate change,
which is translating into higher demand
for sustainable products and services.
To execute our strategy, we have identified
five strategic commitments. Since the
launch of our strategy in 2020, these
commitments have steered our strategic
direction and decision-making, supported
by strategic and financial targets that
enable us to monitor our progress.
At the end of 2023, we refined our five
strategic commitments and introduced
a new commitment on becoming a
‘digital and data-driven organisation’,
while combining our commitments on
customers and products and services
into a single commitment, called
‘engaged customers’. This update
reflects our focus on transforming our
business by further simplifying our
technology and operations, giving us
room to grow our business further.
We will report on our refined strategic
commitments as of 2024.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
21
NN Group N.V.
2023 Annual Report
Progress on our commitments
in Slovenia and hail storms in Italy in
August. For customers stranded in
Italy, experts and claims employees
aimed to give clarity as quickly as
possible. When emergency repair was
not possible locally, 93 vehicles were
repatriated to the Netherlands.
• In the international markets where we
work with tied agents, we continued
to digitalise our processes, and
enhance the digital lead and activity
management support we provide.
We have made significant progress in
new sales life insurance (APE) from
leads provided to our tied agents,
achieving 97% growth compared
to 2022. Approximately 2.5 million
customers use our customer app and
platform systems in these markets,
representing a 17% increase compared
to 2022.
• In our Dutch units, approximately
2.1 million customers use our customer
app and platforms, representing an
8% increase compared to last year.
Overall customer activity on our
platforms was up by 12.5%.
• We strengthened our distribution
network across our European markets.
NN Czech Republic entered into a
Our 2023 progress
• We track the satisfaction of our
customers through the relational
Net Promoter Score (NPS-r), which
measures how likely it is that they will
recommend our products and services
to colleagues, friends or family.
In 2023, our Netherlands business
scored on par with market average
and our International businesses
scored above market average.
• NN announced a final settlement
with consumer interest groups on
unit-linked products sold in the
Netherlands by Nationale-Nederlanden,
including Delta Lloyd and ABN AMRO
Levensverzekering. We have taken
the criticism that certain products did
not meet our customers’ expectations
seriously, and therefore we are pleased
with this final settlement with these
interest groups. With this settlement
we provide clarity to our customers and
can finally resolve this issue. Read more
in Note 43.
• Climate change is fuelling extreme
weather events such as storms and
heavy rainfall. We successfully handled
all insurance claims from Dutch
holidaymakers following major floods
seven-year exclusive partnership
with MONETA Money Bank for the
distribution of its life insurance and
pension savings products to MONETA’s
customers. NN Slovakia strengthened
its partnership with Slovenská
sporiteľňa, the country’s largest bank,
offering its customers a new risk
insurance product. And in Romania,
we extended our bancassurance
distribution agreement with ING.
• NN Romania launched a digital tool
that supports customers to assess
their protection needs and discover
the right insurance and pensions
products for them. NN Life Japan has a
number of platforms aimed at tackling
SME owners’ pain points, including the
pressing issue of business succession.
In 2023, we saw registered users
double on our Kagyo-aid platform and
Tsugunowa website, which support
SME owners’ children and spouses,
respectively, in a smooth business
takeover. Registered users on these
platforms exceeded 25,000.
Read more about how we create value
for our customers on pages 34-36.
Customers and
distribution
Using AI for a personal touch
We believe that our colleagues’ time is best spent helping our
customers and we are exploring how artificial intelligence
(AI) can help us achieve this across our business. In our call
centres in the Netherlands, we introduced automated call
logging in 2023 to provide our agents with an automatic
summary of their customer conversations, replacing a manual
process. With over two million calls logged each year at
3.5 minutes per call after call handling time, using AI to create
these summaries enables our employees to make more time to
support our customers and focus on the conversation. AI can
also help identify customer claims that need further attention
or a personal touch. NN brand OHRA handles a large portion
of their claims through an automated process, allowing
for a quick and efficient process. However, some situations
require closer attention and leniency than the standard
process allows. Their machine learning model the Human
Scale (Menselijke maat) uses text pattern recognition and
predefined business rules to identify claims that require
attention from an employee. By using this model, OHRA is
able to provide personalised care to their customers when
needed, while still maintaining an efficient process for the
majority of claims. Read more about AI on page 34.
Our commitment
Our customers are the starting point of everything we
do. We engage with them to ensure we meet their needs
and offer solutions that create sustainable long-term
value. We use our digital capabilities and leverage our
strong distribution footprint in order to further enhance
our customer experience.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
NN Group N.V.
2023 Annual Report
22
Progress on our commitments continued
• Our Netherlands Life business added
a new collective term life insurance
in NN’s extensive range of pension
products. The collective term life
insurance is available for companies
with at least five employees and is
currently sold in combination with NN’s
Personal Pension Plan (PPP). It insures
employees against the risk of death,
providing an extra financial buffer to
the surviving relatives.
• As part of our ambition to support the
transition to a sustainable society,
our Dutch Non-life business started
a series of initiatives for sustainable
damage repairs. Read more on
page 36.
• We continued to build our protection
business in Europe. NN Hungary
started an exclusive reciprocal
cooperation with Premium Health Fund,
an independent private fund with over
300,000 members, whereby NN covers
the health fund members with health
group insurance, and offers them
individual life and pension products.
Our 2023 progress
• To measure our progress, we have
various key performance indicators
for our business units. For example,
at Netherlands Life, we focus on
growing the defined contribution
pension business through net
inflows. In 2023, the net inflows
were 2.3 billion. Netherlands Non-
life reported a 1.9% increase in
gross premiums written to EUR
3.8 billion, while NN Bank originated
EUR 4.7 billion of new mortgages
in 2023.
• In preparation for the Dutch pension
legislation, which has been in
effect since 1 July 2023, Nationale-
Nederlanden and BeFrank, our online
pension administrator, organised
sessions to educate advisors on the
legislation changes and their impact on
customers. Read more on page 36.
• We continued to develop our Human
Capital Planner (HCP), including the
improved HCP Pension Barometer
where advisors can view their clients’
chosen schemes and compare
different scenarios.
• NN Romania launched a critical
illness insurance covering treatment
abroad for cancer, cardiac surgery,
neurosurgery and transplant.
Each customer is assisted by a
medical navigator throughout their
case, from diagnosis in a top clinic in
Romania to the needed treatment in
top medical centres abroad, benefiting
from covered medical care of up to
EUR 2 million.
• NN Hellas launched a health product
which is available through NN’s
bancassurance channel. The product
supports customers in case of
hospitalisation and offers various
allowances for hospital stay, surgery
and home recuperation.
Read more about how we create value
for our customers on pages 34–36.
Supporting customers with mental health problems
We are responding to the rise in mental health problems in the
Netherlands and Europe. With statistics showing depression
and burnout on the rise among the self-employed, NN
Belgium integrated preventive mental well-being services for
this group as an add-on to its disability insurance, including
counselling, life coaching and mindfulness. The service is
unique in the Belgian market and was recognised by the
2023 DECAVI insurance award in the innovation category.
Nationale-Nederlanden was among the first insurers in
Poland to add a rider to its group life insurance providing
psychological and psychiatric support in the event of mental
health disorders. The product is offered in the form of group
insurance as coverage for employees or as an extended
version that also covers their families. In the Netherlands,
Non-life published research in September 2023 that found that
absenteeism due to mental health problems increased in the
first half of 2023, with a quarter of employees experiencing
too much stress. In addition to its occupational health & safety
services, Netherlands Non-life offers a prevention package
that helps employers and employees avoid absenteeism.
Following a successful pilot, NN Non-life alongside another
seven organisations has initiated a programme on employee
mental vitality, as a collaboration with Erasmus Happiness
Economics Research Organisation and Lab of Life.
Employees become certified trainers in supporting fellow
colleagues to feel less stress and focus on what is important
for them. Across our markets we also partner with NGOs to
support community programmes in this area.
Products and
services
Our commitment
We aim to excel in developing and providing attractive
products and services, and to operate with efficiency,
agility and speed. To continue doing so, we will make
use of digital and data capabilities.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
23
NN Group N.V.
2023 Annual Report
Progress on our commitments continued
• Across our international business units,
we support our people to develop their
digital skills, with 1,833 employees
completing at least eight hours of
training programmes on topics such
as AI, data analytics, Salesforce and
IT-related skills.
• To support well-being, we introduced
the Personal Health Check in the
Netherlands, giving employees insights
into their lifestyle, blood pressure,
cholesterol, work stress and more.
The personal health report has their
risk assessment and recommendations
on how to improve their health.
Our 2023 progress
• We measure our progress through
employee engagement surveys,
which are conducted twice a year.
In 2023, employee engagement
remained high at 7.8 compared to
7.9 in 2022.
• We continued our efforts to become
a more diverse and inclusive
workplace, including through gender
equality. The percentage of women
in senior positions remained stable
at 40% compared to 2022.
• Colleagues representing all NN
countries visited Rotterdam Pride and
joined a training session on LGBTQIA+
topics, we launched an international
diversity and inclusion (D&I) network,
and NN Turkey signed the UN Women’s
Empowerment Principles (WEPs).
In Greece, we organised an event
where employees could experience
the everyday life of people with
visual impairments.
• The Zorggenoot support line was
made available to our employees in the
Netherlands. It provides employees
who are also caregivers information
about different forms of support,
helps them with administrative work
and supports them in finding a good
balance between their own life,
caregiving and work. Since September,
more than 500 colleagues have visited
the platform.
• All ten International Insurance business
units were certified a Top Employer
for the fifth time by the Top Employers
Institute. NN Group was included in the
Top 10 ranking companies in Europe,
as a result of having more than five
business units certified in Europe with
a high aggregated score.
Read more about our talented people
on pages 37–40.
Strengthening our tech talent
NN Life Japan has been investing in technology and data skills
by upskilling employees in technical domains and growing
our engineering base. In 2022, NN Life Japan introduced
Data Academy, an internal programme that provides three
learning pathways for developing data analysts, scientists
and engineers. The programme includes employee training
modules and certifications, with communities to share best
practices. By the end of 2023, 83% of employees had been
trained on data awareness and 28% had attended at least
one of the data academy modules, or related Power BI and
Python training. In addition, in 2023, NN Life Japan rolled
out a ChatGPT training, with 53% of employees attending,
and is working on the first ChatGPT use cases for automated
call logging and a knowledge base chatbot. As part of our
focus on hiring and retaining tech talent, NN Life Japan is
the only company with European headquarters to have
established a Technology Operations Centre in the tech hub
of Fukuoka city, aimed at ensuring business continuity in
the event of a disaster impacting our Tokyo offices. Set up in
cooperation with Team Fukuoka, an industry-government-
academic organisation that promotes the international
financial city concept, the centre has personnel and
equipment to ensure business continuity in a disaster.
People and
organisation
Our commitment
We nurture a culture aligned with our purpose, values
and ambitions. One that supports continuous learning,
collaboration and diversity of thinking. We consider all
colleagues to be talents, and invest in an inclusive and
inspiring environment, so that together we are optimally
equipped to take our business into the future.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
NN Group N.V.
2023 Annual Report
24
• 15% step-up of 2023 total dividend to
EUR 3.20 per share; structural increase
of annual share buyback programme to
EUR 300 million.
• Full-year operating result was
EUR 2.5 billion; full-year net result
was EUR 1.2 billion.
• We successfully conducted a liability
management transaction to proactively
address part of the subordinated
notes due for refinancing for 2024.
We issued EUR 1 billion of dated green
subordinated notes on 3 May 2023
to repurchase subordinated notes
for the same amount. We continue to
have ample financial flexibility given
our remaining tiering capacity and low
financial leverage ratio.
Our 2023 progress
• Continued strong business
performance with full-year operating
capital generation (OCG) rising 13%
(excluding the asset management
business that was sold in 2022) to
EUR 1.9 billion, exceeding 2025
target of EUR 1.8 billion ahead
of plan.
• Increased OCG target to
EUR 1.9 billion and free cash flow
target of EUR 1.6 billion in 2025.
• NN Group Solvency II ratio remains
robust at 197% from 197% at
31 December 2022; unit-linked
settlement agreement and attractive
longevity deals have reduced the risk
profile of the balance sheet.
Read more about our performance in
2023 on pages 28–32 and how we
create value for investors on pages
41–43.
NN Life completes longevity transactions
Underscoring our efforts to continually look for value-
creating opportunities, in 2023, Netherlands Life completed
two transactions to transfer the full longevity risk associated
with approximately EUR 13 billion of pension liabilities in
the Netherlands. The deals have reduced NN’s exposure
to longevity risk and thereby further strengthens NN’s
capital position.
The transactions cover the longevity risk of approximately
300,000 policies and have been entered into with
an insurance subsidiary of Prudential Financial, Inc.
and Swiss Re. The risk transfer became effective as of
31 December 2023, and the reinsurance agreements will
continue until the portfolio has run off. The reinsurance
deals have no impact on the services and guarantees that
NN provides to its policyholders.
Financial
strength
Our commitment
We are committed to maintaining a strong balance sheet
and creating solid financial returns for shareholders
by using our financial strength, scale and international
footprint, and by efficiently managing our customers’
assets and our own insurance portfolios.
Progress on our commitments continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
25
NN Group N.V.
2023 Annual Report
Society
• We announced the launch of a
EUR 300 million investment fund
for infrastructure climate solutions,
together with Rivage Investment.
The fund finances infrastructure assets
aimed at addressing climate change,
focusing on wind, solar, hydro, batteries
and energy management solutions.
• NN Bank set a reference target for
reducing GHG emissions for the
aggregate portfolio of mortgages on the
NN Group balance sheet. To achieve this,
we will encourage borrowers to improve
the energy label of their homes, reduce
GHG emissions and ensure access
to finance.
• NN Bank published a white paper, tooling
and a masterclass for advisors to help
them advise clients on sustainable living.
• Our efforts on responsible investment
were recognised by the Association of
Investors for Sustainable Development
(VBDO) that ranked NN as one of the top
performing insurers in a key benchmark
for responsible investment in the
Netherlands, with a score of 4.1 out of
5 points.
• NN Group’s direct real estate portfolio
received a five-star rating and first
place within its peer group from Global
Real Estate Sustainability Benchmark
(GRESB).
Our 2023 progress
• We continued to make progress
on our goal to more than double
investments in climate solutions,
with EUR 10.8 billion total
investments in climate solutions
from a base of EUR 5 billion in 2021.
• Our role in society is reflected in our
contribution to local communities
and we aim to support the financial,
physical and/or mental well-being
of one million people by 2025.
We have supported 401,000 people
since 2022.
• In July, we published our Climate Action
Plan 2023 Update which describes the
steps we are taking towards net-zero
greenhouse gas (GHG) emissions by
2050, such as tightening our stance on
proprietary investments in the oil and
gas sector to also include conventional
oil and gas activities.
• The carbon intensity (scope 1 and 2)
of our corporate investment portfolio
decreased to 112 tonnes CO₂e per
EUR million invested, representing a
10% reduction compared to our 2021
baseline, and a year-on-year decline
of 15%. This reflects, for example,
changes in portfolio holdings resulting
from our Paris Alignment strategy and
other portfolio management decisions.
• NN Social Innovation Fund invested
EUR 500,000 in the Shaping Impact
Group’s SI3 fund which focuses on
initiatives that contribute to increasing
equity in opportunities and creating a
solidarity-based society.
• An increase of 29% in use of renewable
electricity to 15 gWh in 2023 was mainly
driven by a transition to renewable
electricity sources and an increase of
usage of electricity in the Netherlands.
• We reached more than 9,330 people
and supported 35 charities through our
annual company-wide volunteer week,
with 3,215 colleagues participating.
• In partnership with a local organisation,
NN Romania launched the first
scholarship fund in the country to
support the education of students who
want to start their own business, but
have limited financial means.
• NN Slovakia will participate in the
launch of Talent Garden, a traineeship
programme for university students
in Bratislava, alongside other Dutch
companies. Starting in January 2024,
the participating companies will
provide 10-12 university students the
opportunity to work on assignments
and receive management trainings.
Read more about our commitment to
society on pages 44–59.
Comprehensive oil & gas policy
In May 2023, NN Group introduced its comprehensive oil &
gas policy to achieve net-zero emissions in our investment
portfolio by 2050. It focuses investment on companies
committed to lowering their emissions and transitioning
to a low-carbon economy. The policy covers corporate and
infrastructure investments across the entire oil & gas supply
chain (including upstream, midstream and downstream
activities), representing 1-2% of proprietary assets.
NN Group restricts new investment in companies with
more than 30% of revenues from oil & gas activities and not
aligned with the Paris Alignment categorisation framework.
The policy also prohibits infrastructure investments in oil &
gas exploration or production projects, and infrastructure
focused on oil & gas or using gas to produce hydrogen.
For existing investments, NN will work with companies to
align their activities with climate ambitions and consider
divestment if there is insufficient progress. NN will adjust
discretionary mandates and encourage fund managers
to align with the policy but cannot change investment
conditions for committed funds. Read the full NN Group Oil &
Gas policy on the NN Group website.
Our commitment
We aim to contribute to the well-being of people and
the planet. We do business with the future in mind and
contribute to a world where people can thrive for many
generations to come.
Progress on our commitments continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
NN Group N.V.
2023 Annual Report
26
Solid business performance
We reported a solid business
performance despite the volatile
macroeconomic and geopolitical
environment. Netherlands Life reported
record net inflows of EUR 2.3 billion at its
defined contribution pension business.
Combined with favourable market
movements, Assets under Management
increased to EUR 32.7 billion compared
with EUR 27.8 billion at the end of
2022. Netherlands Non-life reported a
continued strong business performance,
supported by a solid pricing environment
and benign weather in Property
& Casualty (P&C). Results at our
banking business in the Netherlands
benefitted from a higher interest result.
Insurance Europe reported continued
growth momentum with higher sales in
Central and Eastern Europe, with most
notably strong value of new business in
Czech Republic, Poland and Hungary.
Exceeding 2025 OCG target ahead
of plan
Operating capital generation (OCG) in
2023 increased by 13% to EUR 1.9 billion
on a like-for like basis compared with
2022. With this result, we exceeded
our 2025 target of EUR 1.8 billion
OCG ahead of plan. The 2023 result
reflects increased contributions
from Netherlands Non-life, Banking,
the segment Other and Insurance
Europe. Netherlands Non-life reported
a continued strong and favourable
business performance, while Insurance
Europe saw continued strong underlying
growth. Banking benefitted from
higher interest rates and lower capital
consumption. This helped to offset a
lower contribution from Netherlands Life
which was mainly driven by the financial
markets. While we expect favourable
results to normalise, we continue to
expect underlying growth in the coming
years. We have therefore increased our
Our performance
We reported strong results for 2023, driven by a solid business performance
despite the volatile macroeconomic and geopolitical environment.
We exceeded our operating capital generation target for 2025 ahead of plan,
driving increased returns to shareholders.
OCG target for 2025 to EUR 1.9 billion.
This increased target is based on
normal weather conditions, normalised
mortgage margins and otherwise stable
financial markets as per 1 January 2024.
Strong balance sheet
Our balance sheet remained strong,
with a Solvency II ratio of 197% at the
end of 2023, stable versus the end
of 2022. The Solvency II ratio was
positively impacted by OCG and two
longevity transactions executed at
the end of 2023, which were offset by
capital flows to shareholders, the final
settlement agreement on unit-linked
insurance policies, and the impact from
adverse markets driven by negative real
estate revaluations. The impact from
elevated mortgage margins at year-end
was offset by favourable credit spread
changes. Elevated mortgage margins
are not a major concern, as we believe
these dynamics will normalise over
time. Furthermore, we see very marginal
default risk in our mortgage portfolio.
Free cash flow target for 2025
Based on our robust balance sheet
and strong business performance, we
introduced a free cash flow target of
EUR 1.6 billion in 2025. This increase
is supported by more confidence for
increased remittances from Netherlands
Non-life and the banking business and
a continuation of growing remittances
from Insurance Europe. This results
in an increased guidance of EUR
100 million versus our previous guidance
of mid single-digit growth versus the
normalised 2021 level of EUR 1.2 billion.
This increase has been passed on to our
shareholders via an increase of 15% of
the 2022 dividend per share to EUR 3.20
dividend per share, as well as an increase
of our annual share buyback programme
to an amount of EUR 300 million.
Read more on page 42.
Implementation of IFRS 9 and
IFRS 17 in 2023
As of 1 January 2023, NN Group implemented IFRS 9 ‘Financial Instruments’ and
IFRS 17 ‘Insurance Contracts’.
IFRS 9 and 17 were implemented as of 2023 retrospectively with amendment
of the 2022 comparative figures. Therefore, all IFRS-based figures in this report
are presented on the basis of IFRS 9 and 17 where relevant. The implementation
resulted in significant changes to NN Group’s accounting policies and had
significant impact on shareholders’ equity, net result, presentation and
disclosures. Shareholders’ equity under IFRS 9 and IFRS 17 at the 1 January 2022
transition date was significantly lower as a result of the measurement of insurance
liabilities at current assumptions. However, with the increase of market interest
rates during 2022, this difference largely reversed in 2022.
NN Group’s accounting policies under IFRS 9 and 17, the main decisions/choices
in the implementation and the key financial impact are disclosed in Note 1 to the
NN Group 2023 Annual Accounts.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
27
NN Group N.V.
2023 Annual Report
Operating result
Operating result for 2023 increased to
EUR 2,528 million from EUR 2,350 million
in 2022, mainly driven by a higher
interest result at Banking, and a higher
profit margin and investment result at
Insurance Europe, and an improved
operating result of the reinsurance
business. This was partly offset by a
lower technical result at Netherlands
Life, mainly reflecting a lower risk
adjustment release as a result of higher
interest rates, and a lower result at
Netherlands Non-life reflecting a change
to the Contractual Service Margin (CSM)
release pattern.
Net result
The 2023 net result was EUR 1,172 million
compared with EUR 1,634 million in 2022.
The effective tax rate for 2023 was 22.7%,
mainly reflecting tax-exempt investment
results. The 2022 result was impacted
by the gain on the sale of NN Investment
Partners (NN IP). Excluding this gain,
the 2023 net result increased compared
with 2022 as financial markets had a less
adverse impact compared to last year.
CSM growth
The CSM (net of reinsurance) decreased
to EUR 6.4 billion from EUR 6.5 billion,
due to assumption changes and adverse
currency movements partly offset by
organic growth. Organic growth (the sum
of new business added and the underlying
return on in-force minus release of CSM
to P&L) was EUR 0.1 billion, reflecting
business growth in Insurance Europe
and higher margins in Netherlands Non-
life, offsetting the net release of CSM of
Netherlands Life and Japan Life.
Sales and value of new business
The total APE for 2023 decreased
to EUR 1,229 million versus
EUR 1,339 million in 2022, mainly as
a result of lower sales of cash value
insurance products at Japan Life,
partly offset by increased new sales at
Insurance Europe, up 9.5% on a constant
currency basis, driven by higher sales
across the region. Value of new business
for 2023 was EUR 330 million, down
23.7% on 2022, mainly driven by lower
sales of cash value insurance products
at Japan Life.
NN Group
Analysis of result
amounts in millions of euros 2023
2022
(Restated)
Netherlands Life 1,390 1,429
Netherlands Non-life 364 400
Insurance Europe 468 397
Japan Life 197 217
Banking 226 96
Other -117 -189
Operating result
3
2,528 2,350
Non-operating items: -524 -1,461
– of which gains/losses and impairments -345 99
– of which revaluations 94 -1,499
– of which market and other impacts -272 -61
Special items -462 -134
Acquisition intangibles and goodwill -29 -29
Result on divestments 19 984
Result before tax 1,532 1,710
Taxation 348 108
Net result from discontinued operations 26
Minority interests 13 -6
Net result 1,172 1,634
Key figures
amounts in millions of euros 2023
2022
(Restated)⁴
Operating capital generation
1
1,902 1,711
New sales life insurance (APE) 1,229 1,339
Value of new business 330 432
Administrative expenses 2,206 2,138
Solvency II ratio
2
197% 197%
1 NN Group analyses the change in the excess of Solvency II Own Funds over the Solvency Capital Requirement (SCR) in
the following components: Operating Capital Generation, Market variance, Capital flows and Other. Operating Capital
Generation is the movement in the solvency surplus (Own Funds before eligibility constraints over SCR at 100%) in the
period due to operating items, including the impact of new business, expected investment returns in excess of the unwind
of liabilities, release of the risk margin, operating variances, non-life underwriting result, contribution of non-Solvency
II entities and holding expenses and debt costs and the change in the SCR. It excludes economic variances, economic
assumption changes and non-operating expenses.
2 The solvency ratio is not final until filed with the regulators. The Solvency II ratio for NN Group and Netherlands Life is based
on the partial internal model.
3 Operating result is an Alternative Performance Measure. This measure is derived from figures according to IFRS-EU.
The operating result is derived by adjusting the reported result before tax to exclude the impact of result on divestments,
amortisation of acquisition intangibles, discontinued operations and special items, changes to losses from onerous
contracts due to assumption changes, gains/losses and impairments, revaluations and market and other impacts.
Alternative Performance Measures are non-IFRS-EU measures that have a relevant IFRS-EU equivalent. For definitions and
explanations of the Alternative Performance Measures, reference is made to Note 30 in the Annual Accounts.
4 As of 2023, IFRS 9 ‘Financial instruments’ and IFRS 17 ’Insurance contracts’ were implemented. The comparative figures
for 2022 were restated for the impact of IFRS 9 and 17 where relevant.
Our performance continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
NN Group N.V.
2023 Annual Report
28
Key figures¹
amounts in millions of euros 2023
2022
(Restated)
Operating result 1,390 1,429
Result before tax 823 329
Operating capital generation 1,025 1,142
New sales life insurance (APE) 332 353
Administrative expenses 440 465
NN Life Solvency II ratio 196% 191%
Key figures¹
amounts in millions of euros 2023
2022
(Restated)
Operating result 364 400
Result before tax 340 291
Operating capital generation 416 280
Gross premiums written 3,843 3,774
Administrative expenses
2
573 562
Combined ratio:
3
92.6% 92.3%
The Netherlands Life operating result decreased to EUR
1,390 million from EUR 1,429 million in 2022. This was mainly
due to a lower technical result and investment result, partly
offset by a higher profit margin and other result. The profit
margin increased due to a higher CSM release, and lower losses
on onerous contracts. The lower technical result mainly reflects
a lower risk adjustment release as a result of higher interest
rates, whereas the 2022 technical result included a positive
claim variance.
The result before tax increased to EUR 823 million compared
with EUR 329 million in 2022. The increase mainly reflects
positive revaluations on derivatives used for hedging purposes
reflecting accounting asymmetries which were negative in
2022, partly offset by lower revaluations on real estate in
2023. In addition, 2023 reflects lower gains/losses on the
sale of government bonds, lower markets and other impacts
as well as material special items reflecting the provision of
EUR 360 million for the final settlement with interest groups on
unit-linked insurance products.
Full-year 2023 OCG decreased to EUR 1,025 million from
EUR 1,142 million in 2022, mainly driven by a lower investment
return, SCR release and new business contribution as well as
less favourable experience variances. This was partly offset by
the higher net positive impact of the UFR drag and risk margin
release as a result of higher interest rates.
New sales (APE) were EUR 332 million compared to
EUR 353 million in 2022, mainly driven by a lower volume of
group pension contracts.
Assets under Management DC increased to EUR 32.7 billion
compared with EUR 27.8 billion at 31 December 2022, mainly
driven by strong net inflows of EUR 2.3 billion and favourable
market movements.
The operating result for Netherlands Non-life decreased to EUR
364 million from EUR 400 million in 2022, mainly reflecting a
lower CSM release, partly offset by strong underwriting results
in P&C. The combined ratio for 2023 was 92.6% and within
the guidance of 91-93%. This mainly reflects the strong and
persistent underlying business performance.
The result before tax increased to EUR 340 million from
EUR 291 million in 2022, reflecting higher non-operating items
and lower special items, partly offset by the lower operating
result. Special items mainly reflect project expenses.
Full-year 2023 OCG increased to EUR 416 million from
EUR 280 million in 2022, reflecting the continued strong
business performance, supported by a solid pricing
environment and benign weather in Property & Casualty (P&C)
as well as favourable experience variances in Group Income,
and a higher investment margin due to higher interest rates.
2022 included the negative impact of the February 2022 storm
and the hardening of the reinsurance market.
The insurance result in P&C reflects a lower negative impact
from provisioning for the impact of higher inflation, higher
bodily injury claims and lower claims relating to windstorms
than in 2022. The combined ratio of P&C improved to 91.5%
from 93.4% in 2022.
The combined ratio of Disability increased to 95.2% from
89.8% in 2022, mainly reflecting the aforementioned lower
CSM release.
Netherlands Life Netherlands Non-life
1 Please refer to the footnotes under the NN Group financial results on page 27. 1 Please refer to footnotes 1, 3 and 4 under the NN Group financial results on page 27.
2 Including non-insurance businesses (health business and broker business).
3 Excluding non-insurance businesses (health business and broker business).
Our performance continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
29
NN Group N.V.
2023 Annual Report
Key figures¹
amounts in millions of euros 2023
2022
(Restated)
Operating result 226 96
Result before tax 196 105
Operating capital generation 133 35
Administrative expenses
2
268 259
Cost/income ratio
3
51.1% 65.6%
Net operating ROE
4
19.5% 9.1%
CET 1 ratio
5
16.5% 15.3%
Key figures¹
amounts in millions of euros 2023
2022
(Restated)
Operating result 468 397
Result before tax 196 118
Operating capital generation 421 388
New sales life insurance (APE) 772 711
Value of new business 219 231
Administrative expenses 596 530
Banking's Net operating Return on Equity (RoE) increased to
19.5% compared with 9.1% in 2022, reflecting a higher net
operating result. Operating result increased to EUR 226 million
from EUR 96 million in 2022, benefiting from a delayed pass-
through on savings accounts as a result of swift policy rate
action undertaken by the ECB.
The result before tax increased to EUR 196 million from
EUR 105 million in 2022, mainly driven by a higher operating
result, partly offset by lower non-operating items.
Full-year 2023 OCG was EUR 133 million compared with
EUR 35 million in 2022, mainly reflecting a higher statutory net
result and a lower strain from capital requirements. The higher
statutory net result is mainly driven by a higher interest result.
The lower strain from capital requirements is mainly the result
of lower portfolio growth and a higher proportion of state-
guaranteed mortgages (NHG), which is only partly offset by the
negative impact of house prices. The total capital ratio target
for Banking is expected to increase by 1% in 2024 as a result of
the upcoming increase of the Counter Cyclical Buffer.
The cost/income ratio decreased to 51.1% compared
with 65.6% in 2022. The decrease mainly reflects
the higher operating income, partly offset by higher
administrative expenses.
The quality of the mortgage portfolio continues to be strong
with a non-performing loans ratio of 0.4%. NHG share at the
end of 2023 was 32% of Banking’s mortgage portfolio.
The operating result for Insurance Europe increased to EUR
468 million to EUR 397 million in 2022, up 15.8.% on a constant
currency basis. This was mainly driven by higher interest rates
impacting the profit margin and investment result. The profit
margin also benefitted from lower losses on onerous contracts.
This was partly offset by a lower service expense result.
The result before tax 2023 increased to EUR 196 million from
EUR 118 million in 2022. This is mainly driven by a higher
operating result and less negative revaluations. This was
partly offset by negative market and other impacts including
assumption changes, while 2022 included a divestment loss
following the sale of a closed book life portfolio by NN Belgium.
Full-year 2023 OCG increased to EUR 421 million from
EUR 388 million in 2022, mainly reflecting strong business
performance and underlying organic growth.
Value of new business decreased to EUR 219 million from
EUR 231 million in 2022. This reflects higher value of new
business in Central and Eastern Europe, most notably in Czech
Republic, Poland and Hungary, which was more than offset by
the pension legislation changes introduced in Slovakia as well
as unfavourable assumption changes mainly related to Belgium.
1 Please refer to footnotes 1, 3 and 4 under the NN Group financial results on page 27.
2 Operating expenses plus regulatory levies.
3 Cost/income ratio is calculated as Operating expenses divided by Operating income.
4 Net operating RoE is calculated as the (annualised) net operating result of the segment,
divided by the average of the allocated equity at the beginning of the period and the end of
the period.
5 The Common Equity Tier 1 (CET1) ratio is not final until filed with the regulators.
1 Please refer to footnotes 1, 3 and 4 under the NN Group financial results on page 27.
Banking Insurance Europe
Our performance continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
NN Group N.V.
2023 Annual Report
30
Japan Life's operating result decreased to EUR 197 million from
EUR 217 million in 2022, due to negative currency impacts.
The result before tax increased to EUR 129 million from
EUR 118 million in 2022. This was driven by higher
non-operating items, mainly reflecting less negative
revaluation results.
Full-year 2023 OCG decreased to EUR 107 million from
EUR 115 million in 2022, mainly due to the impact of negative
currency impacts. Excluding currency effects, the full-year
OCG increased by 2.3%. The lower new business strain was
partly offset by the impact of a reinsurance transaction, a lower
surrender profit and higher hedge costs.
Value of new business was EUR 65 million, down from
EUR 148 million in 2022, mainly driven by lower sales of cash
value insurance products following a business improvement
order from the local regulator and to a lesser extent negative
currency impacts.
The operating result of the segment Other was EUR -117 million
compared with EUR -189 million in 2022, mainly driven by
improved operating result of the reinsurance business.
The current year included a EUR 5 million non-recurring
positive reinsurance result, while 2022 was impacted by the
February 2022 storm, a claim from a legacy portfolio and a
non-recurring market-related item. The holding result was EUR
-160 million compared with EUR -171 million in 2022, reflecting
higher investment income and fees mainly driven by the higher
interest rate environment in combination with a high level
of cash capital at the holding, partly offset by higher holding
expenses and higher interest on hybrids and debt reflecting the
subordinated notes issued in August 2022 and May 2023.
The result before tax of the segment Other was
EUR -152 million compared with EUR 749 million in 2022,
which included the EUR 1,062 million gain on the sale of NN IP.
Full-year 2023 OCG was exceptionally strong at
EUR -200 million, compared with EUR -280 million in
2022. The improvement was mainly driven by the impact
of higher interest rates in combination with a high level of
cash capital at the holding, as well as strong results of the
reinsurance business. The result of the reinsurance business
mainly reflects a favourable experience variance and lower
capital consumption.
Key figures¹
amounts in millions of euros 2023
2022
(Restated)
Operating result 197 217
Result before tax 129 118
Operating capital generation 107 115
New sales life insurance (APE) 124 275
Value of new business 65 148
Administrative expenses 118 125
Key figures¹
amounts in millions of euros 2023
2022
(Restated)
Operating result -117 -189
Result before tax -152 749
Operating capital generation -200 -280
Administrative expenses: 212 198
1 Please refer to footnotes 1, 3 and 4 under the NN Group financial results on page 27.
1 Please refer to footnotes 1, 3 and 4 under the NN Group financial results on page 27.
Japan Life Other
Our performance continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
31
NN Group N.V.
2023 Annual Report
4 Creating value for
our stakeholders
We aim to address our
customers’ real needs, empower
our people to be their best, and
do business with the future in
mind so we can meet our goal
of continuing to contribute to a
world where people can thrive for
many generations to come.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
NN Group N.V.
2023 Annual Report
32
Our values
To fulfil our purpose of helping people care for what matters most to them, we
are guided by our three values. They are the foundation of our culture, serve
as a compass for decision-making, guide us in all our interactions and are an
integral part of our strategic framework, with the aim of creating sustainable
long-term value for our stakeholders.
N
N
s
t
a
t
e
m
e
n
t
o
f
L
i
v
i
n
g
o
u
r
V
a
l
u
e
s
We help
people care
for what
matters most
to them
R
a
i
s
e
a
w
a
r
e
n
e
s
s
E
v
a
l
u
a
t
e
M
o
n
i
t
o
r
E
m
b
e
d
E
n
g
a
g
e
Raise awareness
Living our values enables us to
carefully consider the interests of all
our stakeholders. NN’s commitment to
sustainable long-term value creation
is anchored in the NN statement of
Living our Values. Every NN employee,
including those of subsidiaries and
anyone representing NN in any capacity,
is required to act in accordance with both
the letter and intent of the statement.
Engage
We engage employees across all
NN countries in how we live our
values through our annual NN
Care
We empower people to be their best and we respect each
other and the world we live in. We work hard to meet
and exceed our customers’ expectations. We respect
human rights, promote equal opportunities and
increase inclusiveness.
Clear
We communicate proactively and honestly and we are
accessible and open. We offer our customers trustworthy
advice using understandable language. We encourage our
employees to be easy to approach, attentive and responsive.
We also strive to minimise complexity in everything we do.
Commit
We act with integrity and we do business with the future in
mind. We take responsibility for our actions and deliver on
our promises. We value long-term objectives over short-term
gains and carefully balance the interests of our stakeholders.
Read the full NN statement of Living our Values on the NN Group website.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
33
NN Group N.V.
2023 Annual Report
Values week. Over 1,550 colleagues
(2022: 1,483) including more than
200 from our international units
(2022: 192) registered for sessions in the
Netherlands in 2023. The survey found
that 78% of participants felt Values week
provided a good opportunity to reflect
on our values, 64% felt it stimulated
discussion and 99% would encourage
colleagues to join the next edition.
Our Management Board and senior
leaders are important role models
in living our values and they actively
participate in both Values week and
our Your Community Matters NN
volunteer week.
Embed
To encourage a values-driven culture
and ensure all employees know and live
the values throughout their NN careers,
the values are incorporated into our HR
policies and processes. They form the
starting point for hiring new employees,
are embedded in our i-LEAD profile and
HR Framework Standard, and form part
of our Key Talent Management process.
They are included in the selection,
recruitment and development activities
of the NN Group Traineeship.
The Executive Board’s remuneration
targets include several strategic targets
related to our values and sustainability
objectives. Read more on pages 119–
120.
We have processes in place for
employees who feel our values are not
being lived up to or who have questions
about our values, and for assistance in
dealing with dilemmas. Employees can
consult their manager, their compliance
officer, and the Values & Code Desk of
NN Group or of their business. They can
report potential violations of the NN
statement of Living our Values and/or
a breach of the NN Code of Conduct
confidentially, and anonymously, through
our reporting system, Speak Up.
Monitor
The values are well-embedded in
NN’s culture and its processes.
We monitor the Living our Values
programme in our bi-annual employee
engagement survey. In the survey,
the questions on our core values met
the expectation that we score 8 or
higher. See the chart on this page for
more information.
We measure the perception of our values
among our customers and the general
public through the Global Brand Health
Monitor (GBHM). The values are part of
our brand, and over 50% of NN customers
in almost all markets (totally) agree with
their alignment to the NN brand. There are
two exceptions where there are lower
percentages: in Japan (care 38%, clear
36%, commit 30%) and the Netherlands
(care 33%, clear 45%, commit 37%),
reflecting the lower market average
scores for these countries. Despite this,
most markets have remained relatively
stable across the three values when
compared to Q4 2022 and the all-market
average has remained stable over the
past three years. When it comes to the
general public’s perception of our values,
most markets continue to show stable
scores in 2023 compared to the GBHM
Q4 2022 score. According to the GBHM,
there were decreases perceived by the
general public on values in Greece, Japan
and the Netherlands. These fluctuations
will be addressed with the countries
concerned and any downward trends will
be assessed.
The Management Board and the Living our
Values Project Group use the outcomes
of the monitoring results to decide areas
for improvement and where we need to
focus attention.
Evaluate
Each year, we provide the Management
Board with a report detailing insights
into the Living our Values programme,
and highlight areas of attention and
concern and recommendations for
improvements. The report is approved
by the Management Board which is
also responsible for incorporating
and maintaining the values within the
company and its affiliated enterprises.
The report is also shared and discussed
with the Supervisory Board and Central
Works Council.
We regularly review our values and
revise if necessary to ensure they
remain relevant and aligned with
stakeholder expectations around our
culture. We last updated the statement
in 2020. The values continue to be a
solid foundation of our culture. In light
of the introduction of NN’s new strategic
commitment on becoming a digital and
data-driven organisation, we will assess
in 2024 if any changes are needed.
Our values continued
Employee engagement survey questions on our values 2023 2022
Care: ‘In our team we genuinely care about our customers
and treat them with respect’
8.4 8.4
Clear: ‘In our team we are easy to approach and
communicate proactively and honestly’
8.3 8.3
Commit: ‘In our team we take responsibility for our actions
and deliver on our promises’
8.4 8.3
‘How connected employees feel to our values’ 8.2 8.2
‘Employees are confident about NN Group taking action
against any kind of misconduct or unethical conduct at
work’
8.3 8.3
‘Employees feel there is open discussion within their team
on the consistency of action taken regarding our values’
8.1 8.0
‘My manager consistently acts as a role model when it
comes to living our NN values’
8.3 8.3
Monitoring how we live our values
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
NN Group N.V.
2023 Annual Report
34
and where they need, to manage their
claims, share insights into their pension
or mortgage, and update personalised
information. To do so, we will continue to
focus on data and digital transformation,
process standardisation and efficiency.
As well as the opportunities new
technologies present, there are also
risks. NN established an Artificial
intelligence (AI) framework to put
necessary safeguards in place and to
prepare for upcoming EU regulation on
AI. NN is committed to sustainable and
ethical use of technology, and maintaining
customer trust. We will refine our AI
Framework to ensure that NN is compliant,
and that this Framework is integrated in
our Effective Control Framework (ECF).
AI helps optimise our processes and
improve our work in many areas,
including freeing our agents to
spend more time helping customers.
For example, our automated call
logging recaps conversations with
customers using a closed version of
ChatGPT that is safe and compliant
with NN standards, allowing our call
agents to focus on questions that really
matter to customers. The tool was first
implemented at our banking business
and rolled out to other call centres in the
Netherlands. Read more on page 21.
AI has the potential to prevent and detect
fraud and our Fraud Risk Model (FRM)
identifies various levels of potential risk
for colleagues to investigate. Our Bodily
Injury claims division uses machine
learning to support claim handlers with
lump-sum reserve estimations and
ChatGPT to summarise incoming emails.
We are exploring other use cases in
our businesses.
Efficient digital processes are also
important for (intermediary) advisors who
We operate in a changing world: people
live longer, digital technologies are
evolving rapidly and climate change is of
growing concern. We help our customers
navigate this environment by providing
products and services that address
both their changing needs and societal
issues, using our digital capabilities to
meet their expectations for a seamless
digital experience.
Measuring our progress
As a customer centric-organisation, we
listen to our customers, so that we can
learn about their preferences, views
and needs. Our quarterly Global Brand
Health Monitor (GBHM) tracks how our
brand is perceived externally and gives
us insights into the performance and
development of our brand.
Our NPS-r
The Net Promoter Score (NPS),
which is the key metric in the GBHM,
measures the likelihood of customers
recommending our products and
services to their colleagues, friends
or family. The relational NPS (NPS-r)
measures the strength of the customer
relationship and provides insights into
customer satisfaction over time. We use
NPS-r to compare the results of our 11
business units with their respective
market averages at year-end. In 2023,
our Dutch business scored on par
with the market average NPS-r. As a
whole, our ten international businesses
combined scored above market average,
with seven out of ten markets scoring
above or on market average.
We are on track to have all business
units score above the market average
by 2025, as per our strategic targets.
Because NPS-r scores fluctuate over
time, we began reporting an aggregated
score in 2023, since that is more stable
and better reflects our efforts. We also
invested in a better understanding of
the drivers of our NPS-r and how we
can improve and stabilise scores across
our business units. We implemented an
integrated driver study for all businesses
to gain additional valuable insights.
In line with our Dutch units, in 2023
we began carrying out the GBHM on
a quarterly basis for all international
business units (instead of twice a year)
to help us monitor our efforts more
closely. We also plan to continue the
integrated driver study to gain additional
valuable insights. These efforts will
assist us in achieving our NPS-r target
and our ambition of being known for our
customer engagement.
Improving the customer experience
Through our brand positioning and
customer experience, we want to show
we can help our customers face any
change with confidence.
In the Netherlands, unit-linked products
have received negative public attention
since the end of 2006. We have taken
this criticism to heart, as our aim is
to support our customers as best we
can. In 2024, we announced a final
settlement with interest groups on unit-
linked products sold in the Netherlands.
With this settlement we provide clarity to
our customers. Read more in Note 43.
In February 2023, NN Life Japan received
a business improvement order from the
Financial Services Agency (FSA) relating
to the improvement of internal controls,
governance and compliance in relation to
local sales practices.
Digitalisation and AI
We can do more to ensure we are
known for our customer experience, and
technology and data can help us realise
our ambition. Through digitalisation, we
can engage with our customers when
Adding value for our customers
Our customers are the starting point of everything we do. From students
and young professionals to business owners and pensioners, we help them
deal with expected and unforeseen changes by offering financial products
and services that meet their needs. Through this commitment, we help our
19 million customers care for what matters most to them.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
35
NN Group N.V.
2023 Annual Report
Our customers continued
Nederlanden collective health insurance.
It will be available for NN pension
customers in 2024 via the Human Capital
Planner (HCP).
Customer communication
We aim to create an inclusive customer
experience by ensuring diverse
representation in our communications,
advertising and expression, and to tailor
our products and services to our diverse
customer base. In line with our NN value
clear, our businesses in the Czech Republic,
Hungary, Slovakia, the Netherlands and
Poland are continuing to convert customer
communications to plain, clear language.
In the Czech Republic, the Netherlands
and Slovakia, for example, this means all
customer content should be written at an
intermediate (B1) level.
We want to offer our customers more
control and self-service. NN Belgium is
digitalising its inbound and outbound
communication, with which customers
can receive messages digitally.
We have begun the process of updating
our website design to meet the European
Digital Accessibility Standards by 2025.
Nationale-Nederlanden Poland was
the first insurer to join the Business
Accessibility Forum, which aims to make
digital environments more inclusive for
its customers.
Customers can lodge complaints or
concerns about our products and
services via our local business unit
websites or other local channels.
For our businesses in the Netherlands,
Belgium, Poland and Romania,
this is outlined on the local website.
For NN Czech and NN Hungary,
complaints can be shared via all
channels and are forwarded to the
complaints department.
Helping customers
address societal and
environmental challenges
We aim to contribute positively to
the well-being of our customers and
communities by addressing societal
needs and reaching more vulnerable
groups. Our products and services
offer solutions for our customers
around sustainable living, health
and well-being, and insuring against
climate change-related risks.
Healthy living
We are developing relevant protection
and health products and services to
respond to the rise of mental health
problems, including solutions to increase
the focus on employee mental health.
Read more on page 22.
NN Hellas launched a health product,
available through NN’s bancassurance
channel, which supports customers in
case of hospitalisation and offers various
allowances for hospital stay, surgery
and home recuperation. The product is
valuable to people living in small cities
without access to hospitals or the means
to cover their hospital stay. Nationale-
Nederlanden Poland introduced a new
product for people with cancer to get
care abroad.
Financial well-being
The number of people reaching
retirement age is increasing and we
support our customers in understanding
their pension products. NN Belgium
introduced a pension passport, a
physical booklet supported by a digital
version, that allows customers to
assess whether they are adequately
insured. In the Netherlands, we are
helping customers navigate the changes
report changes and claims on behalf of our
SME client base. Our Property & Casualty
(P&C) intermediary implemented and
promoted digitalisation. Via active
channel management towards adviseur.
nn.nl, digital input increased by 17
percentage points in 2023 compared to
first quarter 2022. The customer effort
score (CES) improved significantly,
showing advisors experience less effort
doing business with us.
Netherlands Life is working to simplify
its data landscape, decommissioning
applications including its mainframe
platform. This makes our IT landscape
clearer and more affordable, and we can
provide better customer service.
Innovation
We launched our corporate venture builder
in the Netherlands. NN Ventures invests
its innovation resources to launch and
scale products and services that are
complementary to the core NN portfolio,
with a focus on developing products for
the pension market and on embedded
insurance. Through Zorggenoot, we aim
to help customers in the Netherlands
find, organise and finance informal
care for their loved ones. Zorggenoot,
which has a helpline and platform
offering workshops, is offered free of
charge to organisations with Nationale-
SMEs and
self-employed
Individual
consumers
Life insurance
Group pensions
Individual pensions
Retail life insurance
SME life insurance in
Japan
Non-life insurance
Motor insurance
Property insurance
Liability insurance
Transport insurance
Travel insurance
Disability & accident
Health insurance
Related services
Banking
Mortgages
Consumer savings
Retail savings and
investment products
Bancassurance
SMEs and
self-employed
Corporates
Individual
consumers
SMEs and
self-employed
Corporates
Individual
consumers
Individual
consumers
Agents/BrokersTied agents Direct/
Bancassurance
Platform
insurance
Type of
product
Type of
customer
Channel
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
NN Group N.V.
2023 Annual Report
36
Our customers continued
following pension reforms. Nationale-
Nederlanden and BeFrank organised
education sessions for advisors and
we organised a round table meeting
together with AZL, De Nationale APF and
knowledge partner Netspar to support
fund managers. We also developed a
digital tool, Pensioen Pulse, which gives
employers an indication of the financial
consequences of the new pension
legislation. Advisors can also use the
tool for pension schemes from other
providers. Pensioen Pulse is part of
the HCP, our online service that offers
employers and pension advisors relevant
insights based on data showing the use
of parts of the pension scheme and the
pension behaviour of employees.
NN in Turkey aims to invest in the future
of the country’s young people through
helping families start a pension plan
for their children under 18 years of age.
The new product also aims to increase
financial literacy and NN matches
contributions up to a set amount.
We help customers who currently face,
or who are in danger of facing, financial
distress. In the Netherlands, we refer
customers to Geldfit, an initiative by
the National Debt Relief Route, which
refers them to appropriate support
organisations, and we also offer budget
coaches or job coaches, and have a social
collection policy. In 2023, we offered as a
pilot a free training to the HR directors of
our pension clients on how to recognise
employees who are under financial
stress. Following positive feedback from
the participants (9.0), we aim to continue
the workshop in 2024.
Sustainable planet
Climate change is one of the most
pressing risks of our time. Our products
and services include solutions that
contribute to the transition to a low-
carbon economy or help insure our
customers against climate-related
damages. Our sustainable mortgage
provider, Woonnu, supports customers
in making their homes more sustainable
by offering financing solutions and
expert advice. Online platform Powerly
provides tailored advice on sustainable
living and has already helped close
to 120,000 customers over the past
two years. NN Bank offers customers
a digital analysis with insights on how
to make their home more sustainable.
In Greece, we launched an investment
product that includes options that
promote environmental and/or social
characteristics, while also protecting
the customer and their family in case
of an accident. In the Netherlands, our
non-life businesses are aiming to make
sustainable repair the norm. Read more
in the case study on this page.
Sustainable mobility
We continue to offer OHRA’s prepaid
per-kilometre car insurance and electric
vehicle insurance, including NN Belgium’s
electric bike insurance. In 2023, we
wound down our partnership with Hello
Mobility and closed the SME service
Electrifleet due to a lack of interest.
We will maintain the tool to calculate the
costs of ownership and electric vehicle
emissions which was part of Electrifleet
and in 2024 expand this tool to private
users. We are exploring new products
and services to support our customers
in shifting to more sustainable
mobility solutions.
As part of our ambition to support the
transition to a sustainable society,
Netherlands Non-life started a series
of initiatives for sustainable damage
repairs. A glass repair pilot offered
customers the opportunity to upgrade
to better insulated glass, saving on
energy consumption and CO
2
emissions.
We will offer this as the new standard for
our home insurance from the beginning
of 2024. In addition, NN brand OHRA
announced its intention in 2023 to make
sustainable damage repair the norm
for its customers. Their approach is
Making sustainable damage repair the norm
supported by research from sustainability
consultancy Impact Institute that found
that repairing damage has 90% less
climate and biodiversity impact than
complete replacement in the case of
kitchen cabinets and 99.99% less for
kitchen countertops. The difference lies
mainly in reduced material use. In the
coming years, OHRA will aim for at least
65% sustainable recovery of claims on
home insurance policies. For repair to
building damage, sustainable recovery
was used in 44% of claims in the second
half of 2023.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
37
NN Group N.V.
2023 Annual Report
Empowering our people to be their best
Our people are our greatest asset: together we help people care for what
matters most to them, based on a culture of collaboration, growth and
inclusivity. We are driven by our values, purpose and ambition to contribute
to making the world a better place for people and planet.
It is vital to the success of our company
that we foster an open, safe, inclusive
and stimulating environment for our
employees. We therefore place great
emphasis on living our values, promoting
professional development, and driving
diversity and inclusion (D&I). We aim
to offer our employees an environment
where they can develop and prepare for
the future world of work.
Our NN culture
Culture plays a crucial role in shaping
our work environment, driving creativity
and innovation, and helping to attract
and retain top talent. Our culture is
shaped by our employees, who represent
more than 90 nationalities across the
11 countries where we operate, as well
as by our values of care, clear, commit
that guide our work. In 2023, our
workforce increased to 16,364 people
(2022: 16,104). The employee turnover
rate was stable at 11.8% (2022: 12:1%).
All ten of NN’s International Insurance
business units were certified as Top
Employer in 2023, with NN Group also
certified as Top Employer in Europe.
The Top Employer organisation audits
companies for best-in-class HR in
the areas of Strategy, Shape, Attract,
Develop, Engage and Unite.
Employee engagement
We measure our people’s connection
to their work and our company, and
how we are progressing against
our goals, through our bi-annual
employee engagement survey.
By better understanding our employees’
perceptions, we can improve our
working environment.
The overall engagement score in 2023
was 7.8 (2022: 7.9 in 2022, financial
industry benchmark: 8.0). We saw strong
results for how employees feel the work
they do is valued (Recognition), that their
values match those of NN (Organisational
fit), and for feeling they have the right
resources and support to be successful
working in a hybrid set-up (Hybrid
work). We see room for improvement
in the areas of collaboration between
departments, process efficiency and
workload. Business units and teams will
make local action plans to address these
areas. We also monitor how well we live
our values via the engagement survey.
Read more on page 33.
NN way of working
Our hybrid way of working enables
employees to find the combination of
remote and office work that works best
Our workforce
Age of employees
%
< 30 years old 11
30-50 years old 60
> 50 years old 29
Women
%
Men
%
Total workforce
50 50
Management
positions
40 60
Senior management
positions
40 60
Management Board
38 62
Supervisory Board
43 57
New hires managers
42 58
+/-16,000
Employees
90+
Nationalities
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
NN Group N.V.
2023 Annual Report
38
for them and their team. By placing
responsibility with teams and their
managers, we recognise the need to
balance flexibility, autonomy and
well-being. We measure satisfaction with
the NN way of working in the Netherlands
through regular surveys, and use the
insights gained to make adjustments
where needed. We see that employees
are fully accustomed to hybrid working
and continue to be satisfied with the NN
Way of Working policy, with a survey in
early 2023 scoring it 8.5 (2022: 8.1).
Compared to survey results before the
Covid-19 pandemic, hybrid working has
increased colleagues’ job satisfaction
(42% of respondents) and work-life
balance (66% of respondents).
On average, employees come to the
office 1.4 days a week (2022: 1.2)
and managers 2.1 days (2022: 1.9).
Some three-quarters of colleagues say
their team has made agreements about
when they work in the office and two-
thirds have made agreements about
fixed days in the office. Colleagues find
meeting each other important (average
score 8.2) and indicate that coming to
the office plays a role in connecting
with each other and coordinating
work effectively.
Well-being
To support our colleagues to feel healthy,
energetic and at their best, we offer
resources such as work-life coaching
and vitality-themed webinars. In the
Netherlands, colleagues can request a
vitality budget to improve their well-
being in a way that suits them.
In 2023, we began offering Zorggenoot
to our employees in the Netherlands.
More people (in the Netherlands, 1
in 4) care for a dependant loved one
alongside doing a job, which can be very
challenging. The Zorggenoot platform
helps people organise and finance
informal care for their loved ones.
Read more on page 35.
Collective labour agreement
For employees in the Netherlands, we
reached an agreement in December with
the trade unions CNV Vakmensen, De
Unie and FNV Finance for a future-driven
collective labour agreement (CLA) for the
period 1 January 2024–31 December
2025. For the 99% of internal employees
covered by the CLA, the agreements
include a collective salary increase,
a one-off payment, a new Social Plan,
continuation of the Vitality plan and
a generational scheme to support
sustainable employability.
In our international business units, we
have a CLA for all employees in Belgium,
Greece and Romania, while in other
units we align with NN Group policy and
local benchmarks to stay competitive in
each market.
Employee representation
Our works councils advise management
on important decisions that can affect
employees and ensure alignment with
our company strategy. Members are
elected by employees every three
years to represent and promote their
interests in most NN business units.
In the Netherlands, business unit
councils elect representatives to the
Central Works Council, which engages
with management on matters related
to all colleagues in the Netherlands.
Our European Works Council is consulted
on issues relevant to employees
across multiple European countries.
Topics discussed by most works
councils in 2023 included digitalisation,
AI, re- and upskilling, and strategic
workforce planning.
Workforce transformation
With a rapidly evolving macroeconomic
and technological landscape, NN must
ensure our employees’ skills match
our strategic needs. This is an area for
continuous attention as we need to
identify the skills needed on an ongoing
basis and take action whenever a skills
gap is detected. With our strategic
workforce planning, we aim to assess the
existing skills in our company, identify
what is needed for the future and take
action to close any gaps.
Digital capabilities
To enable our digital transformation, we
supported employees to further adopt
artificial intelligence (AI) tools such as
ChatGPT in order to increase individual
efficiency and improve the customer
experience. More than 7,000 colleagues
use our closed ChatGPT environment
across our business units and a series
of workshops have helped familiarise
colleagues with the tool.
Our guilds model, launched in the
Netherlands in 2021, stimulates
professional and personal development,
with professionals working in the same
field at various levels sharing knowledge
with each other. We invest in developing
craftsmanship, as well as attracting
and retaining tech talent. In 2023, we
introduced a new way of working in
empowered product teams, which focus
on creating products based on objectives
and key results (OKRs). By empowering
colleagues to take more responsibility for
their own development, they can become
the ‘leader of their own career’.
Empowering employees on sustainability
We believe that by understanding the
global trends society faces, and the
impact these developments may have
on our customers and business, we
can better contribute to sustainable
long-term value creation. To engage
colleagues in our sustainability
approach and strategy, we developed
a series of e-learning programmes
and an interactive game covering
topics such as the basics of climate
change, EU taxonomy, Sustainable
Finance Disclosure Regulation (SFDR)
and net-zero. Approximately 1,500
colleagues enrolled in at least one of the
sustainability offerings.
Leadership development
To support leadership development,
we focus on coaching the skills of
leadership, personal leadership, change
management and professional expertise
through a combination of experience,
exposure and education. Through our
tailor-made leadership learning portfolio,
LEAD, we aim to cultivate and enable
leadership potential in every level and
part of our organisation. Around half
of our senior leadership group started
LEAD 4 in 2023, with the rest to follow
in 2024. LEAD 4 is interactive and allows
participants to learn from and collaborate
with their peers.
Our people continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
39
NN Group N.V.
2023 Annual Report
Level Description
LEAD 1 Focuses on strengthening
leadership skills and targets
leaders at an early stage in
their career.
LEAD 2 About accelerating the
potential of our young talent.
LEAD 3 Designed for future
generations of leaders and
provides a broad picture of
the company.
LEAD 4 A four-month leadership
development programme,
designed to boost future
leadership behaviour and
support our most senior
leaders in driving sustainable
long-term value creation and
designing a shared future for
NN. Introduced in 2023.
A select group of our senior leaders also
participated in a training programme
with the Massachusetts Institute of
Technology (MIT), in support of our aim to
build our data and digital capabilities for
the future.
Diversity and inclusion
Our approach to D&I is about including
everyone. As outlined in our NN
statement on Diversity and Inclusion, we
focus our efforts around three objectives.
The first, on having an inclusive work
environment, is about increasing equality
in our teams, driving change in our
processes and policies for the employee
journey, and encouraging everyone to be
who they are. The other two objectives
are around an inclusive customer
experience and supporting the diverse
communities in which we live and work.
In 2023, we held our first D&I survey,
inviting all employees including senior
management to share their perceptions
and experiences. With 3,110 participants,
or 18.6% of those invited, the results are a
small sample of our employees’ opinions.
We still received valuable information on
marginalised groups within NN and if they
feel included, for example, the LGBTQIA+
community, neuro and physically diverse
people, and those from diverse cultural
backgrounds. Of the respondents, 42%
feel fully included at NN (Dutch national
benchmark: 27%). Their responses will
help us shape the our D&I roadmap for
2024 and beyond. Looking ahead, we aim
to further improve the employee journey
and will continue to use data-driven
insights to promote an inclusive employee
experience. We aim to improve data
quality so we can better monitor how we
are progressing against our objectives.
In 2023, we also took steps to further
expand, mature and measure our D&I
activities, through research, creating
awareness and contributing to changing
policies and systems, across our five
D&I focus areas of gender, LGBTQIA+,
generations, neuro & physical diversity,
and cultural diversity.
Senior management
Like with our entire workforce, we
aim for diversity of thought in our
senior management to ensure a wide
range of relevant perspectives and
views. Diversity across our boards
and local management teams is a
point of continuous attention. We see
opportunities for improvement as we
strive for a balanced representation in
nationality, gender, age, experience and
skills. We have included principles and
targets in our appointment procedures
to reflect this. We focus on actionable
development of the female talent pool,
succession planning, recruitment and
offboarding to support our target of
more than 40% of senior management
positions being held by women by 2025.
We also aim for a gender balance in our
LEAD portfolio and trainee programme.
In 2023, the percentage of women in
senior management positions remained
at 40% (2022: 40%). To meet this
target, our focus on succession planning
remains important.
Gender and equal pay
Our Women in Leadership Network draws
attention to female empowerment in
various ways, such as through its annual
mentoring programme. In this way, the
network contributes to the growth of the
female talent pool within our company.
On 7 March, about 100 of our female
senior leaders joined a special event in
The Hague to mark International Women’s
Day. The one-day event focused on
building networks, discussing personal
experiences and empowering each other.
Our people continued
In the past, female employees
often had to negotiate for a fairer
salary. In our historical archives
we discovered the story of Miss
Fleischer, who in 1919 applied for
the position of chief typist at de
Nationale. The management hired her
immediately with a starting salary of
100 guilders. However, she responded
that she could not accept that offer,
‘unless my starting salary is set at
125 guilders’. She also issued an
ultimatum: ‘If I have not heard from
you before 12 o'clock tomorrow, I
assume that you have renounced me.’
The management, reluctantly, agreed.
Since then, lots has happened to
reduce inequality. At NN, we firmly
believe in equal pay for equal work,
irrespective of gender. Our latest
A historical perspective on equal pay
equal pay analysis in 2023 shows
that, overall, men and women in the
same job family and compensation
grade, with similar experience and age,
receive fair and equal pay. Read more
on the following page.
Employees of De Nederlanden van 1845, pictured in 1920.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
NN Group N.V.
2023 Annual Report
40
We were included in the Bloomberg
Gender Equality Index (GEI) for the fifth
time in a row, with an overall score of
80.06¹ (2022: 74.78). We also sponsored
the AI Diversity Leader award at the
annual Women in AI Netherlands gala,
which recognises a woman who has
contributed to making AI more diverse,
equitable and inclusive.
Each year, we analyse NN Group’s pay
for all business units with a focus on
gender equality. For 2023, the NN Group
gender pay gap is 28% (2022: 29%).
Having more men than women in higher
pay grades, and more women than men
in lower pay grades, remains the main
cause of this gap. Our in-depth analysis
of equal pay for equal work shows similar
results to 2022.
Management is committed to addressing
any (unexplained) differences, and to
taking appropriate actions to ensure
equal remuneration for equal work.
To further improve the balance between
what men and women are paid within NN,
we closely monitor the compensation
packages for new hires and newly
promoted women on an ongoing basis.
We also take this component into
consideration during the annual pay
review process.
To further accelerate the process
of closing the gender pay gap, the
Pay Transparency Directive was
adopted by the European Parliament
in 2023. NN Group has started
the implementation process and
is committed to implementing all
requirements of this Directive before it
is integrated in national legislation of the
European Member States.
LGBTQIA+
In 2023, we once again sponsored
Rotterdam Pride, co-hosting the Pride
March and commissioning a new artwork
by an LGBTQIA+ talent. We invited
20 D&I ambassadors from our 10
international offices to join Rotterdam
Pride, including training on gender
identity and sessions to learn from
each other’s local experiences, legal
frameworks and needs. We also began
a partnership with Workplace Pride,
contributing to research on the policies
and practices we could improve for
LGBTQIA+ employees.
Generations
With more young people joining the
NN Group workforce, we need to ensure
our young professionals feel included
and taken care of, and that they connect
with other generations within NN Group.
Our NN Young Professionals network
connects and develops people at NN up
to the age of 35 through events such
as networking, sports, an international
business trip to one of our business
units, and an annual conference.
Neuro & physical diversity
Our dedicated recruiter places new
colleagues with a neuro or physically
diverse profile. In 2023, we hired three
people with such a profile in our Dutch
business units. We aim to improve this
number in 2024, including through more
awareness of the need to create space
and time for the onboarding of neuro and
physically diverse employees. We invited
an accessibility specialist to assess our
headquarters in The Hague with the
findings identifying opportunities for
improvement in our parking garages, lift
areas and accessible bathroom facilities,
which we have since addressed together
with the building’s owner. We also hosted
an awareness webinar on neurodiversity
at NN Values week, attracting employees
who managed someone with a
neurodiversity or who were themselves
neurodiverse. The feedback was that
awareness is still very much needed as
well as recognition of the talents that
come with a neurodiversity.
Cultural diversity
As an important employer in the
Netherlands, we want to know if we
reflect the composition of Dutch society.
In 2022, we asked Statistics Netherlands
(CBS) to carry out its Cultural Diversity
Barometer on us. The survey showed
that NN’s employee base consists
of 72% with a Dutch background
and 28% with a background in the
rest of Europe and beyond. Overall,
the NN workforce was found to be
more diverse than the average Dutch
workforce. Employees with a non-Dutch
background were less represented in
longer tenures and higher salary scales.
The percentage of employees with a
migration background is also less among
those over 40 years of age. The data
provided us with valuable insights and
a direction in which to tailor our D&I
efforts, for example in attracting bi-
cultural talent, increasing awareness
within the organisation, and maintaining
open dialogue.
Our Cultural Diversity Network, which
was launched in 2022, aims to enhance
a positive attitude towards cultural
diversity. It hosted a dialogue event in
May 2023 in connection with the UN
World Day for Cultural Diversity.
International initiatives
In all our markets, D&I ambassadors
create plans based on their local context
and maturity level. We define maturity
by metrics such as the formation of
networks, management support and
educational activities.
Colleagues and senior management
participated in unconscious bias training
in our business units in the Czech
Republic, Hungary, Japan, Slovakia and
Spain. NN Hellas colleagues learned
about accessibility for people with
disabilities, and Nationale-Nederlanden
Poland hosted webinars on mental
health, culture and age diversity.
NN Slovakia organised its Mini Tech MBA
for the second year, which is designed to
equip female employees for a career in
IT. Nationale-Nederlanden Spain added
a D&I clause to their supplier contracts
to uphold our values throughout the
supply chain.
In 2023, we launched an International
D&I Network. The network’s board
comprises representatives from five
NN International business units.
The network developed an in-house
inclusive partnership training for
colleagues across NN Group and will host
regular training sessions and events to
help colleagues expand their community
and bring together diverse perspectives.
1 Scores based on year-end 2021 figures.
Our people continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
41
NN Group N.V.
2023 Annual Report
Creating value for investors and beyond
Resilient balance sheet and strong
business performance
In 2023, we have seen volatile financial
markets with increased concerns
about illiquid assets, such as real
estate and mortgages, after several
adverse liquidity events materialised
in, for example, the US and Switzerland.
During 2023, we saw negative
revaluations on real estate, mostly
driven by higher interest rates. However,
we have high occupancy rates in our
portfolio and we also have proven ability
to (partly) pass on inflation into our rental
income. The valuation of our mortgage
book can be volatile due to different
re-pricing dynamics on the swap market
and commercial mortgage rates. This is
not a major concern, as we believe these
dynamics will normalise over time,
furthermore we see very marginal default
risk in our mortgage portfolio. In early
2024, we announced the milestone of
a final settlement with interest groups
on unit-linked insurance products sold
in the Netherlands. The total settlement
involves an amount of approximately
EUR 300 million. Read more in Note 43.
The reported Solvency II ratio for NN
Group was 197% at the end of 2023,
stable versus the end of 2022. We have
been able to counter the negative
effects for NN Group’s Solvency II
ratio of the unit-linked settlement and
adverse market movements during 2023
by securing two attractive longevity
transactions in December 2023.
Therefore, 2023 was another year where
we demonstrated active management
of our balance sheet. We have
expressed comfort in our continued
strong capitalisation by announcing a
15% increase in our ordinary dividend
per share, reflecting the unit-linked
settlement, the attractive longevity
transactions and the optimisation of the
use of capital within the group, while
increasing our annual share buyback to at
least EUR 300 million.
The operating capital generation (OCG)
in 2023 came in at EUR 1.9 billion, ahead
of our EUR 1.8 billion target set for 2025.
Besides strong business performance,
2023 also included some favourable
experience mostly in Netherlands
Non-life and Other. Nevertheless, we
have raised our OCG target for 2025
to EUR 1.9 billion as we believe both
Netherlands Non-life and Bank can
outperform on their target initially set.
Driven by the strong business
performance and capitalisation, we also
have increased confidence in our free
cash flow (FCF) delivery. As a result,
we have stated an explicit FCF target of
EUR 1.6 billion for 2025, which compares
We are committed to delivering strong and sustainable capital returns for our
shareholders. We actively engage with our shareholders and bondholders, and
aim to be clear and transparent on our strategy, financial results and operating
developments, so they can make informed investment decisions.
Our enhanced proposition to investors
Resilient balance
sheet
Group SII ratio
197% (31 Dec 2023)
Higher capital quality
• Lower UFR benefit
• Reduced longevity risk and final
settlement of unit-linked issue
Robust investment portfolio
• High quality real estate portfolio
• Solid mortgage book, with no
material default experience
Low leverage ratio
Step-up in capital
return
Dividend per share
EUR 3.20 (+15% vs 2022)
• Continues to be progressive
• Intention to remove scrip
Annual share buyback
At least EUR 300m
and additional excess capital to be
returned unless used for value-
creating opportunities
Upside to capital return
if NN Group SII ratio is sustainably
above 200%
Strong business
performance
Financial targets 2025
Upgraded
OCG¹ target:
Upgrade: EUR 1.9bn²
previous: EUR 1.8bn
Free cashflow target:
Explicit: EUR 1.6bn
previous: implicit EUR 1.5bn, based
on mid single-digit growth from
normalised EUR 1.2bn in 2021
1 Operating Capital Generation; defined as Own Funds generation (before eligibility) and SCR release (at 100%).
2 Based on normal weather and normalised mortgage margins, otherwise financial markets on 1 January 2024.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
NN Group N.V.
2023 Annual Report
42
to a previous implicit target of mid single-
digit growth versus the normalised 2021
FCF of EUR 1.2 billion. As such, this
represents an increase of approximately
EUR 100 million, which has effectively
been passed onto shareholders by the
increase in capital return.
Capital return policy
Going forward, NN Group intends to
pay a progressive ordinary dividend
per share and execute a recurring
annual share buyback of at least
EUR 300 million. Additional excess
capital is to be returned to shareholders
unless it can be used for value-creating
opportunities. A progressive dividend
means a growing dividend per share.
We decide on the amount of the
dividend each year depending on the
circumstances at the time, but the
long-term growth pattern of the annual
dividend is ultimately linked to the long-
term growth prospects of FCF of around
mid single-digits. When proposing a
dividend or announcing a share buyback
programme, NN will take into account
its leverage and liquidity position, any
regulatory requirements, as well as
strategic considerations or expected
developments in these areas.
Dividends
Dividends are paid either in cash,
after deduction of withholding tax if
applicable, or ordinary shares, as elected
by the shareholder. Dividends paid in the
form of ordinary shares will be delivered
from NN Group treasury shares or issued
at the expense of the share premium
reserve. We intend to neutralise the
dilutive effect of the stock dividend
through repurchase of ordinary shares.
On 25 September 2023, NN Group paid
an interim dividend of EUR 1.12 per
ordinary share, which was calculated in
accordance with the NN Group dividend
policy. The proposed 2023 final dividend
of EUR 2.08 per ordinary share plus the
2023 interim dividend of EUR 1.12 per
ordinary share gives a total dividend for
2023 of EUR 3.20 per ordinary share.
This represents an increase of 15%
compared to the 2022 dividend per share.
Share buybacks
On 29 February 2024, NN Group
announced it would open its market
share buyback programme for an amount
of EUR 300 million. The programme
will be executed within 12 months,
commencing on 2 April 2024. The share
buyback will be deducted in full from
Solvency II Own Funds in the first half
of 2024 and is estimated to reduce
NN Group’s Solvency II ratio by
approximately 3 percentage points.
In addition to this share buyback
programme, NN Group intends to
repurchase shares to neutralise the
dilutive effect of any stock dividends.
NN Group intends to cancel any
repurchased NN Group shares under
the programmes unless used to
cover obligations under share-based
remuneration arrangements or to deliver
stock dividend. NN Group reports weekly
on the progress of the share buyback
programmes on its corporate website.
In 2023, 10,000,000 NN Group treasury
shares that had been repurchased
under the share buyback programmes
were cancelled.
Share capital
The authorised share capital of
NN Group N.V. consists of ordinary
shares and preference shares. Currently,
only ordinary shares are issued, while
a call option to acquire preference
shares has been granted to NN Group
Continuity foundation (Stichting
Continuïteit NN Group). Read more
on pages 101–102.
Investors continued
We combine our strong business
performance with a clear capital return
policy. Thanks to the long-term growth
profile of OCG and FCF, we are able to
consistently provide our shareholders
with attractive and sustainable capital
Continued delivery on capital return to shareholders
returns. We have a proven track record
of delivering on this commitment. Since
NN Group’s initial public offering (IPO)
in 2014, we have paid and declared EUR
10 billion to our shareholders through
dividends and share buybacks.
We expect to continue to deliver on our
capital return policy, with a progressive
dividend and a share buyback of at
least EUR 300 million per annum.
1 Dividend per share based on
declared amounts in book
year, total dividend amounts
are shown on a cash out basis;
2024-2025 dividends in this
graph are indicative and not
based on realisations.
2 Total share buyback amount
shown in the year that the
programme commences;
2024-2025 share buybacks
are based on EUR 300m, in line
with our capital return policy
of at least EUR 300m annual
share buyback.
3 Additional share buyback of
EUR 750m on top of the regular
EUR 250m, reflecting the net
proceeds of the sale of NN
IP minus the funding for the
acquisition of MetLife Greece
and Poland.
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E
2025E
0.57
1.51
1.55
1.66
1.90
2.16
2.33
2.49
2.79
3.20
Share buyback
Dividend
– 500 417 – – 500 250 250 1,000
3
250 300
349 536 526 570 664 705 741 763 804–
Total 2015-2024
EUR 3.5bn
EUR 6.6bn
EUR 10.0bn
DPS 2015-2023: 9.8% CAGR
Accumulated pay-out to shareholders
1,2
(EURbn)
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
43
NN Group N.V.
2023 Annual Report
Major shareholders
According to the Autoriteit Financiële
Markten (AFM) register as at 29 February
2024, the following shareholders had an
interest of 3% or more in NN Group on
the notification date:
• BlackRock, Inc. 6.51%
(4 September 2023)
• Norges Bank 5.03% (17 March 2023)
• Thornburg Investment Management
3.00% (3 April 2023)
Please refer to the AFM register of
substantial holdings and gross short
positions for more details on the nature
and characteristics of these interests.
Ratings
Credit ratings
On 21 December 2023, Standard & Poor’s
upgraded NN Group’s financial strength
rating to ‘A+’ with stable outlook from
‘A’ with positive outlook and the credit
Shareholder by country/region
Q4INC shareholder analysis at October 2023 (%)
Asia 15%
United Kingdom 17%
United States 38%
The Netherlands 3%
Rest of Europe 27%
Rest of the World 1%
Investors continued
rating to ‘A-’ with stable outlook from
‘BBB+’ with positive outlook.
On 22 November 2023, Fitch Ratings
published a report affirming NN Group’s
‘AA-’ financial strength rating and ‘A+’
credit rating with a stable outlook.
Sustainability ratings
We are rated on sustainability by
specialist research agencies such as
Sustainalytics, MSCI and CDP. We are
also included in indices such as the Dow
Jones Sustainability World Index and
FTSE4Good. Read more on page 127.
We proactively inform the market of our
approach and performance during one-on-
one investor meetings, and by publishing
and regularly updating an environmental,
social and governance (ESG) presentation,
which can be found on our website.
Listing
NN Group ordinary shares are listed and traded on Euronext
Amsterdam under the symbol NN.
JanDec
22
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
23
Euro STOXX Insurance indexNN Group
110
130
100
%
80
70
60
90
120
Authorised and issued capital
(in EUR million)
Year-end
2023
Year-end
2022
Year-end
2021
Ordinary shares
– authorised 84 84 84
– issued 34 35 38
Preference shares
– authorised
84
84 84
– issued 0 0 0
Number of shares in issue and shares
outstanding in the market
Year-end
2023
Year-end
2022
Year-end
2021
Authorised share capital (in shares) 700,000,000 700,000,000 700,000,000
Issued ordinary shares 285,000,000 295,000,000 317,878,210
Own ordinary shares held by NN Group 11,138,500 13,608,384 12,294,129
Outstanding ordinary shares 273,861,500 281,391,616 305,584,081
The additional percentage point is due to rounding.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
44
NN Group N.V.
2023 Annual Report
In 2023, we focused on further
developing our active ownership
programme. We published our first
Active Ownership Report, providing an
overview of our policies and activities
related to active ownership of proprietary
assets. We also joined several collective
investor initiatives, such as the Ceres
Valuing Water Initiative and Platform
Living Wages Financials, to extend our
engagement efforts.
As part of our commitment to protecting
and restoring biodiversity and
ecosystems through our investment
activities, we conducted a biodiversity
impact assessment for NN’s proprietary
assets. Additionally, we launched a
sustainable infrastructure debt fund in
cooperation with Rivage Investment
(read more on page 47) and developed
a green, social and sustainability bonds
standard, as well as impact reporting
for our investments in climate solutions.
Read more on page 48.
RI Framework policy
NN Group recognises the critical role
ESG factors play in determining asset
value and long-term performance. Our RI
Framework policy therefore requires
NN and our external asset managers to
systematically integrate material ESG
factors into investment decision-making
and active ownership practices.
Our RI Framework policy applies to both
proprietary and, where possible and
feasible, client assets. Proprietary assets
are those held for our own account,
such as the general account investment
portfolio of the insurance entities, the
assets of NN Bank and the holding
assets of NN Group. Client assets are
those where policyholders bear the
investment risk, including separate
account assets, which primarily consist
of unit-linked portfolios and certain
group pension business of the insurance
entities in the Netherlands. The policy
also encompasses assets not included
on the balance sheet, such as our
insurance and bank operations, which
offer customer propositions such as
defined contribution pensions and (retail)
investment products.
NN Group has an internal guideline
on applying the RI Framework policy
to third-party managers and funds.
This applies to both proprietary and
client assets, and supports investment
departments throughout NN in the
application and implementation of
the requirements related to the due
diligence, selection, monitoring and
review of external asset managers and
funds. In 2023, NN Group’s RI team
organised sessions with business
unit representatives on implementing
the guideline and on consistent
application of the RI Framework policy
across the organisation. The team
also provides guidance on Sustainable
Finance Disclosure Regulation (SFDR)
implementation.
Governance and teams
Decision-making on RI-related topics is
integrated into NN’s existing governance
and committee structure. The NN Group
Management Board is responsible for
approving the RI Framework policy
and any (material) changes to it.
The NN Group Management Board also
periodically discusses progress on
NN Group RI objectives and activities.
The RI Committee oversees the
NN Group RI Framework policy, and
related standards and guidelines, and
Creating a positive impact on society
We do business with the future in mind and want to contribute to a world
where people can thrive for generations to come. We do this by investing
our assets responsibly, taking sustainability matters into account for
our underwriting activities, being a fair taxpayer, managing our direct
environmental footprint, and through our activities in the communities
where we live and work.
We strive to contribute to the well-being
of people and the planet, and we aim
to create sustainable long-term value.
Sustainability matters are part of our
strategy, our strategic commitments
and our interactions with stakeholders.
They are defined as opportunities,
risks and adverse impacts related to
environmental, social and governance
(ESG) factors and are identified using the
double materiality concept: our impact on
the environment and society, and how the
matters impact our company. Read more
about double materiality on pages
11–15.
We apply sustainability matters in our
roles as an investor, insurer, pension
provider, bank, employer, business partner
and corporate citizen. Our key impact
themes of Healthy Living, Sustainable
Planet and Inclusive Economy address
important sustainability matters, for
example, in the areas of climate change
and human rights.
In 2023, we made progress in the
areas of responsible investing,
responsible insurance underwriting,
sustainable sourcing, our road to
net-zero, biodiversity, human rights,
community investment and responsible
tax approach.
Responsible investment
Responsible investment (RI) is an
important element of both NN Group’s
strategy and our commitment to
contribute to the well-being of people
and planet. A key part of our approach
to RI is that, where feasible, we aim to
mitigate the negative impacts of our
investments on sustainability factors.
Focusing on ESG integration helps us to
better align our core business with the
broader expectations of society.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
45
NN Group N.V.
2023 Annual Report
advises the Management Board on
material policy updates. It also oversees
the process of aligning the proprietary
investment portfolio to NN’s strategic
climate and sustainability targets,
defining related action plans and
monitoring progress. The RI Committee
is chaired by the Group Chief Investment
Officer, who reports to the CEO.
Other members include the CPCSO, the
CRO, and representatives from the RI
team and Investment Risk Management.
The CRO and CIO closely oversee and
monitor the asset manager agreements
with our largest external asset manager,
Goldman Sachs Asset Management
(GSAM), who manage most of our
General Account portfolio. In addition,
we have a Sustainability Steering
Committee that regularly brings together
senior leadership from NN and GSAM
to discuss progress and challenges
around implementing our RI initiatives
and policies, and ensuring alignment
with our sustainability objectives.
This includes the objectives in our
extensive ESG Service-Level Agreement,
which covers ESG integration criteria,
active ownership, restrictions, and
other expectations and requirements
related to responsible investing.
We periodically conduct a review to
monitor implementation of ESG criteria in
the investment process.
ESG integration guidance
NN has a comprehensive approach to
systematically integrating ESG factors
into our investment decisions across
asset classes. This includes developing
investment guidance papers that identify
risks and opportunities in investments,
and offer guidance to asset managers
on ESG integration. These papers are a
key component of our policy framework.
They explain to external stakeholders
the ESG integration requirements
in our policy framework and our
stance on various topics related to
responsible investing.
Our RI team organises periodic
alignment sessions with our GSAM and
ESG teams. During these sessions, we
discuss developments in RI, stakeholder
expectations, regulatory changes and
stewardship activities, and align our
respective expectations around ESG
factors in investment decision-making
and evaluation processes.
Our investment guidance papers align
with the UN Global Compact principles
and cover environmental topics, human
rights and labour rights. The paper on
labour rights was published in 2023.
Using stewardship to influence behaviour
Engagement is key to active ownership.
With both equity and fixed income
holdings, we aim to raise awareness of
sustainability issues, and encourage
issuers to improve their policies
and practices. How we engage with
companies depends on the specific
company and our investment exposure.
As an asset owner, NN delegates
various engagement activities to an
external research provider and asset
manager. This means we can pool our
assets with other clients, maximising
our engagement impact. Our RI team
also executes several engagements
itself either individually or through
collaborative engagement initiatives.
In 2023, we developed our active
ownership programme and published
our first Active Ownership Report.
Within the programme, we distinguish
between two types of engagement,
controversy and thematic, and have
taken various steps to formulate those
engagements. For example, in 2023,
NN developed a Controversy and
Engagement Council to oversee and
monitor controversy engagements.
With thematic engagements, we focus
on particular themes: climate change
and net-zero, biodiversity and natural
capital, water, human rights and strong
governance. We have partly outsourced
our engagements to Sustainalytics
Morningstar, and joined several collective
investor initiatives, such as the Ceres
Valuing Water Initiative and PLWF.
Read more in the case studies Platform
Impact on society continued
As the world transitions to a greener and more sustainable
future, it is important to ensure the transition is also just.
A just transition involves maximising the social and economic
benefits of climate and environmental action, while being
careful to leave no one behind, by managing challenges such
as job quality, re-skilling, and continuous engagement with
workers and communities, including indigenous peoples.
For NN Group, this means careful consideration of both
the environmental and social impacts of our investments.
For instance, we invest in renewable energy infrastructure
projects in emerging markets, which is critical to reducing
GHGs. But we also need to scrutinise these investments for
potential negative impacts on workers or local communities.
Despite these challenges, we look for investment
opportunities across various asset classes that align with
the principles of a just transition. Such investments could
include green bonds tracking social impacts or renewable
energy projects that increase access to affordable energy.
For example, in 2023, we explored the potential investing
in sustainable forestry projects, which can contribute to a
just transition provided they generate quality jobs for local
communities. We already invest in programmes that reduce
energy usage and carbon emissions, while taking into
account social impact. Our Positive Impact Programmatic
Venture offers affordable rental housing to households who
do not meet the criteria for social housing, while also aligning
with the environmental goals of the EU taxonomy.
Moving forward, we will look to further integrate just
transition into our investment criteria, with a particular focus
on measuring the impact of our investments on the ground.
Investing in a just transition
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
46
NN Group N.V.
2023 Annual Report
In 2023, we voted at 46 annual general
meetings (AGMs) on 594 agenda items,
focusing on three main issues: board
elections, alignment of executive
remuneration with company strategy,
and integration of sustainability within
company strategy. Read more in the
case study Supporting shareholder
resolutions on page 47.
Investing sustainably
NN wants to play its role in addressing
global sustainability challenges such
as climate change, social issues and
resource scarcity. We seek investment
Living Wage Financials and Climate
change & net-zero engagement on this
page. In total, we had 259 sustainability
dialogues with issuers in 2023.
The right to vote at company shareholder
meetings is fundamental to a well-
functioning corporate governance
system. NN finds it important to exercise
this right, wherever possible, for its
proprietary equity investments. NN’s
listed equity portfolio primarily consists
of 5%+ stakes in European small- to
medium-sized enterprises (SMEs), with a
maximum 50 companies in the portfolio.
The external asset management team
responsible for managing the proprietary
equity portfolio implements an active
investment strategy, which includes
regular engagement with companies on a
variety of topics, including sustainability.
To assure proper implementation of
NN’s voting policy, NN has delegated
management of its proprietary equity
portfolio to GSAM, which also exercises
our voting rights. GSAM uses an
external service provider to support the
process of proxy voting, with all voting
decisions made on a case-by-case basis
in accordance with NN Group’s Voting
Policy. NN Group retains the right to
provide voting instructions for individual
shareholder meetings and ballot items.
opportunities that offer solutions to
these challenges while also meeting
our investment criteria, such as the
investments we have made in climate
solutions and social bonds. We have
a clear ambition to support the global
transition towards net-zero greenhouse
gas (GHG) emissions by 2050, in line
with efforts to limit global warming
to 1.5°C. As part of this ambition, we
set a target in 2021 to increase our
investments in climate solutions by
an additional EUR 6 billion by 2030,
taking the total investments in climate
solutions to around EUR 11 billion.
Impact on society continued
Climate change & net-zero engagement
In 2023, our asset manager
participated in a Climate Action
100+ (CA 100+) engagement with
a Czech utility company to discuss
the company’s climate transition
plan. This was a follow-up to earlier
engagements. The company has
increased its disclosures on climate-
related risks and published a detailed
stand-alone Task Force on Climate-
related Financial Disclosures (TCFD)
report in February 2023, as well as a
new intensity-reduction waterfall chart
linked to its strategic initiatives.
Investors have encouraged the
company over time to disclose more
around its capex plans and how
these link to its stated emissions-
reduction targets. While the company
has demonstrated progress in its
climate objectives, it now needs to
take further steps on its targets and
decarbonisation strategy. As a ‘high-
impact’ company, it also needs capital
allocation to support its transition to
a low-carbon economy and we are
seeking enhanced disclosures on this
matter. As a fixed income investor, we
will strive to continue to engage with
the company and monitor progress,
discussing further steps with our
asset manager.
Platform Living Wage Financials
NN Group joined PLWF in 2023, and
we are involved in PLWF’s Food &
Agri Working Group, which tackles
issues such as child labour, lack of
education, and deforestation in the food
& agriculture sector caused by lack of
living wages. Products such as coffee
and cocoa are often priced at a global
market rate, making it difficult to ensure
even minimum wages for farmers.
Implementing a living wage improves
workers’ standards of living, reduces
child labour, and promotes social and
economic resilience in supply chains.
NN Group is participating in
engagements with food companies
and is lead engager with Nestlé,
which has made substantial efforts to
measure and close living wage gaps
across cocoa and coffee commodities.
NN Group will monitor Nestlé’s
implementation of its Living Wage and
Living Income Action Plans, additional
quantitative data on wage/income
gaps, and enhancements to purchasing
practices. For more, see the PLWF
2023 Annual Report.
Dialogues on
sustainability factors
(%)
Social 15%
Governance 27%
Environmental 39%
ESG overlapping 19%
Social 15%
Governance 27%
Environmental 39%
ESG overlapping 19%
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
47
NN Group N.V.
2023 Annual Report
Supporting shareholder resolutions
During the AGM of French utility
company Engie, several shareholders
proposed a ‘Say on Climate’ shareholder
resolution, which NN Group supported.
While Engie already has GHG emissions
reduction targets and has made
progress in reducing its GHG emissions
and coal-fired generation capacity, it
was unclear how its emissions targets
compared to Paris-aligned scenarios,
how its electricity generation mix would
develop, or how the company would
align its capital expenditures with its
climate targets.
In the lead-up to the AGM, Engie
committed to including an addendum
to its climate report, disclosing the
breakdown of its electricity generation
mix up to 2030, and consulting
shareholders on its climate strategy
every three years through a ‘Say on
Climate’ vote.
Although the company did not commit
to an annual vote, NN Group believes
the shareholder resolution will lead to
more disclosure and better stakeholder
dialogue. While the resolution did not
pass, receiving only 24% of shareholder
support not the required 66%, it
sends a strong signal to the company.
NN Group will continue to engage with
Engie on its climate ambitions.
Since then, we have invested more
than EUR 5 billion in climate solutions,
making total holdings in climate solutions
EUR 10.8 billion. While investments
in climate solutions increased in most
asset classes, the biggest increase
came from our investments in renewable
energy and green bonds. Investments in
green bonds have grown the most in
absolute volume, despite a challenging
market over the past year, underlining
our ambition to deliver on our climate
solutions target. For an overview of
our climate solutions investments, see
page 128.
In 2023, NN launched a new investment
initiative on climate solutions, in
collaboration with an external asset
manager, with a total commitment
of EUR 300 million. Read more in the
case study Launch of sustainable
infrastructure debt fund on this page.
Responsible insurance underwriting
Stakeholders expect NN and its
businesses to integrate ESG factors
in our underwriting process and
incorporate this into products and
services for customers. This includes,
but is not limited to, climate change,
Impact on society continued
Launch of sustainable infrastructure debt fund
NN Group and Rivage Investment have jointly launched
the Rivage Private Debt – Fund for Infrastructure Climate
Solutions. This seeks to finance infrastructure assets in
Europe that provide solutions to the challenges raised by
climate change. The fund focuses on projects in the wind,
solar, hydro, public transport, EV charging, batteries and
energy management sectors. Thus contributing to the
green infrastructure financing necessary to achieve global
climate goals and catalyse the transition to a resilient low-
carbon economy.
Both NN Group and Rivage are committed to accelerating the
transition to a low-carbon economy, and the Infrastructure
Climate Solutions Fund is designed to combine different
types of debt financing for sustainable infrastructure assets
in Europe.
The fund is classified as ‘Article 9’ under the new EU
Sustainable Finance Disclosure Regulation, indicating the
highest sustainable classification in Europe, and is aligned
with the requirements of the Paris Agreement and EU
Taxonomy. NN Group is committing EUR 300 million to the
fund. Rivage will also invest in the fund, and manage it,
applying its extensive experience in providing tailored debt
financing to renewable energy and low-carbon emission
infrastructure projects across Europe. Over the past decade,
Rivage has invested some EUR 1.5 billion in solar farms and
wind plants in eight European countries.
financial inclusion, and health and well-
being. Sustainability needs to be further
embedded in our activities as insurer.
For our underwriting process, we take a
precautionary approach but also take the
perspective from impact and opportunities
to evolve our product offering to meet the
expectations on providing our expertise
and services to the changing environment
in which our customers are active.
Governance and teams
To further strengthen and align NN’s
strategic commitments for society in
its insurance activities, in 2023, NN
set up the NN Responsible Insurance
Underwriting (RIU) Committee to
strategically define and subsequently
oversee and steer the ambition for
responsible underwriting activities
reflecting NN’s strategy and ambition.
The NN RIU Committee aims to ensure
an effective definition and consistent
implementation of responsible insurance
underwriting throughout NN’s business
lines. Chaired by a bi-annually rotating
member of one of the business lines and
sponsored by the NN Group Management
Board, the committee consists of senior
management representing insurance
business lines, senior representatives
of relevant staff departments and
sustainability representatives.
The committee will strategically discuss
sustainability matters for NN’s insurance
underwriting activities such as guidelines
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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NN
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48
NN Group N.V.
2023 Annual Report
and standards, criteria for products and
clients. The RIU Committee will approve
NN Group's Insurance Underwriting
policy and review it on a yearly basis.
The mandate and scope of the committee
regards all business units (excluding
NN Bank), entities and insurance
underwriting activities of NN Group.
The RIU Committee will oversee next
steps in further embedding sustainability
in our insurance activities.
Sustainable sourcing
NN is committed to making sustainable
procurement decisions and we
encourage our suppliers to do the
same. Our decisions aim to meet our
organisation’s need for products and
services, and, through those products
and services, to make a positive
contribution to society and minimise our
environmental impact, while addressing
socio-economic issues. Read more in
our Sustainable Procurement Statement,
published on the NN Group website.
In 2023, the main focus was on capability
build-up and creating awareness within
the (international) procurement and
contract management community.
Also, we focused on defining specific
‘supplier asks’ related to climate
change and human rights topics.
Our suppliers are requested to register
on an FSQS-NL (Financial Services
Qualification System-Netherlands)
supplier qualification platform, where
they provide detailed information on
the policies and processes they have in
place to minimise environmental impact,
among other things. FSQS-NL is a third-
party risk management and compliance
platform for the financial services sector
to collaborate and agree on a single
standard for managing the increasing
complexity of third- and fourth-party (our
suppliers’ suppliers) information needed
to demonstrate compliance to regulators,
By investing in climate solutions, NN aims to contribute
to climate change mitigation and adaptation.
Alongside reporting how much we invest in climate solutions,
we have developed a framework to better understand
the positive impact that investees we invest in through
investments in climate solutions have on the environment.
As an indicator of positive impact, we report on the estimated
avoided GHG emissions for each investment category in our
climate solutions portfolio. We stress that this calculation
is in no way used as an offset in the carbon footprint
calculation of our investments. Nor does it take into account
any negative impact our climate solutions investments may
have on society or the environment. But it is our intention to
further analyse these areas over the coming years.
Estimated avoided emissions are hypothetical emissions
that we presume were avoided due to investments in climate
solutions. Its definition differs for different investment
categories of climate solutions (as defined on page 366).
Emissions avoided were calculated according to an internally
developed methodology based on commonly used industry
guidelines available at the publication of this report.
Since sustainability and impact data are reported with a
significant time lag, we estimated the amount of avoided
emissions over 2022. The scope for the analysis was our
climate solutions portfolio at the end of 2022 and we managed
to estimate avoided emissions for 55% of it. The reasons for a
relatively low coverage range from investees not yet measuring
relevant data to low quality of reported data. Attributed to
our share of investment, investees in our climate solutions
portfolio are estimated to have avoided 770 ktCO
2
e during
2022. This is equivalent to the estimated GHG emissions
produced by 389,690 cars registered across the EU in 2022
that have driven on average 50km per day over one year*.
Attributed to our share of investment, investees we invest
in renewable energy sector specifically, are estimated
to have produced 834 GWh of electricity over 2022.
Without attributing to our share of investments, our
investees in renewable energy in the EU are estimated
to account for 10.1 GW of renewable energy capacity,
equivalent to almost 1% of the EU’s 1236 GW RePowerEU
plan for renewable energy generation capacity by 2030.
For more on the numbers per asset class, and the calculation
methodology, see page 129. A detailed methodology paper
can be found on the NN Group website.
Measuring the positive impact of climate solutions
Our climate solutions portfolio is estimated to
770 ktCO
2
e
avoided during 2022
389,690
equivalent car GHG
emissions per year
=
Our renewable energy investments
834 GWh
Estimated energy produced by our
renewable energy investments over 2022
*Source: https://www.eea.europa.eu/
Impact on society continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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NN
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NN Group N.V.
2023 Annual Report
policies and governance controls. By the
end of 2023, more than 420 of our top
suppliers (spend threshold EUR 100,000)
had completed the questionnaire and
uploaded supporting documentation.
These 420 suppliers represent a
total spend of EUR 593 million, which
accounts for 75.2% of the total spend
in scope. NN also has a process and
governance in place for screening
the integrity of the supplier, both at
onboarding and ongoing during the
contract life cycle. We have included our
most important standards regarding
environmental and human rights issues
in NN’s Terms & Conditions and model
contract repository. In addition, the NN
Supplier Code of Conduct (SCC) outlines
our expectations regarding the policies
and practices of our suppliers, in terms
of the environment, human rights,
diversity and inclusion, and integrity
and ethics. All suppliers above a spend
threshold of EUR 100,000 are asked
to commit to our SCC. Our contract
managers and procurement staff have
access to the FSQS-NL platform, review
the information annually, and discuss
steps for improvement with suppliers
where necessary. A programme has been
started to onboard the suppliers which
have not yet registered.
Our approach to net-zero
NN Group is committed to becoming a net-
zero company by 2050. We are concerned
about the effects of climate change on
society and therefore apply science-based
principles to secure a low-carbon future
that meets the needs of generations to
come. Our approach on our most material
sustainability matters:
• Help accelerate the transition to a
low-carbon economy to limit the rise
in average global temperature to 1.5°C
(by using a range of levers, such as
engagement, capital allocation to
climate solutions, and phase out and/or
exclusion policies)
• Develop and offer products
and services that address the
environmental challenges our
customers face (e.g. by contributing
to a low-carbon economy or helping
insure our customers against climate-
related impact)
• Effectively manage our direct
environmental footprint by reducing
our use of natural resources, seeking
green alternatives and offsetting the
remainder of our GHG emissions
We have developed several strategies
to decarbonise our assets, liabilities
and own operations. To better align
these strategies with our activities and
structure, we have organised them under
the following areas:
• Insurance general account investments
(Government bonds, Residential
mortgages, Corporate investment and
Real estate)
• Banking
• Insurance underwriting
• Own operations
For more on our initial steps and action
plans to reduce GHG emissions, see the
Climate Action Plan 2023 Update on the
NN website.
Government bonds
NN Group’s Paris Alignment strategy aims
to decarbonise our sovereign portfolio
by selecting bonds with better climate
performance and investing in climate
solutions, such as sovereign green
bonds. We use the NN Country Climate
Score methodology to evaluate and
compare the climate performance of our
sovereign holdings. The Climate Change
Performance Index (CCPI) ratings from
Germanwatch are a key part of this scoring
methodology. Our goal is to maintain
or improve our portfolio-weighted
NN Country Climate Score. However,
setting intermediate reference targets
on GHG emissions within the sovereign
bond portfolio is challenging, as the
methodology for measuring them is still in
development and there is currently limited
room to change the portfolio composition.
In 2023, we aligned our carbon
calculations for government bonds
with the latest recommendations from
PCAF. We are also working with GSAM
on an improved methodology for the NN
Country Climate Score and plan to launch
this in 2024. This will enable us to better
evaluate the climate performance of
our sovereign holdings and support our
efforts to decarbonise our portfolio.
NN seeks to leverage its influence
as an investor to promote alignment
with the goals of the Paris Agreement.
In 2023, GSAM engaged with several
sovereign issuers globally, while the
green bond team of GSAM had regular
discussions with government-related
issuers on national and regional climate
performance, and green bond alignment
with the EU taxonomy.
Residential mortgages
Residential mortgages make up a
significant portion of NN’s insurance
general account investment portfolio,
including those originated by the
company’s own banking operations
and external mortgage originators.
We are working to integrate net-zero
considerations into our investment
process for the mortgage portfolio.
This will include monitoring ESG factors
to get greater data insight into these
factors for both the NN Bank and the
externally originated mortgage book.
In 2023, NN Bank and NN set a reference
target for reducing GHG emissions for
the aggregate portfolio of mortgages
on the NN balance sheet. To achieve the
target, we are taking steps to encourage
borrowers to improve the energy label of
their houses, reduce GHG emissions, and
ensure access to finance, with a focus on
contributing to a low-carbon economy
and inclusive society. For external
mortgages, NN Group engages with
originators to monitor whether their
ambitions and progress align with
our own, while also taking steps to
improve data and transparency to gain
a better insight into the portfolio’s
climate impact.
Corporate investments (listed equities and
corporate bonds)
The corporate investments portfolio
includes listed equities and corporate
fixed income (i.e. corporate bonds and
loans). Setting objectives and targets is
crucial for monitoring the effectiveness
of a net-zero investment strategy.
To this end, we established a top-down
reference target for GHG emissions in our
corporate investments portfolio, using
various approaches and methods to do
so, including the Institutional Investors
Impact on society continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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figures
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NN
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accounts
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information
50
NN Group N.V.
2023 Annual Report
Group on Climate Change (IIGCC)-
recommended carbon budget approach.
Our strategy for portfolio alignment
focuses on achieving real-economy
decarbonisation. Together with our
external asset manager, we developed
a methodology to categorise portfolio
companies by their alignment, or
potential to align, with a net-zero
pathway. Read more in the case study
‘Paris alignment categorisation for
corporate investments’ on page 53.
For new investments, we use a best-
in-class policy to focus investments
on companies further down the road
towards a low-carbon future. For existing
assets, we focus on stewardship
and engagement to drive alignment,
as we believe this approach has the
best chance of realising real-world
impact. We have set interim reduction
targets for corporate investments:
GHG emissions 25% lower in 2025 and
45% lower in 2030, compared to the
portfolio’s calculated emissions in 2021
(based on the emissions of underlying
companies in 2019).
We apply investment restrictions to
companies that engage in harmful
activities for nature or the environment,
such as oil sands production and thermal
coal mining. For NN’s proprietary
investments, we also restrict companies
directly involved in oil sands extraction
or offshore oil & gas exploration and
production in the Arctic region, and
with more than 5% turnover in these
activities. Additionally, we restrict
investments in shale oil & gas extraction
companies who have more than 30%
of their revenues derived from these
activities. For new investments in
companies that derive between 5%
and 30% of their revenues from shale
energy, we require a credible transition
plan before making any investment.
This plan will be assessed against the
new framework we have introduced
for conventional oil & gas activities.
Read more in the case study on page 25.
Since 2019, NN Group has had a coal
phase-out policy for our proprietary
investments in the mining and utility
sectors. Our objective is to reduce our
portfolio companies’ involvement in
thermal coal mining and/or coal-fired
power generation to ‘close to zero’
(between 0% and 5%) by 2030. As of
year-end 2023, our portfolio of assets
subject to this policy was EUR 524 million
(EUR 1.8 billion at policy launch in 2019).
The gradual decline of our portfolio
over the years can be attributed to
companies in our portfolio reducing
their coal involvement, bond maturities,
and selective divestments from certain
holdings. We will continue to monitor our
holdings and engage where feasible to
achieve our objectives.
Progress net-zero strategy
The absolute financed emissions of
NN Group's corporate investment
portfolio decreased from 3,725
kilotonnes CO₂e in 2022 to 3,026
kilotonnes CO₂e in the current reporting
period. Additionally, the carbon intensity
of the corporate investment portfolio
decreased by 15% to 112 tonnes CO₂e
per EUR million invested. Compared to
our target setting baseline year of 125
tonnes CO₂e per EUR million invested
in 2021, the reduction was 10%.
The decrease in emissions compared to
the previous year is a result of various
factors, including changes in portfolio
holdings stemming from strategic
decisions outlined in our Climate
Action Plan, such as our coal phase-
out strategy and oil & gas policy, as
well as other portfolio management
decisions. Additionally, changes in the
emission intensities of existing portfolio
Impact on society continued
0 20 40 60 80 100
Aligning
Aligned
Committed to aligning
Not aligned or insufficient data
Achieving net-zero
Proportion of assets meeting at least
‘aligning’ criteria
End of 2023: 54% (2021: 29%)
Note: At present, we have not identified companies in our
portfolio that are ‘achieving net-zero’
0 20 40 60 80 100
Rest
Engaged
Aligned
Proportion of financed emissions in sectors
that either already meet net-zero ‘aligned’
criteria or that will be subject to direct or
collective engagement actions
End of 2023: 70% (2021: 66%)
30%24%46%
Corporate investments portfolio
Portfolio coverage target (y/e 2023) based on assets
Engagement threshold (y/e 2023) based on financed emissions
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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NN
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NN Group N.V.
2023 Annual Report
companies played a role, although to a
lesser extent. Read more on the carbon
footprint of corporate investments on
pages 135–136.
To ensure the effectiveness of our
strategy, we established portfolio
alignment objectives using the Paris
Alignment Categorisation for Corporate
Investments methodology. As of year-end
2023, 54% of our portfolio assets met
the ‘aligning’ criteria, exceeding our 2025
target of 45%. Although this percentage
decreased from 62% in 2022, we see
an improvement in the mix of aligned
versus aligning investments, which is
encouraging. We will maintain our 2025
target, as we anticipate a strengthening
of our data sources in the coming years
due to organisations such as SBTi,
Climate Action 100+ Net-Zero Company
Benchmark and TPI refining their net-zero
expectations for companies. We believe
that this will lead to an improvement in
the quality of data and analysis.
Compared to the previous year, the
engagement threshold has risen.
Currently, 70% of companies fall under
the ‘aligned’ category or are subject to
direct or collective engagement based on
their financed emissions. Our objective
is to increase this percentage to 75% by
2025, with a primary focus on the top 25
holdings in terms of financed emissions.
For investee companies that are not
aligning with a net-zero pathway and
are not covered by current individual or
collective engagement, we will explore
establishing an engagement plan to
maximise our impact and work towards
achieving our net-zero goals.
Real estate
NN invests in real estate across Europe
through direct ownership and non-
listed real estate funds. To achieve
net-zero GHG emissions for our real
estate portfolio, we have set specific
commitments and targets for both
our directly managed and indirect
portfolios, using guidance from external
organisations such as the Net-Zero
Investment Framework.
For directly managed assets, our goal is
for all buildings to be on a 1.5°C pathway
by 2030, with net-zero operational
GHG emissions by 2040. Carbon Risk
Real Estate Monitor (CRREM) is used to
analyse each building’s pathways and set
improvement plans. For the non-listed
indirect real estate portfolio, our target
is to have most funds (>75% based on
GAV) committed to achieving net-zero
GHG emissions by 2040 or sooner, with
the remainder committed to 2050 or
sooner. Further work will be done to set
a quantified target for GHG emission
reductions for the real estate portfolio
in 2024.
NN evaluates its real estate portfolio’s
potential exposure to physical climate
risks and sets clear objectives for
addressing these risks. In addition, we
use GRESB to assess and benchmark
our real estate portfolio’s sustainability
performance and identify areas for
improvement. Read more on our
sustainability efforts in this sector in the
case study NN Group’s strong real estate
performance in GRESB on this page.
Banking
NN Bank, a subsidiary of NN Group,
serves nearly one million customers
with mortgages, savings, insurance and
investment products. As the fifth largest
mortgage provider in the Netherlands,
residential mortgages are a significant
part of NN Bank and NN Group’s assets,
making it a key focus area within our
sustainability strategy.
NN Bank uses CRREM to model
decarbonisation pathways for residential
mortgages in the Netherlands and steer
our mortgage portfolio towards net-zero
by 2050. We aim to reduce our emission
intensity to 18.0 kgCO
2
/m
2
by 2030.
This figure was 24.4 kgCO
2
/m
2
in 2023,
down 12% from our baseline year 2021.
NN Bank recognises that achieving
its 2030 target of reducing emission
intensity to 18.0 kgCO
2
/m
2
, which aligns
with the 2021 CRREM pathway for the
Netherlands, will be ambitious and
depends on external factors such as
consumer behaviour and government
policies to accelerate the availability
of renewable energy. Furthermore, the
updated CRREM pathway of January
2023 presents additional challenges to
all parties in the value chain, and we are
currently engaging with stakeholders
and evaluating these challenges.
NN Bank has defined three areas for
action: engaging with and encouraging
customers to reduce GHG emissions,
Impact on society continued
NN Group’s strong real estate
performance in GRESB
NN Group’s non-listed real estate
portfolio has performed strongly on
sustainability, utilising the Global
Real Estate Sustainability Benchmark
(GRESB) as its primary assessment
and monitoring tool. All real estate
and fund managers are required to
report into the GRESB Real Estate
Assessment, and a significant
percentage of NN’s portfolio of
directly owned buildings, joint
ventures and funds are included
in the 2023 assessment.
The total NN portfolio, direct and
indirect, received a value-weighted
score of 90 on a scale of 1 to 100,
exceeding the European non-listed
real estate benchmark average of 81.
See page 129 for more on our scores.
The direct portfolio received a 5-star
rating, GRESB’s highest, and was
placed first in a peer group of Western
European diversified portfolios.
This was the result of successful
efforts to reduce energy usage overall
while increasing the proportion of
renewable energy used, for example
by installing solar panels and smart
installations. NN’s real estate manager,
CBRE IM, also took steps to reduce
GHG emissions and increase water
data coverage across all asset classes.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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NN Group N.V.
2023 Annual Report
developing new mortgage-specific
propositions and services, and
leveraging NN Bank’s Green Bond
Framework to finance mortgages for
energy-efficient residential buildings in
the Netherlands. We are also working
with industry peers in the Energy-
Efficient Mortgages Netherlands Hub
and PCAF to develop harmonised
standards and frameworks for energy-
efficient mortgages and carbon
footprint measurement.
Insurance underwriting
NN aims to reduce the risks of climate
change to society and the economy while
also contributing to a more sustainable
future for all. The objective for our
underwriting portfolio is to become net-
zero by 2050 at the latest. Our approach
is threefold:
1. Decarbonisation of our underwriting
portfolio by reducing insurance-
associated GHG emissions
2. Engagement in the value chain to
accelerate action to reach net-zero in
the real economy
3. Insuring climate solutions to play our
part in enabling the transition to a net-
zero economy
We see engagement and insuring
climate solutions as essential
approaches to reach GHG reductions
in the real economy and subsequently
decarbonisation in our underwriting
portfolio. For more details on our efforts
to transition to a low-carbon economy,
refer to the Climate Action Plan 2023
Update on the NN website.
NN Non-life
In our approach to reach net-zero
insurance underwriting by 2050, we
are aiming to achieve net-zero, and
enable and influence change in the
real economy. Therefore we have set
intermediate targets for 2030: (i)
decarbonisation for our underwriting
portfolio, (ii) engagement in the
value chain and (iii) insuring the
transition. Reducing insurance-
associated emissions is an important
step in realising a net-zero insurance
underwriting portfolio by 2050.
Read more about what we do to help
customers address societal and
environmental challenges on page
35. As an overall target, NN Group
strengthened its coal policy for insurance
underwriting which was first developed
in 2019. NN Group does not provide
insurance services to companies that
Impact on society continued
NN Non-life acceptance team
NN Group is committed to educating
and informing our intermediaries
and clients on reducing their carbon
emissions and developing their
transition plans. Netherlands Non-
life has set up a dedicated insurance
underwriting team, the climate
acceptance team (klimaat-
acceptatieteam), consisting of advisors
and clients to work on new initiatives
and to enable the possibility to
provide insurance. This team assists
in lowering the complex technical
efforts needed and helps innovate
at an early stage. The team focuses
on sustainability-related risks and
conducts annual research into net-zero
climate risk technologies to improve
our knowledge of new possibilities for
products and services aiming for a net-
zero economy.
Targets for NN Non-life underwriting portfolio
By supporting the transition to a
low-carbon economy, NN can help to
reduce the risks of climate change to
society and the economy, while also
contributing to a more sustainable
future for all. The objective is to become
net-zero in our underwriting portfolio
by 2050 latest. In our approach, we
aim to enable and influence change
in the real economy while taking just
transition factors into account.
To establish insurance underwriting
reduction targets, it is important
to adopt a mutually agreed method
for quantifying relevant emissions.
We therefore adopted Partnership for
Carbon Accounting Financials (PCAF)
methodology to measure insurance-
related emissions and built our first
set of intermediate reduction targets
for 2030: (i) decarbonisation for our
underwriting portfolio, (ii) engagement
in the value chain and (iii) insuring
the transition. Specifically, we have
set an intermediate carbon reduction
target of -26% by 2030 compared to
2022 figures for our Dutch Non-life
commercial lines portfolio, in scope
of the current PCAF methodology.
We have not yet set an interim target
for Personal Motor. A considerable
proportion of NN’s private motor
portfolio is second-hand vehicles,
so the potential for reducing GHG
emissions will be delayed until electric
vehicle introductions filter down to the
second-hand market. Considering the
just transition, the second-hand car
segment is also essential for many
Dutch households for whom mobility
is crucial from a social inclusion
perspective, but who cannot afford
new (electric) cars.
We additionally aim to increase our
efforts to engage with clients and
intermediaries to initiate concrete
steps that will drive the transition.
We have implemented a dedicated
insurance underwriting team focusing
on new sustainability-related risks,
for which we do not already offer an
insurance solution. Insuring these
new risks both helps our clients and
enables the transition to a sustainable
economy. We also improve our
knowledge on new technologies and
possibilities for products and services
aiming for a net-zero economy.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
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NN
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accounts
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derive their revenues from thermal coal
mining or unconventional oil and gas.
Exempt from this policy for coal exclusion
is our marine cargo business where
this includes package and company
insurance. This decision will not apply
to the provision of products or services
if they are intended for the benefit of
employees, such as pension products
and workers compensation.
NN Life & Pensions
We acknowledge we can also have
impact with our life and pensions
business. Within NN Life & Pensions,
a specific ESG policy, in line with the
NN Group Responsible Investment
(RI) policy, is tuned to the product
characteristics and client needs of the
Defined Contribution pension products.
Assets under Management in scope
per year-end 2023 are EUR 32.7 billion.
To raise awareness around climate
change, we provide our customers with
Impact on society continued
For the corporate investment portfolio, NN Group developed
a methodology that uses the six alignment criteria in the
IIGCC Net-zero Investment Framework:
1. Ambition: a long-term goal consistent with achieving
global net-zero by 2050 or sooner
2. Targets: short- and medium-term emissions reduction
target (scope 1, 2 and material scope 3)
3. Emissions performance: current emissions
intensity performance
4. Disclosure: disclosure of scope 1, 2 and material
scope 3 emissions
5. Decarbonisation strategy: a quantified plan setting out the
measures that will be deployed to deliver GHG emissions
targets, proportions of revenues that are green and,
where relevant, increases in green revenues
6. Capital allocation alignment: a clear demonstration that the
capital expenditures of the company are consistent with
achieving net-zero emissions by 2050
Using these six criteria, we categorise the companies in the
portfolio according to their alignment or potential to align
to a net-zero pathway, as follows:
• Achieving net-zero: companies that have current emissions
intensity performance at, or close to, net-zero emissions,
with an investment plan or business model expected to
continue to achieve that goal over time
• Aligned to a net-zero pathway: high-impact companies –
meeting criteria 1-6. Low-impact companies – meeting
criteria 2-4
• Aligning: high-impact companies – meeting criteria 2, 4,
and full or partial 5. Low-impact companies – meeting
criteria 2 and 4, or 3 and 4
• Committing to aligning: meeting criteria 1 by setting a clear
goal to achieve net-zero emissions by 2050
• Not aligned: no commitment to net-zero or data unavailable
Note: High-impact companies are defined as those
companies on the Climate Action 100+ focus list or covered
via the TPI company assessment.
NN Group has developed a data hierarchy to identify the
current and forward-looking data sources that best fit
each alignment criteria. However, such data can be limited.
So NN’s external asset manager also utilises research
to enhance their understanding and assessment of a
corporate’s alignment status. We expect our methodology
may change over time, as data quality, coverage and sources
evolve. For more on the data hierarchy see our Climate Action
Plan 2023 Update.
Paris Alignment categorisation framework for
corporate investments
an overview of the sustainability impact
of their invested premiums.
Own operations
As a financial service provider,
NN Group’s own operations have a
relatively limited direct environmental
impact, as we operate mainly in an office
environment. Nevertheless, we aim to
shrink our environmental footprint where
we can by reducing our use of natural
resources, seeking green alternatives,
and offsetting the remainder of our
GHG emissions. We are committed to
achieving net-zero GHG emissions for
our operations by 2040, with interim
reduction targets for 2025 (35%) and
2030 (70%) across three scopes:
scope 1 (natural gas and company cars),
scope 2 (district heating and electricity)
and scope 3 (business air travel).
Our targets for reducing scope 1 and 2
are more ambitious, as we have direct
influence over them. We also aim to
include other upstream scope 3
emissions, such as purchased goods
and services, waste and employee
commuting, by improving the
calculation methodology and data
gathering process.
To achieve our objectives, we have
implemented energy-efficiency measures
in our buildings, transitioned for new
vehicles to an EV fleet in the Netherlands,
and reduced our energy consumption.
We also support sustainable travel by
promoting public transportation and
cycling, as well as having online meetings
and replacing air travel with low-carbon
transport. For 2023, we had an increase
of 29% in the use of renewable electricity
to 15 gWh which was mainly driven by
a transition to renewable electricity
sources and an increase in electricity
usage in the Netherlands. We have
realised a reduction of 42% compared
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
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5 Managing
our risks
4 Creating value for
our stakeholders
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to 2019 for scope 1, scope 2: market-
based (based on energy procurement
contract) and scope 3: business air travel.
With these reductions, we are progressing
to reach our reduction target of at least
70% by 2030 to reach net-zero GHG
emissions by 2040.
To inspire sustainable consumption,
in the Netherlands we have adopted a
100% vegan food concept in our office
event space and increased the offering
of plant-based and vegetarian options in
our office restaurants. Furthermore, we
introduced the ‘True Price of food’, which
reveals the (hidden) environmental,
climate and social costs.
Despite obstacles, such as limited
options to reduce emissions as a
tenant and a lack of charging stations
in most of our countries, we continue
to reduce emissions where feasible
and offset residual emissions from
hard-to-abate sources through GHG
offsetting programmes.
Our approach on biodiversity
NN Group is committed to protecting and
restoring biodiversity and ecosystems
through our financing activities and
Impact on society continued
investments. As a signatory of the Finance
for Biodiversity (FfB) Pledge, we have
participated in several working groups of
the FfB Foundation, including contributing
to a paper on the interlinkages between
biodiversity and climate change.
Read more in the case study on
this page.
To promote best practices on biodiversity
across the organisation, in 2023
NN Group established a cross-functional
Biodiversity Working Group, with
representatives from Sustainability,
RI, Bank, Risk Management, Insurance
Underwriting and other business
units. In addition to overseeing
internal alignment, the working group
promotes knowledge exchange and
raises awareness of biodiversity among
NN’s broader stakeholder group.
In 2023, NN assessed the impact of
our Corporate Investment portfolio
(as part of NN's proprietary assets) on
nature using the ENCORE tool. This has
helped us identify priority sectors and
we have published the insights from
this assessment in a Biodiversity White
Paper. We also joined several engagement
programmes, including Sustainalytics’
Biodiversity & Natural Capital, Ceres’
Valuing Water Finance Initiative, and
Nature Action 100.
To set targets for biodiversity, we are
collaborating with other institutional
investors to develop an FfB-inspired
target-setting framework that we expect
to be finalised in 2024. We will continue
to work on embedding biodiversity
within our strategy and governance,
increasing internal knowledge sharing, and
developing the first set of targets for our
corporate investment portfolio in 2024 in
line with the Taskforce on Nature-related
Financial Disclosures (TNFD).
Our approach to human rights
We have a responsibility to do business
while respecting human rights, as outlined
in our NN statement of Living our Values.
We see respect for human rights as
a minimum standard for responsible
business and across our value chain.
New guide bridges biodiversity and
climate change integration
The FfB Foundation has released
Unlocking the biodiversity-climate
nexus, a guide to help financial
institutions integrate biodiversity
into their climate change strategies,
using practical recommendations and
sector examples.
The guide outlines the synergies
and trade-offs between climate and
biodiversity in investment solutions,
covering areas such as alternative
energy, regenerative agriculture, the
circular economy and nature-based
solutions. For example, it describes how,
to effectively support biodiversity, it is
crucial to finance high-impact sectors
like agriculture and green infrastructure.
It also explains how conventional
equity investments and direct
lending alone may not be sufficient.
Private debt and equity markets can,
for example, support R&D investments
in agriculture that finance the
specialised telecom infrastructure
required for precision agriculture,
including a local IoT (Internet of
Things) to control efficient irrigated
agriculture, 5G for drones-based field
surveillance, LEO satellites for remote
areas agriculture planning, and SWAT
water mapping and integrity indicator
assessments. (Source: McKinsey
and Company)
• Non-
discrimination
and equality
• Equal pay
• Data privacy
and security
• Financial
inclusion
• Non-
discrimination
and equality
• Living wage
• Child labour and
forced labour
• Equal pay
• Freedom of
association
and collective
bargaining
Business
partner
Service
provider
Investor
Employer
NN's
role
Salient human
rights issues
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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Impact on society continued
The principles contained in the UN Guiding
Principles for Business and Human
Rights (UNGPs) and the OECD Guidelines
for Multinational Enterprises guide us
in implementing human rights in our
business activities and interaction with
stakeholders. Our detailed Human Rights
Statement outlines our commitments
and is published on our website.
In 2023, we continued to enhance our
human rights approach by conducting a
salience assessment, as well as a CSRD
human rights due diligence assessment.
Salient human rights issues are those
human rights at risk of the most severe
and likely actual or potential negative
impact on people across the value chain.
Examples of salient human rights issues
are forced labour, and discrimination and
harassment. It is important to note that
salient human rights issues can vary from
company to company. This assessment
was a part of our compliance with the
UNGPs and it helped us to identify where
we have the greatest potential adverse
impacts on people. We examined our roles
as an employer, investor, financial services
provider and business partner; see the
chart on the opposite page. To ensure a
comprehensive assessment, we consulted
with internal and external stakeholders,
including NGOs, peers, researchers and
financial market supervisors.
Going forward, we aim to further embed
human rights due diligence across our
roles through policy development,
monitoring and tracking adverse impacts,
and working on access to remedy. We will
continue our human rights efforts in
line with the UNGPs as well as the OECD
Guidelines for Multinational Enterprises,
by advancing our knowledge of potential
negative impacts, using leverage and
through awareness in our interactions
with stakeholders. Furthermore, we
acknowledge the link between human
rights and topics such as climate change
and biodiversity. We are currently
investigating how to integrate criteria
on a just transition in our activities.
Read more on page 45.
Respecting human rights in procurement
For many of our suppliers, we are a
key client and we try to work together
to drive socio-economic issues and
inclusiveness through our supply chain.
During the supplier qualification process,
suppliers are asked to share details of
their labour policy so we can be sure
there are appropriate working conditions
for their employees. We also mitigate
human rights risks in our supply chain by
asking suppliers to disclose measures
taken to exclude modern slavery and
human trafficking from their own
business and in their supply chain.
Community Investment
Supporting our communities in
their well-being
We contribute to the financial, physical
and/or mental well-being of the people
in the communities in which we operate,
Overview of our contributions to society (amounts in EUR) 2023 2022 2021
Cash contributions 16.0m 9.7m
In-kind donations (monetised) 384k 166k
Volunteer hours (monetised at EUR 50 p/h) 2.0m 1.5m
Management costs 1.6m 1.4m
Total contribution 20.1 m 12.8m 8,000
% of operating results before tax¹ 1.10% 0.70% 0.40%
People supported with financial well-being 120,705 63,870
People supported with physical and mental well-being 50,896 165,409
Total number of people supported² 171,601 229,279 21,525
Cumulative progress on target of people supported
2
(2022-2025)
400,880 229,279
Fighting poverty
and debt in
our communities
Only a quarter of the Dutch
population is considered financially
healthy, with nearly 1.1 million
Dutch people living in poverty and
1.5 million households behind
on debt payments*. Through the
‘Stronger Together Against Poverty’
programme, in 2023, we
supported six alliances of local aid
organisations in Amsterdam Zuid-
Oost, Den Haag, Haarlemmermeer,
Utrecht and Oldambt.
The organisations received funding
and additional support through
knowledge-sharing sessions and
action research by Hogeschool van
Amsterdam. The programme was
founded by NN and Oranje Fonds in
November 2022 and strengthens
local strategic collaborations that
provide debt relief and financial
support services to people living in
poverty and with problematic debt.
The programme aims to help 9,100
people become financially resilient
by 2025.
* Netherlands Bureau for Economic Policy Analysis.
in particular those whose well-being is
under pressure or at risk. Looking after
one another, especially in difficult or
changing times, is rooted in who we are as
a business. We believe that with positive
support, people can move from a situation
with little perspective to one where they
feel they matter and are able to thrive.
In 2023, we reached our target to
contribute 1% of our operating result
before tax to our communities, which
was part of our strategic commitment
to society. Going forward, we will keep
investing in our communities and aim
to support the financial, physical and/
or mental well-being of one million
people by 2025. We are committed
to transparency and use the Business
for Social Impact (B4SI) standards
and framework to disclose our cash
1 Based on the average of 2020-2022 results.
2 Number of people supported in 2021 does not count towards the new target of supporting 1 million people (2022-2025).
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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2023 Annual Report
contributions, in-kind donations and
volunteer hours (both monetised),
management costs and output. For more
on the specific activities within our
programme, and further notes on the
community investment indicators
used, please read our NN Community
Investment Overview 2023, published on
the NN website.
A year of social impact
Supporting earthquake victims in Turkey
In 2023, large earthquakes struck
south-eastern Turkey, northern Syria
and Morocco, causing widespread
damage. In response to the earthquakes’
devastating impact, NN Group made
donations of over EUR 460,000 in
humanitarian aid to the Red Cross and
the Turkish Foundation of Anatolian
People and Peace Platform (AHBPAP).
This included donations by colleagues
that were matched by NN. At the end
of 2023, NN Group set up a disaster
relief fund with the Red Cross that
enables a timely and effective response
to disasters affecting NN markets.
NN Group donated over EUR 1,950,000
to the fund, for a total of over
EUR 2.4 million in humanitarian aid
in 2023.
Financial well-being
Together with some of our longstanding
charitable partners, and by extending
strategic collaborations, we continued
to support people in improving their
financial well-being, especially in
terms of economic opportunities and
financial empowerment.
Cash contributions: EUR 9.4 million
Total volunteer hours (monetised): EUR
1.1 million
Total people supported: 120,705
Physical and mental well-being
In 2023, we continued to put greater
focus on physical and mental well-
being. In the Netherlands, in addition
to providing access to health services
and addressing loneliness, we worked
on a new fund for mental well-being
to support the mental resilience of the
next generations.
Cash contributions: EUR 6.3 million
Total volunteer hours (monetised): EUR
695,050
Total people supported: 50,896
Volunteering via NN
NN employees have the opportunity to
support our non-profit partners within
working hours with hands-on volunteer
and fundraising activities, and through
more skills-based and strategic support
to strengthen their organisational
capacity. Volunteering mostly takes place
within our strategic themes, with 4,619
hours outside these themes.
Total volunteer hours (monetised): EUR
2,022.35
In 2023, we organised our third Your
Community Matters Week, aimed at
deepening our involvement with our
local charitable partners. We increased
the number of volunteers by 23% and
volunteer hours by 51% compared
with 2022.
Colleagues participating: 3,215
NN markets: 10
Total volunteer hours (monetised): EUR
438,300
Charities supported: 35
Driving social innovation
The NN Social Innovation Fund, which
is committed to supporting early-stage
social enterprises focused on increasing
financial, physical and/or mental
well-being, has invested in Shaping
Impact Group’s SI3 Fund. The fund is
dedicated to reducing inequality and
contributing to a world where no one
is left behind. They invest in improving
equal opportunities for one million
people close to home (in Western Europe
and particularly Benelux), so they can
participate meaningfully in society.
Other initiatives
Other contributions included ad-hoc
donations and volunteer support
to activities that are outside the
scope of our core programmes but
nevertheless important, such as climate-
related activities.
Total cash contributions: EUR 0.8 million
Total volunteer hours (monetised): EUR
230,950
Going forward
In 2023, we developed a more refined
impact framework to enhance our
accountability and transparency and,
more importantly, help us to increase
the impact we have through our
programmes. In 2024, we will implement
this framework, launch new global
programmes and continue to seek the
balance between scale, breadth and
depth-of-impact while supporting at
least 300,000 people.
Responsible tax approach
NN Group strives to be a responsible
taxpayer. In our Tax Policy and Principles
of Conduct, we have laid down the
principles of behaving responsibly,
meaning timely paying our fair share
of taxes in the countries in which we
operate. We publish our Tax Policy and
Principles of Conduct on our website.
We make note that NN Group endorsed
the VNO-NCW Tax Governance Code and
that we comply with the principles as
provided therein.
NN Group considers taxation a
sustainability matter. We believe that
being a responsible taxpayer is part
of good corporate citizenship. We see
taxes as a contribution to society in
the countries in which we operate,
both through our own tax payments
and through collection and payment of
third-party taxes. Further, we recognise
that taxes are vital for sustainable
development of people and planet, either
as a source of income to finance the
transformation or as an instrument to
influence behaviour.
One of our principles is tax transparency.
We are transparent about our
approach to tax and our tax positions.
Disclosures are made in accordance with
reporting requirements and standards.
Disclosures can also derive from the
information needs of stakeholders or
to support the dialogue on taxes with
governments, business groups or
Impact on society continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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figures
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NN
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accounts
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The table provides an overview of how we are striving to contribute to the SDGs
Healthy living
Ambitions and targets Performance 2023 Material topic
SDG 3 Good health and
well-being
Ensure healthy lives
and promote well-
being for all at all ages
Contribute to the physical and
mental health of our colleagues
For 2023, we aimed to contribute 1% of
our operating result before tax to local
communities. With these resources, we aim
to support the financial, physical and/or
mental well-being of one million people
by 2025
Employees are accustomed to
hybrid working and continue to
be satisfied with the NN Way of
Working policy, with a survey in
early 2023 scoring it 8.5 (2022:
8.1). Compared to survey results
before the Covid-19 pandemic,
hybrid working has increased
colleagues’ job satisfaction and
work-life balance
Cash contributions: EUR 6,260,290
Volunteer hours monetised:
EUR 695,050
People supported: 50,896
Working
conditions
Community
investments
Sustainable planet
Ambitions and targets Performance 2023 Material topic
SDG 7 Affordable and
clean energy
Ensure access to
affordable, reliable,
sustainable and
modern energy for all
Increase our investments in climate
solutions with an additional
EUR 6 billion by 2030
We have invested > EUR 5 billion
in climate solutions since 2021,
making total holdings in climate
solutions EUR 10.8 billion
Climate
change
mitigation
civil society. To help our stakeholders
understand the way that we contribute
to society, we have published a Total
Tax Contribution (TTC) Report since
2019. This report provides country-
by-country information on the types of
taxes that we pay and collect and pay
on behalf of tax authorities. NN Group
has been consistently recognised for
its commitment to tax transparency,
receiving the VBDO Tax Transparency
Award among Dutch listed companies
from 2019 to 2022 and ranked in second
place among 51 Dutch listed companies
and 65 EU listed companies in 2023.
Our TTC Report 2023 is published on
our website.
Contributing to the SDGs
We strongly believe the public and
private sector should work together
to help achieve the Sustainable
Development Goals (SDGs). We have
highlighted the SDGs where we can
have the biggest impact through our
products and services, investments
and community programmes.
We have also sharpened our focus
on reaching these goals through a
multistakeholder approach, and believe
we can have the biggest impact on three
interrelated themes:
• Healthy living: NN Group’s efforts to
realise opportunities, manage risks
and mitigate adverse impacts related
to social factors, including rights,
well-being and interests of people and
communities, health, employee rights,
workplace health & safety
• Sustainable planet: NN Group’s efforts
to realise opportunities, manage risks
and mitigate adverse impacts related
to environmental factors, including
climate change, environmental
degradation, biodiversity loss,
animal welfare
• Inclusive economy: NN Group’s efforts
to realise opportunities, manage risks
and mitigate adverse impacts related to
social factors, including inclusiveness,
diversity, (in)equality
Impact on society continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
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NN
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accounts
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information
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Sustainable planet continued
Ambitions and targets Performance 2023 Material topic
SDG 12 Sustainable
consumption and
production
Ensure sustainable
consumption and
production patterns
Develop and offer products and services
that address the environmental challenges
our customers face (e.g. by developing new
products and services that contribute to a
low-carbon economy, or by helping
to insure our customers against climate-
related impact)
Introduction and scaling of
products and services with
environmental impact, such
as a greener housing market,
sustainable living and promotion
of climate-neutral transport, repair
networks
Circular
economy
for our
products
and
services,
Customer
needs and
satisfaction
SDG 13 Climate action
Take urgent action
to combat climate
change and its
impacts
Help accelerate the transition to a low-carbon
economy to limit the rise in average global
temperature to 1.5°C (e.g. by using a range of
levers such as engagement, capital allocation
to climate solutions, and phase-out and/or
exclusion policies)
We have published a
comprehensive oil and gas policy,
and an active ownership report in
which we describe our engagement
efforts. We also developed an
impact reporting framework for our
investments in climate solutions
Climate
change
adaptation
Reduce GHG emissions of our own business
operations by at least 35% by 2025, and 70%
by 2030 (compared to 2019)
Over 2023 we have reduced our
GHG emissions of our own business
operations by 42% compared to our
2019 emissions
Climate
change
mitigation
Inclusive economy
Ambitions and targets Performance 2023 Material topic
SDG 1 No poverty
Improving access
to sustainable
livelihoods,
entrepreneurial
opportunities and
productive resources
For 2023, we aimed to contribute 1% of
our operating result before tax to local
communities. With these resources, we aim
to support the financial, physical and/or
mental well-being of one million people
by 2025
Total cash contributions:
EUR 9,374,112
Total volunteer hours:
EUR 1,096,350
Total people supported: 120,705
Community
investments
Impact on society continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
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Inclusive economy continued
Ambitions and targets Performance 2023 Material topic
SDG 5 Gender equality
Achieve gender
equality and empower
all women and girls
Together increase diversity, inclusion and
equality in our teams; engage everyone, and
encourage them to be who they are, share
their voices and drive change
KPI 40% females by end 2023 on C-suite,
Including scenario analysis how to reach 40%
How do we interpret C-suite: Women in
senior management positions measures
the number of female employees expressed
as a percentage of the Management Board,
Management Board -1 management
positions and the managerial direct reports
to all business unit CEOs (Netherlands and
International Insurance business units)
Yearly equal pay analysis
Talent & Succession focused on
gender: 2x a year a Talent Review
on Management Board level & 1x a
year Succession Planning session
for Management Board -1 positions
in Management Board with strong
emphasis on gender equity
Career Centre initiated HR
Accelerator Project for group-wide
offboarding process to gain better
insights why talents are leaving
Further improvements to ensure
gender neutral job descriptions and
texts on website
Extended transition and parental
leave for LGBTQIA+ colleagues
Executive search companies
contract clause to have 50%
females on shortlists for senior
management positions
Diversity &
inclusion
SDG 8 Decent work and
economic growth
Promote sustained,
inclusive and
sustainable
economic growth,
full and productive
employment and
decent work for all
Employee engagement ≥ 8.0 by 2025
For 2023, we aim to contribute 1% of
our operating result before tax to local
communities. With these resources, we
aim to support the financial, physical and/or
mental well-being of one million people
by 2025
Employee engagement 7.8
The output reported under SDG 1
also relates to SDG 8. For more
details on the exact output, please
refer to the Community Investment
Overview 2023, available on our
website
Human
Capital
Development
and
attraction
Community
investments
Investments in EU SURE social
bonds, protecting employees and
the self-employed against the
risk of unemployment and loss
of income linked to the negative
economic impacts of the Covid-19
pandemic
Working
conditions
Impact on society continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
60
NN Group N.V.
2023 Annual Report
60
Code of Conduct
Founded on our company values and
developed in 2019, the NN Code of
Conduct and Managers Annex offers
clear guidance in a single comprehensible
document. The document aims to
educate employees on appropriate and
expected behaviour and actions. It is
directly linked with the NN Statement
of Living our Values, and other relevant
underlying policies and standards on
how we: interact with colleagues and
customers; deal with information and
(personal) data; deal with conflicts of
interest, fraud, bribery and corruption,
financial economic crime; use equipment
and the internet; and report and deal
with breaches.
Every year we review and update
the Code of Conduct and Manager
Annex, and the underlying policies
and standards. All internal employees
must annually acknowledge that
they understand the content of the
NN Code of Conduct, and can and
will apply the underlying policies and
standards. NN Managers must annually
acknowledge the Manager Annex.
Formal acknowledgement has been
mandatory for several years and in 2023
we achieved an acknowledgement score
of 100% (excluding staff on long-term or
sick leave). External employees and/or
contingent workers receive the Code of
Conduct as part of their contract.
Awareness and e-learning
We raise awareness among employees
around group-wide people and conduct-
related topics through e-learnings.
To support the initial implementation
of the NN Code of Conduct in 2019, we
launched an internal website, Conduct
Matters, in all local NN languages,
alongside several mandatory e-learnings
to raise risk awareness around
confidential/price-sensitive information
(Confidential Matters), market abuse/
insider trading (Trading Matters – all
NN insiders), bribery and corruption/
conflicts of interest (Conflicting Matters
– all local languages), Whistleblowing
Procedure (Speaking up matters – all
local languages), and use of data and
confidential information (Data Matters –
all local languages).
In 2023, we launched an e-learning on
financial economic crime (FEC) for all
NN employees in all local languages.
We also launched additional e-learnings
on FEC and sanctions specific for certain
target groups. In addition, we launched
the e-learning The Code, the Basics,
to improve knowledge of the NN Code
of Conduct and raise awareness on
recognising and knowing how to act in
integrity-sensitive situations. The above
mentioned e-learnings were rolled out
within the Netherlands in 2023, and will
be rolled out in the beginning of 2024 to
all international NN business units in all
local languages.
Digital Compliance Dashboard
In 2023, we continued the development
of the Digital Compliance Dashboard,
used in all NN business units as a step
towards a more data-driven compliance
function within NN. The dashboard uses
various data sources to create a detailed
overview of available information in
order to facilitate effective and efficient
compliance monitoring of various risk
areas such as conflict of interest, bribery
and corruption, financial economic crime
and product suitability. In addition, we
integrated relevant compliance risk
metrics into the Group Risk Dashboard.
In 2023, we developed the Integrity
Dashboard that was rolled out across
NN's footprint. It provides detailed
information for (first line) management to
raise awareness in teams on compliance
topics and monitor the awareness levels
and related behaviour of their team
members, such as a clear overview of
outstanding tasks regarding mandatory
e-learning and the mandatory Oath
for all employees (in the Netherlands
and Head Office) and other compliance
topics such as the numbers of insiders;
numbers and approvals of received
and offered gifts and entertainment;
possible related conflicts of interest;
number and approval of outside
positions and interests; and NN
Code of Conduct acknowledgement
percentages. Future focus will be
on increasing the general use of this
dashboard and actively monitoring use
among managers.
Effective Control Framework
maturity reflection
In January 2019, Group Risk and Group
Compliance launched the Risk Culture
Check-in, whereby all business units
perform a self-assessment of the risk
culture within their unit (including
the independent view of local control
functions) and cooperation with Head
Office control functions.
Since 2021, the Risk Culture Check-in and
the Maturity Assessment of business unit
control functions has been integrated in
the Effective Control Framework (ECF)
Maturity Reflection. The ECF Maturity
Reflection forms the basis for constructive
dialogue with NN senior management on
how we manage the risk culture within
the company and where we can improve.
The resulting 360-degree loop delivers
content to underpin the Employee
Conduct & Business Culture statement
within our risk management framework.
The process is led by Group Risk in close
cooperation with Group Legal and Group
Compliance. The ECF Maturity Reflection
is carried out across all business units
every two years, most recently in 2022
with the next scheduled for 2024.
Reporting misconduct
(whistleblowing)
By living up to our values, we create a
safe working environment for colleagues,
and protect the reputation and integrity
of our company. Not doing so may also
expose NN Group and its employees
to possible regulatory and/or criminal
liability. Internal reporting of potential
criminal and unethical conduct or
breaches of (local and European Union
(EU)) law by or within NN is vital for a safe
working environment in which everyone
feels welcome, valued and respected.
Whenever breaches of the Code of
Conduct or EU legislation are reported,
NN carefully reviews and assesses
whether further investigation or action
is needed.
NN uses the Speak Up system, which
enables every employee and certain
external parties to report, if they wish
anonymously, a concern and/or breach
outside regular reporting channels
within NN Group. NN Group guarantees
Our Code of Conduct and other policies
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
NN Group N.V.
2023 Annual Report
61
various rights, including protection from
retaliation, for any employee or external
party who reports a concern/breach in
good faith in a work-related context.
Due to the introduction of new legislation
in the Netherlands in 2023, the definition
of whistleblowing was narrowed.
Reports that fall outside the remit of the
new definition will be followed up by NN
through alternative and aligned channels.
In 2024, the Compliance Function will
continue to raise awareness through
training and communication, within
the Netherlands and internationally,
in close cooperation with HR and
Communication departments.
2023 reported whistleblower cases
In 2023, we received whistleblower
reports from various parts of
NN Group, both in the Netherlands and
internationally. Reports are recorded
and numbers are periodically reported
by the Chief Compliance Officer to the
Management Board and Risk Committee
of the Supervisory Board.
Whistleblower cases 2023 2022 2021
Total reported 29¹ 17¹ 1
Investigated by CSI 3 2 1
1 Since 2022, the numbers of whistleblower reports as
shown in the table refer to the reports received within the
new Speak Up system.
In 2023, five disciplinary actions were
taken on reported whistleblowing cases.
Other incidents and concerns
For 2023, Corporate Security &
Investigations was involved with
48 cases in total (2022: 51). In five
cases, disciplinary measures (warning,
reprimand, termination of employment
or instant dismissal) were taken.
Employees are informed in writing of any
disciplinary measures.
CSI cases involving disciplinary
measures 2023 2022 2021
Fraud-related 3 1 0
Unethical behaviour 2 1 2
Conflict of interest 0 0 0
Total 5 2 2
Product approval and review process (PARP)
and customer golden rules
The demand for transparent,
simple products from the financial
services industry continues to grow.
Customers expect value for money,
transparency, and products and services
that align with societal expectations and
legislative developments. Any new or
modified products or services are subject
to a thorough PARP to ensure they are
transparent and meet customer needs.
Our customer golden rules are an integral
part of the PARP:
• We strive to meet customers’ needs
throughout their life cycle
• Offer fair value to customers
• Explain the risks, returns and costs of
our products and services
• Regularly assess products, services
and distribution practices
• Only work with professional and
licensed distributors
At the end of 2022, the EU European
Insurance and Occupational Pensions
Authority (EIOPA) published the
regulatory toolbox, Value for Money
for Unit Linked (UL) and a warning
regarding Credit Protection Insurance
(CPI) products. NN has implemented new
specific principles derived from Value for
Money in our Product Policy and PARP
templates. In 2023, we noticed more
regulatory focus on Product Oversight
and Governance (POG) and NN followed
up on reviews and investigations done
by regulators derived from the Value for
Money toolbox.
Product insight
Implementation of the extensive changes
to the Sustainable Finance Disclosure
Regulation (SFDR) and related Insurance
Distribution Directive (IDD) were
completed in 2023. This was a focus
area within NN and across our industry.
To support the SFDR disclosures
throughout NN Group, Finance Service
Centre developed a centralised data
solution, the ESG Central Data Platform,
for making SFDR calculations. A SFDR
Guidance Committee and User Board
were installed to further mature the
reporting process and address any
required regulatory changes to current
processes or methodology.
Our Unit-Linked dashboard was
optimised for our investment products,
giving insight into all Unit-Linked Asset
Managers, funds offered on risk levels,
SFDR classification, fund returns and
the performance of funds available
within NN. The dashboard is a first
step in enabling us to demonstrate
that our fund offering is effectively
managed in the best interest of our
customers. In 2023, Group Compliance,
Group Legal and Group Risk executed
a deep dive into sales quality within
NN Insurance Europe. High sales quality
is key to securing customer interest and
providing easy-to-explain, transparent
products. The good practices resulting
from the deep dive will be implemented
throughout NN. In the fourth quarter of
2023, NN started a review of the PRIIPS
KID (Packaged Retail Investment and
Insurance products, Key Information
Documents) to assess the balance
between expected client return and
total costs.
Data privacy
We are aware of the need to strike an
appropriate balance between individual
choices, privacy and social responsibility.
With digitalisation continuing rapidly,
we are conscious that to safeguard the
privacy of our customers, it is more
important than ever to secure their
personal data and handle it responsibly.
We do this by complying with legislative
data protection requirements, of
which the EU General Data Protection
Regulation (GDPR) is the most important.
In our privacy statement we explain how
we have translated the GDPR into our
day-to-day operations. We ensure the
careful processing of (personal) data by
providing trainings for our employees
and regularly update information on our
intranet. In 2023, all employees within
the EU were requested to complete the
mandatory GDPR e-learning (Privacy
Matters) as a follow-up to a previous
mandatory GDPR e-learning.
Our DPO Charter provides a mandatory
framework that establishes the
function of Data Protection Officer
(DPO). NN Group and its business
units within the EU have appointed a
DPO, who is assigned a clear mandate
Our Code of Conduct and other policies continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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and responsibilities in line with the
DPO Charter and the GDPR. Our DPOs
continuously monitor compliance with
the GDPR, and act as contact points
for supervisory authorities and data
subjects. The DPOs monitor the number
of complaints and data breaches.
These numbers are currently within an
acceptable range.
Artificial intelligence
For years now, data has been a
vital element of serving customers
effectively. In the past year, there has
been a tremendous worldwide focus
on the possible use cases of artificial
intelligence (AI). We believe using AI
will have a significant impact on our
data processing, from straightforward
document handling processes to the
most complex processing of (personal)
data. Using AI, along with other
strategies and tools, to analyse customer
propositions helps us strengthen our
relationships with customers, forge
more intuitive partnerships and create
superior tailor-made solutions. Our data
and AI analysis is currently focused on
product/market optimalisation, process
efficiency, and fraud and claim analytics
and we are exploring other use cases.
It is vital that for all AI use cases that
the application is trustworthy by design.
We developed the NN AI Guidelines
to facilitate the development and
use of AI in a trustworthy manner.
These ethical guidelines are based on
the seven requirements of trustworthy
AI, as set out in the Ethics Guidelines
for Trustworthy AI by the European
Commission in 2019.
We have closely monitored the
development of the European AI Act.
In 2021, a draft was published, which
was then discussed in the European
Parliament in June 2023 and eventually
politically agreed upon at the end of
2023. During the course of 2023, NN
took relevant steps by embedding its
ethical guidelines within NN Group
governance. We also established an
AI Working Group that validates all AI
systems or models to be used within NN,
with reference to the NN AI Guidelines,
thereby focusing on relevant aspects
of trustworthy AI, such as lawful
processing of personal data, preventing
bias and discrimination, and appropriate
assessment of ethical dilemmas.
This means we are also deploying AI
in line with the Ethical Framework for
data-driven applications of the Dutch
Association of Insurers (Verbond van
Verzekeraars). As soon as the AI Act is
in final form, NN will take any additional
steps necessary to comply with the
Act. NN also monitors other relevant
upcoming legislation, such as the
proposed AI Liability Directive, along
with any supervisory guidance in relation
to the use of algorithms.
Financial economic crime
For NN, combating financial economic
crime (FEC) is not a mere obligation. It is
a way to protect society, including our
customers, against criminal activity.
FEC covers the risk of money laundering,
financing of terrorism and breaching
applicable sanctions regimes. As a
corporate citizen, NN Group takes its
gatekeeper role to protect the integrity
of the financial system very seriously.
This commitment is reflected in our Risk
Appetite Statement regarding sound
business conduct and in the NN Group
FEC Policy. The FEC framework sets out
mandatory minimum requirements to
detect and prevent FEC, and is based
on applicable international, European,
Dutch and local laws, regulations
and guidelines.
In 2023, we continued building a
strong FEC framework. An important
milestone was introducing the updated
FEC Policy. In addition, FEC governance
was formalised to enable a local FEC
Compliance Officer to report directly to
their FEC Responsible Board Member and
local management team, and to inform
NN Group boards and the FEC Centre of
Expertise within Group Compliance on
FEC issues.
In addition to the overarching Enterprise
Risk Management (ERM) Report, the FEC
report provides valuable new insights
into progress on FEC remediation, issues
and impediments and contributes to
increased awareness and knowledge
within the business units. In the
Netherlands, the framework has been
further strengthened through a specific
programme focusing on optimising and
remediating the Dutch business units’
overarching processes. In addition, FEC
awareness and training remains a key
element in maintaining a robust FEC
Compliance framework. A group-wide
programme was therefore implemented
in the Netherlands and international
business units. Looking forward, we will
continue our efforts to maintain a strong
FEC framework, by training relevant
employees, executing a group-wide risk
assessment, and performing deep dives
where deemed necessary.
Unit-linked products in the Netherlands
In the Netherlands, unit-linked
products have received negative public
attention since the end of 2006. As of
31 December 2023, the portfolios of
Nationale-Nederlanden comprised
approximately 290,000 active unit-
linked policies. On 9 January 2024,
NN announced a final settlement with
interest groups ConsumentenClaim,
Woekerpolis.nl, Woekerpolisproces,
Wakkerpolis and Consumentenbond
regarding unit-linked products sold by
Nationale-Nederlanden, including Delta
Lloyd and ABN AMRO Levensverzekering.
Read more in Note 43.
Our Code of Conduct and other policies continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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NN
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Our risk strategy helps us to
balance between minimising the
negative impact of risks, while
maximising our potential to
deliver on our commitments to
our stakeholders.
5 Managing our risks
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
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NN
8 Annual
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9 Other
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2023 Annual Report
Managing our risks
Risks represent potential future events that could adversely impact our
business performance and achieving our strategic targets. Strong risk
management helps us monitor developments in our operating environment
and act where necessary.
Introduction
This section covers the following topics:
• Risk control cycle (pages 64–69)
• Risk profile, with a focus on material
risks as established by NN Group’s
Management Board (pages 69–72)
Read more detail on how we manage
sustainability and climate change-
related risks on pages 73-78. Details on
our financial risk profile can be found in
Note 50.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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2023 Annual Report
Risk taxonomy
NN Group has defined and categorised its risk landscape in a risk taxonomy:
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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Managing our risks continued
Risk taxonomy (continued)
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
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2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
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Managing our risks continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
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Managing our risks continued
The 2023 Strategic Risk Assessment identified ten key risks
(ranked by relative importance):
Rank Key risk Risk class Risk level (vs 2022)
1 Cyber (security) risk Technology Risks
2 Climate change – physical
risk for liabilities**
Underwriting & Pricing Risks
Emerging Risks
3 Climate change – transition
risk for assets**
Emerging Risks
Market Risks
4 Sustainable cost levels Strategic Risks
Underwriting & Pricing Risks
5 Model risk** Strategic Risks
6 Regulatory environment Strategic Risks
7 Geopolitical instability Emerging Risks
8 Recession Market Risks
9 Inflation Market Risks
Pricing & Underwriting Risks
10 Product suitability Product Suitability Risks
* The audit scope referenced on page 64 ends here. ** New risks in 2023, compared to 2022.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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NN Group N.V.
2023 Annual Report
stock-interest and first-loss risk and third-
party damage coverage. Furthermore,
through implementation of the Digital
Operation Resilience Act, which came
into force in January 2023, NN Group will
further strengthen the resilience of its
digital operations.
Climate change – physical climate
risk for liabilities
Changes in weather patterns,
temperature, hydrological conditions
or natural ecosystems, affecting
the frequency or severity of natural
disasters(suchasflooding,heatwaves,
droughts, windstorms), potentially
impacting properties and businesses
or increasing chronical diseases
orcasualties.
The physical effects of climate change
are visible around the world, with
rising temperatures and sea levels,
and more frequent and severe natural
disasters such as heatwaves, heavy
precipitation, droughts and storm
surges. These changes are expected
to continue and intensify in the coming
years, leading to risk of increased liability
impacting, for example, our property
insurance products and, potentially,
excess mortality, driving up health and
life insurance claims in the longer run.
NN Group has developed a Climate
Risk Assessment (CRA) to identify,
assess and prioritise the physical and
transitional risks of climate change for its
balance sheet components. Read more
on page 73. Our Non-life business helps
customers take preventive measures,
monitors claims experience, adjusts
pricing and policy conditions, and uses
catastrophe models it has developed for
underwriting. NN also has a group-wide
catastrophe reinsurance programme.
Climate change – transition risk for assets
(In)directfinanciallossesto
investments and/or lower investment
returns resulting from the transition
to a lower-carbon/green economy,
which may adversely affect individual
businesses, sectors or the broader
economy.Inaddition,thereisthe
risk that governments, businesses
and individuals fail to enforce, enact
or invest in effective climate-change
mitigation measures, such as the
decarbonisation of economic activity,
and therefore are not able to meet the
regulatoryESGambitions.
Transition risks arise from the shift
towards a low-carbon economy,
and associated market and policy
developments. This may have a profound
impact on the financial performance of
companies across a range of industries.
Some industries, such as renewable
energy and electric vehicles, will likely
benefit from the transition while others,
such as fossil fuel extraction and energy-
intensive manufacturing, may face
significant challenges.
NN Group monitors, manages and
assesses transition risk through the four
transition risk sub-categories, as outlined
in the Task Force on Climate-related
Financial Disclosures (TCFD): policy,
technology, market and reputational
risks. We regularly review and update
the company's climate strategy and
risk management processes. We also
engage with stakeholders to ensure we
stay abreast of the latest developments
transitioning to a low-carbon economy.
Through our role as a large institutional
investor, NN aims to positively impact
sustainability matters. We have developed
asset-class-specific strategies for
the investment portfolio, including (i)
greenhouse gas emission (GHG) reduction
for the corporate investment portfolio
(25% by 2025 and 45% 2030) and (ii)
a target to increase climate solutions
investments by at least EUR 6 billion by
2030. Additionally, NN actively contributes
to industry bodies to define standards on
sustainable and responsible investments
and underwriting, and has endorsed
various initiatives. We are deploying
qualitative and quantitative scenarios to
further understand impact of both physical
and transitional risks, both during the
business plan period as well as beyond.
Sustainable cost levels
Risk of expenses levels remaining at a
too high level compared to competitors,
for both the closed book (not managing
cost in line with run-off of the books)
andnewproducts.Expenselevelsare
increasingly under pressure due to,
among others, increasing supplier costs
andincreasedpressureonsalaries.
To remain competitive, NN Group needs
to align its revenues and cost base for all
businesses. For example, for Netherlands
Life, improving IT systems and efficiency
is important both to keep cost levels in
line with the run-off pace of the closed
books and to grow further DC business
profitably. Overall, NN Group faces
additional costs related to, for example,
Financial Economic Crime and ESG
implementation, while inflation is driving
higher costs of procured services and
lower than expected cost savings.
NN reduces future expenses through
projects related to digitalisation and
product rationalisation, a simpler
organisation and IT simplification.
We leverage scale where possible
and employ an Agile Way of Working
where beneficial.
Managing our risks continued
Emerging risks are external risks
that cannot yet be fully assessed or
quantified but that could in the future
affect the viability of NN Group’s
strategy. They are relevant for NN Group
because they can accumulate over time
and they can be difficult to link to a
specific cause. In 2023, NN Group was
a chair of the Emerging Risk Initiative
within the CRO Forum. The CRO Forum
Emerging risks
brings together a group of European
chief risk officers (CROs) from insurance
companies who share ideas and
benchmark risk management practices.
The Emerging Risk Initiative identifies
and communicates emerging risks
that may have significant impacts on
the industry within the next ten years.
By monitoring emerging risks through
the Risk Radar, we can develop products
and services that help our customers to
insure themselves against new risks.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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Managing our risks continued
Model risk
Risk of reliance in decision-making on
our internal model, which can be invalid
ormis-specifiedforthepurposesthatit
is used for, leading to wrong decision-
making or undesired movements of the
NNGroupSolvencyIIratio.
For the purposes of calculating the
SCR, NN applies a PIM for the Dutch
insurance entities as it better reflects
their risk profile. Besides the strengths
the PIM has some limitations since
models rely on assumptions and expert
judgement which are essentially the
sum of NN Group’s current knowledge
and experience used to construct
an approximation of the underlying
risk drivers. The limitations should
be considered in the context of
measuring capital requirements, using
PIM in risk management and making
business decisions.
To manage model risk in a proper way,
1) NN Group takes a proactive approach
to identifying and mitigating the PIM’s
potential shortcomings; 2) applies strict
model governance, including regular
monitoring and validation of the model
performance; and 3) conducts other
assessments, such as sensitivity
analysis, stress testing and
scenario analysis.
Regulatory environment
Risk of adverse regulatory change,
increased supervisory scrutiny or
regulatory overload, which may have a
profound impact on our business model,
performance or ability to dedicatedly
work on own innovation or strategic
initiatives(e.g.moresevereSII
regulation, scrutiny on internal model
(diversification),FinancialEconomic
Crime,sustainablefinancelegislation).
Ongoing regulatory changes and topics
subject to additional supervisory
scrutiny might affect our business model,
solvency position or business operations.
Such regulatory developments include
new pension regulations in the
Netherlands, changes to the Solvency II
framework and new regulations
regarding sustainability.
Our capital position might be impacted
by further changes to the Solvency II
framework (e.g. the Solvency II 2020
review) or supervisory scrutiny in areas
such as the internal capital model.
The Solvency II review is expected to
have a positive impact on the Solvency
II ratio in certain areas, such as the
design of the Volatility Adjustment and
Risk margin. However, the legislative
proposals also include potentially
negative areas for NN and the industry
(e.g. changes to the extrapolation of
the risk-free curve, changes to the risk
correction, introduction of the enhanced
prudency principle, and extended powers
for supervisors). Actual implementation
of the changes is not expected before
2026 with a phase-in mechanism
until 2032.
A major sustainability regulatory
development is the EU Sustainable
Action Plan, which requires significant
efforts to implement. NN Group has a
Taskforce Sustainability in Business
(TFSB) to implement the requirements
from, for example, the Corporate
Sustainability Reporting Directive
(CSRD).
We follow the development of (future)
regulations closely so we can take
timely action. NN proactively maintains
relationships with regulators and
supervisors, and assesses and regularly
calculates the potential impact of
regulatory changes on our solvency
position and risk profile.
Geopolitical instability
Escalation of geopolitical tensions
in the world, primarily between the
USandChina(e.g.furthermilitary
escalation around Taiwan) which
may lead to Europe being squeezed
between two power blocks which
mayleadtoeconomicimpacts(e.g.
disruption of supply chains, availability
of resources) as well as diversion
ofresourcestomilitarygoals(e.g.
increasedNATOspending).
Geopolitically, more and more
alliances are forming worldwide,
with no clear demarcations between
countries and different power blocks/
international alliances.
The Russia-Ukraine war has increased
uncertainty around the future course
of the economy and our operating
environment. Although this crisis
can develop in different directions,
the most likely outcome seems a
protracted conflict with no clear winner.
Furthermore, there is continuing
US-China tensions, both military and
economic, with potential side effects
for their allies (for example, sanctions
or other trade barriers). For the EU,
complete de-coupling from China
seems unrealistic and the EC is working
on a de-risking plan, despite lack of
clarity on what this specifically means.
The recent Israel/Hamas conflict only
adds to existing geopolitical tensions,
and further complicates international
political relations and increases
economic uncertainty.
NN does not have direct business
activities in Ukraine, Russia, China
or Israel, and has limited direct
financial exposure to these countries.
However, the impact on our operating
environment and on NN will depend
on how geopolitical tensions
progress and/or escalate, which may
coincide with other inflationary or
recessionary developments.
So far, NN has experienced relatively
modest impact from these adverse
developments. In the short term, NN
should withstand the adversity of these
geopolitical tensions, given our strong
solvency and liquidity positions, and
current asset exposures: low direct
exposure to other financial companies;
relatively high asset duration; a low
duration gap; and a high allocation to
highly rated European countries that,
with relatively strong economies and
sovereign currencies, are considered
safe havens in times of crisis.
NN manages its asset exposures via
concentration limits on sovereign and
country exposures that are regularly
reviewed and monitored. We also
monitor the credit quality of portfolios
and deploy scenario analysis to better
understand our sensitivity to financial
market volatility.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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figures
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NN
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Managing our risks continued
Recession
Risk of central banks applying strict
monetary policies to battle current
inflationviainterestrateshikes,
leadingtoloweringofinflationbut
higher funding costs and tighter lending
conditions affecting, among others,
mortgage demand and long-term
OCG while increasing the likelihood
of a recession (negative GDP growth,
highunemployment).
Global supply chains have been under
pressure by the Russia-Ukraine conflict
and China-US trade restrictions. This has
led to steep energy and commodity price
rises in 2022, followed by broader price
increases and wage inflation in 2023.
Central banks worldwide responded by
increasing interest rates in 2022 and
2023 to combat inflation. It takes time
for inflation to subside and interest rates
may stay elevated, potentially resulting
in households and companies struggling
to cope with higher prices and borrowing
costs. The depth of a recession
ultimately depends on actual levels of
interest rates, debt levels of companies
and individuals, and the resilience of the
wider economy.
The risk of volatility in the financial
markets due to (geo)political instability,
global economic developments and
higher interest rates could have
consequences for the valuation of our
assets and liabilities, and lead to a more
volatile Solvency II ratio. Although we
observed significant volatility in the
markets in 2023, the total market impact
remained limited.
NN manages market risks within
risk limits and other boundaries set
within various policies and standards.
This ensures our investments are well
diversified and that exposure to risks
for which NN Group has no or a limited
appetite (e.g. interest rate, inflation and
foreign exchange risks) remains low.
We reduce interest rate risk by matching
asset and liability cash flows where
markets are deep and liquid. Additionally,
we reduce downside risk through
hedging programmes and our SAA is
designed to optimise capital generation
within acceptable risk levels.
Inflation risk
A combination of geopolitics, higher
energy and commodity prices, and
scarcity in some production factors is
creatinghighinflation,leadingtohigher
costs for households and businesses
andanaemiceconomicgrowth.Thereis
a rising inability among broad sections
of populations to maintain their
currentlifestyle.
Trade and geopolitical tensions, impact
from the Ukraine conflict and the cost
of shifting to a greener economy are
just some of the factors that may drive
energy, commodity and materials costs
up, affecting economic growth and
leading to the highest inflation rates
in decades. Although the inflation rate
decreased in 2023 compared to 2022,
due to falling fuel and food prices,
price pressure is still significant and
visible in the price of various products
and services.
The impact of inflationary developments
on our balance sheet and solvency
position depends on the actual level of
inflation itself, but also on how other
market factors move, driven by, among
other things, the response of central
banks to rising inflation and the market
expectations of investors. The risk of
structural inflation can have a direct
(through operating expenses and claims)
or indirect (effect on interest rates,
equities, real estate and sales) impact
on NN Group’s business plans and
financial position.
NN Group manages this risk by having
a small exposure to inflation-linked
liabilities, managing our cost base and
product premiums, hedging benefit
inflation risk and interest rate risk,
reducing allocation to equity and other
risky asset classes, and selectively de- or
re-risking the balance sheet.
Product suitability
Risk that products do not appropriately
cover customers' interests over the full
productlifetime.
Product suitability is essential to
our relationship with customers
and creating longer-term value for
our stakeholders. Changes to the
macroeconomic environment (such as
high inflation, or changes in interest
rates) can both positively and negatively
impact value of a product to customers.
Regulatory and supervisory attention
for Product Oversight & Governance
remains high, among others expressed
in the 2022 EIOPA statement on Value
for money for unit-linked products.
Furthermore, regulations on cost
levels for investment products may
be expected, as highlighted in the
draft EU Retail Investment Strategy.
In the area of EU Sustainable Finance
Regulations, requirements need to be
adhered to, to properly inform customers
on sustainability characteristics of
investment products.
Throughout the company, the PARP and
our product risk committees oversee
product design and suitability, sound
underwriting and claims management,
and adequate pricing of all existing and
new products. NN Group’s Compliance
Function monitors compliance with the
Product Suitability Guidelines, while
NN Group’s Code of Conduct sets out the
expected behaviour of NN employees and
external business partners.
On 9 January 2024, Nationale-Nederlanden
announced a final settlement with
interest groups ConsumentenClaim,
Woekerpolis.nl, Woekerpolisproces,
Wakkerpolis and Consumentenbond
regarding unit-linked products sold
in the Netherlands by Nationale-
Nederlanden, including Delta Lloyd
and ABN AMRO Levensverzekering.
The settlement relates to all unit-linked
products of policyholders affiliated with
the aforementioned interest groups
and is subject to a 90% acceptance
rate of affiliated policyholders that
have received an individual proposal for
compensation. As part of the settlement,
all pending proceedings with respect to
unit-linked products initiated by these
interest groups against Nationale-
Nederlanden will be discontinued once
the settlement is executed, which is
anticipated ultimately 30 June 2025.
For more information refer to Note 43.
2 Our operating
environment
3 Our strategy and
performance
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5 Managing
our risks
4 Creating value for
our stakeholders
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Sustainability and climate change
risk management
Risk strategy
We provide an overview of our
sustainability risk management
approach, which is designed to
identify, assess, control and monitor
sustainability risks throughout our
operations. It is structured in line with
the risk management cycle: strategy,
identification and assessment, control
and mitigation, and monitoring.
By integrating sustainability risk
management into our overall risk
management framework, we are better
equipped to identify and manage the
risks and opportunities associated with
sustainability issues.
Definitions
NN Group considers sustainability risks
as risks related to environmental, social
and governance (ESG) factors that
can cause material negative impact to
NN Group’s long-term performance,
reputation, value, balance sheet or
operations. They are identified based
on the double materiality concept:
NN Group’s positive or negative
impact on people and the environment,
and how these developments impact
NN Group. ESG factors may contribute to
existing and emerging strategic, financial
and non-financial risks (‘transmission
channels’). ESG factors include:
• Environmental factors: climate
change, other forms of environmental
degradation (e.g. air pollution, water
pollution, scarcity of fresh water, land
contamination, biodiversity loss and
deforestation) and animal welfare, in
addition to corrective policy actions
aimed at addressing such factors.
Climate change is further divided into:
– transitional effects resulting from the
transition to a green economy, and
– physical effects resulting from
changes in weather patterns,
temperature, hydrological conditions
or natural ecosystems (both acute or
longer-term shifts).
• Social factors: rights, well-being and
interests of people and communities,
including human rights, (in)equality,
health, inclusiveness, diversity,
employee rights and labour relations,
workplace health and safety.
• Governance factors: pursuing or
applying proper governance practices,
among others including executive
leadership, executive pay, audits,
internal controls, responsible tax
practices, board independence,
shareholder rights, anti-corruption
and anti-bribery, and also the way in
which companies or entities include
environmental and social factors in
their policies and procedures.
Risk appetite framework
NN Group has defined and categorised its
generic inherent risk landscape in a Risk
Taxonomy. We consider sustainability
risks to be transversal risks. This means
that we consider sustainability risks to
manifest through risk types recognised
in the Risk Taxonomy, such as emerging
risks, strategic risks, financial risks and
non-financial risks. These ESG factors
are seen as risk drivers, meaning that
we believe these ESG factors may drive
the risk levels of the various identified
risk categories. To ensure sustainability
risks are integrated within our risk
management approach, NN Group has
revised the general principles of the risk
framework to systematically embed
sustainability risk management in 2022.
In 2023, NN Group further developed
guidance on how to use its risk taxonomy
and risk appetite framework from a
sustainability perspective and has added
a sustainability risk factors lens to the
risk taxonomy, highlighting through
examples, how a sustainability factor
could influence a risk type.
Risk type Sustainability perspective/ESG factors to consider when taking and managing specific risks
Emerging & Strategic risks We promote sustainable business practices that prevent or minimise adverse impacts on the
environment, people and economy, while also supporting long-term growth and profitability,
and engage with our stakeholders (among other customers, intermediaries, policymakers,
invested companies) to achieve that.
Business Conduct risks We do not want to do business with or invest in companies that violate NN’s corporate values
or environmental or social standards.
Financial risks • We seek to limit our exposure towards companies or industries that may have sustainability
risks that can lead to significant financial impact to our investments, or those of our
customers, or that have material adverse impact on environment or people.
• We prioritise investments and financial products that promote sustainable practices in
general and decarbonisation of portfolios and climate change resilient actions in particular.
• We use active engagement approaches and consider exclusion as a last resort.
Product Suitability risks We will:
• advise financial products and services to customers that are in line with their sustainability
preferences,
• properly inform customers about products that might be sensitive to sustainability risks, and
• provide clear substantiation about how sustainable a financial product is (avoid
greenwashing).
2 Our operating
environment
3 Our strategy and
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our risks
4 Creating value for
our stakeholders
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Risk governance
To contribute to sound decision-
making and to ensure NN Group and its
business units operate within agreed risk
appetites and comply with obligations,
the second line functions provide second
line opinion and engage in discussions
with the first line in an effort to improve
risk management (see the chapter
Risk Governance on pages 107–110).
The NN Group Governance Manual and
Function Charters outline responsibilities
of the second line functions. Read a more
detailed explanation on how sustainability-
related responsibilities have been assigned
between business management, risk
management and compliance management
in the chapter Sustainability Governance
on pages 104–106.
NN Group offers e-learning opportunities
on sustainability risks, including
on upcoming sustainability-related
regulations such as the CSRD, to
provide employees with wide access
to knowledge and education on the
subject. This approach contributes to
sustainability risks being acknowledged
as a responsibility of all employees and
stakeholders and that they are better
equipped to identify, assess and manage
these risks across the business.
Risk policies
We regularly review policies, standards,
technical documents and risk charters
from a sustainability risk perspective.
Where relevant, minimum requirements
for considering ESG factors are detailed
in our governance documents and reflect
wording and definitions to conform with
regulatory language and expectations.
Most relevant documents are:
• The Responsible Investment Framework
policy describes how material ESG
factors should be considered in the
investment decision-making process
and active ownership practices and
applies to both proprietary and, where
possible and feasible, client assets.
Where deemed necessary, we develop
policies and guidance paper to support
the integration and consideration of
ESG factors across asset classes.
These papers are a key component of
our policy framework and reflect our
stance on various topics related to
responsible investing.
• The Product policy describes how
ESG factors are to be incorporated
as part of pricing and underwriting,
to be assessed as part of the product
approval and review process.
• The ORSA Standard and related
guidance define how ESG factors are
integrated into scenario analysis and
stress testing, including climate risks.
Risk identification and assessment,
including stress testing
Risk assessment – process
Sustainability risks can be climate-
related, or related to other ESG
developments. NN Group uses various
proprietary and external tools to identify
and evaluate sustainability factors
and risks, among others, as part of the
Strategic Risk Assessment (SRA), as well
as through materiality assessment and
stress testing as part of the ORSA.
The SRA, which is executed together
with the double materiality assessment,
is a more qualitative assessment into
existing and emerging key risks that are
potentially solvency-threatening or could
have a significant negative impact on NN
achieving one or more of its strategic or
business objectives. The key risks are
reported on quarterly in the ERM report
that goes to the Management Board and
Supervisory Board. Risk management
considers not only risk but also the
identification of opportunities derived
from the actions and decisions taken
to manage or mitigate a sustainability
risk. For example, climate change risk
also creates opportunities – be it in
connection with financing a low-carbon
and climate-resilient future, for example,
by investing in renewable energy, energy
efficiency in real estate, and electric
vehicle infrastructure, or by providing
insurance solutions to protect against
physical climate impacts and to support
low-carbon business models.
Climate change considerations are
an integral part of our insurance and
investment strategy which is informed
by regular stress tests and additional
climate-related scenario analysis. As part
of the ORSA, NN entities are required
to perform stress testing of their
solvency position. For regular business
purposes such as business planning
and control, product development and
capital planning we define time horizons
as follows:
• Short: 1–3 years (business planning)
• Medium: 3–5 years (capital planning)
• Long-term: 5–10 years
(scenario analysis)
For scenario analysis and identifying
emerging risks and trends, for example
climate change, the long-term horizon
should be considered beyond 10 years,
depending on the risk or trend analysed –
this can be up to 50 years.
Deploying qualitative and quantitative
scenario-based analyses helps us better
understand the impact of physical
and transitional risks, both during
the business plan period and beyond.
Where possible, the analyses consider
relevant short-, medium- and long-term
scenarios aligned with the Taskforce
for Climate-related Financial Disclosure
(TCFD) recommendations. We use the
insights gained as further input for
formulating our investment strategy and
integrating climate change issues into
our risk management practices.
Risk assessment – results
As part of our SRA, NN Group has
identified two climate-related risks
as key risks for the organisation.
The assessment considers risks from
climate change factors under emerging
risks, where we closely monitor the
development of the risk landscape
supported by selective analyses on our
portfolios. These risks are reported
on quarterly in our ERM report and
presented to senior management and the
Board. NN manages these risks by using
a variety of tools available to them.
1. Physical climate risk for liabilities:
Changes in weather patterns,
temperature, hydrological conditions
or natural ecosystems, affecting the
frequency or severity of natural disasters
(such as flooding, heatwaves, droughts,
windstorms), potentially impacting
properties and businesses or increasing
chronic diseases or casualties.
The physical effects of climate change
are already being felt around the world.
These changes are expected to continue
Sustainability and climate change risk management continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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Sustainability and climate change risk management continued
In October 2023, NN Group organised a Climate Risk
Assessment Event. During this event representatives
of NN Bank, NN Life & Pension, NN Non-life and the NN
Investment Office presented locally performed climate risk
assessment work. The event allowed for sustainability risk
representatives from across the organisation to exchange
views about the approach, methodology, tools, data gaps
and next steps. Updates were given on the transitional risks
of government bonds and on the physical risks of mortgages
and residential property of the underwriting portfolio.
Climate Risk Assessment Event
and intensify in the coming years,
affecting not only Europe but also other
regions globally. As a result, our company
faces the risk of increased liability due
to climate-related events impacting
for example our property insurance
products, as well as potential excess
mortality driving health and life insurance
claims in the long term. Physical risk is
greatest in the short term for our Dutch
non-life business, with weather events
caused by long-term climate changes
and increases in natural catastrophes (e.g.
the 2021 floods in Belgium, Germany and
the Netherlands) impacting the margins of
our Property & Casualty (P&C) insurance
products. Although this risk mainly
concerns the Netherlands, we also offer
a range of relevant non-life products in
Belgium, Spain and Poland.
Rising temperatures, leading to
increased mortality and morbidity (e.g.
from prolonged and multiple heatwaves),
will impact our life and income insurance
liabilities. Such long-term developments
are difficult to quantify, but we currently
expect them to have less impact on our life
and income insurance liabilities than other
risks, such as changes in demographics.
And from an overall risk perspective,
NN Group has a larger exposure to
longevity risk, which is partly offset by
mortality risk.
2. Transitional climate risk for assets:
(In)direct financial losses to investments
and/or lower investment returns resulting
from the transition to a lower-carbon/
green economy, which may adversely
affect individual businesses, sectors or
the broader economy. In addition, there is
the risk that governments, businesses and
individuals fail to enforce, enact or invest
in effective climate-change mitigation
measures, such as decarbonising
economic activity, and therefore are not
able to meet the regulatory ESG ambitions.
NN Group recognises the importance
of managing transition risks for
assets in the face of climate change.
Pricing and investment returns of financial
assets may be influenced by factors
such as public policy decisions (e.g.
carbon tax and subsidies), technological
developments (with companies
profiting from or negatively impacted
by the transition), changing consumer
preferences (e.g. for greener products)
and evolving interpretations of legal
frameworks. Such trends and attendant
risks are likely to materialise and expose
insurers to potential risks through their
investment portfolios over the medium
term. That said, there are also specific
short-term risks, such as the impact of
sudden adjustments to market sentiment
around climate risks.
In recent years, NN Group has executed
several studies and scenarios related
to climate-related risks by focusing on
different parts of our balance sheet one
at a time. Most of these were qualitative
studies, or quantitatively into specific
balance sheet items. The purpose of
the work is to identify and assess the
climate-related risks most relevant for
NN and its subsidiaries and how they
impact different balance sheet items.
Various assessments were performed
on individual balance sheet components
at NN Bank, Netherlands Life & Pensions
and Netherlands Non-life.
NN Group Risk began developing a
Climate Risk Assessment (CRA) in 2022,
that allows for a more holistic, structured
approach to identifying and assessing
potential balance sheet vulnerabilities to
physical and transitional climate-related
risks. In 2023, NN Group progressed
in further completing the mapping of
its portfolio to climate-related risks.
In 2024, NN Group intends to further
complete the mapping exercise by
adding additional data granularity and
moving from mapping to assessing
balance sheet sections with a higher
perceived vulnerability and assessing the
vulnerability of the balance sheet against
the transitional and physical (sub-)risks.
From 2022 to 2023, NN Group and its
entities performed the following scenario
analyses and stress testing:
• During 2023, NN Bank conducted
additional analyses to assess the
impacts of both physical climate risks
and transition risks. Physical risks
included river flooding, foundation
damages and wildfires, while transition
risks encompassed changes in policies,
regulations and market sentiment.
• Top-down quantitative scenario
analysis with the purpose of assessing
the potential financial impact of
transition risk under varying climate
scenarios. The Current Policies and
Delayed Transition scenario from the
Network for Greening the Financial
System are used. The potential
financial impact on government bonds,
corporate/financial bonds and loans
and listed equity is projected for these
scenarios with a time horizon up to
mid-century.
• Sector-level quantitative stress test
to assess the financial impact of a
disorderly transition risk scenario on
the Solvency ratio. The stress test is
based on the DNB Energy Transition
Risk Stress test (2018). Assets in scope
of the analysis are corporate bonds &
loans and listed equity.
• A qualitative and quantitative
assessment using geographic data
to assess physical (concentration)
risks for NN Non-life residential
property underwriting portfolios in the
Netherlands, looking at river flooding
events (including fluvial river flood
and pluvial flood) using an external
vendor tool.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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NN
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Risk control and monitoring
Sustainability risk management is
integrated throughout our investment
and underwriting processes. The below
section lists a variety of tools used
by the business to implement their
sustainability risk management
approach. Read more about NN Group’s
climate change-related investment
and underwriting approach, strategy
and governance, including the net-zero
roadmap, in the chapter Creating a
positive impact on society on pages
44–59 or the Climate Action Plan 2023
Update published on our website.
Managing climate risk in our
investments
Stewardship (voting and engagement):
NN considers engagement a valuable tool
to manage sustainability risks. We have
an active ownership programme,
including a Controversy and Engagement
Council to oversee and monitor the
controversy engagements focusing
on themes such as climate change
& net-zero, biodiversity & natural
capital, water, human rights and strong
governance. For climate risk, we develop
clear climate change stewardship
expectations with milestones and
targets. While we prefer engagement
over divestment, we will consider
divestment, when we see no potential
to change a company’s behaviour
through engagement.
Sustainable investment targets:
NN Group has set targets to address the
risks we are all facing through climate
change. For example, a target to increase
investments in climate solutions with
an additional EUR 6 billion by 2030.
Read more on page 46.
Investment opportunities: NN regularly
conducts research to identify investment
opportunities that align with our
ambition to support a transition to a low-
carbon economy. Read more on page 45.
Investment restrictions: NN
has environmentally focused
exclusion criteria that support our
risk management and strategy.
We strengthened our screening criteria
for new investments within our thermal
coal phase-out policy. Additionally,
we introduced a comprehensive
oil and gas policy, under which we
apply an exclusionary approach for
unconventional oil and gas activities
such as oil sands production and shale
oil and gas. For conventional activities,
we focus on engagement with existing
investments in our portfolio and applying
strict criteria for new investments.
Developing best practice: Sector
initiatives assist us in developing
methodologies and undertaking other
activities that support us in realising our
sustainability goals. NN Group actively
contributes to industry bodies to define
standards on responsible investments.
NN also joined the European
Commission’s Climate Resilience
Dialogue in 2023 as a member of the
Platform for European Insurance and
Financial Services (PEIF). The primary
task of the Climate Resilience Dialogue
is to exchange views on how to address
the losses incurred from climate-related
disasters and to identify how the
insurance industry can contribute more
to climate adaptation.
Managing climate risks in
our underwriting
Target setting: NN Group is committed
to transitioning our underwriting
portfolios to net-zero greenhouse gas
(GHG) emissions by 2050. Therefore, we
have set intermediate targets for 2030:
(i) decarbonisation for our underwriting
portfolio, (ii) engagement in the value
chain and (iii) insuring the transition.
Adjust product offering: We develop
and offer a range of products that help
customers adapt to and mitigate climate
change, such as coverage against
severe weather events and defined
contribution life cycle pension products
that promote sustainable lifestyles.
We also adapted existing features in
our insurance offerings to address the
climate-related needs of our customers,
such as providing cover for solar
panels on residential and commercial
insurance policies.
Support our customers: Within our P&C
business, NN helps customers take
precautionary measures to prevent and
minimise claims caused by windstorms,
extreme rainfall, hail or other weather-
related events driven by climate change.
We monitor our claims experience
and reprice or adjust policy conditions
where necessary. NN’s P&C portfolio
is predominantly renewable annually,
allowing repricing of products over
the short term; though we apply such
measures cautiously, as longer-term
affordability for our customers remains
an important consideration. NN Group
offers a broad range of non-life insurance
protection options that cover against a
wide variety of causes of damage and loss.
In line with EIOPA’s objective to close
existing protection gaps as much as
possible, we have extended the coverage
of our policies to include protection
against a breach of secondary dikes.
We also believe a joint approach from
Dutch P&C insurers, reinsurers and
environmental authorities is needed to
provide additional protection against
losses resulting from breaches of primary
dikes. Netherlands Non-life encourages
the pursuit of risk-mitigating market
solutions, through both our membership
of the Dutch Association of Insurers
and our intensive involvement in climate
change-related topics.
Modelling and scenario-analysis: Insights
from catastrophe models guide our
pricing/underwriting risk management
process. For this we use external
vendor models to estimate the impact
and damage that would be caused by
large natural catastrophes, such as
windstorms and hail. Netherlands
Non-life is developing and implementing
a Climate Change Physical Risk Tool
which will be used to assess the
impact of climate change-related perils
on the underwriting portfolio. In an
ongoing process and where possible
quantification of the preselected perils
will be based on the Representative
Concentration Pathways (RCPs) of the
Intergovernmental Panel on Climate
Change (IPCC) and various time horizons.
Catastrophe models are also part of the
solvency and capital risk management
process, with portfolio diversification
and addressing tracking concentration
also being key risk-mitigating steps.
Sustainability and climate change risk management continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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figures
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NN
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Sustainability and climate change risk management continued
The main objective of the assessment is to provide a high-
level and qualitative indication of transition and physical
climate-related risks associated with the most material
assets and liabilities of NN Group’s balance sheet. Climate-
related risks are determined by considering the location
of the balance sheet item and the industry sector the item
is associated with. By considering the financial exposure
NN Group has to each balance sheet item, we can identify
areas of the balance sheet deserving priority attention.
Our climate risk approach is to:
1. Identify the major transitional and physical (sub-)risks for
NN Group.
2. Perform qualitative materiality assessments of identified
physical and transitional risks.
3. Prioritise the transitional and physical risks through
heatmaps and rating systems.
4. Use the findings to investigate the availability of, and/or
develop, appropriate vulnerability factors.
5. Adjust (local) stress scenarios to quantify the potential
impact of climate change on the balance sheet in the
medium and long term.
What we have done so far:
• Breakdown of balance sheet items: Asset breakdown
was done by using EIOPA’s Complementary Identification
Code (CIC) Table. Liabilities breakdown considered sub-
categories of life and non-life products. Based on these
breakdowns, common characteristics were understood
and three modules for the risk assessment were created:
(1) country physical, (2) country transition, (3) NACE
sector transition.
• A climate risk driver list: A comprehensive climate risk driver
list has been compiled by reviewing expert sources against
the existing internal taxonomy.
• Risk mapping: A risk mapping was performed based on the
climate risk driver list and identified balance sheet items
for the assessment. The process covered: 36 countries;
10 high-risk sectors; 30 physical and 25 transition (unique)
risks; 100+ sources for references.
• We established a scoring system to come to a transition risk
score and physical risk score per NACE code and country.
Both transition risk score and physical risk score are
determined considering the industry-specific and country
specific characteristics of the balance sheet component.
• Prioritisation and transmission channels: Following the
risk mapping process, a prioritisation was made based on
exposure, availability of data, homogeneity and relevance.
This has resulted in transmission channels for four balance
sheet items (Life & Non-life products, government &
corporate bonds).
• Initial progress reports have been presented to the Risk
Management Committee and relevant internal stakeholders.
Challenges
The used approach to identifying country and sector physical
and transitional sub-risks includes the consideration of
multiple external sources and is a manual process. While we
do not expect the ratings to change significantly on a year-to-
year basis, we acknowledge the manual effort it takes to keep
the risk rating up-to-date and are continuing to look for a
more automated approach that is able to provide us with the
needed granularity of insights.
The current stage of the assessment does not yet allow
for the identification of climate risk exposures but should
be considered as a mapping of inherent risk and trends
only. The translation of inherent risk to impact on a product
or asset class will vary, requiring product-specific risk
conversion models. Best practice conversion models have
not yet been established for many of the sub-risks, asset
classes and product categories.
Learnings from building the Climate Risk Assessment
Entity climate risk
Indicators encompass both
Transition and Physical risk
Climate risk score
Transitional risk score Physical risk score
Indicators include
Transition risk only
Indicators include
Physical risk only
NACE Industry (Average)
Climate-related risk
NACE Industry (Average)
Transitional risks
Country (Average)
Transitional risks
NACE Industry (Average)
Physical risks
Country (Average)
Physical risks
Country (Average)
Climate-related risk
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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NN
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Reinsurance: External reinsurance
will, under certain conditions, partially
mitigate potential impacts. We have a
group-wide catastrophe reinsurance
programme to protect against the
severity and frequency of large natural
catastrophes. Reinsurance covers are
placed with a diverse range of strongly
capitalised external reinsurers and
reduce the losses to NN from both
large events and multiple smaller
ones. Both the applicability of the
external vendor models and the
reinsurance structure and cover are
reviewed annually.
Developing best practices: NN actively
contributes to industry bodies to define
standards on sustainable underwriting.
NN is an active participant of the CRO
Forum. NN Group has endorsed various
initiatives, such as the International
Corporate Social Responsibility covenant
for the Dutch insurance sector and also
signed the United Nations Principles for
Sustainable Insurance.
Managing other ESG-related risks
NN Group actively monitors the risk
landscape. Where a sustainability risk
gains importance, we take steps to
better understand the nature of the
risk and to assess whether our current
risk management approach effectively
addresses the risk.
Addressing nature-related risks: We
recognise that addressing adverse
impacts on the environment is not only
about reducing our GHG emissions and
becoming climate change resilient, but
also about preserving and restoring
our ecosystems, biodiversity and much
more. As an insurer, we seek solutions
that address nature-related risks.
For example, as one of the leading
marine insurers in the Netherlands,
NN Group aims to limit negative impacts
to the oceans’ ecosystems, both from
climate change and from pollution
and overfishing. To underscore our
intentions, NN Group signed the Marine
Insurance Statement to fight pirate
fishing. Furthermore, as a responsible
investor, NN Group adopts biodiversity
factors under the E in our ESG integration
strategy. We apply active ownership
practices to encourage investee
companies to adopt more responsible
environmental and social practices
to enforce nature positive changes.
In 2023, NN Group established a cross-
functional Biodiversity Working Group
to promote knowledge exchange on
biodiversity and performed a nature-
related impact assessment on our
corporate investment portfolio.
Addressing human rights: As a financial
services provider, we are at risk of
causing, contributing and/or being
linked to adverse human rights impacts.
By carefully analysing our business
activities, customers, partners and
suppliers, we identify the areas with the
most human rights risks. This means that
within our activities we identify the most
salient human rights issues, which refers
to those issues with the most severe
risks to people. We have conducted
reviews to identify these issues and will
continue to monitor this in an ongoing
process. We consider global trends
including data privacy and protection,
and diversity & inclusion. In 2023,
NN Group performed a Human Rights
Salience assessment to determine how
NN addresses human rights. The process
included a review of relevant internal
policies and a gap assessment with
international standards and regulatory
expectations. We will continue to
enhance our human rights approach
in 2024.
Sustainability and climate change risk management continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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NN
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6 Corporate governance
NN recognises the importance
of good corporate governance.
We provide an overview of our
governing bodies, namely our
Executive Board, Management
Board and Supervisory Board.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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figures
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NN
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Supervisory Board chair David
Cole reflects on NN’s performance
over the year, and on the global
developments and opportunities
seized in 2023.
In 2023 we saw ongoing economic and
geopolitical turmoil. How did NN navigate
these challenges?
Across the globe, 2023 was another year
of challenging circumstances. From the
war in Ukraine, to an escalating conflict
in Gaza; all with devastating impact
on people and their livelihoods. As an
internationally operating business, this
means we have to stay alert, monitor
developments closely, and remain
aware of our role, responsibilities and
potential impact.
At the same time, our international
footprint also helps to spread geopolitical
and economic risks across the portfolio.
The benefits of diversification in our
business, both geographically and in
terms of business lines, contribute to
our resilience. Also, as a long-term asset
holder, increasing interest rates over
time can be positive, but we need to
continuously manage our sensitivity.
How do you look back on NN’s performance
in 2023?
The company performed well both
strategically and financially, as reflected
in the strong results for 2023. Taking into
account the uncertain macroeconomic
environment over the past year, it is
good to see the continued progress on
the strategy focused on customers,
employees and society.
The financial results were supported
by rising interest rates and strong
business performances across the
segments of NN. Our Dutch Non-life
and banking businesses performed
strongly, while the Life business was
effective in preparing for the Dutch
pension reform whilst managing the
existing business. In Europe, we saw
continued growth momentum, and a
lot of energy to innovate, strengthen
distribution channels, and build stronger
relationships with customers.
What really continues to stand out is
our company’s resilience and how NN
employees again worked hard to serve
customers and communities. This has
led to good progress on our strategic
objectives, as reflected in continued
high levels of employee engagement and
customer satisfaction. This is a great
recipe for delivering sustainable long-
term value creation. We have also been
impressed by how the values of NN are
strongly embedded in the culture and
have helped build the company over
the years.
What were the focus areas for the
Supervisory Board?
Like in previous years, we have been
focused on strategy execution,
monitoring ongoing performance,
and regulatory developments around
topics like environmental, social and
governance (ESG).
Firstly, we engaged extensively with the
Management Board on the issue of unit-
linked insurance products. During 2023,
there were a number of developments
that led to meaningful conversations
with interest groups, which ultimately
led to the settlement that was agreed
at the start of 2024. NN Group has
always cared for its customers, and this
has been a matter that required careful
consideration to ensure fair outcomes
for all stakeholders. For us, it was about
offering fair and far-reaching settlements
that provide clarity for those involved.
As a Supervisory Board, we are pleased
that a solution has been reached, so that
involved customers are taken care of, and
this chapter can be closed.
Secondly, sustainability matters were
a prominent topic throughout the year.
The insurance industry has a significant
role to play in addressing climate change
and NN Group took a lot of important
measures in 2023, for example, by
refining our investment policies and by
introducing new targets for our insurance
underwriting and mortgage portfolios.
Good progress has been made but as
expectations will continue to rise, we
need to continue to think critically about
what we do and how we do it.
Thirdly, we focused on new regulatory
requirements, such as IFRS17 and the
upcoming Corporate Sustainability
Reporting Directive (CSRD).
We monitored NN’s ability to meet
these new requirements, which require
years of extensive preparations by
departments across the organisation.
The company was able to smoothly
deliver and implement the IFRS17
reporting standard, and we also got well
on our way in preparing for new reporting
expectations in light of the CSRD as of
2024. As a Supervisory Board, we will
continue to pay close attention to this
going forward.
A conversation with our
Supervisory Board chair
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performance
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5 Managing
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4 Creating value for
our stakeholders
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Across the world, rapid developments in
generative artificial intelligence (AI) have
attention. How is NN responding to this?
NN was quick to grasp opportunities in
the area of technology and generative
AI, for example by creating a secure
ChatGPT environment and enhancing
employees’ digital capabilities. As a
Supervisory Board, we showed a special
interest in NN remaining future proof
and AI is becoming an increasingly
important driver in this. Technology has
the potential to solve many challenges
in the insurance industry and it could
help improve operational efficiency and
improve the customer experience. But of
course, we also need to ensure it is used
effectively and ethically.
Looking ahead, what are the priorities of the
Supervisory Board?
We have been looking at the kinds of
skills we need to fulfil our responsibilities
as a Supervisory Board, taking into
account developments we foresee
in the future. With so many diverse
topics coming to our table, we need
to grasp opportunities to learn, stay
up to date and ensure a well-balanced
Supervisory Board to add the most
value. Therefore we were pleased with
the nomination of Koos Timmermans
for appointment as member of the
Supervisory Board for a term of four
years. Koos has a strong background in
the financial sector, making him well-
qualified for this role.
Our priorities will continue to focus
on strategy execution, monitoring
performance, enhancing transparency,
and fulfilling our role in society. Above all,
we are here to help deliver sustainable
long-term value for our stakeholders
and will remain committed to this.
We appreciated the feedback received
during our ongoing dialogue with
stakeholders. We take this seriously
and will continue to seek their input, to
understand what matters most to them.
On behalf of the Supervisory Board,
we thank the Management Board and
all employees at NN Group for their
dedication and strong performance in
2023, and we look forward to supporting
them in 2024.
A conversation with our Supervisory Board chair continued
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environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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European Insurance Forum, member of the
World Economic Forum’s Alliance of CEO
Climate Leaders and Governors meeting
Financial Sector, and a supervisory board
member of Stichting Erasmus Trustfonds.
On 15 February 2023, he became a societal
member of the KHMW.
David Knibbe
Chief Executive Officer
Appointment
Appointed to the Executive Board and
designated as Chief Executive Officer
(CEO) of NN Group and as a result chair
of the Executive Board and Management
Board effective 1 October 2019 and was
reappointed on 2 June 2023.
Role and experience
Mr Knibbe is responsible for the business
strategy, performance and day-to-day
operations of NN Group. Mr Knibbe has been
a member of the Management Board since
7 July 2014, at which time he served as CEO
Netherlands. Mr Knibbe’s previous positions
include CEO of ING Insurance Europe.
Mr Knibbe holds a Master’s degree in
monetary economics from the Erasmus
University in Rotterdam (the Netherlands).
Mr Knibbe is member of the board
and treasurer of the Confederation of
Netherlands Industry and Employers (VNO-
NCW), member of the Federative Board
VNO-NCW and MKB NL, member of the board
of the Johan Cruyff Foundation, member
of the advisory board of JINC, member
of the Hoogeschoolraad of Vereniging
Trustfonds Erasmus University, member of
the Geneva Association, member of the Pan
Annemiek van Melick
Chief Financial Officer
Appointment
Appointed member of the Management
Board as of 1 June 2022. Appointed member
of the Executive Board and designated
as Chief Financial Officer (CFO) and as a
result vice-chair of the Executive Board and
Management Board effective 1 July 2022.
Role and experience
Ms Van Melick is responsible for NN Group’s
finance departments and investor relations.
Ms Van Melick’s previous positions include
CFO at a.s.r.
Ms Van Melick holds a degree in business
administration from Nyenrode Business
Universiteit (the Netherlands) and a
law degree from Utrecht University
(the Netherlands).
Ms Van Melick is member of the supervisory
board and chair of the audit committee at
Royal Swinkels Family Brewers, and member
of the CFO Forum.
Our Management Board
David KnibbeLeon van Riet
Annemiek van Melick Frank EijsinkTjeerd BosklopperDailah Nihot
Bernhard Kaufmann Janet Stuijt
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environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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Our Management Board continued
Dailah Nihot
Chief People, Communications, and
Sustainability Officer
Appointment
Appointed Chief Organisation & Corporate
Relations and member of the Management
Board as of 1 September 2018. To better
reflect the portfolio managed by Ms Nihot,
her title changed to Chief People,
Communications, and Sustainability Officer
with effect from 1 December 2022.
Role and experience
Ms Nihot is responsible for human resources,
corporate communications, sustainability,
and corporate citizenship, branding and
sponsorship, public and government
affairs, and facility management. Ms Nihot’s
previous positions include Managing Director
of Corporate Relations for NN Group.
Ms Nihot holds a Master’s degree in
European Studies from the University
of Amsterdam (the Netherlands) and
an Executive Master in Corporate
Communication from the RSM Erasmus
University in Rotterdam (the Netherlands).
Ms Nihot is member of the supervisory board
of WOMEN Inc.
Leon van Riet
Chief Executive Officer Netherlands
Life & Pensions
Appointment
Appointed CEO Netherlands Life & Pensions
and member of the Management Board as of
1 June 2020.
Role and experience
Mr Van Riet is responsible for the
Life and Pension businesses in the
Netherlands, as well as for Japan
Life as of 1 September 2023. Mr Van
Riet’s previous positions include CEO
of Nationale- Nederlanden Non-life in
the Netherlands.
Mr Van Riet holds a degree in electrical
engineering from Delft University of
Technology (TU Delft, the Netherlands).
Mr Van Riet is chair of the sector life
insurances of the Dutch Association of
Insurers (Verbond van Verzekeraars)
and member of the board of Stichting
Dienstverlening VoV. Mr Van Riet
is also member of the supervisory
board of Dutch Terrorism Claims
Reinsurance Company (Nederlandse
Herverzekeringsmaatschappij
voor terrorismeschaden).
Janet Stuijt
General Counsel
Appointment
Appointed to the Management Board as
General Counsel as of 1 September 2018.
Role and experience
Ms Stuijt is responsible for NN Group’s legal
function, compliance function and Corporate
Security & Investigations department and
holds the position of Company Secretary.
Ms Stuijt’s previous positions include
General Counsel & Head of Compliance of
NN Group.
Ms Stuijt holds a Master’s in Civil law, from
the University of Leiden (the Netherlands).
Ms Stuijt is vice-chair of the supervisory
board of Nederlandse Spoorwegen N.V., chair
of its nomination & remuneration committee
and member of its risk & audit committee
and Ms Stuijt is also member of the advisory
board of the Master’s Law & Finance of the
University of Amsterdam.
Tjeerd Bosklopper
Chief Executive Officer Netherlands
Non-life, Banking & Technology
Appointment
Appointed CEO Netherlands Non-life,
Banking & Technology and member of the
Management Board as of 1 June 2020.
Role and experience
Mr Bosklopper is responsible for the Dutch
Non-life and Banking business segments,
Customer & Commerce, NN Ventures, IT
and procurement globally.
Mr Bosklopper was CEO Netherlands
ad interim from 17 December 2019
until 1 June 2020. Mr Bosklopper was
appointed to the Management Board of
NN Group as Chief Transformation Officer
on 1 September 2018. Mr Bosklopper’s
previous positions include Head of
Integration of Nationale-Nederlanden
Netherlands and Belgium.
Mr Bosklopper holds a Master of Science in
Business Information Technology from the
University of Twente (the Netherlands).
Mr Bosklopper is chair of the board of the
Dutch Association of Insurers (Verbond van
Verzekeraars) and member of the Steering
Committee of SchuldenlabNL.
Frank Eijsink
Chief Executive Officer International Insurance
Appointment
Appointed CEO International Insurance and
member of the Management Board as of
1 September 2023.
Role and experience
Mr Eijsink is responsible for Insurance
Europe, NN Group’s European insurance
businesses excluding the Netherlands.
Mr Eijsink’s previous positions include CEO
of several NN Group International Insurance
business units.
Mr Eijsink holds a Master of Science in
Physics and a Master of Science in Business
Engineering and Management Science from
the University of Technology in Eindhoven
(the Netherlands).
Bernhard Kaufmann
Chief Risk Officer
Appointment
Appointed Chief Risk Officer (CRO) and
member of the Management Board as of
1 June 2020.
Role and experience
Mr Kaufmann is responsible for the overall
risk framework with direct responsibility for
the risk management departments. He is
also responsible for the Actuarial function,
and reinsurance. Mr Kaufmann’s previous
positions include Group CRO and CRO
Reinsurance at Munich Re Group.
Mr Kaufmann holds a PhD (Dr. rer. Nat.)
in theoretical physics from the Technical
University of Munich (Germany), an
intermediate diploma in economics from
the University of Hagen (Germany), and
a diploma in theoretical physics from the
Technical University of Munich (Germany).
Mr Kaufmann is member of the CRO Forum
and member of the supervisory committee of
Alma Mundi Insurtech Fund.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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figures
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Pauline van der Meer Mohr
Vice-chair
Appointment
Appointed to the Supervisory Board on
19 May 2022, which appointment became
effective 1 January 2023. As of the close
of the AGM on 2 June 2023, Ms Van der
Meer Mohr serves as vice-chair of the
Supervisory Board.
Skills, competence and experience
Ms Van der Meer Mohr’s previous positions
include chair of the executive board of
Erasmus University of Rotterdam and chair
of the Dutch Corporate Governance Code
Monitoring Committee.
Ms Van der Meer Mohr holds a Master’s in
Advanced Dispute Resolution, University
of Amsterdam and Dutch Law, Erasmus
University Rotterdam (the Netherlands).
Ms Van der Meer Mohr is also chair of the
supervisory board of ASM International N.V.
and member of the supervisory board of
Koninklijke Ahold Delhaize N.V.
Inga Beale
Member
Appointment
Appointed to the Supervisory Board on
20 May 2021.
Skills, competence and experience
Ms Beale’s previous positions include CEO of
Lloyd’s of London.
As a reinsurance underwriter, Ms Beale
attained a degree equivalent insurance
qualification as an Associate of the United
Kingdom Chartered Insurance Institute
and became Chartered in 2016. She is also
a qualified Six Sigma Green Belt (2002),
and completed the Manager Development
Course (MDC) and higher-level Business
Management Course (BMC) as part of the
Executive Education programme at GE’s
Stamford-based University (United States).
Ms Beale is non-executive director of
Crawford & Company Inc. and member of the
board of Willis Towers Watson.
David Cole
Chair
Appointment
Appointed to the Supervisory Board on
31 May 2018, which appointment became
effective on 1 January 2019. As of the close
of the AGM on 29 May 2019, he serves as
chair of the Supervisory Board. Mr Cole was
reappointed on 19 May 2022.
Skills, competence and experience
Mr Cole’s previous positions include CFO and
CRO of Swiss Re Ltd.
Mr Cole holds a Bachelor of Business
Administration degree from the University
of Georgia (United States) and attended the
International Business Programme at the
Nyenrode University (the Netherlands).
Mr Cole is also a member of the board of
directors of Vontobel Holding AG (Zürich),
member of the European Financial
Roundtable (EFR), chair of the supervisory
board of IMC B.V. and member of the board of
directors of COFRA Holding AG.
Our Supervisory Board
Cecilia ReyesRobert Jenkins
Hans SchoenDavid ColeRob Lelieveld
Inga Beale Pauline van der Meer Mohr
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environment
3 Our strategy and
performance
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governance
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4 Creating value for
our stakeholders
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Our Supervisory Board continued
Hans Schoen
Member
Appointment
Appointed to the Supervisory Board as of
7 July 2014. Mr Schoen was reappointed
on 31 May 2018 and on 19 May 2022.
He is considered appointed pursuant to
the enhanced recommendation right of the
Central Works Council as of 12 April 2020.
Skills, competence and experience
Mr Schoen’s previous positions include
partner at KPMG Accountants and chair
of the EFRAG Insurance Accounting
Working Group.
Mr Schoen holds a degree in economics and a
postdoctoral degree in accountancy from the
University of Amsterdam (the Netherlands).
In September 2015, he received a PhD
from the Vrije Universiteit (VU) Amsterdam
(the Netherlands).
Robert Jenkins
Member
Appointment
Appointed to the Supervisory Board on
6 October 2015, which appointment became
effective on 2 February 2016. Mr Jenkins
was reappointed on 28 May 2020.
Skills, competence and experience
Mr Jenkins’ previous positions include head
of trading at various international Citibank
offices, CEO of several asset management
firms, and a policy-making role at the Bank
of England. He has chaired the Investment
Association UK, the AQR Asset Management
Institute, and CFA Institute.
Mr Jenkins holds a Master’s degree in
International Studies with the focus on
International Economics and European Area
Studies from Johns Hopkins University
(United States).
Mr Jenkins is currently Adjunct Professor,
Finance at London Business School and
a member of the Advisory Council to
the Research and Policy Center of the
CFA Institute.
Rob Lelieveld
Member
Appointment
Appointed to the Supervisory Board on
20 May 2021, which appointment became
effective 1 September 2021. Mr Lelieveld
was appointed pursuant to the enhanced
recommendation right of the Central
Works Council.
Skills, competence and experience
Mr Lelieveld’s previous positions include chair
of the managing board of EY Accountants in
the Netherlands and member of the board of
directors of EY in the Netherlands.
Mr Lelieveld holds a degree in accountancy
but deregistered as a chartered accountant
from the register of accountants held by the
Koninklijke Nederlandse Beroepsorganisatie
van Accountants (NBA) when he left EY in
June 2021.
Mr Lelieveld is vice-chair of the supervisory
board and chair of the audit committee of
the Mauritshuis.
Cecilia Reyes
Member
Appointment
Appointed to the Supervisory Board as of
20 May 2021.
Skills, competence and experience
Ms Reyes’ previous positions include group
CIO and group CRO at Zurich Insurance
Group Ltd. In both roles, Ms Reyes was
member of the group executive committee
until her retirement from the company in
February 2018.
Ms Reyes holds a Bachelor of Science in
Management Engineering from the Ateneo
de Manila University (Philippines), an MBA in
Finance from the University of Hawaii (United
States), and a PhD in finance from London
Business School (United Kingdom).
Ms Reyes serves as managing director of
PIONEER Management Services GmbH, non-
executive director and member of the audit,
risk committee, remuneration committee
and nominations committee of Beazley plc,
and non-executive director of RiverStone
International Holdings Limited.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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When considering all stakeholder
interests, the Supervisory Board also
takes into account the continuity
of NN Group, NN Group’s view on
sustainable long-term value creation,
the impact the actions of NN Group
have on people and the environment,
as well as applicable legislation,
regulations and rules of conduct.
Specifically, the Supervisory Board
monitors and evaluates the management
of the Executive Board and advises
the Executive Board on matters
such as (i) establishing and reaching
NN Group’s goals, (ii) sustainable
long-term value creation by NN Group,
and (iii) sustainability matters that are
relevant to NN Group.
This Supervisory Board Report should be
read in conjunction with the Corporate
Governance section (pages 95–110)
and the Remuneration Report (pages
111–124) of this Annual Report.
Profile of the Supervisory Board
The composition of the Supervisory
Board is such that its members are able
to act critically and independently from
each other, the Executive Board, and
any particular interests. The Supervisory
Board works as a collegial body and
the individual members’ knowledge,
experience and background are
attributed to the Supervisory Board
as a whole. In the composition of
the Supervisory Board, there is a
balanced representation in members'
(a) nationality, nation of origin, race,
ethnicity, languages spoken, belief
system, gender, age, sexual orientation,
neurodiversity and physical diversity,
(b) affinity with the nature of the
businesses and culture of NN Group, and
(c) executive experience, experience in
complex multinationals and the political
and social environment they operate in.
This ensures a broad range of relevant
perspectives and opinions on NN Group,
and the opportunities and challenges it
faces today and will face in the future.
The Supervisory Board strives to ensure
that all its members are independent,
as defined in the Dutch Corporate
Governance Code.
The Diversity and Skills matrix on
page 94 provides an overview of the
range of knowledge, experience,
and backgrounds of the individual
Supervisory Board members.
Supervisory Board meetings
The Supervisory Board met 11 times
in 2023. One meeting was held in
Athens as part of the Supervisory
Board’s visit to NN Group’s business in
Greece. The average attendance rate for
Supervisory Board meetings was 92.4%,
demonstrating members’ commitment
and ability to devote sufficient time and
attention to the affairs of NN Group.
None of the Supervisory Board members
were frequently absent from meetings,
and at all meetings attendance was
sufficient to constitute a quorum.
In addition to the formal meetings,
the chair and other members of the
Supervisory Board maintained regular
contact with NN Group’s CEO, CFO, the
Management Board, senior management,
heads of NN Group's support functions,
and business unit CEOs. The Supervisory
Board also met with the supervisory
authorities, (representatives of) the
Central Works Council and NN Group's
external auditor, KPMG.
Discussion topics
The overarching topic on the Supervisory
Board agenda in 2023 and in the
dialogues between the Supervisory
Board and the Executive Board and
Report of the Supervisory Board
11
Supervisory Board meetings
held in 2023
34 hours
In total, 34 hours spent
on Permanent Education
sessions arranged by NN Group.
Permanent Education
attendance rate: 82%
3
Supervisory Board Committees
Supervisory Board composition
(after 2 June 2023)
Overall attendance of
Supervisory Board meetings
Male 4
Female 3
4:3
92.4%
Supervisory Board facts
and figures
The Supervisory Board is responsible for supervising the management
of the Executive Board and the general course of affairs of NN Group and
its businesses. The Supervisory Board also advises the Executive Board.
In carrying out its duties, the Supervisory Board carefully considers and acts
in accordance with the interests of NN Group and its businesses, taking into
consideration the interests of all stakeholders of NN Group.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
87
NN Group N.V.
2023 Annual Report
Management Board was the geopolitical
and microeconomic environment
NN Group operates in. The year 2023
was marked by uncertainty and volatility.
Geopolitical instability, such as the
Russia-Ukraine war and increased
tensions in the Middle East, contributed
to more volatile financial markets, more
persistent inflation, higher levels of
interest rates, and the risk of recession,
especially in Europe. The Supervisory
Board monitored these developments
closely and challenged and advised the
Executive Board and Management Board
on decisions with regard to sustainable
long-term value creation for NN Group
and its stakeholders.
In addition, sustainability matters were
a prominent topic in the boardroom, as
well as in knowledge sessions, also at
the specific request of the Supervisory
Board. Sustainability matters are
sustainability opportunities and risks, and
(positive and adverse) impacts related
to environmental, social and governance
(ESG) factors, including climate change,
employee and human rights, anti-
corruption and anti-bribery. They are
identified based on the double materiality
concept: our positive and negative impact
on people and the environment, and
how these matters impact our company.
The Supervisory Board was informed of
the double materiality approach as part
of the implementation of the Corporate
Sustainability Reporting Directive (CSRD)
and invited to participate in NN Group’s
double materiality assessment. Moreover,
environmental factors, such as climate
change, were discussed within the
Supervisory Board in relation to risk
management, but also in relation to
requested updates on NN Group’s Paris
alignment strategy and the Climate Action
Plan, as an integral part of NN's Strategy.
With respect to sustainable long-term
value creation, the Supervisory Board
also took part in discussions around the
well-being of staff. NN Group’s corporate
culture is an annually recurring topic
on the Supervisory Board agenda and
NN Group’s Living our Values report of
2022 was extensively discussed within
the Supervisory Board.
The Supervisory Board was also updated
on developments around the progress
and status of NN Group’s Partial Internal
Model (PIM) for the calculation of the
Solvency Capital Requirement (SCR).
The Supervisory Board discussed
the main features, assumptions and
limitations of the PIM, and the validation
and internal audit processes undertaken
to ensure its reliability and accuracy.
The Supervisory Board showed a special
interest in NN remaining future-proof as
the world is rapidly changing and artificial
intelligence (AI) is becoming increasingly
relevant. On request, the Supervisory
Board was updated on topics including
the use and possibilities of AI within
the company, such as ChatGPT, which
has already generated significant cost
reductions and other benefits, and on
IT simplification developments. This fits
in NN Group becoming a digital and
data-driven organisation, which was
added to NN's strategic commitments in
2023. The Supervisory Board requested
close involvement and was regularly
updated on the plans and progress on
this commitment.
Other important discussion topics for
the Supervisory Board in 2023 included
(i) business performance, (ii) annual
accounts, dividend proposals and share
buyback programmes, and (iii) unit-linked
litigation and collective settlements
in the Netherlands. Moreover, the
Supervisory Board was updated on
the first reporting under IFRS17 and
new pension legislation throughout
the year. The remaining wide variety of
topics for 2023 were pre-discussed and
prepared in one of the three Supervisory
Board committees and were reported
on in the Supervisory Board meetings
by the respective committee chairs.
These subjects are outlined in the
committee paragraphs.
Business performance
Building on the NN Group Financial Plan
2023–2025 and Capital Plan 2023–2027,
which were discussed and approved
by the Supervisory Board in 2022, the
Supervisory Board was updated on
NN Group and business unit performance
throughout the year. The Supervisory
Board was closely involved in
tracking delivery on the strategic and
financial targets.
Particular focus topics were:
• Net promotor score – 2025 target: all
business scoring above market average
• Employee engagement – 2025 target:
at least 8.0
• Women in senior management
positions – 2025 target: at least 40%
• Reduction of greenhouse gas
emissions of corporate investment
portfolio – 2025 target: -25%
• Reduction of greenhouse gas
emissions of own business operations
to net zero – 2025 target: -35%
• More than double the investments in
climate solutions by 2030
• People supported on their financial,
physical and/or mental well-being –
2025 target: more than 1 million
• Operating capital generation – 2025
target: EUR 1.8bn
• Progressive dividend per share
• Annual share buyback of at least
EUR 250m
• Solvency II ratio within comfort zone of
150% – 200%
• Free cash flow of mid-single growth
The Supervisory Board showed
appreciation for the comprehensive
updates and the ongoing advancement.
Annual accounts, dividend and share
buyback programmes
During 2023, the Supervisory Board
discussed and approved the 2022
annual accounts, the 2022 proposed
final dividend payment, the share
buyback programme for an amount of
EUR 250 million, and NN Group’s 2023
interim dividend.
In these discussions, the Supervisory
Board carefully examined NN Group's
financial strength and liquidity situation,
its risk appetite for Solvency II
fluctuations, and the possible adverse
scenarios from the ORSA analysis,
aiming to ensure that NN Group
maintains a cautious approach to its
capital decisions.
Report of the Supervisory Board continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
88
NN Group N.V.
2023 Annual Report
The Supervisory Board discussed the
2023 annual accounts with the Executive
Board. The 2023 annual accounts will
be submitted for adoption by the annual
general meeting (AGM) in May 2024.
NN Group will propose paying a final
dividend of EUR 2.08 per ordinary share,
or approximately EUR 570 million in total,
based on the number of outstanding
shares on 29 February 2023 (2H2023
publication date). The proposed final
dividend of EUR 2.08 per ordinary share
brings the total 2023 dividend to EUR
3.20 per ordinary share, which is 15%
higher than in 2022.
Unit-linked
The Supervisory Board was periodically
updated on the pending collective
proceedings against NN, most notably
in relation to the judgment of the Court
of Appeal in The Hague of 26 September
2023. A special Supervisory Board
committee was established in
anticipation of the judgment to discuss
the judgment and its implications in
detail. The special committee facilitated
the Supervisory Board in challenging
and advising the Executive Board and
Management Board in their decisions
in this regard. For a description of legal
proceedings with respect to unit-linked
products in the Netherlands, read more
in Note 43.
Continuous learning
The Supervisory Board of NN Group is
committed to continuous learning and
development to ensure its members have
the knowledge, skills and competencies
required to fulfil their roles effectively.
The Permanent Education Programme
for the Supervisory Board covers a wide
range of topics relevant to the business
strategy, risks and opportunities of
NN Group, as well as market trends and
regulatory developments impacting the
financial sector.
In 2023, the Supervisory Board
participated in several permanent
education sessions. The Supervisory
Board received updates on, among
others, NN Group’s sustainability
strategy, policies and performance, as
well as the integration of ESG factors
into the investment process and product
development. The Supervisory Board also
discussed the impact of climate change
on NN Group’s risk profile and resilience,
and the opportunities to contribute
to the transition to a low-carbon
economy. For educational purposes,
the Supervisory Board invited external
experts on biodiversity and human
rights to gain a deeper understanding of
these issues, their business impact and
implementation within NN.
Furthermore, the Supervisory Board
learned about the applications and
implications of AI for NN Group’s
business model, operations and
customer experience. The Supervisory
Board also explored the ethical and legal
aspects of using AI, and the governance
and oversight mechanisms in place to
ensure responsible and transparent
use of AI.
In addition to these topics, the
Supervisory Board also received
regular updates on NN Group’s PIM,
and the financial performance, risk
management, internal audit, compliance,
legal and regulatory affairs, and
corporate governance of NN Group.
The Supervisory Board members
also attended external seminars and
conferences on topics relevant to the
financial sector and its supervision.
Complementary to the educational
sessions, the Supervisory Board
conducted two business unit visits
in 2023, one to NN Life & Pensions in
the Netherlands in January, and one
to NN Hellas in Greece in September.
The purpose of these visits was to
gain a deeper understanding of the
local markets, strategies, products,
customers, distribution channels,
competitors, risks and opportunities of the
respective business units. The Supervisory
Board met with the senior management
and employees of the business units.
The Supervisory Board evaluates the
effectiveness and relevance of the
Permanent Education Programme on
an annual basis and identifies areas for
improvement and further development.
The Supervisory Board also seeks
feedback from the Executive Board and
Management Board and other internal
and external parties on the quality
and suitability of the programme.
The Supervisory Board is confident that
the Permanent Education Programme
in 2023 has enhanced its members'
knowledge, skills and competencies, and
has enabled them to perform their duties
with due diligence and professionalism.
Additionally, NN Group has a thorough
Induction Programme, as part of
NN Group’s onboarding process for
Supervisory Board members. It consists
of meetings with Executive Board,
Management Board and Supervisory
Board members, management teams
of the Dutch business units, and other
key staff, as well as sessions on the
Solvency II framework, System of
Governance, Economic Balance Sheet
and Solvency Capital Requirements
(including PIM).
Self-assessment
As is customary on an annual basis,
the Supervisory Board evaluated its
performance over the year 2023.
It was agreed that the self-assessment
focused on five main questions: (i) How
can the Supervisory Board improve? (ii)
Thinking about all relevant areas, where
should the Supervisory Board increase
focus for 2024 and 2025? (iii) What
can the Supervisory Board do to help
the management to be more effective?
(iv) Are there any other matters worth
mentioning? And, (v) is there any
feedback for the chair of the Supervisory
Board? In addition to the Supervisory
Board, both the Executive Board and
the Management Board provided input
for the self-assessment. This approach
ensured that relevant forward-looking
priorities were identified.
In January 2024, the Supervisory Board
had a robust dialogue on the outcomes of
the 2023 self-assessment.
The outcome of the self-assessment
was positive overall, with the
Supervisory Board members expressing
satisfaction with their cooperation and
communication, which ensured sufficient
alignment on key dilemmas.
Report of the Supervisory Board continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
89
NN Group N.V.
2023 Annual Report
The main strengths of the Supervisory
Board were identified as: diversity
of perspectives and backgrounds,
constructive challenge and dialogue,
trust and openness, and engagement
and commitment.
The main areas of attention were
identified as: more focus on strategy
and NN Group’s operating model,
and continuous focus on sustainable
long-term value creation, such as
NN Group's people, and culture, and
ESG-related topics in general. In addition
the Supervisory Board expressed the
desire to better use of time and agenda
setting to being able to reach in-depth
discussions with management.
Supervisory Board committees
On 1 January 2023, four committees
supported the Supervisory Board: the
Risk Committee, Audit Committee,
Remuneration Committee and
Nomination and Corporate Governance
Committee. As of 2 June 2023, the
Supervisory Board has decided to change
the organisation of its committees
by combining the Remuneration
Committee and Nomination and
Corporate Governance Committee
into a single new committee, the
Nomination, Remuneration and
Governance Committee.
At the close of the 2023 AGM, Hélène
Vletter-van Dort’s term of appointment
as Supervisory Board member, vice-chair
of the Supervisory Board, member and
chair of the Remuneration Committee
and member of the Nomination and
Corporate Governance Committee
ended. As of the close of the 2023 AGM,
Pauline van der Meer Mohr was appointed
as vice-chair of the Supervisory Board
and chair of the newly combined
Nomination, Remuneration and
Governance Committee. Rob Lelieveld
succeeded Hans Schoen as chair of
the Audit Committee. The graphic on
page 94 shows the composition of the
Supervisory Board Committees.
The Supervisory Board committees are
responsible for preparing matters that
are delegated to them. Each committee
covers sustainability matters that fall
within its responsibilities and area of
expertise. The chair of each committee
reports the main points of discussion
and the resulting recommendations to
the Supervisory Board, which enables
the Supervisory Board to decide on these
matters. For each committee, the key
inputs and underlying considerations
that lead to a recommendation
are documented.
In 2023, the Risk Committee meetings
were attended by NN Group's CEO, CFO,
CRO, General Counsel (GC), General
Manager of Corporate Audit Services
(CAS), Head of Group Enterprise Risk
Management, Chief Compliance Officer
(CCO) and the external auditor.
The Audit Committee meetings were
attended by NN Group's CEO, CFO, CRO,
GC, Chief People, Communications,
and Sustainability Officer (CPCSO) (if
appropriate), General Manager of CAS,
Head of Group Finance & Reporting, Head
of Performance & Analytics, Head of
Financial Accounting & Reporting, Chief
Actuary and the external auditor.
The Nomination and Corporate
Governance Committee meetings,
Remuneration Committee meetings,
and Nomination, Remuneration and
Governance Committee meetings
respectively were attended by NN Group's
CPCSO and when appropriate the CEO,
GC and the Head of Reward.
Subject-matter specialists also
regularly attended the meetings of
the committees when requested, and
throughout the year, the chair of the
committees stayed in regular contact
with the respective members of the
Executive Board and Management
Board and the other staff to discuss
various topics.
Risk Committee
The Risk Committee assists the
Supervisory Board in performing its
duties. To this end, it prepares items
for discussion and decision-making by
the Supervisory Board, and recommends
actions in various areas, including
(i) NN Group’s key risks and risk appetite
statements, risk strategy and policies,
(ii) risk exposures resulting from the
business strategies and plans of
NN Group and its affiliated businesses,
(iii) the design, operation and
effectiveness of the risk management
and internal control systems of
NN Group (the Risk Control Framework),
(iv) NN Group’s public disclosures on
risk and risk management, and (v)
Material Transactions.
The Risk Committee works closely with
the Audit Committee, not only in order
to avoid omissions and duplication in
activities but also to give insights into
the risks in the reporting of financial
and non-financial results. The chair of
the Risk Committee is therefore also a
member of the Audit Committee, and vice
versa. In 2023, the Risk Committee and
Audit Committee, in close consultation
with the Management Board, agreed on
certain process-related improvements to
further increase the focus on key topics.
In 2023, the chair of the Risk Committee
regularly liaised with the CRO, General
Manager of CAS and CCO, and met with
the external auditor and relevant subject-
matter experts.
During the Risk Committee meetings,
the Management Board provided
regular updates on strategic, financial
and non-financial risks, including legal
and compliance risks. These updates
encompassed a range of topics, including
solvency, liquidity, credit and capital
markets, sustainability, IT, data and
AI, funding, sound business conduct
including financial economic crime,
product suitability, operational risks and
employee conduct. The discussions in
the Risk Committee were supported by
analyses that evaluated the potential
impact of these events on NN Group’s
credit investment portfolio, capital
and liquidity position, and credit
developments in specific countries
and portfolios.
Report of the Supervisory Board continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
90
NN Group N.V.
2023 Annual Report
During the year, the Risk Committee
discussed its regular annual agenda
topics, including:
• The performance and appropriateness
of NN Group’s PIM
• The Enterprise Risk Management
reports covering strategic, financial,
and non-financial risks (including legal
and compliance risks)
• The risk appetite statements which
are foundational to the group’s
risk strategy
• NN Group’s ORSA
• The update to the Preparatory
Crisis Plan
• The NN Group Systematic Integrity Risk
Assessment (NN Group SIRA)
• The quarterly reports on IT operations
and security
• NN Group's Strategic Asset Allocation
(SAA) and investment-related risks
• Annual operational work plans
of Group Risk, Actuarial and
Compliance functions
The quarterly Enterprise Risk
Management reports provided updates,
including measures taken and planned,
on the current and forward-looking
risks emanating from uncertainty in the
operating environment. This uncertainty
was driven by geopolitical instability
(Russia-Ukraine war and increased
tensions in the Middle-East),
characterised by more volatile financial
markets, more persistent inflation,
higher levels of interest rates and risk of
recession (especially in Europe).
Each year, an assessment of the
performance and assessment of the
PIM takes place in the first quarter.
This covers all relevant information from
the preceding calendar year, including all
risk models that are part of NN Group’s
PIM used to calculate the Basic Solvency
Capital Requirement (SCR). The Risk
Committee extensively discussed the
outcome of this assessment on multiple
occasions, which for example also
takes into account results from stress
testing in the ORSA and includes the
key priorities for the year going forward.
The Risk Committee agreed with the
main conclusion of the 2022 report on
the PIM’s performance that, given the
assumptions used and understanding of
their implications, the internal model is
appropriate for its intended use.
The Risk Committee was pleased
with the broad scope of the scenarios
that were included in the 2022 ORSA.
Given the climate change developments,
the Risk Committee further reflected
on the PIM and suggested that the
Management Board further extend
NN Group’s scope as climate change
scenarios are further developed, and to
pay particular attention to the potential
knock-on impact of climate change risks
in medium- to longer-term analyses.
The Risk Committee also regularly
discussed the major model changes
submitted by the relevant business
units as well as the approvals granted
by the Dutch Central Bank (DNB) and
terms and conditions attached to them.
In 2023, NN Group submitted to DNB
for approval major model changes
to its PIM, for example, relating to
market risk aggregation, non-market
risk aggregation and group income
business. All of these proposed model
changes were approved by DNB and
implemented in time for the 2023 year-
end SCR calculation.
The Risk Committee further discussed
the nature and use of expert judgments
within the Risk Management function.
The Risk Committee requested the
Management Board to provide a further
explanation on the nature and use
of expert judgments within the Risk
Management function in the knowledge
session on the PIM in November 2023.
The Risk Committee monitored the
developments in the IT landscape and
cybersecurity and changes in NN Group’s
SAA and impacts on the market risk
profile of the group.
Other topics with relevance to risk
management that arose during the
year were also discussed, such as
improving the process and procedures
for timely estimating and forecasting
solvency ratios.
Audit Committee
The Audit Committee assists the
Supervisory Board in the performance
of its duties. To this end, the Audit
Committee prepares items for
discussion and decision-making
by the Supervisory Board, and
recommends actions in various areas,
including (i) the design, operation
and effectiveness of the internal risk
management and control systems
related to financial reporting, (ii) the
integrity and quality of the financial
reporting process, (iii) periodic financial
reports and any ad-hoc financial
information, (iv) the findings and
outcomes of any audit work, by both
the external auditor (KPMG) and CAS,
NN Group’s internal audit department
(e.g. as contained in the quarterly and
annual audit reports), including the
findings and observations on the key
audit matters identified by the external
auditor, and (v) establishing a procedure
for the selection and recommendation
of the (re)appointment of the external
auditor by the Supervisory Board.
The Audit Committee works closely
with the Risk Committee, not only to
avoid omissions and duplication in its
activities but also to provide insights
into the risks in the reporting of financial
and non-financial results. The chair of
the Audit Committee is therefore also a
member of the Risk Committee, and vice
versa. In 2023, the Risk Committee and
Audit Committee, in close consultation
with the Management Board, agreed on
certain process-related improvements to
further increase the focus on key topics.
During 2023, the chair of the Audit
Committee regularly met with the CFO,
General Manager of CAS, subject-matter
experts and KPMG to discuss various
topical issues.
In addition to the regular Audit
Committee meetings, the Audit
Committee also held closed sessions
attended by the Audit Committee
members, General Manager of CAS
and KPMG.
Report of the Supervisory Board continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
91
NN Group N.V.
2023 Annual Report
The topics discussed and assessed
during the Audit Committee
meetings included:
• NN Group’s quarterly performance
reviews including financial results
• Financial reporting: NN Group’s annual
accounts; interim accounts; and
financial press releases
• The independence of KPMG
• IFRS 9 and 17 implementation
• The 2023 Audit Plans of CAS and KPMG.
• Audit findings and observations as
included in the quarterly internal and
external reports of CAS and KPMG
• Kick-off of the rotation process towards
appointment of a new external auditor
for NN Group as of financial year 2026.
• ESG and preparation for the
CSRD reporting
• IT and cybersecurity
• Accounting and other regulatory
developments: Solvency II
developments; IFRS and Solvency
II reporting, including a second line
review opinion on the Own Funds and
the SCR; internal controls on financial
reporting and changes in financial
reporting processes and systems
• Tax-related topics: the current
tax positions and (legislative)
developments impacting the tax
function such as Pillar II; NN Group’s
tax strategy; Tax Policy and Principles
of Conduct; developments in the area
of public tax reporting
• Various other topics, such as pending
legal proceedings, (interim) dividend
payment to shareholders and the share
buyback programme, remuneration
and evaluation of both KPMG and the
General Manager of CAS, and specific
financial transactions
The quarterly performance review
reports provided updates on business
performance and financial results, both
at NN Group level and at the level of the
various business segments. In addition,
these reports further provided the Audit
Committee with meaningful insights on,
among other things, NN Group’s OCG
results and expectations, the status of
the financial targets set, and expected
financial outlooks and attention points
going forward for NN Group and its
business segments. Throughout the year,
the Audit Committee closely monitored
NN Group’s performance and financial
results in light of the major geopolitical
developments and resulting impact
on the macroeconomic environment,
such as the sharp rise in inflation and
significant financial market volatility.
The Audit Committee discussed the
2023 audit plan of CAS. The main drivers
behind the CAS audit priorities for
2023 were (i) coverage requirements,
(ii) strategic importance and key
change initiatives, and (iii) ongoing key
remediations. The Audit Committee
discussed CAS’s findings and
observations resulting from the quarterly
reports of CAS. These reports include
findings and observations regarding
governance, risk management and
internal control, focusing on significant
internal control weaknesses and areas
for improvement noted in ongoing audit
activities, and follow-up by responsible
management on agreed actions and
weaknesses. The Audit Committee
discussed and monitored this follow-up
throughout the year.
The reports categorise the findings and
observations into five areas: (i) primary
processes, (ii) IT, cyber and physical
security, (iii) financial risk management
and reporting, (iv) the development of
outstanding risks and their mitigation,
and (v) the key internal developments
of CAS. CAS’s findings are summarised
annually in the CAS Annual Internal
Control Report NN Group, which also
includes forward-looking considerations.
The Audit Committee further discussed
the 2023 KPMG audit plan including their
assessment of the risk of error and fraud.
KPMG’s areas of focus in 2023 included
(i) IFRS 9 and 17 transition, including
IFRS 9 and 17 opening balance sheet,
(ii) valuation of insurance liabilities,
(iii) valuation of illiquid investments,
(iv) unit-linked exposure, and (v) risk of
management override of controls.
It was agreed that as of 2023, KPMG
will report its findings and observations
on NN Group’s internal controls over
financial reporting in each quarterly
KPMG report, and as part of its year-
end Audit Report and as a consequence
KPMG will no longer issue a separate
management letter at year-end.
The quarterly reported key findings and
observations and those included in the
year-end Audit Report were discussed in
the Audit Committee. Examples of those
topics are the quality and timeliness
of the IFRS (interim) reporting, the
assumption setting process, the
valuation of the insurance liabilities
and illiquid investments, the unit-linked
litigation and observations about the
continuity and reliability of IT.
IT and cybersecurity were extensively
discussed each quarter in the Risk
Committee. These meetings were
attended by the General Manager of
CAS and KPMG, as well as the chair and
several other members of the Audit
Committee. Subsequently, the chair
of the Risk Committee reported any
topics relevant for financial reporting,
also on a quarterly basis, to the Audit
Committee. To avoid duplication, the
Audit Committee therefore focused on
those elements of IT and cybersecurity
that (may) impact financial reporting
and the security, reliability, integrity
and availability of data and assets
across NN Group and its affiliated
business. This included discussing the
IT and security section of the quarterly
reports of CAS, and the link between
IT developments (in particular the IT
simplification 2.0 programme and the
IT Control Framework), the ongoing
programmes in respect of the Finance
& Risk Roadmap, and the status and
implementation of the IFRS 9 and 17
Programme. In addition, the Audit
Committee discussed the ESG and
CSRD implementation in November
2023, which topic will going forward be
discussed on a quarterly basis.
The Audit Committee acknowledges that
2023 marks an important milestone in
terms of NN Group’s transition to IFRS 9
and 17. Throughout the years, both CAS
and KPMG were closely involved in their
role as external auditor in the IFRS 9 and
17 implementation, each with their own
areas of focus. The Audit Committee
also closely monitored the IFRS 9 and 17
implementation, discussed the progress
on a quarterly basis and provided their
Report of the Supervisory Board continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
92
NN Group N.V.
2023 Annual Report
suggestions and feedback. Despite the
challenges driven by the complexity of
implementation and the impact on the
overall data and systems landscape, the
Audit Committee was pleased with the
successful transition to IFRS 9 and 17.
Nomination, Remuneration and
Governance Committee
In 2023, the Remuneration Committee
and the Nomination and Corporate
Governance Committee were combined
into the Nomination, Remuneration and
Governance Committee.¹ This committee
assists the Supervisory Board in the
performance of its duties in relation to
a number of nomination, remuneration
and governance topics, scheduled on
annual basis or ad-hoc. It prepares items
for discussion and decision-making by
the Supervisory Board and recommends
actions concerning these areas.
An annual nomination-related topic is
the composition of the Executive Board,
Management Board and Supervisory
Board. NN strives for a balanced
representation in nationality, nation of
origin, race, ethnicity, languages spoken,
belief system, gender, age, sexual
orientation, neurodiversity and physical
diversity, as is embedded in the Diversity
and Inclusion Policy for the Executive
Board, Management Board, Supervisory
Board and senior management of
NN Group (D&I Policy), in order to reach
a diverse and inclusive composition
of NN Group’s boards and senior
management. Therefore, succession
planning is an important recurring
topic on the Nomination, Remuneration
and Governance Committee agenda.
The committee prepared the
reappointment of David Knibbe as
member of the Executive Board for
a term of four years, which term will
end at the close of the 2027 AGM.
The Nomination, Remuneration and
Governance Committee also focuses on
broader talent and succession planning.
The Executive Board, Management Board
and Supervisory Board profiles capture
the elements of the D&I Policy and are
discussed on an annual basis as well.
The rotation and succession plan for
the Supervisory Board was especially
paid attention to, since the terms of
appointment of Robert Jenkins and Hans
Schoen will end at the close of the 2024
AGM. The Nomination, Remuneration
and Governance Committee prepared
the nomination of Koos Timmermans
for appointment as member of the
Supervisory Board and the nomination
of Robert Jenkins for reappointment as
member of the Supervisory Board.
An important remuneration-related
topic was the review and evaluation of
the remuneration policies of NN Group.
The Executive Board and Supervisory
Board remuneration policies are due for
adoption by the shareholders at the AGM
in 2024 and were therefore thoroughly
reviewed in 2023. Throughout the year,
the Nomination, Remuneration and
Governance Committee engaged with
stakeholders to obtain feedback about
the remuneration policies and practices.
Another important remuneration topic
on the committee agenda related to the
update of the performance objectives
and conducting the performance
assessment of the Executive Board and
Management Board. Individual meetings
between Supervisory Board members
and Executive Board and Management
Board members formed part of these
assessments. The 2023 performance
objectives of the Executive Board and
the Management Board were reviewed by
the committee and it was ensured that
these were still aligned with NN Group’s
overall ambition and five strategic
commitments. In this regard, particular
attention was paid by the Nomination,
Remuneration and Governance
Committee to the ESG objective setting
of the Executive Board.
The committee reviewed and endorsed
the updated NN Group Remuneration
Framework. A risk assessment
was carried out on the NN Group
Remuneration Framework and related
processes, focusing on the processes
designed to avoid excessive risk taking
by staff of NN Group. The Nomination,
Remuneration and Governance
Committee reports that no risks with a
critical or high managed risk level were
found. Also, the committee reviewed
and recommended to adjust the peer
group validation and remuneration
benchmark for the Supervisory Board,
Executive Board and Management
Board, which was confirmed based
on an analysis done by an external
agency. Remuneration matters for
identified staff and high earners were
reviewed and approved in line with the
NN Group Remuneration Framework
and governance, including the 2023
Identified Staff selection. The committee
also reviewed and endorsed the
remuneration proposals for the Executive
Board and Management Board, and the
proposal to the AGM of NN Group to
amend the level of the fixed annual fee for
the Supervisory Board members. Lastly,
an extensively discussed topic was the
equal pay analysis. The Nomination,
Remuneration and Governance
Committee gave its full support in
relation to ensuring fair and equal pay
levels throughout the organisation.
Please refer to pages 115–124 of this
Annual Report for more information
on the remuneration of Executive
Board members and Supervisory
Board members.
Finally, the Nomination, Remuneration
and Governance Committee discussed
a number of governance topics.
It endorsed the updated selection and
(re)appointment processes for the
Executive Board, Management Board
and Supervisory Board members. And,
as is required on an annual basis, the
committee reviewed the amended
charters of the Executive Board,
Management Board, Supervisory Board
and Supervisory Board Committees,
which were brought in line with the
updated Dutch Corporate Governance
Code provisions and other regulations.
And, in February 2024, the Nomination,
Remuneration and Governance
Committee reviewed and discussed
NN Group’s application of and compliance
with the updated Dutch Corporate
Governance Code for the financial
1 References to the Nomination, Remuneration and Governance Committee also refer to the Nomination and Corporate Governance Committee and the Remuneration Committee
where applicable.
Report of the Supervisory Board continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
93
NN Group N.V.
2023 Annual Report
year 2023. The committee was further
consulted in relation to the annual review
of NN Group’s Decision Structure.
The Nomination, Remuneration and
Governance Committee discussed
the review carried out by NN Group
Compliance on the various outside
positions (other than NN Group-related
positions) held by Supervisory Board and
Executive Board members. This review
concluded that all board members are
compliant with the relevant rules and
obligations, and that all Supervisory
Board members have shown flexibility
and commitment in fulfilling their
obligations, both in terms of attendance
and engagement.
Closing
Despite the uncertainty and turbulence
in the economy and politics, NN Group
demonstrated its strength and delivered
value to its stakeholders in 2023.
The Supervisory Board is grateful to the
Executive Board, Management Board,
all employees and its businesses for
their unwavering commitment and hard
work in overcoming these difficulties,
while keeping an eye on sustainable
long-term value creation. Along with
the Executive Board and Management
Board, the Supervisory Board is eager
to continue building on NN Group’s solid
foundations and achieve our goal of
being an industry leader, known for our
customer engagement, talented people,
and contribution to society.
Report of the Supervisory Board continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
94
NN Group N.V.
2023 Annual Report
The attendance rate of the individual Supervisory Board members was as follows:
None of the Supervisory Board members were frequently absent from meetings, and at all meetings attendance was sufficient to
constitute a quorum. After the close of the annual general meeting (AGM) on 2 June 2023:
• Hélène Vletter-van Dort’s term of appointment as Supervisory Board member ended.
• The Remuneration Committee and Nomination and Corporate Governance Committee merged into the Nomination, Remuneration
and Governance Committee (previously called Combined RemCo/NomGovCo).
• Hans Schoen stepped down from the Risk Committee and Pauline van der Meer Mohr joined the Risk Committee.
Inga
Beale
David
Cole
Robert
Jenkins
Rob
Lelieveld
Pauline van
der Meer
Mohr
Cecilia
Reyes
Hans
Schoen
Hélène
Vletter-van Dort
Overall
attendance
average
Supervisory Board 10/11 11/11 9/11 10/11 9/11 11/11 11/11 4/4 92.4%
Audit Committee – 6/6 5/6 6/6 – 6/6 6/6 – 96.7%
Risk Committee 5/5 – 5/5 5/5 2/2 5/5 3/3 – 100%
Remuneration Committee – – – 3/3 2/3 3/3 3/3 3/3 93.3%
Nomination and Corporate Governance
Committee
2/2 2/2 – – 2/2 – – 2/2 100%
Combined RemCo/
NomGovCo
1/1 1/1 – 1/1 1/1 1/1 1/1 1/1 100%
Nomination, Remuneration and
Governance Committee
2/2 2/2 – 2/2 2/2 – 2/2 – 100%
Diversity and Skills matrix Inga Beale David Cole Robert Jenkins Rob Lelieveld
Pauline
van der Meer Mohr Cecilia Reyes Hans Schoen
Year of birth 1963 1961 1951 1962 1960 1959 1954
Gender:
Male (M) or Female (F)
F M M M F F M
Nationality British American,
Dutch
American Dutch Dutch Filipino,
Swiss
Dutch
Management of complex
multinational enterprises
International economic, regulatory
and public policy issues
Labour relations, human resources
and management development
Insurance
Asset management
Retail banking
Audit, finance and control¹
Risk management
Legal affairs and corporate
governance
Corporate integrity
Information technology and
transformation
Marketing, in particular in the area
of financial products and services
Sustainability matters
1 Financial expert as defined in article 39 (1) of Directive 2014/56/EU of the European Parliament and of the Council of 16 April 2014 amending Directive 2006/43/EC on statutory audits of
annual accounts and consolidated accounts.
Considered an expert given previous and/or current roles (other than non-executive roles)
Sufficient experience and knowledge to be able to take an informed decision
Insufficient knowledge
All members of the Supervisory Board are independent, as defined in the Dutch Corporate Governance Code.
Report of the Supervisory Board continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
95
NN Group N.V.
2023 Annual Report
General
NN Group N.V. (NN Group) is a
public limited company (naamloze
vennootschap) incorporated under
the laws of the Netherlands and has a
two-tier board structure consisting of
an executive board (Executive Board) and
a supervisory board (Supervisory Board).
NN Group also has a management
board (Management Board). NN Group
mandatorily applies the full large
company regime.
Executive Board
Duties
The Executive Board is entrusted with the
management, the strategy, operations
and risk management of NN Group under
supervision of the Supervisory Board.
In performing its duties, the Executive
Board must carefully consider and act
in accordance with the interests of
NN Group and the business connected
with it, taking into consideration the
interests of all stakeholders of NN Group.
When considering these interests, the
Executive Board shall also take into
account the continuity of NN Group,
NN Group’s view on sustainable long-
term value creation, the impact the
actions of NN Group have on people and
the environment, as well as applicable
legislation, regulations and rules
of conduct.
The organisation, duties and working
methods of the Executive Board are
detailed in the charter of the Executive
Board. This charter is available on the
NN Group website.
The Executive Board is responsible for
ensuring that the company has adequate
internal risk management and control
systems in place so that it is aware,
in good time, of any material risks the
company has and that these risks can be
managed properly. As part of its overall
responsibilities for risk management,
the Executive Board is responsible for
establishing and maintaining adequate
internal control over financial reporting to
provide reasonable assurance regarding
the reliability of financial reporting and
the preparation of the annual accounts
in accordance with generally accepted
accounting principles. Internal control over
financial reporting includes those policies
and procedures that:
• Pertain to the maintenance of records
that, in reasonable detail, accurately
and fairly reflect the transactions and
dispositions of assets
• Provide reasonable assurance that
transactions are recorded as necessary
to permit preparation of the annual
accounts in accordance with generally
accepted accounting principles
(International Financial Reporting
Standards as endorsed by the European
Union and Part 9 of Book 2 of the Dutch
Civil Code)
• Provide reasonable assurance regarding
prevention or timely detection of
unauthorised acquisition, use or
disposition of assets that could have a
material effect on the annual accounts
Because of its inherent limitations, internal
control over financial reporting may not
prevent or detect all misstatements.
Also, projections of any evaluation of
effectiveness to future periods are
subject to the risk that controls may
become inadequate because of changes
in conditions, or that the degree of
compliance with the policies or procedures
may deteriorate.
Certain resolutions of the Executive
Board require the approval of the
Supervisory Board and/or general
meeting of shareholders of NN Group
(General Meeting). These resolutions are
outlined in the articles of association of
NN Group (Articles of Association), which
are available on the NN Group website,
and in the charter of the Executive Board.
Appointment, removal and suspension
Under the full large company regime,
the members of the Executive Board
are appointed individually by the
Supervisory Board.
Prior to appointing a member of the
Executive Board, the Supervisory
Board must notify the General Meeting
of such an intended appointment.
An Executive Board member is appointed
for a maximum of four years and may be
reappointed for a term of not more than
four years at a time.
Only the Supervisory Board may suspend
or remove a member of the Executive
Board. However, the Supervisory Board
is only entitled to remove a member of
the Executive Board after the General
Meeting has been consulted on the
intended removal.
As at 31 December 2023, the Executive Board consisted of the following persons:
Name Position Date of birth Gender Nationality Appointment
Termination/
reappointment Tenure
David Knibbe Chair, Chief Executive
Officer (CEO)
15 March 1971 Male Dutch 1 October 2019,
reappointment
2 June 2023
2027
1
4 years
Annemiek van
Melick
Vice-chair, Chief
Financial Officer (CFO)
31 March 1976 Female Dutch 1 July 2022
2
2026
3
1 year
1 David Knibbe’s term of appointment will end at the close of the annual general meeting (AGM) in 2027.
2 Annemiek van Melick joined NN Group as of 1 June 2022 as member of the Management Board.
3 Annemiek van Melick’s term of appointment will end at the close of the AGM of NN Group in 2026.
Corporate governance
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
96
NN Group N.V.
2023 Annual Report
Composition
The Executive Board must consist of
two or more members, with the total
number of members of the Executive
Board determined by the Supervisory
Board after consultation with the
Executive Board. Guiding principles for
the appointment of members and the
composition of the Executive Board are
provided in the profile of the Executive
Board and Management Board, and in the
D&I Policy. The profile and the D&I Policy
are available on the NN Group website.
Information on the composition and the
members of the Executive Board can be
found on page 82.
Remuneration
Information on the remuneration policy
for members of the Executive Board and
on their individual remuneration can be
found in the Remuneration Report, on
pages 115-123.
Management Board
Role and duties
The Management Board is entrusted with
the day-to-day management and the
overall strategic direction of NN Group.
In performing its duties, the Management
Board must carefully consider and act
in accordance with the interests of
NN Group and the business connected
with it, taking into consideration the
interests of all stakeholders of NN Group.
When considering these interests, the
Management Board shall also take into
account the continuity of NN Group,
NN Group’s view on sustainable long-
term value creation, the impact the
actions of NN Group have on people
and the environment, as well as
applicable legislation, regulations and
rules of conduct. Notwithstanding the
foregoing, the rights and obligations of
the Executive Board under Dutch law, the
Articles of Association and the Charter
of the Executive Board remain in full
force and effect. Each of the members
of the Management Board is responsible
and accountable to the Executive Board
and within the Management Board
for the specific tasks as assigned.
Being comprised of the Executive Board
members as well as key leaders with a
divisional or functional responsibility, the
Management Board allows for integral
and holistic decision-making at the
highest level of NN Group with functions,
the businesses and Executive Board
members represented. Besides providing
balanced, effective and timely decision-
making, NN Group having a Management
Board also provides for flexibility in terms
of composition, allocation of tasks and
responsibilities and required knowledge.
In supervising the functioning of
NN Group’s corporate governance
structure, including its checks and
balances, the Supervisory Board pays
specific attention to the dynamics and
relationship between the Executive
Board and the Management Board
as well as the way the Management
Board operates.
The Supervisory Board will be provided
with all the information necessary
for the proper performance of this
duty. In principle, members of the
Management Board are present at
meetings with the Supervisory Board
where topics are discussed that relate
to their area of responsibility. Next to
that, the Supervisory Board regularly
meets with the full Management Board.
The organisation, role, duties and
working methods of the Management
Board are detailed in the charter of the
Management Board, which is available on
the NN Group website.
Composition, appointment and removal
The Management Board consists of
the members of the Executive Board
and other such members as appointed
individually by the Executive Board
after consultation with the Supervisory
Board. The number of members of the
Management Board is determined by
the Executive Board. Guiding principles
for the appointment of members and
the composition of the Management
Board are provided in the profile of
the Executive Board and Management
Board, and in the Diversity and Inclusion
Policy. The profile and the Diversity and
Inclusion Policy are available on the
NN Group website.
The members of the Management Board
may be suspended and removed by the
Executive Board after consultation with
the Supervisory Board.
Information on the composition and the
members of the Management Board can
be found on pages 82–83.
Corporate governance continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
97
NN Group N.V.
2023 Annual Report
of NN Group and the business connected
with it, taking into consideration the
interests of all stakeholders of NN Group.
When considering these interests, the
Supervisory Board shall also take into
account the continuity of NN Group,
NN Group’s view on sustainable long-
term value creation, the impact the
actions of NN Group have on people and
the environment, as well as applicable
legislation, regulations and rules
of conduct.
The organisation, duties and working
methods of the Supervisory Board are
detailed in the charter of the Supervisory
Board. The charter is available on the
NN Group website.
Appointment, removal
and suspension
The members of the Supervisory
Board are appointed individually by the
General Meeting upon nomination of the
Supervisory Board. The General Meeting
and the Central Works Council may
recommend candidates for nomination
to the Supervisory Board.
The Supervisory Board must
simultaneously inform the General
Meeting and the Central Works Council
of the nomination. The nomination
must state the reasons on which it
Fabian Rupprecht was appointed as CEO
International Insurance and member of
the Management Board of NN Group as
of 1 September 2018 and stepped down
as of 30 June 2023. Mr Rupprecht was
responsible for NN Group’s insurance
businesses outside the Netherlands:
Insurance Europe, Japan Life and
Japan Closed Block VA businesses.
Mr Rupprecht’s previous positions
include CEO Middle East & Africa, and
Regional CFO and member of the regional
executive committee at AXA Emerging
Markets (CEE, MEA, LATAM).
Mr Rupprecht holds a Diploma in
Business Administration, with majors in
finance and controlling, from the WHU
Otto Beisheim School of Management
(Koblenz, Germany).
Supervisory Board
Duties
The Supervisory Board is responsible
for supervising the management of the
Executive Board and the general course
of affairs of NN Group and its businesses.
The Supervisory Board may, on its own
initiative, provide the Executive Board with
advice and may request any information
from the Executive Board that it deems
appropriate. In performing its duties, the
Supervisory Board must carefully consider
and act in accordance with the interests
is based. The Supervisory Board is
required to nominate one-third of the
Supervisory Board members on the
enhanced recommendation (versterkt
aanbevelingsrecht) of the Central Works
Council, unless the Supervisory Board
objects to the recommendation on
the grounds that the recommended
candidate is not suitable to fulfil the
duties of a member of the Supervisory
Board or that the Supervisory Board
will not be properly composed if the
nominated candidate is appointed.
The General Meeting may reject the
nomination of a Supervisory Board member
by an absolute majority of the votes cast
by shareholders representing at least one-
third of NN Group’s issued share capital.
If the General Meeting resolves to reject
the nomination by an absolute majority
of the votes cast, but this majority
does not represent at least one-third
of NN Group’s issued share capital, a
new meeting can be convened in which
the nomination can be rejected by an
absolute majority of the votes cast,
irrespective of the part of NN Group’s
issued share capital represented. If the
General Meeting resolves to reject the
recommendation, the Supervisory Board
will then prepare a new nomination. If the
General Meeting does not appoint the
Corporate governance continued
As at 31 December 2023, the Management Board consisted of the following persons*:
Name Position Date of birth Gender Nationality Appointment Tenure
David Knibbe Chair, Chief Executive Officer
(CEO) (as of 1 October 2019)
15 March 1971 Male Dutch 7 July 2014 9 years
Annemiek van Melick Vice-chair, Chief
Financial Officer (CFO)
(as of 1 July 2022)
31 March 1976 Female Dutch 1 June 2022 1 year
Tjeerd Bosklopper CEO Netherlands Non-life,
Banking & Technology
(as of 1 June 2020)
3 March 1975 Male Dutch 1 September 2018 5 years
Frank Eijsink CEO International Insurance 17 March 1973 Male Dutch 1 September 2023 <1 year
Bernhard Kaufmann Chief Risk Officer (CRO) 19 April 1969 Male German 1 June 2020 3 years
Dailah Nihot Chief People,
Communications, and
Sustainability Officer
12 June 1973 Female Dutch 1 September 2018 5 years
Leon van Riet CEO Netherlands
Life & Pensions
2 September 1964 Male Dutch 1 June 2020 3 years
Janet Stuijt General Counsel 26 September 1969 Female Dutch 1 September 2018 5 years
* Mr Rupprecht stepped down as member of the Management Board and CEO International Insurance as of 30 June 2023.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
98
NN Group N.V.
2023 Annual Report
person nominated by the Supervisory
Board and does not resolve to reject the
nomination, the Supervisory Board will
appoint the person nominated.
A member of the Supervisory Board is
appointed for a maximum period of four
years. A Supervisory Board member can
be reappointed once for a term of four
years. A Supervisory Board member
can subsequently be reappointed
again for a period of two years, which
appointment can be extended by
at most two years. In the event of a
reappointment after an eight-year period,
such reappointment shall be adequately
motivated in the Supervisory Board
Report. The members of the Supervisory
Board retire periodically in accordance
with a rotation schedule drawn up by the
Supervisory Board.
The rotation schedule is available on the
NN Group website.
The Supervisory Board may suspend
a member of the Supervisory Board.
The suspension will lapse by law if
NN Group has not submitted a petition
to remove the suspended member of
the Supervisory Board to the Enterprise
Chamber of the Amsterdam Court of
Appeal (Ondernemingskamer van het
Gerechtshof te Amsterdam) within
one month after commencement of
the suspension.
The General Meeting can, by an absolute
majority of votes cast, representing
at least one-third of the issued share
capital, resolve to abandon its trust
(het vertrouwen opzeggen) in the entire
Supervisory Board.
A resolution to remove the Supervisory
Board for lack of confidence cannot be
adopted until the Executive Board has
notified the Central Works Council of
the proposal for the resolution and the
reasons therefore.
If the General Meeting removes the
Supervisory Board members for lack
of confidence, the Executive Board
must request the Enterprise Chamber
of the Amsterdam Court of Appeal
to temporarily appoint one or more
Supervisory Board members.
Composition
The Supervisory Board must consist of
three or more members, with the total
number of members of the Supervisory
Board determined by the Supervisory
Board. As at 31 December 2023, the
Supervisory Board consisted of seven
members, who are all independent within
the meaning of best practice provision
2.1.8 of the Dutch Corporate Governance
Code, and there were no vacancies.
The profile of the Supervisory Board is
available on the NN Group website.
Information on the composition and
the members of the Supervisory Board
can be found on pages 84–85 and in
the Report of the Supervisory Board, on
page 94.
As at 31 December 2023, the Supervisory Board consisted of the following persons*:
Name Position Date of birth Gender Nationality Appointment
Termination/
reappointment Tenure**
David Cole Chair (as of the close of
the AGM on 29 May 2019)
2 October 1961 Male Dutch and
American
1 January 2019,
reappointment
19 May 2022
2026 5 years
Pauline van der
Meer Mohr
Vice-chair (as of the close
of the AGM on 2 June 2023)
22 February 1960 Female Dutch 1 January 2023 2026 1 year
Inga Beale Member 15 May 1963 Female British 20 May 2021 2025 2 years
Robert Jenkins Member 17 January 1951 Male American 2 February 2016,
reappointment
28 May 2020
2024 8 years
Rob Lelieveld Member (recommended
by Central Works Council)
29 September
1962
Male Dutch 1 September
2021
2025 2 years
Cecilia Reyes Member 3 February 1959 Female Filipino
and Swiss
20 May 2021 2025 2 years
Hans Schoen Member (recommended
by Central Works Council)
2 August 1954 Male Dutch 7 July 2014,
reappointments
31 May 2018 &
19 May 2022
2024 9 years
* Ms Vletter–van Dort’s term of appointment as Supervisory Board member and vice-chair ended at the close of the AGM on 2 June 2023.
* On 29 February 2024 it was announced that the Supervisory Board has decided to nominate Koos Timmermans for appointment as member of the Supervisory Board for a term of four years.
The proposal will be submitted for adoption at the AGM to be held on 24 May 2024.
** The tenure up to the date of publication of this Annual Report.
Corporate governance continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
99
NN Group N.V.
2023 Annual Report
Hélène Vletter-van Dort was appointed
to the Supervisory Board on 6 October
2015 pursuant to the enhanced
recommendation right of the Central
Works Council. She was reappointed
on 29 May 2019. As of the close of
the AGM on 28 May 2020, Ms Vletter-
van Dort served as vice-chair of the
Supervisory Board.
Ms Vletter-van Dort’s term of
appointment ended at the close of the
AGM on 2 June 2023.
Ms Vletter-van Dort holds a Master’s in
Corporate and Commercial Law from the
University of Leiden and a PhD from the
Utrecht University, Title ‘Equal treatment
of shareholders when distributing price
sensitive information’.
Ms Vletter-van Dort’s positions
included professor of financial law &
governance at the Erasmus School of
Law, member of the supervisory board
of the Netherlands Public Broadcasting
(NPO), partner of De Bestuurskamer,
supervisory board member of Anthos
Fund & Asset Management B.V., and
member of the Board of Stichting
Nyenrode. Furthermore, she holds a
position with the Ivo centre for financial
law and governance.
Remuneration
Information on the remuneration of the
members of the Supervisory Board can
be found in the Remuneration Report,
on pages 123-124.
Committees of the Supervisory Board
As at 1 January 2023, the Supervisory
Board had established four committees:
the Risk Committee, Audit Committee,
Remuneration Committee, and
Nomination and Corporate Governance
Committee. As of 2 June 2023, the
Supervisory Board has decided to change
the organisation of its committees
by combining the Remuneration
Committee and the Nomination and
Corporate Governance Committee into
the Nomination, Remuneration and
Governance Committee. Therefore, as
of 2 June 2023, the Supervisory Board
has established three committees: the
Audit Committee, the Risk Committee,
and the Nomination, Remuneration and
Governance Committee.
The organisation, duties and
working methods of the Supervisory
Board committees are detailed in a
separate charter for each committee.
These charters are available on the
NN Group website.
Information on the duties and
responsibilities of the respective
committees and their composition
can also be found in the Report of the
Supervisory Board on pages 89-94.
Conflicts of interest
No transactions were entered into in
2023 in which there were conflicts of
interest with Executive Board members
and/or Supervisory Board members that
are of material significance to NN Group
and/or to the relevant board members.
Diversity and inclusion
NN Group aims to have an adequate
and balanced composition of its boards.
In order to ensure such composition at all
times, several relevant selection criteria
are balanced and (re)appointments to
these boards are made on the basis of
harmonised policies, including the D&I
Policy, and in accordance with legal and
regulatory requirements.
The objective of the D&I Policy is to set
forth our approach to reaching a diverse
and inclusive composition of NN Group’s
boards and senior management. In order
to get to a balanced composition of our
Boards (and senior management), the
appointment procedures for Executive
Board members, Management Board
members and Supervisory Board
members, as well as the NN Group
Human Resources Framework Standard,
applicable to the Management Board
members and (other) members of
our senior management (excluding
Executive Board members), include
various principles and targets regarding
the recruitment and appointment or
nomination (where applicable) for these
positions. These principles and targets,
and the guiding principles included in
the profile of the Executive Board and
Management Board and the profile of the
Supervisory Board as well as in the D&I
Policy are taken into account when
(re)appointing board members.
This means, that in board composition
(and senior management) we strive for a
balanced representation in nationality,
nation of origin, race, ethnicity,
languages spoken, belief system, gender,
age, sexual orientation, neurodiversity
and physical diversity. In addition, there
has to be a balance in the affinity with the
nature and culture of the business of the
company and its subsidiaries.
As of 1 January 2021, NN Group aims to
have a gender balance of at least 40%
women and 40% men for its boards.
As of 2021, NN Group also has a target
to have at least 40% women in senior
management positions. Since 2022,
these positions include the Management
Board, managerial positions reporting
directly to a Management Board member
and all senior managerial positions
reporting to a business unit CEO.
With the application of ambitious gender
diversity targets for its boards, and the
target to have more than 40% women
in senior management positions (by
2025), NN Group complies with the
requirement to set ambitious gender
diversity targets as included in the act
on gender diversity in boards of Dutch
companies (Wet tot wijziging van Boek
2 van het Burgerlijk Wetboek in verband
met het evenwichtiger maken van de
verhouding tussen het aantal mannen
en vrouwen in het bestuur en de raad
van commissarissen van grote naamloze
en besloten vennootschappen, ‘the Act
on gender diversity’) which entered into
force on 1 January 2022.
In support of the ambitious gender
diversity targets, NN Group has set an
action plan, that is also adopted by the
(other) NN Group companies in scope of
the Act on gender diversity. This action
plan supports a healthy and diverse
succession pool for senior management
throughout the organisation, as part of
our Diversity and Inclusion and Key Talent
Management policy and processes.
We have set out various actions on the
different drivers behind our Diversity and
Inclusion roadmap such as: enhanced
Corporate governance continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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processes, data & monitoring, visibility
and networks, and mindset & awareness.
Actions include among others:
• The 40% target must be taken into
account in the succession planning
and process for appointments
of persons in board and senior
management positions
• At least once a year Talent Review
& Succession Planning sessions
for senior management positions
are organised
• Strive for a minimum of 50%
females on shortlists for senior
management positions
• A list of female talent pool is kept
and participation in succession
planning sessions and leadership and
development programmes is ensured
• Engagement with female talent pool
and increase visibility (examples:
networking events, mentoring
programme Women in Leadership
Network, etc.)
• Performing equal pay analysis
Composition of NN Group’s
Executive, Management and
Supervisory Boards and senior
management
NN Group’s aim to have a gender balance
of at least 40% women and 40% men for
its boards, and the fact that its Executive
Board consists of only two members
requires the Executive Board to consist
of one female and one male. In 2023, the
composition of the Executive Board was
50% female and 50% male, meeting this
target. Considering the limited number
of members in the Executive Board,
achieving a well-rounded representation
of the diverse criteria outlined in
our D&I Policy is challenging. As the
Executive Board members are part of the
Management Board as well, we prioritise
attaining diversity balance in the
Management Board. For the Management
Board, NN Group also aims to have a
gender balance of at least 40% of both
women and men. In 2023, the gender
balance of the Management Board
was 37.5% female and 62.5% male.
The succession of Fabian Rupprecht,
former CEO International of NN Group,
by Frank Eijsink as per 1 September
2023 did not result in an improved
gender balance of the Management
Board. However, as Frank Eijsink has
worked in various international positions,
dedicating a significant portion of his
life to understanding and working in
different cultures, this has allowed him
to develop skills that are relevant for an
international leadership position and
contributed significantly in diversity
of thought. Throughout 2023, the
Management Board was diverse and
inclusive; its members representing a
broad diversity of thought. In addition,
the affinity with the nature and culture
of the business of the company and its
subsidiaries was well balanced across
the Management Board.
Although the act on gender diversity
in boards of Dutch companies includes
a statutory diversity quota of at least
one-third for both women and men on
supervisory boards of listed companies,
NN Group aims to have a gender balance
of at least 40% of both women and
men for its Supervisory Board. As from
1 January 2023, the composition of the
Supervisory Board was 50% female and
50% male. Following Hélène Vletter-van
Dort stepping down as per the close of the
AGM on 2 June 2023, this composition is
43% female and 57% male.
As per the Supervisory Board’s rotation
schedule, the terms of appointment
of Robert Jenkins and Hans Schoen
will end as per the close of the AGM
on 24 May 2024. As announced on
29 February 2024, the Supervisory
Board has decided to nominate Koos
Timmermans for appointment as
member of the Supervisory Board,
which appointment is anticipated to
become effective on 24 May 2024.
On 21 March, it is announced that Robert
Jenkins is nominated for reappointment.
If the proposed appointment and
reappointment are adopted, the
composition of the Supervisory Board
as per the close of the AGM on 24 May
2024 will continue to be 43% female and
57% male.
In 2023, the composition of the
Supervisory Board was diverse and
inclusive. Despite many members
belonging to the same age group,
representation among others of
nationality, nation of origin, ethnicity,
languages spoken, gender, and sexual
orientation was diverse, resulting in a
board that is characterised by strong
diversity of thought. In addition, the
affinity with the nature and culture
of the business of the company and
its subsidiaries was well balanced
across the Supervisory Board. In future
appointments of Executive, Management
and Supervisory Board members,
NN Group will continue to consider
all applicable laws and regulations,
our D&I Policy and relevant selection
criteria including but not limited to
executive experience, experience in
corporate governance of large stock-
listed companies, and experience in the
political and social environment in which
NN Group operates.
As at 31 December 2023, 40% of senior
management positions were held by
women. More information on senior
management positions and on inflow of
employees can be found in the Diversity
and inclusion section on pages 39-40
of this Annual Report, and is deemed
to be incorporated by reference herein.
We believe our company is strongest
when we embrace the full spectrum
of humanity. Regardless of what we
look like, where we come from, or who
we love. That is why NN Group takes a
stand for diversity, inclusion and equal
opportunities for all. When people
inside of our company represent the
people outside our company, we can
be more responsive to what they
expect, want and need, also in changing
circumstances. After all, change is a
constant factor in our lives, also in the
financial sector. More information can
be found in the Diversity and inclusion
section on pages 39–40 of this Annual
Report and our NN Statement on
Diversity and Inclusion.
General Meeting
Frequency, notice and agenda
Each year, no later than the month
of June, NN Group holds its annual
general meeting (AGM). Its general
purpose is to discuss the Report of
the Management Board, advise on the
Remuneration Report, adopt the annual
accounts, release the members of the
Corporate governance continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
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2023 Annual Report
Executive Board and the members of the
Supervisory Board from liability for their
respective duties, appoint and reappoint
members of the Supervisory Board,
decide on the dividend to be declared,
if applicable, and decide on other items
that require shareholder approval
under Dutch law. Extraordinary General
Meetings are held whenever the
Supervisory Board or the Executive
Board deems such to be necessary.
In addition, one or more shareholders
who jointly represent at least 10% of the
issued share capital of NN Group may, on
application, be authorised by the court in
interlocutory proceedings of the district
court to convene a General Meeting.
General Meetings are convened by
a public notice via the NN Group
website no later than on the 42nd day
before the day of the General Meeting.
The notice includes the place and time
of the meeting and the agenda items.
Shareholders who, alone or jointly,
represent at least 3% of the issued share
capital of NN Group may request to place
items on the agenda, provided that
the reasons for the request are stated
therein and the request is received by
the chair of the Executive Board or the
chair of the Supervisory Board in writing
at least 60 days before the date of the
General Meeting.
Admission to the General Meeting
Each holder of shares in the share
capital of NN Group entitled to vote, and
each other person entitled to attend
and address the General Meeting,
is authorised to attend the General
Meeting, to address the General Meeting
and to exercise voting rights.
For each General Meeting, a statutory
record date will, in accordance with
Dutch law, be set on the 28th day prior
to the date of the General Meeting,
to determine whose voting rights and
rights to attend and address the General
Meeting are vested. Those entitled to
attend and address a General Meeting
may be represented at a General Meeting
by a proxy holder authorised in writing.
The 2023 AGM of NN Group was held
in hybrid form. Shareholders were
able to attend in person or virtually or
follow the meeting via a live webcast.
Questions could be submitted in advance,
as well as during the meeting in person or
virtually. Voting rights could be exercised
during the meeting in person or by
electronic means. Shareholders could
also exercise their voting rights by
providing an electronic proxy with voting
instructions in advance.
Voting and resolutions
Each share in the share capital of
NN Group confers the right on the holder
to cast one vote. At a General Meeting
all resolutions must be adopted by an
absolute majority of the votes cast,
except in those cases in which the law
or the Articles of Association require a
greater majority. If there is a tie in voting,
the proposal concerned will be rejected.
Powers of the General Meeting
The most important powers of the
General Meeting are to:
• Appoint members of the Supervisory
Board upon nomination of the
Supervisory Board
• Recommend persons to the
Supervisory Board for nomination as a
member of that board
• Abandon its trust in the
Supervisory Board
• Release the members of the Executive
Board and the members of the
Supervisory Board from liability for their
respective duties
• Advise on the Remuneration Report
• Adopt the remuneration policy for
the members of the Executive Board
and the remuneration policy for the
members of the Supervisory Board,
including the remuneration for the
Supervisory Board members, upon a
proposal of the Supervisory Board
• Adopt the annual accounts
• Appoint the external auditor
• Approve resolutions of the Executive
Board regarding important changes in
the identity or character of NN Group or
its business
• Issue shares, restrict or exclude pre-
emptive rights of shareholders and
delegate these powers to the Executive
Board, upon a proposal of the Executive
Board which has been approved by the
Supervisory Board
• Authorise the Executive Board to
repurchase shares
• Reduce the issued share capital, upon
a proposal of the Executive Board
which has been approved by the
Supervisory Board
• Dispose the profit remaining after
the payment of dividend on any
outstanding preference shares and
after a decision has been taken on
the addition of all or part of the profits
to the reserves, upon a proposal of
the Executive Board which has been
approved by the Supervisory Board
• Amend the Articles of Association,
upon a proposal of the Executive
Board which has been approved by the
Supervisory Board
Shares and share capital
Classes of shares and NN Group Continuity
Foundation
The authorised share capital of NN Group
consists of ordinary shares and
preference shares. Depositary receipts
for shares are not issued with the
cooperation of NN Group.
Currently, only ordinary shares are issued,
while a call option to acquire preference
shares is granted to the foundation
Stichting Continuïteit NN Group (NN Group
Continuity Foundation). The objectives of
the NN Group Continuity Foundation are
to protect the interests of NN Group, the
business maintained by NN Group and
the entities with which NN Group forms a
group and all persons involved therein, in
such a way that the interests of NN Group
and those businesses and all persons
involved therein are protected to the best
of its abilities, and by making every effort
to prevent anything which may affect the
independence and/or the continuity and/
or the identity of NN Group and of those
businesses in violation of the interests
referred to above. The NN Group
Continuity Foundation shall pursue its
objectives, inter alia, by acquiring and
holding preference shares in the share
capital of NN Group and by enforcing
the rights, in particular the voting
rights, attached to those preference
shares. To this end, NN Group Continuity
Foundation has been granted a call
option by NN Group.
Corporate governance continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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figures
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NN
8 Annual
accounts
9 Other
information
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According to the call option agreement
concluded between NN Group and
NN Group Continuity Foundation,
NN Group Continuity Foundation has
the right to subscribe for preference
shares in the share capital of NN Group,
consisting of the right to subscribe for
such preference shares repeatedly.
This may happen each time up to a
maximum corresponding with 100% of
the issued share capital of NN Group
in the form of ordinary shares, as
outstanding immediately prior to the
exercise of the subscribed rights, less
one share (which equals a maximum of
50% less one share after dilution), from
which maximum shall be deducted any
preference shares already placed with
NN Group Continuity Foundation at the
time of the exercise of the subscribed
rights. NN Group Continuity Foundation
qualifies as a legal entity independent
from NN Group, within the meaning of
section 5:71, paragraph 1, subparagraph
c of the Dutch Financial Supervision Act.
As at 31 December 2023, the board of
NN Continuity Foundation consisted of
three members who are independent
from NN Group: Marc van Gelder (chair),
Karin Bergstein (treasurer) and Steven
Perrick (secretary).
Issuance of shares and pre-emptive rights
The General Meeting may resolve to issue
shares in the share capital of NN Group,
or grant rights to subscribe for such
shares, upon a proposal of the Executive
Board which has been approved by the
Supervisory Board.
The Articles of Association provide that
the General Meeting may delegate the
authority to issue shares, or grant rights
to subscribe for shares, to the Executive
Board, upon a proposal of the Executive
Board which has been approved by the
Supervisory Board.
If the Executive Board has been
designated as the body authorised to
resolve upon an issue of shares in the
share capital of NN Group, the number
of shares of each class concerned
must be specified in such designation.
Upon such designation, the duration of
the designation shall be set, which shall
not exceed five years. A resolution of the
Executive Board to issue shares requires
the approval of the Supervisory Board.
Upon the issue of new ordinary shares
(or the granting of rights to subscribe for
ordinary shares), each holder of ordinary
shares in the share capital of NN Group
has a pre-emptive right in proportion
to the aggregate nominal value of his
or her shareholding of ordinary shares.
Holders of ordinary shares have no
pre-emptive right upon (a) the issue of
new ordinary shares (or the granting of
rights to subscribe for ordinary shares):
(i) against a payment in kind, (ii) to
employees of NN Group or of a group
company, or (iii) to persons exercising
a previously granted right to subscribe
for ordinary shares, and (b) the issue of
preference shares.
Upon a proposal of the Executive
Board which has been approved by the
Supervisory Board, the General Meeting
may resolve to limit or exclude the pre-
emptive rights. According to the Articles
of Association, the General Meeting may
designate the Executive Board as the
competent body to do so upon a proposal
of the Executive Board which has been
approved by the Supervisory Board.
Both resolutions require a majority of at
least two-thirds of the votes cast, if less
than one-half of the issued share capital
is represented at the General Meeting.
The designation to the Executive Board
to resolve to limit or exclude the pre-
emptive rights may be granted for a
specified period of time of not more
than five years and only if the Executive
Board has also been designated or is
simultaneously designated the authority
to resolve to issue shares. A resolution
of the Executive Board to limit or exclude
the pre-emptive rights requires the
approval of the Supervisory Board.
Designation of the Executive Board
at the 2019 and 2023 annual general
meetings
Share issuance in the context of issuing
Contingent Convertible Securities
On 29 May 2019, the General Meeting
designated the Executive Board for a
term of five years, from 29 May 2019
up to and including 28 May 2024, as the
competent body to resolve, subject to
the approval of the Supervisory Board,
on the issuance of ordinary shares in
the share capital of NN Group (including
the granting of rights to subscribe for
ordinary shares) upon conversion of any
Contingent Convertible Securities (CCS)
instruments in accordance with its terms
and conditions during the term of the
CCS instruments.
This authority of the Executive Board
is limited to a maximum of 30% of
the issued share capital of NN Group
as at 29 May 2019. This designation
enables the Executive Board to issue
CCS instruments and to set the terms
and conditions for any CCS instrument,
including the limitation or exclusion of
pre-emptive rights, the mechanism for
the conversion and the conversion price.
Share issuance and limitation of
pre-emptive rights
On 2 June 2023, the General Meeting
designated the Executive Board for a
term of 18 months, from 2 June 2023 up
to and including 1 December 2024, as
the competent body to resolve, subject
to the approval of the Supervisory Board,
to issue ordinary shares in the share
capital of NN Group and to grant rights
to subscribe for such shares, and to
limit or exclude the pre-emptive rights
of existing shareholders with respect to
such issue of ordinary shares in the share
capital of NN Group and such granting of
rights to subscribe for ordinary shares.
The authority of the Executive Board
is limited to a maximum of 10% of the
issued share capital of NN Group as at
2 June 2023.
Rights issue
On 2 June 2023, the General Meeting
designated the Executive Board for a
term of 18 months, from 2 June 2023 up
to and including 1 December 2024, as
the competent body to resolve, subject
to the approval of the Supervisory Board,
to issue ordinary shares in the share
capital of NN Group and to grant rights
to subscribe for ordinary shares by way
of a rights issue. This authority of the
Executive Board is limited to a maximum
Corporate governance continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
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2023 Annual Report
of 20% of the issued share capital of
NN Group as at 2 June 2023.
This authority to issue shares may be
used for any purpose, including but not
limited to safeguarding or conserving the
capital position of NN Group and mergers
or acquisitions.
Acquisition of own shares
NN Group may acquire fully paid-up
shares in its own share capital for
no consideration (om niet) or if:
(a) NN Group’s shareholder’s equity
less the payment required to make the
acquisition does not fall below the sum
of called-up and paid-in share capital
and any statutory reserves, and (b)
the nominal value of the shares which
NN Group acquires, holds or holds as
pledge, or which are held by a subsidiary,
does not exceed half of the issued share
capital. The acquisition of its own shares
by NN Group for consideration requires
authorisation by the General Meeting.
The authorisation is not required for
the acquisition of shares for employees
of NN Group or of a group company
under a scheme applicable to such
employees. The Executive Board may
resolve, subject to the approval of the
Supervisory Board, to alienate the shares
acquired by NN Group in its own share
capital. The resolution of the Executive
Board to acquire shares in its own share
capital for consideration requires the
prior approval of the Supervisory Board.
No voting rights may be exercised in the
General Meeting with respect to any share
or depositary receipt for such share held
by NN Group or by a subsidiary, and no
payments will be made on shares which
NN Group holds in its own share capital.
On 2 June 2023, the General Meeting
authorised the Executive Board for a
term of 18 months, from 2 June 2023
up to and including 1 December 2024, to
acquire in the name of NN Group, subject
to the approval of the Supervisory Board,
fully paid-up ordinary shares in the share
capital of NN Group. This authorisation
is subject to the condition that following
such acquisition the par value of the
ordinary shares in the share capital of
NN Group which are held by NN Group or
for which NN Group holds a right of pledge,
or which are held by its subsidiaries for
their own account, shall not exceed 10%
of the issued share capital of NN Group as
at 2 June 2023. Shares may be acquired
on the stock exchange or otherwise, at
a price not less than the par value of the
ordinary shares in the share capital of
NN Group and not higher than 110% of
the highest market price of the shares
on Euronext Amsterdam on the date of
the acquisition or on the preceding day
of stock market trading.
Cancellation of own shares
On 2 June 2023, the General Meeting
adopted the proposal to reduce the
issued share capital of NN Group by
cancellation of ordinary shares held by
NN Group in its own share capital up to
a maximum of 20% of the issued share
capital of NN Group as at 2 June 2023.
The cancellation may be executed in
one or more tranches. The number of
ordinary shares to be cancelled shall
be determined by the Executive Board.
Capital reduction shall take place
with due observance of the applicable
statutory provisions and the articles of
association of NN Group.
Transfer of shares and transfer
restrictions
The transfer of ordinary shares in the
share capital of NN Group included in
the Statutory Giro System must take
place in accordance with the provisions
of the Dutch Securities Giro Act (Wet
giraal effectenverkeer).
The transfer of shares in the share capital
of NN Group not included in the Statutory
Giro System requires an instrument
intended for that purpose. To become
effective, NN Group has to acknowledge
the transfer, unless NN Group itself is
a party to the transfer. The Articles of
Association do not restrict the transfer
of ordinary shares in the share capital
of NN Group, while the transfer of
preference shares in the share capital
of NN Group requires the prior approval
of the Executive Board. NN Group is not
aware of the existence of any agreement
pursuant to which the transfer of ordinary
shares in the share capital of NN Group
is restricted.
Significant shareholdings
Substantial shareholdings, gross and
net short positions
Under the Dutch Financial Supervision
Act, each legal and natural person having
a substantial holding or gross short
position in relation to the issued share
capital and/or voting rights of NN Group
that reaches, exceeds or falls below any
one of the following thresholds: 3%, 5%,
10%, 15%, 20%, 25%, 30%, 40%, 50%,
60%, 75% and 95%, must immediately
give written notice to the Dutch Authority
for Financial Markets.
These notifications will be made public
via the Register substantial holdings
and gross short positions (Register
substantiële deelnemingen en bruto
short posities) of the Dutch Authority for
Financial Markets.
Pursuant to EU regulation No 236/2012,
each legal and natural person holding
a net short position representing 0.1%
of the issued share capital of NN Group
must report this position and any
subsequent increase by 0.1% to the
Dutch Authority for Financial Markets.
Each net short position equal to 0.5% of
the issued share capital of NN Group and
any subsequent increase of that position
by 0.1% will be made public via the short
selling register of the Dutch Authority for
Financial Markets.
In 2023, no legal or natural person held
at least 10% of the shares in NN Group,
therefore NN Group did not enter into any
transaction with any such person.
Information on shareholders with an
(indirect) holding and/or gross short
position of 3% or more can be found
in the Annual Report on page 43 and
is deemed to be incorporated by
reference herein.
Dutch Corporate Governance Code
NN Group is subject to the Dutch
Corporate Governance Code (Code).
The application of the Code by NN Group
during the financial year 2023 is described
in the publication Application of the
Dutch Corporate Governance Code by
NN Group, dated 20 March 2024, which
is available on the website of NN Group.
Corporate governance continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
104
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2023 Annual Report
This publication is to be read in conjunction
with this chapter and is deemed to
be incorporated by reference herein.
The Code is available on the website of
the Dutch Corporate Governance Code
Monitoring Committee (www.mccg.nl).
VNO-NCW Tax Governance Code
NN Group endorsed the VNO-NCW Tax
Governance Code and reports on the
application of its principles in our 2023
TTC Report on our website.
Articles of Association
The General Meeting may pass a
resolution to amend the Articles of
Association with an absolute majority
of the votes cast, but only on a proposal
of the Executive Board, which has been
approved by the Supervisory Board.
NN Group’s Articles of Association were
last amended on 28 May 2020.
Change of Control
NN Group is not party to any material
agreement that takes effect, alters or
terminates upon a change of control of
NN Group following a takeover bid as
referred to in article 5:70 of the Dutch
Financial Supervision Act, other than
a revolving credit facility agreement
entered into with a syndicate of lenders.
The revolving credit facility agreement
includes a change of control provision
which entitles the lenders to cancel
the commitment under the facility and
declare any outstanding amounts under
the facility immediately due and payable.
The assignment contracts with the
members of the Executive Board provide
for severance payments, which are
to become due in case of termination
of the contract in connection with a
public bid as defined in article 5:70 of
the Dutch Financial Supervision Act.
Severance payments to the members
of the Executive Board are limited to
a maximum of one year’s fixed salary,
in line with the Code and the Dutch
Financial Supervision Act.
External auditor
The external auditor is appointed
by the General Meeting upon
nomination of the Supervisory Board,
after recommendation by the Audit
Committee. On 28 May 2015, the General
Meeting appointed KPMG Accountants
N.V. (KPMG) as the external auditor of
NN Group for the financial years 2016
through 2019. On 29 May 2019, KPMG
was reappointed as the external auditor
of NN Group for the financial years 2020
through 2022. On 19 May 2022, KPMG
was further reappointed as external
auditor of NN Group for the financial
years 2023 through 2025.
The external auditor may be questioned
at the AGM in relation to its audit opinion
on the annual accounts. The external
auditor will therefore attend and be
entitled to address this meeting. In 2023,
the external auditor attended the AGM.
The external auditor also attended the
meetings of the Audit Committee and the
Risk Committee of the Supervisory Board
in 2023, as well as part of the meetings
of the Supervisory Board where relevant,
such as the meeting in which the 2022
Annual Accounts were approved.
In 2023, NN Group initiated the selection
process to select a new external
auditor as of the financial year 2026.
It is intended to appoint a new external
auditor in the General Meeting in 2025.
More information on NN Group’s policy
on external auditor independence is
available on the NN Group website.
Sustainability governance
Strategy setting
The Executive Board is responsible for
the formulation and execution of the
company’s strategy, consistent with its
position on sustainable long-term value
creation. In 2023, NN refined our five
strategic commitments which reflects
our focus on transforming our business
(read more on pages 20-25). Our strategy
remains aligned with long-term trends
including sustainability matters and we
see increased demand from customers
for sustainable products and services.
The strategy pursued by the Executive
Board is supervised by the Supervisory
Board. Each Supervisory Board
Committee covers sustainability
matters that fall within its
responsibilities and area of expertise.
Reporting the main points of discussion
and recommendations to the Supervisory
Board safeguards an integrated approach
with regard to sustainability matters at
Supervisory Board level.
The Management Board is entrusted
with the day-to-day management
and overall strategic direction of
NN Group. This includes the setting
and achievement of the company’s
objectives, and any sustainability
matters it deems relevant.
Within the Management Board, the
Chief People, Communications, and
Sustainability Officer (CPCSO), who
reports to the CEO, has Corporate
Citizenship, including sustainability,
in her portfolio and is the sponsor of
topics related to sustainability, climate,
responsible investment and responsible
insurance underwriting discussed in
the Management Board. The CRO, also
a member of the Management Board,
and reporting to the CEO, has day-to-
day responsibility for NN Group’s Risk
Management function.
The CRO is tasked with ensuring both
the Management Board and Supervisory
Board are informed of and understand
at all times the material risks NN Group
is exposed to, which also includes
sustainability risks.
The General Counsel, also a member
of the Management Board, ensures
that both the Management Board and
Supervisory Board are informed and
understand the legal and compliance
risks related to sustainability matters.
The CRO is also the sponsor of the
NN Group ORSA, in which outcomes
of scenario analyses, including
climate change, are evaluated on an
annual basis. To ensure NN Group
adheres to regulations related to
sustainability matters, the NN Group
Control Functions, including Risk and
Compliance, are tasked with overseeing
proper implementation and monitoring
ongoing compliance.
In addition, each of our Management
Board members is responsible for
Corporate governance continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
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NN
8 Annual
accounts
9 Other
information
105
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2023 Annual Report
promoting and integrating sustainability
into their respective businesses or
functions as relevant.
Sustainability matters are regularly on
the agenda of the Management Board
covering items such as (material) policy
changes and updates, assessments of
external benchmarks and ratings, and
sustainability risks and opportunities.
The progress on the financial and
strategic targets, including the net-
zero ambition, is discussed on a
quarterly basis.
NN Group has the following dedicated
committees around sustainability to
support the strategy execution and
monitoring of progress. See also the
visual on page 106.
Purpose Council
NN Group introduced its Purpose
Council in 2019, consisting of several
Management Board members, heads
of relevant staff departments and
business representatives, which is
chaired by the CPCSO and sponsored by
the CEO. The Purpose Council supports
the Management Board in steering,
measuring and reporting on targets
related to customers, people and society.
Performance on strategic targets is
reported via a Strategy dashboard,
which is evaluated in the Purpose
Council and subsequently in the
Management Board on a quarterly basis.
The Purpose Council also performs an
advisory and consultative role with
regard to purpose-related areas such as
sustainability matters.
Responsible Investment Committee
NN’s Responsible Investment (RI)
Framework policy describes our
approach to integrating sustainability
factors, including climate change, in
our investment process. NN Group has
an RI governance structure to facilitate
multidisciplinary discussions and
exchange of information between the
right people at the right time. The RI
Committee is chaired by the Group
Chief Investment Officer, who reports
to the CEO. Other members include the
CPCSO, the CRO, and representatives
from the RI team and Investment
Risk Management. The RI Committee
advises the Management Board on the
RI strategy and policies, and oversees
the RI approach of NN Group. It defines
the net-zero roadmap and related action
plans and targets and performs oversight
and steering of the net-zero ambition for
the proprietary investment portfolio. It is
authorised to decide on RI standards,
non-material policies and updates, and
investment restrictions. New material
policy proposals and updates, such as for
oil and gas in 2023, require approval of
the Management Board, while asset class
specific strategies for Paris Alignment
require approval of the NN Group
Investment Office Investment
Committee. The RI Committee reports on
progress and challenges at least once a
year to the Management Board.
Controversy and Engagement Council
The Controversy and Engagement
Council plays a key role in monitoring
and overseeing NN Group’s direct,
collaborative and delegated controversy
engagement activities. Established in
2023, the Council is chaired by the Active
Ownership function of the RI team, with
members from NN Group’s Investment
Office and Corporate Citizenship
department. The Council meets quarterly
to discuss progress on engagement
activities and determine necessary steps
to achieve engagement objectives at the
individual company level.
In addition to its oversight and advisory
function, the Council provides inputs and
recommendations to the RI Committee,
which validates whether engagement
remains feasible or if a company
should be added to the NN Group
Restricted List.
Responsible Insurance Underwriting
Committee
In the first half of 2023, an operational
Net-Zero Insurance working group
aligned net-zero activities within the
business units involved, to include
insurance activities in the 2023 Climate
Action Plan (CAP) update. To strengthen
our net-zero strategy beyond investing,
we set up an equivalent Committee for
Responsible Insurance Underwriting
(RIU) in the second half of 2023.
The RIU Committee is chaired by the
CEO of NN Re, who reports to the CRO.
Members include the Manager Group
Sustainability and representatives
of Group Risk, Group Compliance,
Netherlands Life, Netherlands Non-
life and NN Insurance International.
This Committee will strategically
discuss sustainability matters for NN’s
insurance underwriting activities,
draft and keep oversight on NN Group
RIU-related policies, standards and
guidelines, proactively align and guide
responsible insurance throughout the
company, and report to the Management
Board on progress. RIU-related policies
and standards require approval of the
Management Board.
Strategy execution and integration in
operating model
NN Group has a dedicated Corporate
Citizenship department, with a
Sustainability expert centre, to
advise the Management Board on the
implementation of the overall approach
to sustainability. The experts work
closely together with the different
business units and functions to steer
and advise on embedding sustainability
matters into their business in accordance
with the overall strategy. This includes
our net-zero commitments, with a
focus on accelerating the transition to
a low-carbon economy, an RI strategy
and sustainability-related strategic
targets. A dedicated working group
was established to prepare and align
NN Group’s CAP 2023 update.
Within NN Group, we have a dedicated
RI team that consists of several ESG and
RI professionals from within NN Group’s
Corporate Citizenship team and the
NN Group Investment Office.
To meet regulatory requirements, further
embed sustainability in our products
and services, and build sustainability
capabilities throughout the organisation,
in 2022 we set up a Task Force
Sustainability in Business (TFSB) for, in
principle, a period of two years. With the
additional dedicated resources, we aim
to accelerate our efforts and provide
Corporate governance continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
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NN Group N.V.
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Integration of climate-related action into strategy, decision making and business
Strategy setting
Supervisory Board
Supervises the strategy pursued by the Executive Board.
Management Board
Is responsible for the company’s day-to-day management and overall strategic
direction. This includes the setting and achievement of the company's objectives
and any sustainability matter it deems relevant.
Executive Board
Is responsible for the formulation and execution of the company's strategy,
which includes our net-zero ambition.
Purpose Council
Advisory, consultative and preparatory role
Alignment overarching sustainability themes
Chaired by CPCSO, includes CEO, several other Management Board members, heads of staff and BU managers.
Responsible Investment Committee
Advises Management Board on RI strategy, policies and standards, incl.net-zero investment target and restrictions
Chaired by CIO, members include CPCSO, CRO, RI Team and IRM.
Operational implementation
Responsible Insurance Underwriting Committee
Advises Management Board on RIU strategy, incl. net-zero insurance underwriting targets.
Chaired by CEO NN Re, includes representatives Netherlands Life, Netherlands Non-life,
Compliance, and Risk Management.
Executive Board compensation
Several strategic targets linked to the Executive Board’s variable
remuneration are related to sustainability, including the contribution to
the transition to a low-carbon economy and the reduction of our direct
environmental footprint. These climate- related targets set measurable
reduction targets for a specific year.
Education and training
The Executive Board, Management Board, Supervisory Board and
senior management attend knowledge sessions on our sustainability
developments, the regulatory landscape, and our net-zero strategy
from internal and external experts. We have introduced specific
learning modules for specialists and a general sustainability training
for all employees in 2023.
Cross-functional working groups
Ensure there is internal alignment and oversight on specific
themes (e.g. net-zero strategy, biodiversity)
Centre of Expertise | Group functions | Business Units
Develop and implement sustainability policies and
standards and embed it in day to day operations
Taskforce Sustainability in Business workstreams
Facilitate implementation of the Taskforce objectives
Controversy and Engagement Council
Monitoring and overseeing engagement activities and recommending to RI Committee on potential restrictions.
Chaired by the Active Ownership function of the RI team, members include representatives from
NN Group's Investment Office and Corporate Citizenship department.
Risk management
Enterprise Risk Management (ERM) and Investment Risk Management (IRM)
Integrates sustainability in risk framework & policies, risk management and reporting,
and helps mitigate strategic, financial and non-financial risks
Strategy execution and monitoring
Taskforce Sustainability in Business
Taskforce Sustainability in Business
Advises Management Board and supports BUs on meeting regulatory requirements,
integration of sustainability in our products and services, and capability build-up.
Sustainability is embedded in our governance
Executive
Board
Management
Board
S
u
p
e
r
v
i
s
o
r
y
B
o
a
r
d
Corporate governance continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
107
NN Group N.V.
2023 Annual Report
our business units with guidance and
support in implementation.
The Risk, Compliance and Legal
functions have dedicated resources
working on sustainability matters.
The functions review, challenge and
support management in setting and
realising its sustainability strategy and
targets, as well as to identify and assess
sustainability risks. Our Risk, Compliance
and Legal functions support our business
lines with implementing sustainability-
related regulations, including integrating
this into NN’s own risk framework.
Three lines of defence
2
Corporate governance continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
108
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2023 Annual Report
Corporate governance continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
109
NN Group N.V.
2023 Annual Report
Corporate governance continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
110
NN Group N.V.
2023 Annual Report
Corporate governance continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
111
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2023 Annual Report
Our purpose
We help people care for what matters most to them
The link between our strategy and remuneration
Our ambition
We want to be an industry leader, known for our customer
engagement, talented people, and contribution to society
Finance
Other strategic
Sustainability
Composition of the Executive Board’s remuneration (in EUR 1,000 and gross)
CEO %
Base salary in cash 53
Base salary in shares 13
Variable remuneration
in cash
6
Variable remuneration
in shares
6
Pension 1
Other emoluments 4
Individual savings
allowance
14
Employer cost
social security
3
CFO %
Base salary in cash 54
Base salary in shares 14
Variable remuneration
in cash
6
Variable remuneration
in shares
6
Pension 1
Other emoluments 2
Individual savings
allowance
14
Employer cost
social security
3
CEO
CFO
100%
100%
Above targetBelow target
Weighting
Outcome
Outcome
Target
Outcome
Outcome
Outcome
Customers and
distribution
We see our
customers as the
starting point of
everything
we do
We develop and
provide attractive
products
and services
We empower our
colleagues to be
their best
We are financially
strong and seek
long-term returns
for shareholders
We contribute to
the well-being of
people and the
planet
Products and
services
SocietyPeople and
organisation
Financial
strength
20%
20%
15%
15%
10%
25%
40%
25%
15%
15%
Remuneration at a glance
EUR 2,902 EUR 1,932
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
112
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2023 Annual Report
Opening statement
On behalf of the Nomination,
Remuneration and Governance
(NRG) Committee, I would like to
elaborate on the main remuneration-
related developments during the
year and other relevant topics that
are important to NN Group and its
stakeholders. In addition to regular
remuneration topics, the following topics
highlighted my first year as chair of the
NRG Committee.
Remuneration in perspective
The year 2023 was marked by a globally
uncertain macroeconomic environment,
including the ongoing geopolitical
conflicts and challenges posed by
inflationary pressures, which impact
the lives of many of us. Even though the
continuation of geopolitical uncertainties
is affecting NN Group as a whole, its
business performance remained robust.
At the same time, the NRG Committee
was mindful of these circumstances,
including the current labour shortage, in
its activities in 2023.
Annual general meeting 2023
We were pleased with the General
Meeting’s positive advice on the 2022
Remuneration Report at NN’s annual
general meeting (AGM) in 2023.
The proposal was adopted with 94.84%
of the votes granted in favour, slightly
above the support level in 2022.
The proposal to amend the level of the
fixed annual fee for the members of
the Supervisory Board was adopted
with 99.06% of the votes in favour.
We aim to improve the content of the
Remuneration Report each year to meet
our shareholder’s expectations. The NRG
Committee will closely monitor the
implementation of new remuneration-
related disclosure requirements,
including those arising from the
Corporate Sustainability Reporting
Directive (CSRD).
At the close of the AGM on 2 June
2023, the term of appointment of
Hélène Vletter-van Dort as member
and vice-chair of the Supervisory Board
and as chair of the Remuneration
Committee ended. On the same day,
the Remuneration Committee and
Nomination and Corporate Governance
Committee were combined into a
single new committee called the NRG
Committee. I am honoured to succeed
Hélène and to be appointed as vice-chair
of the Supervisory Board and chair of the
newly combined NRG Committee. I want
to thank Hélène for almost eight years
of highly valued contributions in chairing
the Remuneration Committee, and for
the very pleasant cooperation since my
arrival as Supervisory Board member
in 2023.
Remuneration policy update
In 2023, I had the pleasure of meeting
with numerous stakeholders who
shared with me their feedback on the
remuneration report and remuneration
policies for the members of the
Executive Board and the Supervisory
Board. In these interactive meetings,
we discussed the intended changes in
these policies, as they will be submitted
for adoption to the General Meeting at
the AGM in 2024. Stakeholders invited
included shareholders, shareholder
representative bodies, proxy advisors,
employees including trainees and
young professionals, the Central Works
Council, a regulator, and the Dutch
general public, including customers.
I would like to express my gratitude to
all stakeholders for providing the NRG
Committee with their valuable input.
When drafting the intended changes
in the remuneration policies, the NRG
Committee has sought a careful balance
of all feedback, views and interests of the
various stakeholders.
In May 2023, the Supervisory Board
discussed the approach and steps for
the review of the remuneration policies
for the Executive Board and Supervisory
Board. The Supervisory Board thoroughly
reviewed these policies and carefully
considered all remuneration elements.
This review also took into account
the changes in the Dutch Corporate
Governance Code, the feedback received
from internal and external stakeholders
in the stakeholder consultation sessions
mentioned above, as well as external
market practices. In general, we
concluded that the remuneration policies
operate as intended. The updated
remuneration policy for the Executive
Board, will include more focus on
sustainable long-term value creation,
more detailed information about the
circumstances under which deviation can
be applied and for which remuneration
elements, as well as more information
on how the policy ensures alignment
between the remuneration of the
Executive Board and the long-term
interest of all stakeholders.
During the stakeholder consultation
sessions, I was pleased to hear from
investors that they appreciated that
the remuneration principles of our
policies are well aligned with NN Group's
practice and culture. The Supervisory
Board carefully considered the input as
provided by our stakeholders and spent
time incorporating this to the best extent
possible and in a balanced way, when
preparing the final updated remuneration
policies that will be proposed for
adoption to the 2024 General Meeting
for adoption.
2024 performance objectives
The stakeholder consultation
sessions emphasised that related to
the performance objectives of the
Executive Board, we should continue
to work towards objectives that have
more focus, are simpler and more
measurable. The Supervisory Board
took this into consideration and I am
pleased that the performance objectives
for 2024 are more focused, simplified
and straightforward to communicate –
leading to fewer performance objectives.
Even with this approach, we hold on
to strong elements from the previous
set-up, such as the coverage of our
strategic commitments, including the
sustainability-related objectives.
Quality of disclosures on
performance objectives
As a result of this stakeholder
engagement, the level of disclosure in
this year's Remuneration Report has
increased compared with previous years.
The most significant improvements relate
to presenting the Executive Board’s
remuneration packages and performance
objectives outcomes concisely at the
Remuneration Report
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
113
NN Group N.V.
2023 Annual Report
beginning of the Remuneration Report.
This page also indicates the background
of each strategic commitment, for
example, if they have a financial or
sustainability-related background.
Dutch Collective Labour Agreement
In December 2023, the majority of the
members of CNV Vakmensen, De Unie
and FNV Finance voted in favour of
NN Group’s offer, leading to a new
Collective Labour Agreement (CLA) that
came into effect on 1 January 2024.
The NRG Committee monitored the CLA
negotiations with the unions, and is
pleased with the positive outcome.
As chair of the NRG Committee, it is
my privilege to present NN Group’s
2023 Remuneration Report. I would
once more like to express my gratitude
to all stakeholders who contributed
to our dialogues and I look forward to
continuing our interactions and seeing
shareholders at the upcoming AGM.
Pauline van der Meer Mohr
Chair of the Nomination, Remuneration
and Governance Committee
Remuneration Report continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
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2023 Annual Report
Introduction
This Remuneration Report describes
NN Group’s remuneration policy and
methodology. Furthermore, details are
provided on the remuneration of the
Supervisory Board and the Executive
Board. This Report is divided into the
following subsections:
I Remuneration in general
II Remuneration of the Executive Board
III Remuneration of the
Supervisory Board
Reference is made to Note 47 ‘Key
management personnel compensation’
in the Consolidated annual accounts for
more information on the remuneration of
the Executive Board, Management Board
and Supervisory Board, including loans
and advances provided to the members
of these Boards. This Remuneration
Report serves as the report referred
to in article 2:135b of the Dutch Civil
Code and Best Practice Provision 3.4.1
of the Dutch Corporate Governance
Code. The information provided in this
Remuneration Report is based on the
current remuneration policies of NN Group
as applicable in 2023.
Remuneration in general
NN Group has an overall remuneration
policy, as described in the NN Group
Remuneration Framework, which sets
out guidelines and principles for all
country and business unit remuneration
policies within NN Group. On an annual
basis, the NN Group Remuneration
Framework is reviewed and updated
in line with legislative changes and
other relevant internal and external
developments. NN Group aims to apply
a clear and transparent remuneration
policy that is adequate to attract and
retain expert leaders, senior staff
and other highly qualified employees.
The NN Group strategy sets out our goals
and how we will achieve them through
our shared purpose, our ambition
and our five strategic commitments.
These strategic commitments are
embedded in the remuneration policies
within NN Group. The remuneration
policy is also designed to support
NN Group’s employees to act with
integrity and to carefully balance the
interests of our stakeholders. It supports
doing business with the future in mind,
and aims to focus on creating sustainable
long-term value for all stakeholders.
At the same time, NN Group is conscious
of its role in society, which is considered
and embedded in the remuneration policies
and practices as applicable to NN Group
employees. These policies promote robust,
balanced and effective risk management,
including risk management of sustainability
risks (risks related to environmental, social
and governance factors) and the integration
thereof in the risk management system
and procedures. This will, among others,
be supported by performance objective
setting processes.
NN Group’s remuneration policy for
executives and senior staff is based on
a total compensation approach, and is
benchmarked on a regular basis with
relevant national and international peers,
both within the financial sector and outside
the financial sector. Clear financial and
strategic performance objectives are set
which are aligned with the overall strategy
of NN Group, both in the short term and
the long term, to ensure that remuneration
is properly linked to individual, team and
NN Group performance. The remuneration
policy supports a focus on the company’s
long-term interests and the interests of
its customers and various stakeholders
by ensuring that, by linking remuneration
to the company’s long-term objectives,
staff are not encouraged via remuneration
to take excessive risk. In addition, the
remuneration policy ensures that NN Group
complies with all the relevant (inter)
national regulations on remuneration
as relevant to our business, such as the
Act on Further Remuneration Measures
for Financial Undertakings (Wet nadere
beloningsmaatregelen financiële
ondernemingen) that entered into force
per 1 January 2023.
Gender equality contributes to an inclusive
working environment by ensuring equal
opportunities, working conditions and
equal pay for equal work. NN Group
constantly strives to promote and achieve
equal pay for equal work, or work of
equal value, for all employees, as this is
a key component of supporting equal
opportunities for all genders.
To this end, NN Group has implemented
remuneration policies that do not
differentiate for gender. This means that,
in principle, all aspects of NN Group’s
remuneration policies and processes
are aimed to be gender neutral, such as
the determination of salary levels for our
employees and the process in relation to
setting the award and pay-out levels for
variable remuneration.
NN Group’s pay is analysed annually with a
focus on gender equality. When comparing
similar compensation grades and job
profiles, it can be concluded that we offer
equal pay for equal work. We are proud to
be once again included in the Bloomberg
Gender Equality Index, given that equal pay
& gender pay parity are topics that are taken
into account in the Bloomberg assessment.
More information on our actions and
efforts in relation to gender diversity,
and the key findings resulting from our
latest equal pay analysis, can be found on
pages 39–40. Equal pay will remain under
continuous attention, as we believe equal
pay is a key component of supporting equal
opportunities for everyone. Together, we
will continue on our path of building and
fostering a diverse, inclusive, healthy and
safe workplace for all colleagues.
To further accelerate the process of
closing the gender pay gap, the Pay
Transparency Directive has been adopted
by the European Parliament. NN Group has
started the implementation process and is
committed to implement all requirements
of this Directive before it is integrated
in national legislation of the European
Member States.
With respect to performance year 2023,
the total number of staff of NN Group
eligible for variable remuneration is 5,547.
The total approved variable remuneration
budget is EUR 37.4 million, which will
be paid in March or April 2024. In 2023,
7 persons employed within NN Group
received a total remuneration of more
than EUR 1 million. For this calculation, the
individual base salary, awarded variable
remuneration and, where applicable, life
course savings schemes, individual saving
allowances and pension contributions
were included.
Remuneration Report continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
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Remuneration of the
Executive Board
The members of the Executive Board
have a commission contract (in Dutch:
overeenkomst van opdracht) with
NN Group N.V. David Knibbe was appointed
to the Executive Board and designated as
Chief Executive Officer (CEO) of NN Group
and as a result chair of the Executive Board
effective 1 October 2019. After notification
to the General Meeting of NN Group at the
AGM on 2 June 2023, David Knibbe was
reappointed as member of the Executive
Board and again designated as CEO of
NN Group and as a result chair of the
Executive Board for a term of four years,
which term will end at the close of the
2027 AGM.
Annemiek van Melick was appointed as
a member of the Management Board
effective 1 June 2022. She was appointed
member of the Executive Board and
designated as Chief Financial Officer (CFO)
and as a result vice-chair of the Executive
Board effective 1 July 2022. Her term of
appointment will end at the close of the
AGM of NN Group in 2026.
Composition EB remuneration
Remuneration elements Portion Split Awarded Retention period
Base salary in cash 80%
Base salary in shares 20% 5 years
Total base salary 100%
Variable remuneration Min 0%
Target 16%
Max 20%
50% in cash 60% deferred
40% upfront
50% in shares 60% deferred 5 years
40% upfront 5 years
Total direct remuneration Min 100%
Target 116%
Max 120%
Members of the Executive Board can be
reappointed by the Supervisory Board for
consecutive periods of up to four years
after notification to the General Meeting of
NN Group.
The remuneration policy for the members
of the Executive Board was adopted by
the General Meeting on 28 May 2020,
effective as from 1 January 2020.
The data presented in this report relates to
remuneration awarded to the members of
the Executive Board in respect of the whole
of 2023. The 2023 total remuneration as
provided to the members of the Executive
Board is in line with the applicable
remuneration policy. The Supervisory
Board has not applied any deviation from
the procedure for the implementation of
the remuneration policy or derogation from
the remuneration policy for the members of
the Executive Board.
The remuneration policy for the members
of the Executive Board is required to be
submitted to a vote by the General Meeting
at least every four years.
In 2023, therefore, a thorough review
of the remuneration policy took place in
which all remuneration elements were
considered. In general, it was concluded
that the policy operates at intended.
The policy has been amended to reflect
the changes in the Dutch Corporate
Governance Code and to take into account
the feedback received from internal and
external stakeholders and external market
practices. The remuneration policy for the
Executive Board will be submitted to a
vote by the General Meeting at the AGM
in 2024.
The remuneration of the members
of the Executive Board consists of a
combination of fixed remuneration
(‘base salary’; of which 80% is paid
in cash and 20% in shares) and base
salary related allowances, variable
remuneration (of which 50% is paid
in cash and 50% in shares), pension
arrangements and other emoluments
as described below. To support the
sustainable long-term value creation,
a retention period of five years starting
from the date of award is applicable to all
share awards. The detailed composition
of the Executive Board remuneration is
illustrated below.
Remuneration Report continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
116
NN Group N.V.
2023 Annual Report
The total compensation of the members
of the Executive Board is benchmarked on
a regular basis against market data that
includes peers both inside and outside
the financial sector in the Netherlands
and abroad. The peers are selected
with reference to asset base, market
capitalisation, revenue and number of
employees. For 2023, the peer group
consists of ABN AMRO Bank, Achmea,
Aegon, Ageas, Akzo Nobel, Aviva,
Hannover Rueck Se, Koninklijke DSM, Legal
& General Group, Munich Re, Rabobank,
Randstad, Swiss Life Holding, Talanx and
Wolters Kluwer. NN Group has worked
with a consistent peer group approach
since the current remuneration policies of
NN Group came into force on 1 January
2020. To determine the peer group for
2024, a fundamental review of the guiding
principles as defined in 2019 took place
to ensure that they are still future-proof
and fit for purpose. In this process, the
Supervisory Board was supported by
an independent advisor. Based on this
review the Supervisory Board decided
that for 2024, the only change needed
was replacing AEGON and DSM, as
these peers moved their headquarters
outside the Netherlands. Taking into
account the predefined selection criteria,
these companies have been replaced
by two suitable new peers, being a.s.r.
and Koninklijke Philips.
In line with the remuneration policy
as adopted by the General Meeting on
28 May 2020, the Supervisory Board
aims to set the remuneration levels
below market median. If, based on the
annual benchmark, the remuneration
level is not in line with the approved
policy, appropriate measures will be
considered. The Supervisory Board also
takes into account all stakeholders’
interests, including social context and
the results of scenario analyses, before
finalising executive pay levels.
Only in the event of an involuntary exit
(e.g. a mutual agreement at NN Group’s
initiative where the member of the
Executive Board has been requested
to leave), Executive Board members
are eligible to an exit arrangement
limited to a maximum of one year
base salary. Exit arrangements will
in no way qualify as reward for failure
(within the meaning of the applicable
regulatory requirements).
Executive Board base salary
The Executive Board base salary is
based on the remuneration policy for the
Executive Board, which aims at retaining
highly qualified leaders and positioning the
Executive Board total direct compensation
(i.e. the total of the base salary and
variable remuneration) below the market
median. Aligned with this remuneration
policy, the Supervisory Board evaluates
the remuneration of the members of the
Executive Board each year in comparison
with the remuneration at NN Group’s
peer companies. The Supervisory Board
also consults external experts to provide
relevant benchmark insights.
In 2023, the Supervisory Board performed
an assessment of the Executive Board’s
remuneration, taking into account, among
others, the position compared to the
market, internal pay relativities and the
interests and opinions of stakeholders.
On the basis of this assessment, the
Supervisory Board has decided not to
grant a salary increase to the members
of the Executive Board during the year
2023. As part of the regular annual review
cycle, the Supervisory Board will continue
to monitor the salaries of the members of
the Executive Board, and relevant related
considerations during 2024.
Executive Board
variable remuneration
The remuneration policy for the
members of the Executive Board
combines the short- and long-
term variable components into one
structure. This structure supports
both sustainable long-term value
creation and short-term company
40% upfront
shares
60%
deferred
shares
1,3
40% upfront
cash
60%
deferred
cash
1,2
Variable
remuneration
Deferral period
Deferral period Retention period
Retention period
Retention period
Retention period
Deferral period
Deferral period
Deferral
Deferral
50%
shares
50%
cash
Performance year
Award
moment
Vesting
year 1
Vesting
year 2
Vesting
year 3
Vesting
year 4
Vesting
year 5
Remuneration Report continued
1 One-third of the deferred cash and deferred shares awards vest each year.
2 Subject to ‘Hold-Back and Claw-Back’ clauses and leaver provisions during the deferral period up to the third anniversary award moment.
3 Subject to ‘Hold-Back and Claw-Back’ clauses and leaver provisions during the deferral period. Subsequently, the retention period applies until the fifth anniversary award moment.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
117
NN Group N.V.
2023 Annual Report
objectives. Performance objectives
reflect NN Group’s medium-term
strategic priorities as communicated
to the market and as such contribute
to the long-term strategy of NN Group.
Variable remuneration is based on both
the financial and strategic performance
of the individual and the company.
The Supervisory Board annually
determines the performance objectives
at the start of the performance year and
defines the relevant ‘at target’ level.
Following the performance year, the
Supervisory Board determines the extent
to which the financial performance
objectives are met based on the full-
year financial results. The extent to
which strategic performance objectives
are met is also assessed by the
Supervisory Board.
The emphasis on long-term performance
within the variable component of the
compensation package is realised by
means of deferral of 60% of the total
variable remuneration. Furthermore, an
annual re-evaluation by the Supervisory
Board takes place with the option to
hold back (i.e. prevent from ever vesting)
and/or claw back vested and paid
variable remuneration. The Supervisory
Board has the authority to reclaim any
variable remuneration allocated to a
member of the Executive Board based
on inaccurate data and/or behaviour
that led to significant harm to the
company. In addition, the Supervisory
Board has the authority to adjust
variable remuneration in the event that
the application of the predetermined
performance criteria would result in an
undesired outcome.
The maximum variable remuneration of
the members of the Executive Board for
performance year 2015 onwards has
been capped at 20% of the base salary
and the on target level of the annual
variable remuneration has been set at
16% of the base salary. This is in line with
the requirements of the Dutch regulatory
regime as applicable to NN Group.
Additionally, the short-term component
of variable remuneration (the so-called
‘Upfront Portion’) is 40% of the total
variable remuneration and is equally
divided between an award in cash and an
award in stock. The deferred portion is
also equally divided between an award in
deferred cash and an award in deferred
stock. Both the deferred cash and the
deferred stock awards are subject to
a tiered vesting on the first, second
and third anniversary of the grant date
(one-third per annum). Similar to the
shares awarded as fixed remuneration,
a retention period of five years starting
from the date of award is applicable
to all stock awards (both upfront and
deferred), with the exception that part of
the stock will be withheld at the relevant
date of vesting to cover any income tax
liability arising from the vested share
award (withhold-to-cover). In addition
to the general principles described
above, more specific details on the 2023
variable remuneration of the members of
the Executive Board are provided below.
Performance for the year 2023 was
assessed based on a number of
objectives, as outlined on the next
pages. Estimated risks and capital
adequacy were also taken into account
when determining the award of
variable remuneration.
Performance objectives of the
members of the Executive Board
The performance of the members of the
Executive Board is assessed annually
against their financial and strategic
objectives as set by the Supervisory
Board. When determining the objectives
for a specific performance year, the
Supervisory Board takes into account
the medium-term financial, as well
as strategic company targets which
contribute to the long-term strategy
of NN Group. When determining
the relative weighting between the
financial and strategic performance
objectives, the Supervisory Board takes
into account the requirements of the
Dutch regulatory regime as applicable
to NN Group and the Executive Board
remuneration policy. At the end of the
year, the Supervisory Board executes a
performance assessment to determine
to what extent the objectives have been
met. The Supervisory Board is supported
by various departments, such as Finance,
Corporate Development, Business
Strategy, Compliance, Corporate
Relations, Risk and HR, to provide
relevant input.
The ambition of our company describes
what we want to achieve in the years to
come. We want to be an industry leader,
known for our customer engagement,
talented people, and contribution to
society. All our different business entities
are expected to contribute to the delivery
of our ambition. To realise this ambition,
five strategic commitments have
been identified and the performance
objectives of the members of the
Executive Board were structured around
these commitments.
At the end of 2023, we refined our five
strategic commitments and introduced
a new commitment on becoming a
‘digital and data-driven organisation’,
while combining our commitments on
customers and products and services
into a single commitment, called
‘engaged customers’. This update
reflects our focus on transforming our
business by further simplifying our
technology and operations, giving us
room to grow our business further.
The financial and strategic performance
objectives of the members of the
Executive Board over the year 2024, as
set by the Supervisory Board in January
2024, are aligned with the refined
strategic framework.
Remuneration Report continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
118
NN Group N.V.
2023 Annual Report
CEO: 20% CFO: 20%
Weighting
Target
i. Relational net promoter scores
(NPS-r) for the Netherlands and
Insurance International in line
with market average
• On track: on an aggregated level,
NPS-r in the Netherlands was on
par with market average and the
International business scored
above market average.
ii. Successfully execute strategy for
the Netherlands on digital, data,
technology simplification and
engagement platforms
• On track: the agreed strategic
items and identified business
value for 2023 are delivered
and reported within time
and budget. These served
as a basis for redefining the
strategic commitments.
iii. Insurance International: successfully
execute strategy on bionic
advisor model, data and customer
engagement platforms
• On track: strong performance
of data enhanced sales support
for agents (bionic advisor),
supported by recently deployed
capabilities, leading to higher
sales (Annual Premium Equivalent
(APE)) from lead conversion for
all business units compared to
2022. Good progress has been
made in the Salesforce system
implementation as well as in digital
use cases.
Customers and
distribution
We see our customers
as the starting point of
everything we do
Key objectives and achievements:
i. Netherlands Life: expand DC
capabilities, both in accumulation
and decumulation. Measured by
total net flows
• Above target: the total contribution
to Assets under Management (AuM)
Defined Contribution in Netherlands
Life was significantly above target,
based on total net inflows of
EUR 2.3 billion.
ii. Netherlands Non-life: implement 2025
strategy, measured by implementation
milestones of the key strategic
programmes
• On track: good results on the
established milestones and benefits
are higher than expected. On track
in the transition towards the strategy
2030 programme (both new and
ongoing projects).
iii. NN Bank: Successfully implement
Digital Retail Bank strategy (meet key
milestones) and originate EUR 6bn in
mortgages
• On track: steady progress on
strategic initiatives related to data,
ESG and streamlining processes with
a positive impact on the Banking
products and services.
• Below target: NN Bank originated
EUR 4.7 billion in mortgages in a
competitive, but gradually recovering
mortgage market as a result of
interest rate movements.
iv. Insurance Europe: continue to shift to
protection products for higher customer
relevancy and margins, and continue to
invest in our main banking partnerships
(measured by GWP and VNB)
• Above target: both Gross
Written Premiums (GWP) of in-
force protection business and
Value New Business (VNB) of
Bancassurance were above target
in 2023, mainly reflecting strong
business performance.
v. Japan: continued focus on SME Life
protection and long-term savings.
Measured by VNB of SME Life protection
and long-term savings products
• Below target: the VNB of SME
Life protection of Japan Life is
below target for 2023, mainly
driven by lower sales of cash value
insurance products.
vi. Continue to support a solid investment
capability build-up
• On track: NN has professionalised its
working relationship with its external
asset manager(s) following the sale
of NN Investment Partners, improved
its yearly fund evaluation process
and is moving DC investments to
dedicated funds/mandates.
vii. Product performance reviews
executed on a quarterly basis to ensure
they continue to add value to our
customers
• On track: in 2023, the overall number
of executed product reviews is in line
with the annual ambition level and in
line with 2022.
Products and services
We develop and provide attractive products and services
CEO: 10% CFO: 25%
Weighting
Target
Key objectives and achievements:
Remuneration Report continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
119
NN Group N.V.
2023 Annual Report
Remuneration Report continued
CEO: 15% CFO: 15%
Weighting
Target
i. Employee engagement of ≥ 7.8 for
NN Group for each of the MB members
• On track: the 2023 year-end
employee engagement survey
resulted in a score of 7.8.
• Colleagues feel connected with our
values: care, clear, commit, that
they have the right resources and
support to be successful working in
a hybrid setup, and that their work
is valued.
ii. Women in senior management
positions ≥ 39%
• Above target: at the end of 2023,
40% of senior management
positions in NN Group were
held by women.
iii. People Cycle and meaningful
conversations including usage on
NN Competencies: >95% of the
employees have a completed 2022
Year-end review conversation and
2023 Goal Setting
• Above target: the completion of
the year-end review of 2022 was
98.2% and the 2023 Goal Setting
was 93.8%, leading to an average
score of 96%.
iv. Management and execution of
workforce transformation activities
to overcome the most important
gaps in the Netherlands, Insurance
International and Group Support
Functions
• Above target: at the end of 2023,
all businesses with a target have
overachieved their objective to
upskill at least 50% of their people.
People and
organisation
We empower our
colleagues to be
their best
Key objectives and achievements:
i. Operating capital generation
(in EUR million)
Target Outcome
1,883 1,902
Threshold Cap
1,412 2,353
• Above target: full-year 2023 OCG
increased by 13% (excluding the
asset management business that was
sold in 2022) to EUR 1,902 million
from EUR 1,681 million in 2022.
The increase in OCG reflects higher
contributions from Netherlands
Non-life, Banking, the segment Other
and Insurance Europe, and a lower
contribution from Netherlands Life.
ii. Free cash flow to the holding
(in EUR million)
Target
1,530
Outcome
1,487
Threshold Cap
1,115 1,859
• Above target: full-year 2023 free
cash flow of EUR 1,530 million was
above target.
• Note that the free cash flow of EUR
470 million is adjusted for the capital
injection into Netherlands Life and
the capital injection into NN Spain.
iii. The transition to IFRS17, measured
by complete and timely availability
of information and adequate
understanding to manage internal and
external stakeholders
• On track: the IFRS17 disclosure is
embedded in the business processes.
iv. Department budgets for Control
Functions (CFO only)
• On track: for the CFO, additional
consideration was given to
the budget discipline of the
Finance department.
v. Manage risks according to ECF
framework requirements and further
improve ECF quality where necessary,
including inclusion of ESG related risks
• On track: the Effective Control
framework (ECF) activities are run
according to relevant requirements.
• The ECF quality is considered
adequate, with planned further
improvements on track. The inclusion
of ESG related risks is ongoing.
Financial strength
We are financially strong and seek solid long-term returns
for shareholders
CEO: 40% CFO: 25%
Weighting
Target
Key objectives and achievements:
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
120
NN Group N.V.
2023 Annual Report
Remuneration Report continued
i. Continue to drive action plans to
reduce GHG emissions of the corporate
investment portfolio by 25% by 2025
and by 45% by 2030. Net additions to
climate solutions between EUR 550-
750m annually to be on track to reach at
least EUR 11bn investments in climate
solutions by 2030
• On track: Greenhouse Gas (GHG)
emissions on corporate investment
portfolio are reduced with 10% vs
the baseline 2021 and a year on
year decline of 15%, mainly driven
by sales, maturities and portfolio
management decisions.
• Above target: total investments in
climate solutions well ahead of target
and has reached EUR 10.8 billion,
mainly driven by higher-than-
expected investments in green bonds
and infrastructure debt.
ii. Further implement ESG policies in
insurance underwriting and set specific
targets to transition the underwriting
portfolio to net-zero GHG emissions
by 2050
• On track: new targets have been
set in relation to the reduction of
carbon emissions for insurance
underwriting (26% by 2030) and
reduction in carbon emission
intensity (kgCO
2
/m2) associated
with residential mortgages.
iii. Reduce GHG emissions of our facilities/
offices and business air travel by at
least 25% in 2023 (versus 2019) and
implement local plans to reduce GHG
emissions to meet the 35% reduction
target in 2025
• On track: the year 2023 shows an
increase in gas consumption and air
travel post Covid 19, but still on track
to a reduction of CO
2
emissions of our
own operations of 35% in 2025.
iv. Develop action plans to further embed
sustainability aspects in our products &
services with focus to address societal
and environmental challenges
• On track: in 2023, a first report on the
sustainability portfolio was drafted,
based on the Strategic Sustainability
Framework. Plans for further
embedding sustainability in the
business in 2024 have been written,
including the transition to business
as usual. Roadmap workshops were
held in Insurance International and
deliverables for local businesses have
been established.
v. Support the financial, physical and/or
mental well-being of 400K people by
2023 (cumulative 2022-2023)
• Above target: the 2023 ambitions
with regard to the number of people
supported (>400K), investing 1% of
operating result before tax to support
relevant initiatives and the number of
hours volunteered by NN colleagues
have all been reached.
Society
We contribute to the well-being of people and the planet
CEO: 15% CFO: 15%
Weighting
Target
Key objectives and achievements:
2023 Variable Remuneration award
The Supervisory Board concluded that
the Executive Board continued to deliver
a strong performance throughout
the year 2023. The members of the
Executive Board have provided solid
leadership through a period of external
volatility, underpinned by an overall
robust performance for both the financial
and strategic objectives.
The overall outcome on the objectives
related to the Financial Strength
commitment was above target.
The overall outcome in relation to the
strategic objectives is also positive,
with the overall score of the objectives
related to the Products and Services
commitment being slightly below target,
while the other strategic objectives
related to the Customer and Distribution,
People and Organisation and Society
commitments being above target.
On the basis of the assessment of the
Supervisory Board, it was concluded to
award David Knibbe in his capacity of
chair of the Executive Board and CEO a
variable remuneration of 17.3% of his
base salary, which is EUR 334,325 and
108% of his variable remuneration target
(2022: 97.2% of target) and Annemiek
van Melick in her capacity of vice-chair of
the Executive Board and CFO a variable
remuneration of 17.3% of her base
salary, which is EUR 226,541 and 108%
of her variable remuneration target
(2022: 100.1% of target).
In 2023, there was no hold back
applied to unvested deferred variable
remuneration nor was claw back applied
to paid or vested variable remuneration
for any of the Executive Board members.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
121
NN Group N.V.
2023 Annual Report
Remuneration Report continued
Remuneration of the Executive Board members (in EUR 1,000 and gross)
David Knibbe
Annemiek van
Melick
2023 2022 2023 2022
Base salary in cash 1,548 1,463 1,049 524
Base salary in shares 387 366 262 131
Total base salary 1,935 1,829 1,311 655
Variable remuneration 334 284 227 105
Total direct remuneration 2,269 2,113 1,538 760
Employer contribution to pension fund 27 25 27 12
Individual savings allowance
1
421 399 275 139
Other emoluments 106 107 33 191
Employer cost social security
2
79 78 59 29
Relative proportion base salary versus variable remuneration
85.3%/
14.7%
86.5%/
13.5%
85.3%/
14.7%
86.2%/
13.8%
1 The individual saving allowance scheme is applicable for both the Executive Board and staff of NN Group in the Netherlands.
2 The employer social security contributions do not impact the overall remuneration received by Executive Board members.
The total remuneration as disclosed in the table above (for 2023: EUR 4.8 million) includes all variable remuneration related to the
performance year 2023. Under IFRS-EU, certain components of variable remuneration are not recognised in the profit and loss
account directly, but are allocated over the vesting period of the award. The comparable amount recognised in staff expenses
in 2023 and therefore included in ‘Total expenses’ in 2023, relating to the fixed expenses of 2023 and the vesting of variable
remuneration of 2023 and earlier performance years, is EUR 4.6 million.
2023 Variable remuneration of the Executive Board members (in EUR 1,000 and gross)
Upfront
cash paid
Deferred
cash granted
Upfront
shares granted
Deferred
shares granted Total
David Knibbe 67 100 67 100 334
Annemiek van Melick 45 68 45 68 227
Executive Board pension arrangements
The pension arrangement for the members of the Executive Board is the same as the pension arrangement that is applicable to all
staff of NN Group in the Netherlands and as of 1 October 2022 comprises an individual defined contribution (IDC) plan up to the
annual tax limit EUR 128,810 for the year 2023) and a taxable individual savings allowance on pensionable fixed remuneration
exceeding the tax limit.
The table above provides details on the amount of contribution that was paid by NN Group to the pension arrangement of the
Executive Board members.
Executive Board other emoluments
The members of the Executive Board were eligible for a range of other emoluments, which may include healthcare insurance, life
cycle saving scheme, transportation and external tax advice. The Executive Board members were also able to obtain banking and
insurance services from NN Group in the ordinary course of business and on terms that apply to all employees of NN Group in the
Netherlands. As at 31 December 2023, the Executive Board members did not have loans outstanding with NN Group regulated
entities. No guarantees or advanced payments were granted to the Executive Board members. The table above provides details on
the amount of emoluments that was paid by NN Group to the benefit of the Executive Board members.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
122
NN Group N.V.
2023 Annual Report
Remuneration Report continued
Long-term incentives awarded in previous years and in 2023 to the Executive Board members
The Executive Board members receive deferred cash and upfront and deferred share awards under NN Group’s Aligned
Remuneration Plan (ARP). The table below provides a summary of the number of NN Group shares awarded and vested for
the Executive Board members during 2023 under the ARP.
Overview of number of NN Group shares awarded and vested for the Executive Board members during 2023
Plan Award Date
Outstanding and
unvested per
1 January
2023
Awarded
during
2023
Vested
during
2023
Outstanding and
unvested per
31 December
2023
Vesting
Price in
euros
David Knibbe Deferred Shares Plan 16 March 2020 1,147 – 1,147 – 33.80
Deferred Shares Plan 15 March 2021 1,568 – 784 784 34.85
Deferred Shares Plan 14 March 2022 1,936 – 645 1,291 35.31
Deferred Shares Plan 13 March 2023 – 2,099 – 2,099 37.00
Upfront Shares Plan 13 March 2023 – 1,400 1,400 – 37.00
Annemiek van
Melick Deferred Shares Plan 16 March 2020 – – – – 33.80
Deferred Shares Plan 15 March 2021 – – – – 34.85
Deferred Shares Plan 14 March 2022 – – – – 35.31
Deferred Shares Plan 13 March 2023 – 904 – 904 37.00
Upfront Shares Plan 13 March 2023 – 603 603 – 37.00
The table below shows a summary of the (vested) NN Group shares held by the Executive Board members on 31 December 2023
(including the shares vested during 2023) and 31 December 2022. The total of shares is broken down into shares that may be sold
(free) and shares that remain subject to the retention period (restricted). The shares are either awarded as part of base salary or
variable remuneration.
NN Group shares held by the Executive Board members
2023
total
2022
total
2023
free
2022
free
2023
restricted
2022
restricted
David Knibbe 54,828 46,410 21,248 18,437 33,580 27,973
Annemiek van Melick 6,609 2,036 0 0 6,609 2,036
NN Group is dedicated to aligning the interests of the members of the Executive Board with those of the company and its
shareholders. This is realised through various ways, including awarding 50% of the variable remuneration in NN Group shares and
applying a five-year retention period as from the award date, during which period the shares cannot be sold. Furthermore, 20%
of the base salary of the Executive Board members is delivered in the form of NN Group shares, again with a mandatory retention
period of five years as from the award date. This way, the Executive Board members build up a substantial interest in NN Group
shares, without having formalised share ownership guidelines. As at 31 December 2023, the total value of the shares, based on
the year-end share price, equals 12 months of the gross base salary held by the Chief Executive Officer and 2 months of the gross
base salary held by the Chief Financial Officer.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
123
NN Group N.V.
2023 Annual Report
Remuneration Report continued
Remuneration of the Executive Board members, company performance and average employee remuneration
2023 2022 2021 2020 2019
Executive Board remuneration (amounts in Euro 1,000 and gross)
Total direct remuneration David Knibbe 2,269 2,113 2,102 2,059 515
Total direct remuneration Lard Friese
1
1,061
Total direct remuneration Annemiek van Melick 1,538 760
Total direct remuneration Delfin Rueda
2
820 1,682 1,669 1,705
Company performance (amounts in Euro million)
Operating capital generation 1,902 1,711 1,584 993 1,349
Operating result 2,528 1,743 2,036 1,889 1,794
Solvency II ratio 197% 197% 213% 210% 224%
Average remuneration (amounts in Euro 1,000 and gross)
Average employee remuneration 92.6 84.3 88.9 90.3 88.6
Pay ratio 31:1 32:1 30:1 30:1 26:1
1 Lard Friese stepped down as member and chair of the Executive Board and CEO of NN Group as of 12 August 2019. His remuneration in the capacity of CEO of NN Group is shown in the
table above.
2 Delfin Rueda stepped down as member of the Executive Board and CFO of NN Group as of 1 July 2022. His remuneration in the capacity of CFO of NN Group is shown in the table above.
the feedback received from internal and
external stakeholders and external market
practices. An updated remuneration policy
for the members of the Supervisory Board
will be submitted for adoption to the
General Meeting at the AGM in 2024.
NN Group does not grant variable
remuneration, shares or options to the
Supervisory Board members. This ensures
the independence of the Supervisory Board
and is in line with the Dutch Corporate
Governance Code. Supervisory Board
members may obtain banking and
insurance services from NN Group in
the ordinary course of business and on
terms that are customary in the sector.
As at 31 December 2023, the Supervisory
Board members did not have loans
outstanding with NN Group regulated
entities. No guarantees or advanced
payments were granted to Supervisory
Board members.
In line with market practice, a distinction
is made between the fees as provided to
the chair, vice-chair and other members
of the Supervisory Board. A fixed annual
expense allowance is payable to cover all
out-of-pocket expenses. Travel and lodging
expenses in relation to meetings are paid
by NN Group.
Remuneration of the
Supervisory Board
As at 31 December 2023, the Supervisory
Board was comprised of the following
members: Mr Cole, Ms Beale, Mr Jenkins,
Mr Lelieveld, Ms Reyes, Mr Schoen and
Ms Van der Meer Mohr. More information
on the composition of the Supervisory
Board and its Committees can be
found in the Report of the Supervisory
Board, on pages 86–94. The 2023 total
remuneration as paid to each of the
members of the Supervisory Board is
in line with the applicable Supervisory
Board Remuneration Policies effective
throughout 2023.
The Supervisory Board remuneration
policy needs to be submitted to the
General Meeting of NN Group for adoption
every four years based on Dutch law.
The Supervisory Board remuneration
policy, including an amendment to the level
of the fixed annual fee for the members of
the Supervisory Board has been adopted
by the General Meeting in June 2023.
The Supervisory Board remuneration
policy was last fully reviewed in 2020.
In the second half of 2023, a thorough
review of the remuneration policy took
place taking into account the changes in
the Dutch Corporate Governance Code,
Pay ratio
The pay ratio compares the total CEO
compensation and the remuneration
of all staff (‘pay ratio’) as stated in the
Dutch Corporate Governance Code.
For the CEO, the total remuneration used
in the pay ratio is the total remuneration
as disclosed in the Remuneration
Report. For the staff members, the total
remuneration used in the pay ratio is
the total remuneration as disclosed in
the Consolidated annual accounts Note
27 ‘Staff expenses’. In order to provide
a meaningful comparison, the total
remuneration of the staff population
excludes the remuneration of the CEO
of NN Group.
NN Group aims to align with the pay
ratio calculation method as prescribed
in the Dutch Corporate Governance
Code. The pay ratio calculation excludes
external staff costs and includes all
variable remuneration related to the
performance year.
The Supervisory Board considers trends
in the pay ratio in its assessment of the
compensation of the members of the
Executive Board, while Human Resources
closely monitors the pay ratio.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
124
NN Group N.V.
2023 Annual Report
Remuneration Report continued
The remuneration for the members of the Supervisory Board (in EUR)
1
Chair Vice-chair Member
Fixed annual fee Supervisory Board 116,000 78,500 71,000
Fixed annual fee for position in Committee 20,000 n/a
2
15,000
Fixed annual expense allowance to cover out-of-pocket expenses (travel and lodging
will be paid) 9,000 9,000 9,000
1 The level of the fixed annual fee for the members of the Supervisory Board is shown in the table above and is effective as from 1 June 2023.
2 There are no vice-chair positions in Supervisory Board Committees.
Fees and allowances of Supervisory Board members
1
Fixed annual fees
Total fixed gross
expense allowance Total
In EUR and gross 2023 2022 2023 2022 2023 2022
D.A. (David) Cole (chair)
2
143,708 140,500 9,000 9,000 152,708 149,500
P.F.M. (Pauline) van der Meer Mohr (vice-chair) 104,542 – 9,000 – 113,542 –
I.K. (Inga) Beale 97,250 92,000 9,000 9,000 106,250 101,000
H.J.G. (Heijo) Hauser
3
– 41,923 – 3,462 – 45,385
R.W. (Robert) Jenkins 97,250 92,000 9,000 9,000 106,250 101,000
R.J.W. (Rob) Lelieveld 114,542 105,537 9,000 9,000 123,542 114,537
C.G. (Cecilia) Reyes
2
107,250 102,508 9,000 9,000 116,250 111,508
J.W. (Hans) Schoen 104,333 109,000 9,000 9,000 113,333 118,000
C.C.F.T. (Clara) Streit
4
– 35,385 – 3,462 – 38,847
H.M. (Hélène) Vletter-van Dort
5
42,917 103,000 3,750 9,000 46,667 112,000
1 This table shows the fixed fees and expense allowances for the members of the Supervisory Board of NN Group for 2023 and 2022. Mr Schoen was appointed as Supervisory Board member of
Nationale-Nederlanden Levensverzekering Maatschappij N.V. as from 21 January 2020 and Nationale-Nederlanden ABN AMRO Verzekeringen Holding B.V. and ABN AMRO Schadeverzekering
N.V. as from 15 September 2021. Ms Beale has been appointed as Supervisory Board member of Nationale-Nederlanden Schadeverzekering Maatschappij N.V. and NN Non-life Insurance
N.V. as from 8 June 2022 and Mr Lelieveld has been appointed as Supervisory Board member of NN Re Netherlands N.V. as from 14 June 2022. In 2023, the total fees for these roles were
EUR 104,750.
2 Mandatory social security and occupational disability contributions in relation to the NN Group Supervisory Board fees are due for Mr Cole, for Ms Beale and for Ms Reyes on the basis of
specific local requirements as applicable to the Supervisory Board members. The mandatory employer contributions in relation to 2023 that are made to relevant local institutions amount
to EUR 19,690 for Mr Cole, EUR 19,397 for Ms Beale and EUR 7,382 for Ms Reyes. The relevant employee contributions are fully borne by Mr Cole, Ms Beale and Ms Reyes themselves, and the
Supervisory Board members are not compensated for that in any way.
3 At the close of the 2022 AGM on 19 May 2022, Mr Hauser’s term of appointment as NN Group Supervisory Board member ended.
4 At the close of the 2022 AGM on 19 May 2022, Ms Streit stepped down as member of the NN Group Supervisory Board.
5 At the close of the 2023 AGM on 2 June 2023, Ms Vletter-van Dort’s term of appointment as NN Group Supervisory Board member ended.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
125
NN Group N.V.
2023 Annual Report
The Executive Board is required to
prepare the annual accounts and the
Report of the management board
(bestuursverslag) of NN Group N.V.
for each financial year in accordance
with applicable Dutch law and the
International Financial Reporting
Standards (IFRS) as endorsed by the
European Union.
As required by section 5:25c
paragraph 2(c) of the Dutch Financial
Supervision Act, each of the signatories
hereby confirms that to the best of
his knowledge:
• The NN Group N.V. 2023 annual
accounts, as referred to in section
2:361 of the Dutch Civil Code
including the relevant additional
information as referred to in section
2:392 paragraph 1 of the Dutch Civil
Code, give a true and fair view of the
assets, liabilities, financial position
and profit or loss of NN Group N.V.
and the enterprises included in the
consolidation taken as a whole.
• The NN Group N.V. 2023 Report of the
management board (bestuursverslag),
as referred to in section 2:391 of the
Dutch Civil Code, gives a true and fair
view of the position at the balance
sheet date, and the development
and performance of the business
during the 2023 financial year of
NN Group N.V. and the enterprises
included in the consolidation taken as
a whole, together with a description
of the principal risks NN Group N.V.
is confronted with.
With reference to best practice
provision 1.4.3(i), (iii) and (iv) of the
Dutch Corporate Governance Code, the
Executive Board hereby confirms that,
to the best of its knowledge:
• The NN Group N.V.’s description of
its risk management organisation
and framework as described in the
Report of the management board
(bestuursverslag) including Note 50
Risk management to the Consolidated
annual accounts provides sufficient
insights into any material failings in
the effectiveness of the internal risk
management and control systems with
regard to, in any case, the strategic,
operational, compliance and reporting
risks as referred to in best practice
provision 1.2.1 of the Dutch Corporate
Governance Code.
• Based on the current state of affairs, it
is justified that the financial reporting is
prepared on a going concern basis.
• The NN Group N.V. 2023 Report of the
management board (bestuursverslag)
includes the material risks as referred
to in best practice provision 1.2.1 of the
Dutch Corporate Governance Code, and
the uncertainties, to the extent that
they are relevant to the expectation
of NN Group N.V.’s continuity for
the period of 12 months after the
preparation of the report.
The Executive Board of NN Group
N.V. assessed the effectiveness of
the internal control over financial
reporting during 2023. Based on the
Executive Board’s assessment, with
reference to best practice provision
1.4.3(ii) of the Dutch Corporate
Governance Code, the Executive Board
of NN Group N.V. concluded that the
risk management and control systems
provide reasonable assurance that the
financial reporting does not contain any
material inaccuracies.
The Hague, 20 March 2024
David Knibbe
CEO, chair of the Executive Board
Annemiek van Melick
CFO, vice-chair of the Executive Board
Conformity statement
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
126
NN Group N.V.
2023 Annual Report
7 Facts and figures
What we do centres around
people, professionalism, and
trust. We share more information
on our key strategic and financial
indicators, the carbon footprint
of our proprietary assets, and our
EU Taxonomy disclosures.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
127
NN Group N.V.
2023 Annual Report
Key financial indicators (in EUR million)
2023 2022 2021
Operating result
1
2,528 2,350 2,036
Net result (after minority interests)
1
1,172 1,634 3,278
Operating capital generation 1,902 1,711 1,584
Solvency II ratio 197% 197% 213%
Value of new business 330 432 428
Dividend (per ordinary share, in EUR) 3.20 2.79 2.49
NN Group share price (last trading day of the year, in EUR) 35.75 38.16 47.61
1 Amounts for 2022 are restated for the impact of IFRS 9 and 17. Amounts for 2021 are as published earlier and are not restated for the impact of IFRS 9 and 17.
Key strategic indicators
2023 2022 2021
Insurance businesses NPS compared with market average
– Relational Net Promoter Score Netherlands (NPS-r)
2
On par On par n/a
– Relational Net Promoter Score International (NPS-r) Above On par n/a
Employee engagement 7.8 7.9 7.7
− participation in the engagement survey
3
84% 82% 83%
Women in senior management positions
4
40% 40% 34%
Investments in climate solutions (EUR billion) 10.8 8.2 5.0
Contribution to our communities (cumulative number of people supported since
2022)
5
400,880 229,279 n/a
2 Customer engagement (NPS) covers all markets.
3 Employee engagement score and the percentage of participation consists of internal and external employees.
4 In 2020, the target group for this indicator was adjusted to Management Board and Management Board minus one managerial position (instead of the composition of our Senior
Leaders Group).
5 In 2022 we set a new target: supporting 1 million people in their financial, physical and mental well-being by 2025. The number of people supported in 2021 does not count towards the
target. In 2023, we supported 120,705 people in their financial well-being and 50,896 people in their physical and/or mental well-being.
Sustainability indices and ratings
2023 2022 2021
Indices
Dow Jones Sustainability Index (out of 100) 70 (Included) 80 (Included) 80 (Included)
FTSE4Good (Included) Included Included
Bloomberg Gender-Equality Index Included Included Included
Ratings and benchmarks
Sustainalytics
6
18.5/100
(low risk)
14.7/100
(low risk)
15.2/100
(low risk)
MSCI AA AA AA
ISS ESG research C C+ C+
CDP B B B
World Benchmarking Alliance financial system benchmark
7
8th position
VBDO (Ranking of Responsible Investments by Insurers in the Netherlands)
8
4th position
6 Sustainalytics provides ESG Risk Ratings scoring companies on their ESG risks from negligible (0-10), low (10-20), medium (20-30), high (30-40) to severe risk (40-100).
7 The World Benchmarking Alliance financial system benchmark assessment takes place once every two years. The 2022 assessment ranked NN Group 8th out of 395 financial institutions
and 2nd in the Insurance Sector.
8 VBDO 4th out of 20 for Ranking of Responsible Investments by Insurers in the Netherlands and 2nd out of 51 on Tax Transparency Benchmark.
Key strategic and financial indicators
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
128
NN Group N.V.
2023 Annual Report
Responsible investment indicators
2023 2022 2021
Voting
Shareholders meetings where we voted
1
46 50 3,307
– as % of total votable meetings 96% 100% 97%
Agenda items on which we voted 594 686 35,985
How we voted on agenda items (%)
– for 92% 89% 83%
– against 7% 10% 15%
– abstain/other 1% 1% 2%
Countries where we voted 11 11 61
Shareholder resolutions on which we voted by topic 2 3 568
– environmental 1 1 68
– social 0 0 112
– governance 1 2 388
GRESB Real Estate Assessment scores
2
Private real estate – portfolio average (vs. benchmark average) 90 (81) 86 (78) 87 (78)
1 Decrease due to the sale of NN Investment Partners.
2 NN calculates the GRESB scores on a value-weighted basis, and compares these to the relevant benchmark average. Scores are on a scale of 1 to 100. The real estate portfolios
are part of NN Group’s proprietary assets.
Investments in climate solutions (in EUR million)
2023 2022 2021
Renewable energy investments 1,255 792 567
– of which: Infrastructure equity 354 250 44
– of which: Infrastructure debt 901 542 523
Certified green buildings¹ 5,323 5,198 3,817
– of which: Equity investments 4,722 4,454 3,236
– of which: Debt investments 601 744 581
Green bonds 4,091 2,113 637
Other 83 64 41
Total
10,752 8,167 5,062
1 Buildings within NN’s non-listed real estate portfolio; the residential mortgage portfolio of NN Group is not covered in this category.
To support our Paris Alignment strategy, NN Group has developed an internal framework to define ‘climate solutions investments’
as part of its proprietary investments portfolio. We have defined climate solutions as investments in economic activities
that contribute substantially to climate change mitigation or adaptation. Please refer to the glossary on page 365 for the
definitions used.
As a step in classifying climate solutions investments, and in line with guidance from the IIGCC Paris Aligned Investment Initiative,
we focused on SDG 7-related areas of energy efficiency and renewable energy. Furthermore, we supported our definitions with
external certifications, asset labels and environmental standards where possible and relevant.
Key strategic and financial indicators continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
129
NN Group N.V.
2023 Annual Report
Key strategic and financial indicators continued
Estimated avoided emissions
By investing in climate solutions, NN aims to contribute to climate change mitigation and adaptation. We have developed a
framework to better understand the positive impact that investees we invest in through our investments in climate solutions have
on the environment. As an indicator of our positive impact, we report on the estimated avoided greenhouse gas (GHG) emissions
for each investment category in our climate solutions portfolio. We stress that this calculation is in no way used as an offset in
the carbon footprint calculation of our investments. Nor does it take into account any negative impact that our climate solutions
investments may have on society or the environment. But it is our intention to further analyse these areas over the coming years.
Climate solutions¹ 2022 (EUR million)
Estimated
emissions avoided
(ktCO
2
)²
,
³
% of climate
solutions portfolio
estimated data⁴ Data quality⁵
Renewable energy investments
– of which: Infrastructure equity 250 49 76% Score 3
– of which: Infrastructure debt 542 278 90% Score 3
Certified green buildings
– of which: Equity investments 4,454 20 51% Score 2 – Score 4
– of which: Debt investments 744 (1) 67% Score 3 – Score 4
Green bonds 2,113 419 46% Not classified
Other 64 5 43% Not classified
Total 8,167 770 55%
1 As defined in Investments in Climate Solutions in the Annual Report, page 365.
2 Sustainability and impact data are reported with a significant time lag. We therefore estimated the amount of avoided emissions over 2022 as this is the latest available data.
3 GHG emissions can be avoided, reduced or sequestered.
4 Estimated emissions avoided in parenthesis are negative primarily due to data quality. Estimation in certified green buildings debt investments rests upon estimated emission intensity
based upon property's energy ratings as opposed to actual emission intensity used in equity investments. In some countries and sectors, the energy rating required to achieve better
estimated emission intensity than the average emission intensity of that particular country and sector is higher than EPC label A, which is the minimum threshold for a property to be
included in climate solutions. In the same countries and sectors, but for equity investments where we have access to actual emission intensity, this is not the case.
5 Proportion of the respective climate solution portfolio for which avoided emissions have been estimated. The reasons for lower than 100% figures vary. They could be non-applicability of
estimated emissions avoided as a KPI to some investments, low data quality in estimation, missing data, assets not yet reporting or in wind-down.
6 As defined by PCAF. Score 1 is considered the highest, while Score 5 is considered the lowest.
Estimated avoided emissions are hypothetical emissions that we presume were avoided due to investments in climate
solutions. Emissions avoided were calculated according to an internally developed methodology based on commonly used
industry guidelines available at the publication of this report. Please refer to the glossary on page 366 for the definitions used.
All estimated avoided emissions’ figures are proportioned to NN’s share of financing in the investment.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
130
NN Group N.V.
2023 Annual Report
Key strategic and financial indicators continued
Human capital indicators
1
2023 2022 2021
Workforce (end of year)
2
Total full-time equivalents (FTEs) 15,990 15,667 15,168
Total number of employees (headcount) 16,364 16,104 15,417
– Netherlands Life 2,217 2,210 2,152
– Netherlands Non-life 4,394 4,407 3,668
– Banking 1,072 1,035 971
– Insurance Europe 5,623 5,554 4,698
– Japan Life 1,020 972 888
– Asset Management 952
– Other 2,038 1,926 2,088
Part-time employees 18.5% 19.3% 17.0%
Temporary employees 7.2% 6.7% 6.0%
Average years of service 11.6 11.8 12.1
Male/female ratio 50/50 49/51 52/48
Male/female ratio managers 60/40 60/40 63/37
Male/female ratio in senior management group
3
60/40 60/40 66/34
Well-being and engagement
Sick leave 3.7% 3.8% 3.3%
Engagement score 7.8 7.9 7.7
Participation in engagement survey
4
84% 82% 83%
Grievances on labour practices 14 8 6
Employee participation
Employees covered by Collective Labour Agreement (CLA) 65.6% 66.6% 71%
Employees represented by an employee representative body 85.7% 85.5% 84.8%
Formal meetings held with employee representative bodies 163 203 200
Talent development
Total spending on training and development (in EUR million) 15.8 15.5 14.7
Spending/average FTE
5
(in EUR) 1,026 982 959
Human capital return on investment
6
(in EUR) 2.8 2.8 2.5
Employees with completed standard performance process 96.6% 97.6% 96.7%
1 The scope of the Human Resources data is all business units, representing 99.3% of our total organisation.
2 Figures do not include NN’s share in Heinenoord.
3 In 2020, the target group for this indicator was adjusted to Management Board and Management Board minus one managerial position (instead of the composition of our Senior
Leaders Group).
4 Employee engagement score and the percentage of participation consists of internal and external employees.
5 The average FTE used for this calculation is higher than both the 2022 FTE and the 2021 FTE. This is because the 2021 FTE did not contain the FTE of Heinenoord, Qare and Metlife Greece,
which were included as of January 2022. The 2022 FTE is lower than the FTE of January mainly because of the divestment of NN IP.
6 Human capital ROI is calculated as: (operating result + employee expenses)/employee expenses.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
131
NN Group N.V.
2023 Annual Report
Human capital indicators continued
2023 2022 2021
Employee turnover
New hires 2,181 2,912 1,963
Employee turnover 11.8% 12.1% 12.4%
– voluntary employee turnover 7.1% 8.2% 6.9%
– involuntary employee turnover 4.7% 3.9% 5.5%
Open positions filled by internal candidates 30.6% 25.6% 27.6%
Whistleblower cases
1
29 17 1
– of which investigated by Corporate Security & Investigations
2
3 2 1
Other incidents and concerns 48 51 41
Measures taken, related to: 5 2 2
– fraud (and alleged fraud) 3 1 0
– unethical behaviour 2 1 2
– conflict of interest 0 0 0
Employee compensation
Total employee wages and benefits (in EUR million) 1,664 1,561 1,607
Ratio of CEO compensation to the average employee compensation
3
31:1 32:1 30:1
1 In 2023, five disciplinary actions were taken on reported whistleblowing cases, please refer to page 61 for more details on reporting misconduct.
2 From 2022 onwards, the number of whistleblower reports are the reports received in the new Speak Up system. The topics raised ranged from unethical behaviour between colleagues and
internal fraud to improper handling of confidential information.
3 NN Group aims to align with the pay ratio calculation as prescribed in the Dutch Corporate Governance Code. The pay ratio calculation excludes external staff costs and includes all variable
remuneration related to the performance year. For more information, refer to the Remuneration Report on page 112.
Community investment indicators
2023 2022 2021
Total number of people supported
4
171,601 229,279 21,525
Cumulative progress on target of people supported (2022-2025) 400,880 229,279
Total contribution to our communities (x EUR 1,000) 20,098 12,804 8,000
% of operating result before tax 1.1 0.7 0.4
4 In addition to the contribution to our communities, in 2022 we set a new target: supporting 1 million people in their financial, physical and mental well-being by 2025. Therefore, the number
of people supported in 2021 does not count towards the target. In 2023, we supported 120,705 people in their financial well-being and 50,896 people in their physical and/or mental well-
being.
Key strategic and financial indicators continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
132
NN Group N.V.
2023 Annual Report
Environmental indicators
2023 2022 2021
Emissions category (in kilotonnes)
Grand total GHG emissions (includes market-based scope 2)
1
10 9 9
Grand total GHG emissions (includes location-based scope 2)
1
15 13 14
Total scope 1 and market-based scope 2 emissions 7 7 9
Total scope 1 and location-based scope 2 emissions 11 10 13
Scope 1 4 4 4
Operational road travel 3 3 3
Natural gas
2
1 0 1
Scope 2: Market-based
3
3 3 5
Electricity 3 3 4
District heating 1 1 1
Scope 2: Location-based
4
7 7 9
Electricity 7 6 8
District heating 1 1 1
Scope 3 3 2 0
Business travel (only air) 3 2 0
Other indicators
Total (market-based) GHG emissions (in tonnes)/FTE 0.7 0.6 0.6
GHG emissions offset
5
10 9 8
Energy consumption
Total energy consumption (mWh x 1000) 33 28 36
Non-renewable electricity
6
7 7 10
Renewable electricity 15 11 13
– renewable electricity as % of total electricity 69% 61% 57%
Natural gas
7
5 2 5
District heating 7 8 8
Paper
Total paper use (tonnes) 124 196 238
– sustainable paper 104 80 132
– sustainable paper as % of total paper 83% 41% 55%
Waste
Total waste (tonnes)
8
376 261 285
– recycled waste 179 168 207
– recycled waste as % of total waste 48% 64% 73%
1 Includes the principal subsidiaries and excludes the entities AZL, Heinenoord, HCS and Zicht. In 2023 Turkey is excluded.
2 Increase in 2023 is caused by increased coverage and improvement in data quality.
3 Based on the type of electricity that NN has chosen to purchase.
4 Based on the average emission factors of the local grid.
5 Current emissions in scope for offsetting include scope 1, scope 2: market-based and scope 3 business travel (only air). The amount offset is not adjusted based on past recalculations.
6 Includes electricity by nuclear sources.
7 Increase in 2023 is caused by increased coverage and improvement in data quality.
8 For 2023, no information was available for Belgium and Poland. Increase is caused by improvement in data quality.
Key strategic and financial indicators continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
133
NN Group N.V.
2023 Annual Report
To achieve NN Group’s decarbonisation
objectives, we closely monitor the
greenhouse gas (GHG) emissions
related to our organisation’s activities.
This process includes both the direct
emissions of our internal operations
(see page 53) and the indirect emissions
associated with our investment portfolio.
When examining the carbon footprint of
our investment portfolio, we focus on NN
Group's proprietary assets, which are the
investments listed on our balance sheet
that we hold for our own account.
In 2023, the carbon intensity (scope
1 and 2) of our corporate investment
portfolio decreased to 112 tonnes CO
2
e
per EUR million invested. This represents
a 10% reduction compared to our 2021
baseline, and a year-on-year decline
of 15%. The decrease in emissions
compared to the previous year is a result
of various factors, including changes in
portfolio holdings stemming from our
Paris Alignment strategy, as well as
other portfolio management decisions.
Changes in the emission intensities of
existing portfolio companies also played
a role, although to a lesser extent.
In addition, we have observed a
reduction in the carbon intensity
of our other asset classes as well.
Our mortgage portfolio's carbon
intensity, measured in kg of CO
2
e per
m², decreased by 3% compared to last
year, resulting in a level 12% lower than
our baseline year of 2021. Similarly,
our government bond portfolio and
real estate portfolio had year-on-year
declines in carbon intensity, measured in
tonnes of CO
2
e per EUR million, of 4% and
12%, respectively.
Financed emissions of NN Group’s proprietary assets
Carbon footprint proprietary assets
Breakdown of assessed assets
Corporate investments 21%
Residential mortgages 41%
Government bonds 30%
Real estate 8%
Fixed income 19%
Equity 2%
Total assessed
assets*
(in EUR billion)
Financed emissions
(kilotonnes of CO₂e)
Carbon intensity
(tonnes of CO₂e per
EUR million invested)
Coverage
(% of assessed
assets)
PCAF Data
Quality Score
(1-5)
2023
Scope
1 + 2 Scope 3
Scope
1 + 2 Scope 3
Scope
1 + 2 Scope 3
Fixed Income Corporate 24 2,785 19,773 117 833 88% 1.2 2.9
Equity 3 241 1,809 73 552 100% 1.3 3.7
Corporate Total 27 3,026 21,583 112 799 89% 1.2 3.0
Residential Mortgages 53 475 n/a 9 n/a 100% 3.5 n/a
Real Estate **** 10 19 47 2 5 85% 2.0 2.0
Total excl. Government** 91 3,520 n/a 39 n/a 95% 2.6 n/a
Government Bonds*** 38 7,770 n/a 206 n/a 100% 1.1 n/a
2022
Scope
1 + 2 Scope 3
Scope
1 + 2 Scope 3
Scope
1 + 2 Scope 3
Fixed Income Corporate 25 3,484 22,273 137 894 90% n/a n/a
Equity 3 289 2,381 89 684 98% n/a n/a
Corporate Total 28 3,725 24,654 131 868 91% n/a n/a
Residential Mortgages 53 515 n/a 10 n/a 100% 3.5 n/a
Real Estate **** 11 23 50 2 5 88% 2.0 2.0
Total excl. Government** 92 4,263 n/a 46 n/a 97% n/a n/a
Government Bonds*** 40 8,490 n/a 215 n/a 99% 1.1 n/a
* The total assessed assets represent the assets in scope for the carbon footprint report. This number may be smaller than the total assets in our portfolio if carbon measurement methodologies
for certain instrument types have not been developed. An example is municipal bonds within our government bond portfolio.
** In order to align with the updated PCAF guidelines we now show totals excluding government bonds to avoid double counting of emissions. Refer to section ‘methodology enhancements’ for
more information. Due to the variation in the scope and definition of Scope 3 across different asset classes, we believe it is not meaningful to report aggregated numbers for Scope 3.
*** Government bond emission figures have been restated to align with the updated PCAF guidelines. For government bonds we report scope 1 emissions excluding the effects of land use, land
use change and forestry. A comprehensive explanation of the methodology used for government bonds, can be found in the sub-section dedicated to government bonds.
**** Real estate emission figures for 2022 have been restated to incorporate restatements by underlying funds that were done during the year.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
134
NN Group N.V.
2023 Annual Report
Methodology enhancements
Our methodology follows internationally
recognised standards such as the GHG
Protocol and the Global GHG Accounting
and Reporting Standard for the Financial
Industry from the Platform Carbon
Accounting Financials (PCAF). In 2023, we
updated our methodology for sovereign
bonds to align with the updated PCAF
standard and improve reporting quality.
To avoid issues with double counting of
emissions, we report on our government
bond emissions separate from the
rest of our portfolio in accordance with
PCAF standards. We also extended our
measurement to include scope 3 data for
corporate investments and real estate.
For more background, please refer to the
case study. Finally, where possible, we
have added PCAF Data Quality Scores
ranging from 1 (highest quality) to 5
(lowest quality) to indicate the quality of
data used in the calculation.
As we continue to improve our data and
refine our approach, our methodology
may evolve further over time. Read more
on our methodology in the Glossary on
pages 365–372. Next to an overview of
the methodologies used per asset class,
the Glossary also contains an explanation
of our baseline recalculation policy for GHG
emission targets.
Scope
When assessing the carbon footprint
of our investments, we focus on our
proprietary assets, which are the assets
we hold for our own account and where
we run the investment risk. These assets
include the general account investment
portfolio of the insurance entities, the
assets of NN Bank (primarily residential
mortgages) and the holding companies
within NN Group. Together, these assets
comprise approximately 77% of the IFRS
balance sheet.
Not included in this carbon footprint
analysis are the separate account assets
of the insurance entities that are on the
balance sheet. For these assets, the
policyholders bear the investment risk.
These separate account assets consist
of primarily unit-linked portfolios as well
as certain group pension business in the
Netherlands. Furthermore, our insurance
and bank operations also offer customer
propositions such as defined contribution
pensions, and (retail) investment
products. These assets managed for
third parties are not included on the
balance sheet and are not part of this
carbon footprint analysis.
Coverage
The December 2023 analysis includes
the following asset categories:
government bonds, corporate
investments, residential mortgages and
real estate investments. The residential
mortgages considered in the assessment
are those originated and/or serviced
by NN Bank. Taken together, the
total proprietary assets that have
been assessed is EUR 128 billion.
This represents approximately 80% of
the proprietary asset portfolio on our
balance sheet.
Assets that are not (yet) assessed
broadly fall into three categories.
First of all there are assets such as
cash and derivatives (primarily FX and
interest rate) for which measuring the
Carbon footprint proprietary assets continued
The Greenhouse Gas (GHG) Protocol
categorises GHG emissions into three
categories. Scope 1 emissions include
the GHG emissions that a company has
direct control over, such as emissions
from its own production processes or
facilities. Scope 2 emissions include the
indirect GHG emissions that arise from
a company's use of purchased energy,
such as electricity or heat. Scope 3
emissions encompass all other GHG
emissions that are a consequence of a
company's activities but occur outside
of its operational boundaries.
In many cases, scope 3 emissions make
up the vast majority of a company’s
total emissions. In fact, research has
shown that these indirect emissions
are on average up to 11.4 times higher
than a company’s operational emissions
(source: CDP Global Supply Chain
Report 2021). The relevance of scope
3 emissions varies by sector. In the
automotive sector, for example, they are
very relevant as most of the emissions
are released during fuel combustion in
the ‘use phase’ of the product (scope
3) rather than during the production
of the car. In other sectors, such as
cement production, the focus is more
on scope 1 reduction as most emissions
are released during the production
process itself.
It is therefore essential for companies
to evaluate their scope 3 emissions
What are scope 3 emissions?
alongside their scope 1 and 2
emissions and assess their role
in managing and reducing these
emissions. However, measuring
scope 3 emissions can be a significant
challenge for companies. Scope 3
emissions encompass all emissions
within the value chain and can be
categorised into 15 sub-categories,
requiring significant data gathering
processes. This complexity has led to
data quality concerns as data is often
incomplete, and estimation models
have proven to be imprecise. Moreover,
scope 3 reporting on a portfolio level
inherently leads to double counting of
emissions, as one company's scope 1
emissions can be another company's
scope 3 emissions.
To address these issues, for the
financed emissions of our investment
portfolio we report on scope 3
emissions separately from scope
1 and 2. This is in accordance with
PCAF recommendations to ensure
transparency, while also avoiding
double-counting issues. We recognise
the challenges in measuring scope 3
emissions but believe it is essential to
report on them given their real-world
impact and the majority of emissions
they represent for any investment
portfolio. We aim to improve the quality
and reliability of scope 3 data through
our active involvement in financial sector
initiatives and company engagements.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
135
NN Group N.V.
2023 Annual Report
carbon footprint is not appropriate or
feasible. In total these assets make up
approximately 7% of our proprietary
portfolio. In addition, there are asset
categories for which there currently is a
lack of established methodologies and
data, this concerns mostly sub-sovereign
bonds, such as municipality and agency
debt, which represent approximately 4%
of our proprietary portfolio.
The remaining 10% of our proprietary
portfolio comprise assets not yet
measured for other reasons and
include among others asset-backed
securities, non-corporate loans,
residential mortgages from external
originators, infrastructure investments,
and private equity. We are currently
developing Paris Alignment strategies
for our infrastructure and private equity
investments and as part of this process
we are exploring ways to gather emission
data for these asset classes. In addition
to this, we are exploring options to obtain
data and assess the carbon footprint for
externally originated mortgages.
Limitations
To ensure the relevance of our Paris
Alignment strategy to real-world
decarbonisation efforts, we continuously
improve our methods and data sources.
We have expanded our GHG emissions
reporting to include scope 3 emissions
for corporates and real estate. However,
the limited amount of corporate
disclosure and lower data quality of
reported data for scope 3 emissions can
impact the accuracy of scope 3 GHG
emissions reporting.
Another challenge we face in evaluating
the carbon emissions of our investment
portfolio is the time lag in emissions
data. This time lag differs per asset class.
For sovereign and corporate investments
the data lag is two years, for real estate
the lag is one year while the mortgage
data is based on last years emission
figures. As a result of this, there is a
delay in reflecting actual changes in
emissions for our investment portfolios.
It is therefore important to note that the
carbon footprint provides a snapshot and
may not fully reflect an entity’s transition
to a low-carbon economy. To address this
issue, we include a forward-looking view
of companies' decarbonisation strategies
in our investment process, which is
discussed in more detail on pages
49–54. Our decarbonisation strategy
is based on a combination of historical
carbon footprint data presented in this
report and forward-looking indicators.
Finally, we are in the process of
further improving the accuracy of
residential mortgage carbon footprint
data. Currently, our method relies on
theoretical average consumption data,
which may not accurately reflect actual
consumption patterns. To address this
limitation, we have partnered with TNO,
a leading Dutch research organisation
focused on sustainability and innovation,
to identify solutions for obtaining actual
consumption data.
Carbon footprint of corporate
investments
The financed emissions for a corporate
portfolio are based on the amount we
as an investor have invested relative to
the issuer’s enterprise value. That is, it
is the share of the company’s emissions
that can be attributed to NN Group based
on the amount we have invested in
the company.
As of this year, we report on three GHG
emission scopes: scope 1, 2 and 3.
We do so based on emissions data that
is sourced from our data vendor ISS ESG.
To ensure full transparency, while at the
same time avoiding potential double-
counting issues, we report scope 3
emissions separately from scope 1 and 2
emissions. Read more on the difference
between these scopes and the reason for
incorporating scope 3 emissions in the
case study on page 134.
Data coverage of our corporate portfolio
currently stands at 89%, with data
availability varying across security types.
Coverage is typically lowest for smaller
companies without a public listing,
and in particular for corporate loans;
which, however, only represent a small
portion of our corporate investment
portfolio. Note as well that approximately
5% of our corporate bond portfolio
consists of green bonds which typically
Carbon footprint proprietary assets continued
direct proceeds towards low-carbon
initiatives. As there is currently no widely
accepted way to account for the unique
characteristics of green bonds, we report
on these bonds as if they are regular
bonds to maintain consistency in our
reporting methodology.
The absolute financed emissions of
our corporate investment portfolio per
year-end 2023 was 3,026 kilotonnes
CO
2
e, a decline of 19% compared to
2022. Additionally, the carbon intensity
decreased by 15% to 112 tonnes CO
2
e
per EUR million invested. Compared to
our target-setting baseline year of 125
tonnes CO
2
e per EUR million invested in
2021, the reduction was 10%.
The decrease in emissions compared
to the previous year is a result of
various factors, including changes
in portfolio holdings stemming from
strategic decisions outlined in our
Climate Action Plan, such as our
coal phase-out strategy and oil &
gas policy, as well as other portfolio
management decisions. Additionally,
changes in the emission intensities of
existing portfolio companies played
a role, although to a lesser extent.
In the coming years, we expect the
contribution of decarbonisation of
portfolio companies to increase, as a
result of our focus on companies with
best-in-class decarbonisation strategies
in combination with ongoing engagement
efforts to encourage the transition to
a low-carbon economy. This remains
an essential aspect of NN's long-term
decarbonisation strategy, as we aim
to achieve real-world decarbonisation.
Read more on our Paris Alignment
Strategy for our corporate investment
portfolio on pages 49–51.
We also report the Weighted Average
Carbon Intensity (WACI) of our portfolio,
which measures a portfolio's exposure
to carbon-intensive companies by
revenue, expressed in tonnes of CO₂e
per EUR million revenue. This metric
declined by 34% versus the prior year.
This decrease was more pronounced
because it was amplified by a material
increase in corporate revenues across
portfolio companies. Finally, scope 3
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
136
NN Group N.V.
2023 Annual Report
intensity of our portfolio also decreased
by 8%. However, we caution against
drawing significant conclusions from this
number due to the large use of estimated
data, which results in low data quality as
seen in the PCAF Data Quality Scores of
2.9 and 3.7 for Fixed Income and Listed
Equity investments, respectively.
Carbon footprint of government
bonds
In 2023, we updated our methodology
for government bonds to align with the
revised methodology prescribed by
the PCAF. The Global GHG Accounting
and Reporting Standard for Financed
Emissions was updated by the PCAF on
14 December 2022, which included a
significant revision of the methodology
for calculating financed emissions
associated with investments in
sovereign debt.
This new approach allows us to account
for a more holistic view of a sovereign’s
responsibility in generating emissions
and aligns more closely with the UNFCCC
national emissions inventory, which
forms the basis of the Paris Agreement.
Under this approach, a sovereign is
treated as a national territory, and
its direct (scope 1) emissions are
attributed to emissions generated within
its boundaries.
We also considered expanding the scope
to include net imported electricity (scope
2) and non-energy imports (scope 3),
which is referred to as the ‘consumption
Carbon footprint proprietary assets continued
approach’. However, implementing this
approach would have had significant
impact on data quality, resulting in
an additional two-year time lag, a
substantial increase in estimated data,
and lower coverage. Therefore, for now
we are reporting based on the production
approach which allows us to report with
higher confidence in the quality of the
underlying data.
Similar to corporate financed emissions,
sovereign financed emissions represent
the share of a country’s emissions that
can be attributed to NN Group based
on the amount we have invested in the
sovereign. As there is no ‘total market
value of a country’, it is market practice
to use a proxy to attribute the right
amount of emissions to an investment.
According to the recently updated PCAF
standard, we divide the total amount
we have invested by the PPP-adjusted
GDP of a country to calculate financed
emissions, where the latter then
serves as a proxy for the borrower’s
economic scale.
In addition to a change in methodology,
we have also revised the way we present
sovereign emission data. Starting this
year, we report sovereign emissions
separately from corporate emissions.
This is because due to the change to a
territorial approach, emissions generated
within countries would be double
accounted if we account for them in our
sovereign as well as our corporate and
real estate investments. Furthermore, in
line with PCAF requirements, NN reports
sovereign emission data including and
excluding land use, land use change and
forestry (LULUCF) emissions. The figures
that include LULUCF emissions take into
account the role of land use and forestry
as a carbon sink.
Finally we note that approximately 5% of
our government bond portfolio consists
of green bonds. Since there is no widely
accepted way to account for the unique
characteristics of green bonds, we
report them as regular bonds to maintain
reporting consistency.
We have restated our 2022 numbers
in line with the above-mentioned
methodological changes. Due to the
significant changes in the approach, it
is not possible to compare the current
methodology with the previous one.
As shown in the table below, the carbon
intensity of our sovereign portfolio
emissions excluding LULUCF decreased
by 4%, and by 3% when accounting
for the carbon sink effects of land
use, land use change and forestry.
The decrease can be attributed to the
ongoing decrease in emission intensity in
developed markets.
Carbon footprint of real
estate investments
The reporting of our non-listed real
estate investment portfolio comprises
the direct engine, over which we have
direct ownership, and the indirect engine,
which includes funds. NN requires all real
Overview of financed emissions related to NN Group’s corporate portfolio
Total
assessed
assets (in
EUR billion)
Financed emissions
(kilotonnes of CO₂e)
Carbon intensity
(tonnes of CO₂e per EUR
million invested)
Weighted Average
Carbon Intensity
(tonnes of CO₂e per million
EUR revenue)
Coverage
(% of
assessed
assets)
PCAF Data
Quality Score
(1-5)
Scope
1 + 2 Scope 3
Scope
1 + 2 Scope 3
Scope
1 + 2 Scope 3
Scope
1 + 2 Scope 3
Fixed Income
Corporate 24 2,785 19,773 117 833 169 1,276 88% 1.2 2.9
Equity 3 241 1,809 73 552 127 901 100% 1.3 3.7
Corporate Total –
2023 27 3,026 21,583 112 799 163 1,293 89% 1.2 3.0
Corporate Total –
2022 28 3,725 24,654 131 868 247 1,293 91% n.a n.a
YoY Change
2022/2023 -5% -19% -12% -15% -8% -34% 0%
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
137
NN Group N.V.
2023 Annual Report
Overview of financed emissions related to NN Group’s real estate portfolio
Year
Total assessed
assets
(in billion EUR)
Financed emissions
(kilotonnes of CO₂e)
Carbon Intensity
(tonnes of CO₂e per
EUR million invested)
Coverage
(% of assessed
assets)
PCAF Data
Quality Score (1-5)
Scope
1 + 2 Scope 3
Scope
1 + 2 Scope 3
Scope
1 + 2 Scope 3
2022 11 23 50 2 5 88% 2.0 2.0
2023 10 19 47 2 5 85% 2.0 2.0
YoY Change
2022/2023 -2% -17% -6% -12% -1%
Carbon footprint proprietary assets continued
estate asset managers to participate
in the GRESB Real Estate assessment,
which provides us with emissions data.
GRESB requires participants to report
on actual building energy consumption
and calculate GHG emissions based on
the average emissions intensity of the
grids on which the energy is consumed
(using mostly grid-average emission
factor data provided by participants).
Emission factors are determined based
on geographic locations. This reporting
corresponds to Score 2 of the
PCAF Standard.
In the carbon footprint analysis of our
real estate portfolio, three scopes are
relevant. Scope 1 and 2 emissions are
under the control of the owner of the
buildings (i.e. the landlord), who can
introduce and implement operating and/
or environmental policies and measures.
However, in some cases, tenants hold
the energy contracts directly. In that
case, the energy consumption of the
tenants falls under scope 3 where the
owner or landlord has no operational
control. Considering that the energy
consumption of tenants is dominant
in the overall energy consumption of a
building, scope 3 is especially important
for real estate. Starting this year, we
report scope 1, 2 and scope 3 tenant
emissions for our real estate portfolio.
Like for our corporate portfolio, we report
on scope 3 emissions separately from
scope 1 and 2 emissions.
To calculate the carbon footprint of our
real estate investments portfolio, we
attribute a real estate fund’s annual
emissions based on NN’s share in the
fund. To determine this attribution factor,
we use the outstanding investment
amounts (Net Asset Value (NAV)) as the
numerator and Gross Asset Value (GAV)
of the funds, as reported to us by our real
estate managers, as the denominator.
All investment amounts, fund values and
emissions are based on the most recent
data available, which lags by one year.
Using the process described above,
we calculated the absolute financed
emissions of our non-listed real estate
portfolio to be 19 tonnes of CO
2
e at
year-end 2023. This represents a 17%
decline compared to the previous year.
Additionally, we observed a 12% decline
in the carbon intensity, measured in
tonnes of CO
2
per EUR million, of our
portfolio. The decline in carbon intensity
is due to the sale of relatively energy-
intensive funds and a reduction of energy
intensity in existing fund positions.
Carbon footprint of mortgages
In our 2023 carbon footprint analysis,
we included the total number of Dutch
mortgages originated and/or serviced
by NN Bank, as represented on the
NN Group balance sheet. This amounted
to 225,330 homes, with a total
value of EUR 53 billion. NN also has
approximately EUR 6 billion of residential
mortgages on the balance sheet from
external mortgage originators which are
not included in this analysis.
We account for the scope 1 and 2
emissions of each house (i.e. the natural
gas used to heat the house + the
purchased electricity by the occupant
of the house = the energy consumed by
the building occupant). We measure the
carbon footprint of every house based
on energy label, floor space, building
Overview of financed emissions related to NN Group’s government bond portfolio
Total assessed
assets
(in EUR billion)
Financed emissions
(kilotonnes of CO₂e)
Carbon intensity
(tonnes of CO₂e per
EUR million invested)
Coverage
(% of assessed
assets)
PCAF Data
Quality Score
(1-5)
Year
Scope 1 incl.
LULUCF
Scope 1 excl.
LULUCF
Scope 1 incl.
LULUCF
Scope 1 excl.
LULUCF
2022 40 8,010 8,490 203 215 99% 1.1
2023 38 7,393 7,770 196 206 100% 1.1
YoY Change -5% -8% -8% -3% -4%
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
138
NN Group N.V.
2023 Annual Report
type and corresponding emission factor.
This method is in line with the PCAF
Standard and corresponds to a data
quality score of 3 (on a 1–5 scale where
1 is the highest). This is the highest
data quality score that can be achieved
in absence of actual building energy
consumption data (i.e. metered data).
Dutch Financial Institutions that are
part of PCAF, including NN, are currently
exploring ways to obtain the actual
consumption data to further enhance
quality of reporting. By improving the
monitoring of household CO
2
emissions,
we can bring the outcomes closer to the
actual emitted emissions.
The energy label remains an important
data input for the methodology. The chart
on this page shows the energy label
distribution of NN’s mortgage portfolio.
Compared to 2019 when we first
gathered this information, the share of
label A in our portfolio increased from
25% to 30%, label B increased slightly
from 13% to 14%, label C declined from
26% to 25%, labels D, E, F and G (taken
together) declined from 36% to 31%.
Around 54% of the houses in our
mortgage portfolio have a definitive
energy label. If no definitive energy label
is available, we matched the addresses
with a provisional energy label, as
this currently is the best estimate
available. For the rest of the mortgage
portfolio, we looked at the building year
of the property. Based on the building
year and the corresponding building
standards at that time, an energy label
can be assumed. For a small number
of properties (1%), we could not match
the property with an energy label due to
missing information.
As shown in the image Data Quality
Score, 55% of NN's mortgage portfolio
had a PCAF Data Quality score 3, 43%
had PCAF Data Quality score 4 and 2%
had PCAF Data Quality score 5 at the end
of 2023. The scores mainly relate to the
availability of energy labels. If the energy
label is not available, emission data can
be estimated based on indicators like
average carbon intensities, surface area
and building types in line with PCAF’s
data quality tables. The average PCAF
Data Quality score for our portfolio is 3.5.
The average is calculated based on the
number of houses.
Emissions are attributed to NN Group
according to the loan-to-value (LTV)
ratio. The LTV used is the current loan-
to-original-market-value ratio, which is
the net outstanding mortgage amount
divided by the original property value.
If these original values are not available,
the latest available property value will be
used as denominator. We also take into
account the latest available market value
when available when improvements have
been made to the property.
The financed emissions of our mortgage
portfolio per year-end 2023 was 475
kilotonnes of CO₂e, an 8% decline
compared to last year. The decline
in financed emissions is the result of
a lower attribution factor, and lower
emission factors which improved by
3% in 2023 as energy production in the
Netherlands became more sustainable.
To measure progress towards our
net-zero ambition, we also calculated
the carbon intensity measured in kg
CO
2
e/m². We used data from the Dutch
Land Registry (Kadaster) to convert the
financed emissions to an intensity metric.
The emissions intensity in 2023 was
24.4 kg of CO
2
e per m². This represents
a decline of 12% versus the baseline
year of 2021. Our target is to achieve a
34% decline by 2030, or 18.0 kg CO
2
e
per m². Our methodology and target is
based on the CRREM NL 1.5°C pathway
(2021 version) and aligned with criteria
as set forth by the Science Based Targets
initiative (SBTi).
Meeting the ambitious 18.0 kg CO
2
e per
m² objective by 2030 requires not just
our own efforts, but also collaboration
between all parties in the residential real
estate value chain. The recent adoption
of a steeper pathway for the Netherlands
by CRREM further exacerbates the
challenges for our organisation, the Dutch
government and the real estate value
chain. We are evaluating the updated
pathways to determine the best way to
contribute to realising a successful energy
transition and aim to provide further
insights in our next Climate Action Plan.
A
NN Portfolio: Energy label distribution
(based on number of houses, compared to 2019)
B C D E F G
25%
30%
13%
14%
26%
25%
2019
9%
8% 8% 8% 8%
7%
9%
10%
2023
NN Portfolio:
Data Quality Score
DQS = 5 (2%)
DQS = 3 (55%)
DQS = 4 (43%)
Carbon footprint proprietary assets continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
139
NN Group N.V.
2023 Annual Report
Overview of financed emissions related to NN Group’s mortgage portfolio
Year
Total
assessed
assets (in
billion EUR)
Financed emissions
(kilotonnes of CO₂e)
Carbon Intensity
(tonnes of CO₂e per EUR
million invested)
Carbon intensity per m² (kg
of CO₂e per m²)
Coverage
(% of
assessed
assets)
PCAF Data
Quality Score (1-5)
Scope
1 + 2 Scope 3
Scope
1 + 2 Scope 3
Scope
1 + 2 Scope 3
Scope
1 + 2 Scope 3
2021 (baseline) 52 581 n/a 11 n/a 27 n/a 100% 3.4 n/a
2022 53 515 n/a 10 n/a 25 n/a 100% 3.5 n/a
2023 53 475 n/a 9 n/a 24 n/a 100% 3.5 n/a
YoY Change
2022/2023 1% -8% -7% -3%
Carbon footprint proprietary assets continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
140
NN Group N.V.
2023 Annual Report
EU Taxonomy disclosures
EU Taxonomy disclosures
In order to meet the EU’s climate and
energy targets for 2030 and to reach the
objectives of the European Green Deal
for the EU to be climate neutral by 2050,
it is important to direct investments
towards sustainable projects and
activities. To contribute to this, the EU
has created the EU Taxonomy, a common
language with a definition of what is
sustainable and a classification system
for sustainable economic activities.
The EU Taxonomy Regulation requires
NN Group to disclose information, such
as the proportion of covered assets that
finance or are invested in taxonomy-
eligible, non-eligible and taxonomy-
aligned economic activities, as well as
the proportion of taxonomy-eligible,
non-eligible and taxonomy-aligned non-life
insurance gross written premium income.
Taxonomy-eligible economic activities are
those activities that are described under
one of the six environmental objectives
covered by the EU Taxonomy:
Climate-related objectives
1. Climate change mitigation
2. Climate change adaptation
Non-climate related objectives
3. Sustainable use and protection of
water resources
4. Transition to a circular economy
5. Pollution prevention and control
6. Protection and restoration of
biodiversity and ecosystems
For economic activities to be aligned
with the EU Taxonomy, they need to
substantially contribute to any one of the
environmental objectives by adhering to
the technical screening criteria (TSC)¹ .
In addition, these activities should do no
significant harm to any of the other EU
Taxonomy environmental objectives, while
respecting minimum social safeguards.
As required by the EU Taxonomy
Regulation, NN Group discloses taxonomy-
eligibility related to the six environmental
objectives and taxonomy-alignment
related to the two climate objectives in
this section of the Annual Report.
Since 2021, NN Group has been
required to disclose taxonomy-eligibility
information related to the two climate
objectives. In 2023, taxonomy-
alignment information related to the
two climate objectives and taxonomy-
eligibility information related to the
four non-climate environmental
objectives is required to be disclosed
for the first time on a best effort basis.
As limited reported data is available,
the eligibility information related to
non-climate environmental objectives
is estimated using internal data (NACE
codes) and therefore presented as a
voluntary disclosure.
The following sections show detailed
EU Taxonomy information of NN Group’s
investments and underwriting activities.
The first section covers quantitative
and qualitative eligibility and alignment
information of the investments. In the
second section, eligibility and alignment
information related to NN Group’s non-
life underwriting activities is disclosed.
In December 2023, the EU Commission
published a draft commission notice (the
‘draft notice’) on the interpretation and
implementation of certain provisions of
the EU Taxonomy regulation. This draft
notice is expected to be finalised during
2024. Although the draft notice was
published late in 2023, is still in draft,
and not mandatory applicable for the
disclosures in this 2023 Annual Report,
NN Group compared the guidance in the
draft notice to the approach that was
applied in preparing the disclosures in
this Annual Report. Certain differences
were identified, which are explained
below. Other than indicated below,
NN Group’s approach is in line with the
draft notice or the guidance in the draft
notice is not relevant or does not lead
to significant impact. NN Group will
continue to monitor the content and
status of this additional guidance and
will consider the impact on NN Group's
disclosures going forward.
• The draft notice suggests that parent
entities of financial conglomerates
that have different activities should
report the KPIs per segment as well
as weighted average KPIs for the sum
of the segments. This would result in
NN Group disclosing the KPIs separately
for its insurance and its banking
activities. NN Group discloses all its
activities (insurance and banking) in
a consolidated manner in the format
of the dominant activity, which is
insurance. NN Bank reports stand-alone
EU Taxonomy disclosures in its own
Annual Report.
• The draft notice suggests that the
prudential scope of consolidation should
be used, whereas NN Group uses the
scope of consolidation of the IFRS
Annual Accounts. Had NN Group used
the prudential consolidation scope,
information related to NN Japan and
NN Bank would have been excluded.
• The draft notice suggests that green
bonds issued by non-NFRD companies
should be included in the numerator of
the investment KPI. For 2023, NN Group
has not included these bonds (with
a fair value of EUR 535 million) in the
investment KPI numerator.
All amounts are in millions of euros
unless indicated otherwise.
Investments
The Investment KPI represents the
amount and extent to which NN Group’s
investments are directed at funding
taxonomy-aligned economic activities.
This is the first year that NN Group
reports on both taxonomy-eligibility
and alignment related to the two
climate objectives. NN Group reports
this eligibility and alignment for the
mandatory disclosures using externally
available information. For investments
for which there is no externally reported
information available, estimates are
used². The estimated eligibility and
1 The technical screening criteria (TSC) are specific characteristics that can be used to determine whether an economic activity provides a substantial contribution to climate change mitigation
or adaptation. The criteria also aim to avoid significant harm to other objectives and comply with relevant laws.
2 The only exception are externally managed mortgages, which are presented as non-aligned in the reported figures in case of no data available.
3 NN Group reports against the EU Taxonomy voluntarily because it recognises the importance of increasing transparency about how companies are progressing in changing of and adapting to
climate change, even if the regulation is evolving and not yet mature.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
141
NN Group N.V.
2023 Annual Report
EU Taxonomy disclosures continued
alignment are reported voluntarily³
and are therefore not part of the
mandatory disclosures.
Under the EU Taxonomy, exposures to
derivatives and non-NFRD companies
cannot be eligible and aligned and are
therefore excluded from the numerator of
the eligibility and alignment disclosures
but included in the denominator.
Other assets⁴ (non-investment assets)
and exposures to central governments,
central banks and supranational issuers
(sovereign entities) are excluded from
both the numerator and the denominator
of the EU Taxonomy disclosures.
This amounts to EUR 54,925 million and
is the difference between total assets
on the NN Group consolidated balance
sheet and assets covered by the KPI
(covered assets).
The voluntary table below summarises
the key EU Taxonomy information of NN
Group’s investments. NN Group’s assets
covered in the Investment KPI are EUR
154,016 million. Out of these assets,
the mandatory taxonomy-alignment
(Investment KPI) based on turnover is
11% and 1% based on CapEx. The main
driver of the turnover Investment KPI is
retail mortgage loans which are linked
to the real estate activity ‘Acquisition
and ownership of buildings’ in the EU
Taxonomy. Financing this activity makes
a contribution to the climate change
mitigation objective. The investments in
the covered assets that are eligible, but
not aligned with the technical screening
criteria (TSC) set out in the EU Taxonomy,
amount to 32% based on turnover and
47% based on CapEx. Together with the
alignment figures, this forms the eligible
investments proportion of NN Group’s
covered assets. The remainder of
covered assets is the non-eligible
portion, which amounts to 57% based on
turnover and 52% based on CapEx.
Investment KPI
This section contains the mandatory
Investment KPI disclosures. Based on
the information available, the table
below reflects the proportion of assets
covered by the KPI (covered assets) that
are taxonomy-aligned related to the two
climate objectives. Consistent with the
summary table above, the mandatory
taxonomy-alignment (Investment KPI)
based on turnover is 11% and 1% based
on CapEx.
Voluntary taxonomy-alignment based on
turnover of 2% and 1% based on CapEx
is shown. This voluntary turnover KPI
amount is mainly driven by investments
in real estate for which the alignment
is estimated based on buildings with at
least an energy label of A.
Mandatory Voluntary* Mandatory Voluntary*
The weighted average value of all the investments of NN Group
that are directed at funding, or are associated with taxonomy-
aligned economic activities relative to the value of total assets
covered by the KPI, with following weights for investments in
undertakings per below:
that are directed at funding, or are associated with taxonomy-
aligned economic activities, with following weights for
investments in undertakings per below:
Turnover-based: % 11% 2% Turnover-based: amount 16,702 3,016
Capital expenditures-
based: % 1% 1%
Capital expenditures-
based: amount 2,042 1,294
The percentage of assets covered by the KPI relative to total
investments of NN Group (total AuM). Excluding investments
in sovereign entities.
The monetary value of assets covered by the KPI. Excluding
investments in sovereign entities.
Coverage ratio: % 100% 100% Coverage: amount 154,016 154,016
4 This relates to assets included in the following balance sheet lines: Insurance and Reinsurance contracts, Property and equipment, Intangible assets, Deferred tax, and Other assets.
Turnover CapEx
Amount Proportion % Amount Proportion %
Taxonomy-alignment 16,702 11% 2,042 1%
Of which related to CCM 16,676 11% 1,972 1%
Of which related to CCA 26 0% 70 0%
Taxonomy non-alignment 48,767 32% 71,777 47%
Taxonomy-eligible 65,469 43% 73,819 48%
Taxonomy non-eligible 88,547 57% 80,197 52%
Assets covered by the KPI 154,016 100% 154,016 100%
* Estimated EU Taxonomy figures are reported on a voluntary basis in addition to the mandatory EU Taxonomy figures, therefore there is no overlap in mandatory and voluntary figures.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
142
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2023 Annual Report
EU Taxonomy disclosures continued
* There is only a difference between mandatory and voluntary figures for the information that is based on reported data (mandatory) and estimated data (voluntary).
Additional, complementary disclosures: breakdown of denominator of the KPI
Mandatory Voluntary* Mandatory Voluntary*
The percentage of derivatives relative
to total assets covered by the KPI: 2% 2%
The value in monetary amounts of
derivatives: amount 2,704 2,704
The proportion of exposures
to financial and non-financial
undertakings from EU-countries not
subject to the NFRD over total assets
covered by the KPI: %
Value of exposures to financial and
non-financial undertakings from EU-
countries not subject to the NFRD:
For non-financial undertakings: % 3% 3%
For non-financial undertakings:
amount 5,240 5,240
For financial undertakings: % 37% 37% For financial undertakings: amount 56,592 56,592
The proportion of exposures
to financial and non-financial
undertakings from non-EU countries
not subject to the NFRD over total
assets covered by the KPI: %
Value of exposures to financial and
non-financial undertakings from non-
EU countries not subject to the NFRD
For non-financial undertakings: % 5% 5%
For non-financial undertakings:
amount 7,637 7,637
For financial undertakings: % 5% 5% For financial undertakings: amount 7,377 7,377
The proportion of exposures
to financial and non-financial
undertakings subject to the NFRD over
total assets covered by the KPI: %
Value of exposures to financial and
non-financial undertakings subject to
the NFRD
For non-financial undertakings: %
5% 5%
For non-financial undertakings:
amount 7,437 7,437
For financial undertakings: % 3% 3% For financial undertakings: amount 3,923 3,923
The proportion of exposures to other
counterparties and assets over total
assets covered by the KPI: % 41% 41%
Value of exposures to
other counterparties
and assets: amount 63,106 63,106
The proportion of NN Group’s
investments other than investments
held in respect of life insurance
contracts where the investment risk
is borne by the policyholders, that are
directed at funding, or are associated
with, taxonomy-aligned economic
activities: %
N/A for
NN Group
N/A for
NN Group
Value of NN Group’s investments
other than investments held in
respect of life insurance contracts
where the investment risk is borne
by the policyholders, that are
directed at funding, or are associated
with, taxonomy-aligned economic
activities: amount n/a n/a
In the table below, information on the
denominator (covered assets) of the
Investment KPI is provided. The largest
part of the denominator (41%) relates
to investments in other counterparties
which consist of retail mortgage loans
and direct real estate investments.
The investments in NFRD companies
are in total 8% of the denominator.
These two figures together (49%)
comprise the investments of NN Group
subject to a mandatory eligibility and
alignment assessment.
NN Group’s mandatory eligibility is
43% based on turnover and 48% based
on CapEx. This turnover-based figure
consists of 11% aligned and 32% non-
aligned investments and the CapEx-
based figure consists of 1% aligned
investments and 47% non-aligned
investments. The difference between
these turnover and CapEx-based figures
can be explained by the fact that retail
mortgage loans are only included in the
turnover-based figure as they relate to
the financing of existing buildings.
The sum of alignment, non-alignment
and non-eligible must equal covered
assets. As data is not available for all
investments for which EU Taxonomy data
is relevant, an adjustment was required
at aggregated level. As real estate
investments are 100% eligible, the
adjustment was made to non-aligned for
the part of investments with no available
data. For all other investments for which
data is expected but not available, the
adjustment is made to non-eligible as
eligibility is unknown.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
143
NN Group N.V.
2023 Annual Report
* There is only a difference between mandatory and voluntary figures for the information that is based on reported data (mandatory) and estimated data (voluntary).
** NN Group does not have non-life insurance contracts where the investment risk is borne by policy holders.
Additional, complementary disclosures: breakdown of numerator of the KPI
The proportion of taxonomy-aligned exposures to
financial and non-financial undertakings subject to
the NFRD over total assets covered by the KPI:
Value of taxonomy-aligned exposures to financial
and non-financial undertakings subject to the NFRD :
Mandatory Voluntary* Mandatory Voluntary*
For non-financial
undertakings:
Turnover-based 1% 0% 859 1
Capital
expenditures-
based 1% – 1,304 –
For financial
undertakings
Turnover-based 0% 2% 359 3,217
CapEx-based 0% 0% 738 512
The proportion of the insurance or reinsurance
undertaking’s investments other than investments
held in respect of life insurance contracts where
the investment risk is borne by the policyholders,
that are directed at funding, or are associated
with, taxonomy-aligned:
Value of insurance or reinsurance undertaking’s
investments other than investments held in respect
of life insurance contracts where the investment risk
is borne by the policyholders, that are directed at
funding, or are associated with, taxonomy-aligned
(in millions):
Turnover-based n/a** n/a**
Capital
expenditures-
based n/a** n/a**
In the table below, information on the
numerator (taxonomy-alignment) by type
of counterparty of the Investment KPI
is provided. This shows that NN Group’s
mandatory alignment is mainly driven
by investments in other counterparties,
which are the retail mortgage loans,
and to a small extent by investments
in non-financial companies. There is
limited alignment from investments in
financial companies because alignment
information of these counterparties,
other than investments funds, is not
yet available as these companies are
reporting this information at the same
time as NN Group
EU Taxonomy disclosures continued
Additional, complementary disclosures: breakdown of denominator of the KPI (continued)
Mandatory Voluntary Mandatory Voluntary
The value of all the investments that are funding economic
activities that are not taxonomy-eligible relative to the value of
total assets covered by the KPI:
Value of all the investments that are funding economic activities
that are not taxonomy-eligible:
Turnover-based:% 57% 55% Turnover-based: amount 88,547 84,036
Capital expenditures-based: % 52% 55% Capital expenditures-based: amount 80,197 84,020
The value of all the investments that are funding taxonomy-
eligible economic activities, but not taxonomy-aligned relative
to the value of total assets covered by the KPI:
Value of all the investments that are funding taxonomy-eligible
economic activities, but not taxonomy-aligned:
Turnover-based: % 32% 44% Turnover-based: amount 48,767 66,965
Capital expenditures-based: % 47% 45% Capital expenditures-based: amount 71,777 69,995
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
144
NN Group N.V.
2023 Annual Report
* Estimated EU Taxonomy figures are reported on a voluntary basis in addition to the mandatory EU Taxonomy figures, therefore there is no overlap in mandatory and voluntary figures.
Breakdown of the numerator of the KPI per environmental objective
Taxonomy-aligned activities – provided ‘do-not-significant-harm’ (DNSH) and social safeguards positive assessment:
Transitional Enabling
Mandatory Voluntary* Mandatory Voluntary* Mandatory Voluntary*
(1) Climate change
mitigation
Turnover 11% 2% 0 % – 0 –
CapEx 1% – 0% – 1% –
(2) Climate change
adaptation
Turnover 0% –
n/a
– –
CapEx 0% – – –
(3) The sustainable
use and
protection of
water and marine
resources
Turnover – –
n/a
– –
CapEx – – – –
(4) The transition
to a circular
economy
Turnover – –
n/a
– –
CapEx
– – – –
(5) Pollution
prevention and
control
Turnover – –
n/a
– –
CapEx
– – – –
(6) The protection
and restoration
of biodiversity
and ecosystems
Turnover – –
n/a
– –
CapEx – – – –
* Estimated EU Taxonomy figures are reported on a voluntary basis in addition to the mandatory EU Taxonomy figures, therefore there is no overlap in mandatory and voluntary figures.
EU Taxonomy disclosures continued
Additional, complementary disclosures: breakdown of numerator of the KPI (continued)
Mandatory Voluntary* Mandatory Voluntary*
The proportion of taxonomy-aligned exposures to
other counterparties and assets over total assets
covered by the KPI:
Value of taxonomy-aligned exposures to other
counterparties and assets over total assets covered
by the KPI (in millions):
Turnover-based 10% 1% 15,484 781
Capital
expenditures-
based – – – –
In the table below, information on the
numerator (taxonomy-alignment) of
the Investment KPI by environmental
objective and type of economic activity
is provided. This shows that NN Group’s
mandatory alignment is related to the
climate change mitigation objective and
only to a very limited extent related to
transitional and enabling activities⁵.
This can be explained by the fact that
mandatory alignment is mainly driven
by the retail mortgage loans that link
to the economic activity ‘Acquisition
and ownership of buildings’, which is
not a transitional⁶ or enabling activity,
and makes a substantial contribution to
climate change mitigation.
5 Under the EU Taxonomy, enabling activities are economic activities that directly enable other activities to make a substantial contribution to one or more of the six environmental objectives
of the EU Taxonomy.
6 Under the EU Taxonomy, transitional activities are ones that support the transition to a climate-neutral economy in a manner that is consistent with a pathway to limit the temperature
increase to 1.5 degrees Celsius above pre-industrial levels.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
145
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2023 Annual Report
EU Taxonomy disclosures continued
7 The EU Taxonomy currently applies only to companies that are subject to the Non-Financial Reporting Directive (NFRD), which are large public-interest entities with more than 500 employees.
Public-interest Entities are defined as follows: (a) EU companies with transferable securities (debt or equity) on an EU regulated market, (b) credit institutions; or (c) insurance undertakings.
Large companies are defined as companies which, on balance sheet date, exceed at least two of the three following criteria: (a) a balance sheet total of €20,000,000; (b) a net turnover of
€40,000,000; (c) an average of 250 employees during the financial year.
8 These are investment funds that primarily invest in listed equities and debt instruments.
Based on the information currently
available, the tables above provide
insight into the composition of
NN Group’s Investment KPI.
Further explanation on this information,
associated assumptions and limitations,
is presented below.
Assumptions
NN Group collected EU Taxonomy data
related to the two climate objectives
in respect of mortgage loans to retail
clients internally and from external
data providers for direct investments
and investment funds where these
data providers have this data available.
For direct investments, NN Group
has assessed the NFRD⁷ status of
its counterparties using internal and
external data.
For investment funds⁸, NN Group has not
used look-through information regarding
the exposure to non-NFRD issuers and
decided to consider these all as NFRD
issuers. Look-through information is only
used for calculating the eligibility and
alignment of the fund related to the two
climate objectives using the weighted
average exposure to taxonomy-eligible
and aligned economic activities of
the investments in the fund. In case
EU Taxonomy data is not available for
investment funds, NN Group presented
these exposures as taxonomy non-
eligible (zero in the numerator and for
the full amount in the denominator of
the investment KPI). Data availability is
expected to improve in the coming years
when reported eligibility and alignment
data increases.
For type of counterparty information,
all investment funds are classified as
exposures to financial undertakings.
NN Group's investments in other
insurance companies, banks, and
asset managers are also classified as
exposures to financial undertakings.
Investments in other counterparties
and assets consist of mortgage
loans to retail clients and direct real
estate investments. The remaining
investments (i.e. those that are not
classified as investments in other
insurance companies, banks, asset
managers, investments funds and
exposures to other counterparties
and assets consisting of mortgage
loans to retail clients, direct real estate
investments, derivatives, or sovereigns),
are classified as investments in non-
financial undertakings. For classifying
investments into counterparties from
the EU and non-EU, internally available
data on country of incorporation of
counterparties was used.
NN Group’s weighted average of EU
Taxonomy values of investments is
based on the proportion of EU Taxonomy-
aligned economic activities of investee
companies measured by their turnover
and CapEx KPIs. The green asset and
investment ratios for investments
in banks and insurance companies
respectively are not presented as the
necessary alignment information is not
yet available.
For determining the substantial
contribution criteria of mortgage loans,
NN Group has used Energy Performance
Certificates (EPCs) for the majority
of mortgage loans. The substantial
contribution criteria include an option
of selecting the top 15% of buildings
based on Primary Energy Demand (PED).
Where no EPCs are available, the top
15% PED approach is applied.
In case of unavailable data for
investments subject to a mandatory
taxonomy-eligibility and alignment
assessment, NN Group has presented
these investments as taxonomy non-
aligned for external retail mortgage
loans and real estate investments and
non-eligible for investments in NFRD
companies and investments funds.
Eligibility of the four non-climate
environmental objectives
In 2023, the Commission introduced the
Environmental Delegated Act defining
the economic activities making a
substantial contribution to one or more
of the four non-climate environmental
objectives. Under the Environmental
Delegated Act, taxonomy-eligibility
information related to the four non-
climate environmental objectives is
required to be disclosed in 2023.
NN Group has no reported counterparty
information available to disclose
information on the eligibility related
to the four non-climate environmental
objectives as counterparties have not yet
reported on this. Therefore, NN Group
assessed this eligibility based on the
NACE codes of the counterparties and
presented this as a voluntary disclosure.
The EU Taxonomy includes NACE codes
in the description of economic activities.
If the NACE code of the counterparty
for the remaining exposures matches
those included in the EU Taxonomy,
these are considered taxonomy-eligible;
if the NACE code of the counterparty
does not match to the EU Taxonomy,
these are considered taxonomy non-
eligible. An inherent limitation in this
approach is that the outcome of the
assessment with NACE code of the
counterparty is binary and therefore
does not reflect a counterparty’s multiple
economic activities.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
146
NN Group N.V.
2023 Annual Report
Eligibility of the four non-climate environmental objectives
Amount Proportion %
Non-climate eligible 901 1%
Assets covered by the KPI 154,016 100%
* Estimated EU Taxonomy figures are reported on a voluntary basis in addition to the mandatory EU Taxonomy figures, therefore there is no overlap in mandatory and voluntary figures.
Template 1: Nuclear and fossil gas related activities
Row Nuclear energy-related activities Mandatory Voluntary*
1. The undertaking carries out, funds or has exposures to research, development,
demonstration and deployment of innovative electricity generation facilities that produce
energy from nuclear processes with minimal waste from the fuel cycle.
NO NO
2. The undertaking carries out, funds or has exposures to construction and safe operation
of new nuclear installations to produce electricity or process heat, including for the
purposes of district heating or industrial processes such as hydrogen production, as well
as their safety upgrades, using best available technologies.
YES NO
3. The undertaking carries out, funds or has exposures to safe operation of existing nuclear
installations that produce electricity or process heat, including for the purposes of
district heating or industrial processes such as hydrogen production from nuclear energy,
as well as their safety upgrades.
YES NO
Fossil gas-related activities
4. The undertaking carries out, funds or has exposures to construction or operation of
electricity generation facilities that produce electricity using fossil gaseous fuels.
YES NO
5. The undertaking carries out, funds or has exposures to construction, refurbishment and
operation of combined heat/cool and power generation facilities using fossil gaseous
fuels.
YES NO
6. The undertaking carries out, funds or has exposures to construction, refurbishment and
operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.
YES NO
EU Taxonomy disclosures continued
As shown below, non-climate eligibility amounts to EUR 900 million and represents 1% of covered assets. In calculating these
figures, investments for reported climate eligibility were adjusted based on turnover, where applicable.
Gas and Nuclear
From 2023, the Complementary
Delegated Act added gas and nuclear
activities to the economic activities that
can make a substantial contribution to
climate change mitigation and climate
change adaptation. Following the
inclusion of gas and nuclear economic
activities in the scope of the EU
Taxonomy disclosures, NN Group is
required to disclose information on
eligibility and alignment of gas and
nuclear activities as described in the
EU Taxonomy.
The tables below are required under the
EU Taxonomy Regulation and reflect
whether NN Group finances or invests in
gas and nuclear activities.
EU Taxonomy data is not available
for all gas and nuclear investments.
Therefore at aggregated level,
adjustments were made so that the
sum of alignment, non-alignment and
non-eligible equals covered assets.
The investment alignment figures
were used as a base for totals for each
template. Other taxonomy economic
activity rows were determined,
by deducting the sum of fossil gas
and nuclear economic activities
from the respective total number.
Where alignment data was received for
both the climate change mitigation and
climate change adaptation objectives,
the alignment has been included in the
climate change mitigation section.
In the table below, the mandatory
overview of activities is shown. While a
YES can be shown in the first table it is
possible that the following tables show
no data in the respective fields, due to
the small amount of exposure. In general,
the majority of alignment stems from
other activities with limited gas and
nuclear data available.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
147
NN Group N.V.
2023 Annual Report
EU Taxonomy disclosures continued
The tables below (template 2 and template 3) provide information on the amount and proportion of taxonomy-aligned exposures
to gas and nuclear economic activities. Table 2 sets the alignment into perspective to covered assets (denominator).
Template 2: Gas and Nuclear taxonomy-aligned economic activities (denominator)
Monetary amount (in EUR million) and proportion (%)
Mandatory Turnover Mandatory CapEx
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA) CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Economic activities Amount % Amount % Amount % Amount % Amount % Amount %
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.26 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.27 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.28 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
148
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2023 Annual Report
EU Taxonomy disclosures continued
Template 2: Gas and Nuclear taxonomy-aligned economic activities (denominator) continued
Monetary amount (in EUR million) and proportion (%)
Voluntary* Turnover Voluntary* CapEx
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA) CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Economic activities Amount % Amount % Amount % Amount % Amount % Amount %
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.26 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.27 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.28 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
149
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2023 Annual Report
EU Taxonomy disclosures continued
Template 2: Gas and Nuclear taxonomy-aligned economic activities (denominator) continued
Monetary amount (in EUR million) and proportion (%)
Mandatory Turnover Mandatory CapEx
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA) CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Economic activities Amount % Amount % Amount % Amount % Amount % Amount %
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.29 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI 28 0% 28 0% – – 46 0% 46 0% – –
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.30 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.31 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI
Amount and
proportion of other
taxonomy-aligned
economic activities
not referred to in
rows 1 to 6 above in
the denominator of
the applicable KPI 16,674 11% 16,648 11% 26 0% 1,996 1% 1,926 1% 70 0%
Total applicable KPI 16,702 11% 16,676 11% 26 0% 2,042 1% 1,972 1% 70 0%
* Estimated EU Taxonomy figures are reported on a voluntary basis in addition to the mandatory EU Taxonomy figures, therefore there is no overlap in mandatory and voluntary figures
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
150
NN Group N.V.
2023 Annual Report
EU Taxonomy disclosures continued
Template 2: Gas and Nuclear taxonomy–aligned economic activities (denominator) continued
Monetary amount (in EUR million) and proportion (%)
Voluntary* Turnover Voluntary* CapEx
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA) CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Economic activities Amount % Amount % Amount % Amount % Amount % Amount %
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.29 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.30 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.31 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI
Amount and
proportion of other
taxonomy-aligned
economic activities
not referred to in
rows 1 to 6 above in
the denominator of
the applicable KPI 3,016 2% 3,016 2% – – 1,294 0% 1,294 0% – –
Total applicable KPI 3,016 2% 3,016 2% – – 1,294 0% 1,294 0% – –
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
151
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2023 Annual Report
EU Taxonomy disclosures continued
Template 3: Gas and Nuclear taxonomy–aligned economic activities (numerator)
Monetary amount (in EUR million) and proportion (%)
Mandatory Turnover Mandatory CapEx
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA) CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Economic activities Amount % Amount % Amount % Amount % Amount % Amount %
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.26 of
Annexes I and II to
the Complementary
Delegated Act in the
numerator of the
applicable KPI – – – – – – – – – – – –
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.27 of
Annexes I and II to
the Complementary
Delegated Act in the
numerator of the
applicable KPI – – – – – – – – – – – –
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.28 of
Annexes I and II to
the Complementary
Delegated Act in the
numerator of the
applicable KPI – – – – – – – – – – – –
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.29 of
Annexes I and II to
the Complementary
Delegated Act in the
numerator of the
applicable KPI 28 0% 28 0% – – 46 2% 46 2% – –
The table below (template 3) aims at showing the Gas and Nuclear portion of the overall taxonomy-alignment. Therefore, the total
alignment is used as a base instead of covered assets.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
152
NN Group N.V.
2023 Annual Report
EU Taxonomy disclosures continued
Template 3: Gas and Nuclear taxonomy–aligned economic activities (numerator) continued
Monetary amount (in EUR million) and proportion (%)
Voluntary* Turnover Voluntary* CapEx
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA) CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Economic activities Amount % Amount % Amount % Amount % Amount % Amount %
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.26 of
Annexes I and II to
the Complementary
Delegated Act in the
numerator of the
applicable KPI – – – – – – – – – – – –
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.27 of
Annexes I and II to
the Complementary
Delegated Act in the
numerator of the
applicable KPI – – – – – – – – – – – –
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.28 of
Annexes I and II to
the Complementary
Delegated Act in the
numerator of the
applicable KPI – – – – – – – – – – – –
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.29 of
Annexes I and II to
the Complementary
Delegated Act in the
numerator of the
applicable KPI – – – – – – – – – – – –
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
153
NN Group N.V.
2023 Annual Report
EU Taxonomy disclosures continued
The table below (template 3) aims at showing the Gas and Nuclear portion of the overall taxonomy-alignment. Therefore, the total
alignment is used as a base instead of covered assets.
Template 3: Gas and Nuclear taxonomy–aligned economic activities (numerator) continued
Monetary amount (in EUR million) and proportion (%)
Mandatory Turnover Mandatory CapEx
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA) CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Economic activities Amount % Amount % Amount % Amount % Amount % Amount %
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.30 of
Annexes I and II to
the Complementary
Delegated Act in the
numerator of the
applicable KPI – – – – – – – – – – – –
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.31 of
Annexes I and II to
the Complementary
Delegated Act in the
numerator of the
applicable KPI – – – – – – – – – – – –
Amount and
proportion of other
taxonomy-aligned
economic activities
not referred to in
rows 1 to 6 above in
the denominator of
the applicable KPI 16,674 100% 16,648 100% 26 0% 1,996 98% 1,926 95% 70 3%
Total applicable KPI 16,702 100% 16,676 100% 26 0% 2,042 100% 1,972 97% 70 3%
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
154
NN Group N.V.
2023 Annual Report
EU Taxonomy disclosures continued
Template 3: Gas and Nuclear taxonomy–aligned economic activities (numerator) continued
Monetary amount (in EUR million) and proportion (%)
Voluntary* Turnover Voluntary* CapEx
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA) CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Economic activities Amount % Amount % Amount % Amount % Amount % Amount %
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.30 of
Annexes I and II to
the Complementary
Delegated Act in the
numerator of the
applicable KPI – – – – – – – – – – – –
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.31 of
Annexes I and II to
the Complementary
Delegated Act in the
numerator of the
applicable KPI – – – – – – – – – – – –
Amount and
proportion of other
taxonomy-aligned
economic activities
not referred to in
rows 1 to 6 above in
the denominator of
the applicable KPI 3,016 100% 3,016 100% – – 1,294 100% 1,294 100% – –
Total applicable KPI 3,016 100% 3,016 100% – – 1,294 100% 1,294 100% – –
* Estimated EU Taxonomy figures are reported on a voluntary basis in addition to the mandatory EU Taxonomy figures, therefore there is no overlap in mandatory and voluntary figures.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
155
NN Group N.V.
2023 Annual Report
EU Taxonomy disclosures continued
The table below (template 4) provides information on the amount and proportion of taxonomy-eligible but not taxonomy-aligned
exposures to gas and nuclear economic activities.
Template 4: Taxonomy–eligible but not taxonomy–aligned Gas and Nuclear economic activities
Amount and proportion (%)
Turnover CapEx
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA) CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Economic activities Amount % Amount % Amount % Amount % Amount % Amount %
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.26 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI – – – – – – – – – – – –
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.27 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI – – – – – – – – – – – –
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.28 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI – – – – – – – – – – – –
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
156
NN Group N.V.
2023 Annual Report
EU Taxonomy disclosures continued
Template 4: Taxonomy–eligible but not taxonomy–aligned Gas and Nuclear economic activities continued
Amount and proportion (%)
Voluntary* Turnover Voluntary* CapEx
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA) CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Economic activities Amount % Amount % Amount % Amount % Amount % Amount %
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.26 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI – – – – – – – – – – – –
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.27 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI – – – – – – – – – – – –
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.28 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI – – – – – – – – – – – –
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
157
NN Group N.V.
2023 Annual Report
EU Taxonomy disclosures continued
The table below (template 4) provides information on the amount and proportion of taxonomy-eligible but not taxonomy-aligned
exposures to gas and nuclear economic activities.
Template 4: Taxonomy–eligible but not taxonomy–aligned Gas and Nuclear economic activities continued
Amount and proportion (%)
Turnover CapEx
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA) CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Economic activities Amount % Amount % Amount % Amount % Amount % Amount %
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.29 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI 33 0% 33 0% – – 14 0% 14 0% – –
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.30 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI 2 0% 2 0% – – – – – – – –
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.31 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI – – – – – – – – – – – –
Amount and
proportion of other
taxonomy-aligned
economic activities
not referred to in
rows 1 to 6 above in
the denominator of
the applicable KPI 48,732 32% 47,963 31% 769 1% 71,763 47% 70,532 46% 1,231 1%
Total applicable KPI 48,767 32% 47,998 31% 769 1% 71,777 47% 70,547 46% 1,231 1%
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
158
NN Group N.V.
2023 Annual Report
EU Taxonomy disclosures continued
Template 4: Taxonomy-eligible but not taxonomy-aligned Gas and Nuclear economic activities continued
Amount and proportion (%)
Voluntary* Turnover Voluntary* CapEx
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA) CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Economic activities Amount % Amount % Amount % Amount % Amount % Amount %
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.29 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI – – – – – – – – – – –
–
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.30 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI – – – – – – – – – – –
–
Amount and
proportion of
taxonomy-aligned
economic activity
referred to in
Section 4.31 of
Annexes I and
II to Delegated
Regulation
2021/2139 in the
denominator of the
applicable KPI – – – – – – – – – – –
–
Amount and
proportion of other
taxonomy-aligned
economic activities
not referred to in
rows 1 to 6 above in
the denominator of
the applicable KPI 66,965 44% 66,952 44% 13 0% 69,995 45% 69,986 45% 9
0%
Total applicable KPI 66,965 44% 66,952 44% 13 0% 69,995 45% 69,986 45% 9 0%
* Estimated EU Taxonomy figures are reported on a voluntary basis in addition to the mandatory EU Taxonomy figures, therefore there is no overlap in mandatory and voluntary figures
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
159
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2023 Annual Report
The table below (template 5) provides information on the amount and proportion of gas and nuclear exposures that are not
taxonomy-eligible.
Template 5: Taxonomy non–eligible economic activities
Mandatory Turnover Mandatory CapEx Voluntary Turnover Voluntary CapEx
Economic activities Amount % Amount % Amount % Amount %
Amount and proportion of economic activity
referred to in row 1 of Template 1 that is
taxonomy–non–eligible in accordance
with Section 4.26 of Annexes I and II to
the Complementary Delegated Act in the
denominator of the applicable KPI
– – – – – – – –
Amount and proportion of economic activity
referred to in row 2 of Template 1 that is
taxonomy–non–eligible in accordance
with Section 4.27 of Annexes I and II to
the Complementary Delegated Actin the
denominator of the applicable KPI
– – – – – – – –
Amount and proportion of economic activity
referred to in row 3 of Template 1 that is
taxonomy–non–eligible in accordance
with Section 4.28 of Annexes I and II to
the Complementary Delegated Act in the
denominator of the applicable KPI
– – – – – – – –
Amount and proportion of economic activity
referred to in row 4 of Template 1 that is
taxonomy–non–eligible in accordance
with Section 4.29 of Annexes I and II to
the Complementary Delegated Act in the
denominator of the applicable KPI
– – – – – – – –
Amount and proportion of economic activity
referred to in row 5 of Template 1 that is
taxonomy–non–eligible in accordance
with Section 4.30 of Annexes I and II to
the Complementary Delegated Act in the
denominator of the applicable KPI
– – – – – – – –
Amount and proportion of economic activity
referred to in row 6 of Template 1 that is
taxonomy–non–eligible in accordance
with Section 4.31 of Annexes I and II to
the Complementary Delegated Act in the
denominator of the applicable KPI
– – – – – – – –
Amount and proportion of other taxonomy–
non–eligible economic activities not referred
to in rows 1 to 6 above in the denominator of
the applicable KPI
88,547 57% 80,197 52% 84,036 55% 84,020 55%
Total amount and proportion of taxonomy–
non–eligible economic activities in the
denominator of the applicable KPI
88,547 57% 80,197 52% 84,036 55% 84,020 55%
EU Taxonomy disclosures continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
160
NN Group N.V.
2023 Annual Report
Non-life Underwriting
The Underwriting KPI represents
the amount and extent to which NN
Group’s non-life underwriting activities
are directed at taxonomy-aligned
economic activities.
Consistent with the Investments KPI,
this is the first year that NN Group
reports on both taxonomy-eligibility and
alignment for its underwriting activities.
The EU Taxonomy-related activities
covered by the underwriting disclosures
relate to non-life (re)insurance activities
consisting of the underwriting of
climate-related perils. In order to assess
taxonomy alignment, NN Group first
identified the Lines of Business (based
on the Solvency II Lines of Business)
containing policies with terms related to
the treatment of ‘climate perils’ under the
EU Taxonomy. NN Group then selected
the Solvency II Lines of Business for
which one or more climate-related
perils are priced separately.
The table below shows the climate-
related policy terms that are used
in the underlying products of the
Solvency II Lines of Business, which
have a direct correlation with weather-
related events, such as windstorms and
mainly refer to properties, vehicles and
personal belongings.
Applicable Solvency II lines of business
Climate-related policy terms Use of climate-related margin Type of climate-related peril
Medical expense No No Not applicable
Income protection No No Not applicable
Workers’ compensation No No Not applicable
Motor vehicle liability No No Not applicable
Other motor Yes Yes Windstorm, Hail, River Flood
Marine, aviation and transport Yes No Not applicable
Fire and other damage to property Yes Yes Windstorm, Hail, River Flood
Assistance Yes No Not applicable
EU Taxonomy disclosures continued
In 2023, NN Group reports gross written
premiums of EUR 3,900 million included
in the Underwriting KPI, of which the
taxonomy alignment (underwriting
KPI) is 0%. The percentage of eligible
but not aligned premiums is 43%.
NN Group has taxonomy alignment of
0% for its underwriting activities as
NN Group does not yet fully meet the
minimum safeguards criteria under the
EU Taxonomy. For further information on
minimum safeguards, see page 163.
NN Group reports the percentage of
products measured by gross written
premiums that covers at least one
aspect of climate-related perils (i.e.
measuring the premium at product
level). Therefore, only the share of
premium covering specific climate
risks is considered taxonomy aligned.
This results in a more prudent taxonomy
alignment percentage compared to
when the climate-related coverage is
embedded in another, wider product;
where the full premium of this product
qualifies as taxonomy-aligned, provided
that the technical screening criteria (TSC)
are fulfilled.
The interpretation and assessment of the
TSC for insurance activities was based on
NN Group’s interpretation of the current
legislation and guidance published by
the European Commission. NN Group
continues to monitor developments
and interpretations but different
interpretations of the regulations in the
EU Taxonomy may exist.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
161
NN Group N.V.
2023 Annual Report
EU Taxonomy disclosures continued
Underwriting KPI
The NN Group underwriting KPI
represents the amount of NN Group’s
non-life gross premiums which relate to
taxonomy-aligned insurance activities.
This section covers the mandatory
Underwriting KPI template. Based on the
information available, the table below
reflects the proportion of premiums
that are taxonomy-aligned based
on the approach explained above.
The taxonomy-aligned Underwriting
activities is 0%. Gross premiums
included in the table relates to the
Netherlands Non-life segment.
The difference with Gross premiums
written in Note 30 to the Annual
Accounts relates to non-life premiums in
certain international businesses.
Table 1. Full premium method for eligibility and the split premium method for alignment
Substantial contribution to climate change adaptation DNSH (Do No Significant Harm)
Economic activities
Absolute
premiums,
2023
Proportion of
premiums, 2023
Proportion of
premiums,
2022
Climate
change
mitigation
Water and
marine
resources
Circular
economy Pollution
Biodiversity
and
ecosystems
Minimum
safeguards
Amount % % Y/N Y/N Y/N Y/N Y/N Y/N
A.1. Non-life insurance
and reinsurance
underwriting Taxonomy-
aligned activities
(environmentally
sustainable) 0 0 0 Y Y Y Y Y N
A.1.1 Of which reinsured 0 0 0 Y Y Y Y Y N
A.1.2 Of which stemming
from reinsurance activity 0 0 0 Y Y Y Y Y N
A.1.2.1 Of which
reinsured (retrocession) n/a n/a n/a n/a n/a n/a n/a n/a n/a
A.2 Non-life insurance
and reinsurance
underwriting
Taxonomy-eligible but
not environmentally
sustainable activities
(not Taxonomy-aligned
activities) 1,599 41% n/a n/a n/a n/a n/a n/a n/a
B. Non-life insurance and
reinsurance underwriting
Taxonomy-non-eligible
activities 2,302 59% n/a n/a n/a n/a n/a n/a n/a
Total (A.1 + A.2 +B) 3,901 100% 100% n/a n/a n/a n/a n/a n/a
Note: The total non-life insurance and reinsurance premium amount in this table relates to the Netherlands Non-life segment. The difference with Gross premiums written as per the Annual
Accounts relates to non-life premiums in certain international businesses.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
162
NN Group N.V.
2023 Annual Report
EU Taxonomy disclosures continued
Table 2. Split premium method for eligibility and the split premium method for alignment
Substantial contribution to climate change adaptation DNSH (Do No Significant Harm)
Economic activities
Absolute
premiums,
2023
Proportion of
premiums, 2023
Proportion of
premiums,
2023
Climate
change
mitigation
Water and
marine
resources
Circular
economy Pollution
Biodiversity
and
ecosystems
Minimum
safeguards
Amount % % Y/N Y/N Y/N Y/N Y/N Y/N
A.1. Non-life insurance and
reinsurance underwriting
Taxonomy-aligned
activities (environmentally
sustainable) 0 0 0 Y Y Y Y Y N
A.1.1 Of which reinsured 0 0 0 Y Y Y Y Y N
A.1.2 Of which stemming
from reinsurance activity 0 0 0 Y Y Y Y Y N
A.1.2.1 Of which
reinsured (retrocession) n/a n/a n/a n/a n/a n/a n/a n/a n/a
A.2 Activities not
included in A1 50 1% n/a n/a n/a n/a n/a n/a n/a
B. Non-life insurance and
reinsurance underwriting
Taxonomy-non-eligible
activities 3,851 99% n/a n/a n/a n/a n/a n/a n/a
Total (A.1 + A.2 +B) 3,901 100% 100% n/a n/a n/a n/a n/a n/a
Note: The total non-life insurance and reinsurance premium amount in this table relates to the Netherlands Non-life segment. The difference with Gross premiums written as per the Annual
Accounts relates to non-life premiums in certain international businesses.
In order to achieve substantial
contribution to climate change
adaptation, NN Group has assessed the
following criteria:
Using forward-looking climate risk
modelling as basis for pricing – Relevant
climate related perils for NN Group’s
business such as Windstorm and Hail
are taken into account in the partial
internal model for P&C Catastrophe risk.
The partial internal model and insights
from the reinsurance programme are
being used as a basis for pricing. In the
Own Risk and Solvency Assessment
(ORSA), process forward-looking climate
related scenarios are used to validate the
model. NN Group aims to further develop
the use of such scenarios and analyses,
for example, for River Flood NN Group is
assessing the impact under various IPCC
scenarios and time horizons.
Risk-based rewards for policyholders'
preventive actions – In NN Group’s Non-
life insurance underwriting and pricing
activities, NN Group provides incentives
(where applicable and practicable) to
its policyholders to take risk-mitigating
measures against climate damage by
means of (standard) product conditions
for the cover and/or by setting price
incentives which may, for example,
include a premium discount or premium
surcharge, deductible adjustment,
standard coverage for climate adaptation
measures with no premium surcharge or
a discount on the purchase. For Solvency
II lines of business ‘Fire and other
damage to property’, NN Group’s Retail
home insurance product offers standard
conditions for preventive actions that
(in)directly contribute to the reduction
of CO
2
emissions and against climate
damage and a premium discount when
using a sustainable damage repair
network fulfils this criterion. For ‘Other
motor’, NN Group’s mileage insurance
product offering consumers an incentive
to drive less also fulfils this criterion.
Innovative solution for insurance
coverage – Meeting client needs
and where possible NN Group offers
solutions to close existing protection
gaps, for example, for flood risk.
NN Group has extended the coverage of
its policies to include protection against
a breach of secondary dikes. Through its
membership of the Dutch Association of
Insurers and its intensive involvement
in climate change related topics, NN
Group investigates risk mitigating
market solutions, including possibilities
to provide protection against losses
resulting from primary dike flood risk.
Sharing of data – As a member of
the Dutch Association of Insurers,
NN Group shares (climate related claims)
data with the Association's Digital
Analytics Centre. This data can then
be used for analytical research when
deemed necessary.
High level of service after a disaster –
NN Group complies with the Code of
Conduct for Claims Handling and act
within applicable (reasonable) periods.
In this regard no structural negative
deviations have been identified with
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
163
NN Group N.V.
2023 Annual Report
EU Taxonomy disclosures continued
regard to recent calamities, by the
Foundation for the Assessment of
Insurers (STV) or by a judicial authority.
In the event of an (climate-related)
emergency, NN Group makes information
relating to procedures for taking
additional measures available to the
public, including via the website.
Do No Significant Harm (DNSH)
Products that are aligned with the
taxonomy substantial contribution to
climate change adaptation criteria must
also be checked in relation to the Do
No Significant Harm (DNSH) criterion.
Economic activities that do not comply
with the taxonomy’s requirement for
sustainable economic activities cannot
be considered taxonomy-aligned. For a
general insurance company, the DNSH
criterion is also an inherent part of the
climate change adaptation objective.
For the non-life insurance activity, only
DNSH requirements relating to the EU
Taxonomy climate change mitigation
environmental objective apply. In relation
to climate change mitigation, this
means that insurance of activities such
as the production, storage, transport
and processing of fossil fuels must be
deducted from the earned premiums that
are deemed to comply with the criteria
for sustainable non-life insurance.
NN Group has used NACE codes
registered in its insurance administration
systems as the basis for identifying
relevant activities in the portfolio.
The number of activities that can be
linked to DNSH after this review would
be deducted from the activities that are
covered by the taxonomy criterion.
We note that it is not possible to deduct
a premium for customers with a different
SBI/NACE code, who for example
occasionally transport fossil fuels, from
the premiums earned that are deemed to
meet the criteria.
Minimum safeguards
In order to be aligned, the Taxonomy
regulation also requires products
to be compliant with the Minimum
Safeguards. These minimum safeguards
can be regarded criteria or processes for
responsible business conduct, applicable
both to the products as well as NN Group
as a corporate entity.
To meet the criteria of responsible
business conduct, both NN Group and
the products in its value chain will have
to demonstrate compliance on the
following topics:
• Human rights including workers’ rights
• Anti-bribery and corruption
• Taxation
• Fair competition
Currently NN Group is deemed not to
be in full compliance with the criteria.
As NN Group adheres to the OECD
Guidelines for Multinational Enterprises
and is a member of Global Compact, it
adheres to principles of human rights,
labour rights, environmental protection,
combatting bribery and corruption as
documented in NN Group’s most recent
annual Communication of Progress
which is listed on the website of
Global Compact.
NN Group also has anti-corruption
policies in place via, for example, the
Code of Conduct and its underlying
policies and standards, such as the
Outside Positions and Outside Interests
standard, the Gifts and Events and
Business Meals policy and the Financial
Economic Crime policy.
To become compliant, additional steps
have been determined in 2023 following
the introduction of a human rights
impact assessment. Next steps will be
performed in combination with further
implementation of the OECD Guidelines.
For NN Group’s products in the value
chain, we deem NN Group not yet
compliant. On adherence to the minimum
safeguards due diligence processes
will be enhanced on screening and
monitoring business sector clients.
NN Group has established a Responsible
Insurance Underwriting Committee to
oversee achieving these next steps.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
164
NN Group N.V.
2023 Annual Report
Assurance report of the independent auditor
KPMG Accountants N.V., a Dutch limited liability company registered with the trade register in the Netherlands under number
33263683, is a member firm of the global organization of independent member firms affiliated with KPMG International Limited, a
private English company limited by guarantee.
Limited assurance report of the independent auditor on non-financial information
To: the General Meeting of Shareholders and the Supervisory Board of NN Group N.V.
Our conclusion
We have performed a limited assurance engagement on the non-financial information in the
annual report 2023 of NN Group N.V. ('the Group’) based in Amsterdam and headquartered in
The Hague.
Based on the procedures performed and the assurance information obtained nothing has come to
our attention that causes us to believe that the non-financial information in the accompanying
annual report does not fairly present, in all material respects:
— the policy with regard to sustainability matters; and
— the business operations, events and achievements in that area in 2023,
in accordance with the applicable criteria as included in the section ‘Criteria’.
The non-financial information is included in the following sections of the annual report:
— ‘1 About NN’;
— ‘2 Our operating environment’;
— ‘3 Our strategy and performance’;
— ‘4 Creating value for our stakeholders’;
— ‘5 Managing our risk’; and
— ‘7 Facts and figures’ (with the exclusion of the section ‘EU Taxonomy Disclosures’).
Basis for our conclusion
We performed our limited assurance engagement on the non-financial information in accordance
with Dutch law, including Dutch Standard 3810N ‘Assurance-opdrachten inzake
duurzaamheidsverslaggeving’ (Assurance engagements relating to sustainability reporting). Our
responsibilities under this standard are further described in the ‘Our responsibilities for the
assurance engagement on the non-financial information’ section of our report.
We are independent of the Group in accordance with the ‘Verordening inzake de
onafhankelijkheid van accountants bij assurance-opdrachten’ (ViO, Code of Ethics for
Professional Accountants, a regulation with respect to independence). Furthermore, we have
complied with the ‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of
Ethics for Professional Accountants).
We believe the assurance evidence we have obtained is sufficient and appropriate to provide a
basis for our conclusion.
KPMG Accountants N.V., a Dutch limited liability company registered with the trade register in the Netherlands under number
33263683, is a member firm of the global organization of independent member firms affiliated with KPMG International Limited, a
private English company limited by guarantee.
Limited assurance report of the independent auditor on non-financial information
To: the General Meeting of Shareholders and the Supervisory Board of NN Group N.V.
Our conclusion
We have performed a limited assurance engagement on the non-financial information in the
annual report 2023 of NN Group N.V. ('the Group’) based in Amsterdam and headquartered in
The Hague.
Based on the procedures performed and the assurance information obtained nothing has come to
our attention that causes us to believe that the non-financial information in the accompanying
annual report does not fairly present, in all material respects:
— the policy with regard to sustainability matters; and
— the business operations, events and achievements in that area in 2023,
in accordance with the applicable criteria as included in the section ‘Criteria’.
The non-financial information is included in the following sections of the annual report:
— ‘1 About NN’;
— ‘2 Our operating environment’;
— ‘3 Our strategy and performance’;
— ‘4 Creating value for our stakeholders’;
— ‘5 Managing our risk’; and
— ‘7 Facts and figures’ (with the exclusion of the section ‘EU Taxonomy Disclosures’).
Basis for our conclusion
We performed our limited assurance engagement on the non-financial information in accordance
with Dutch law, including Dutch Standard 3810N ‘Assurance-opdrachten inzake
duurzaamheidsverslaggeving’ (Assurance engagements relating to sustainability reporting). Our
responsibilities under this standard are further described in the ‘Our responsibilities for the
assurance engagement on the non-financial information’ section of our report.
We are independent of the Group in accordance with the ‘Verordening inzake de
onafhankelijkheid van accountants bij assurance-opdrachten’ (ViO, Code of Ethics for
Professional Accountants, a regulation with respect to independence). Furthermore, we have
complied with the ‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of
Ethics for Professional Accountants).
We believe the assurance evidence we have obtained is sufficient and appropriate to provide a
basis for our conclusion.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
165
NN Group N.V.
2023 Annual Report
Assurance report of the independent auditor continued
2
Criteria
The criteria applied for the preparation of the non-financial information are the GRI Sustainability
Reporting Standards (GRI Standards) as listed in the GRI Content Index and the criteria
supplementally applied as disclosed in section ‘1 About NN’ of the annual report. The non-
financial information is prepared in accordance with the GRI Standards.
The comparability of non-financial information between entities and over time may be affected by
the absence of a uniform practice on which to draw, to evaluate and measure this information.
This allows for the application of different, but acceptable, measurement techniques.
Consequently, the non-financial information needs to be read and understood together with the
criteria applied.
Materiality
Based on our professional judgement we determined materiality levels for each relevant part of
the sustainability matter. When evaluating our materiality levels, we have taken into account
quantitative and qualitative aspects as well as the relevance of information for both stakeholders
and the company.
We have agreed with the Audit Committee of the Supervisory Board that misstatements which
are identified during the assurance engagement and which in our view must be reported on
quantitative or qualitative grounds, would be reported to them.
Limitations to the scope of our assurance engagement
The non-financial information includes prospective information such as ambitions, strategy, plans,
expectations, estimates and risk assessments. Prospective information relates to events and
actions that have not yet occurred and may never occur. We do not provide any assurance on the
assumptions and achievability of prospective information.
The references to external sources or websites in the non-financial information are not part of the
non-financial information as included in the scope of our assurance engagement. We therefore
do not provide assurance on this information.
Our conclusion is not modified in respect to these matters.
Responsibilities of the Executive Board and Supervisory Board for the non-
financial information
The Executive Board is responsible for the preparation and fair presentation of the non-financial
information in accordance with the criteria as included in the section ‘Criteria’, including the
identification of stakeholders and the definition of material matters.
The Executive Board is also responsible for selecting and applying the criteria and for
determining that these criteria are suitable for the legitimate information needs of stakeholders,
considering applicable law and regulations related to reporting.
The choices made by the Executive Board regarding the scope of the non-financial information
and the reporting policy are summarized in section ‘1 About NN’ in the annual report
KPMG Accountants N.V., a Dutch limited liability company registered with the trade register in the Netherlands under number
33263683, is a member firm of the global organization of independent member firms affiliated with KPMG International Limited, a
private English company limited by guarantee.
Limited assurance report of the independent auditor on non-financial information
To: the General Meeting of Shareholders and the Supervisory Board of NN Group N.V.
Our conclusion
We have performed a limited assurance engagement on the non-financial information in the
annual report 2023 of NN Group N.V. ('the Group’) based in Amsterdam and headquartered in
The Hague.
Based on the procedures performed and the assurance information obtained nothing has come to
our attention that causes us to believe that the non-financial information in the accompanying
annual report does not fairly present, in all material respects:
— the policy with regard to sustainability matters; and
— the business operations, events and achievements in that area in 2023,
in accordance with the applicable criteria as included in the section ‘Criteria’.
The non-financial information is included in the following sections of the annual report:
— ‘1 About NN’;
— ‘2 Our operating environment’;
— ‘3 Our strategy and performance’;
— ‘4 Creating value for our stakeholders’;
— ‘5 Managing our risk’; and
— ‘7 Facts and figures’ (with the exclusion of the section ‘EU Taxonomy Disclosures’).
Basis for our conclusion
We performed our limited assurance engagement on the non-financial information in accordance
with Dutch law, including Dutch Standard 3810N ‘Assurance-opdrachten inzake
duurzaamheidsverslaggeving’ (Assurance engagements relating to sustainability reporting). Our
responsibilities under this standard are further described in the ‘Our responsibilities for the
assurance engagement on the non-financial information’ section of our report.
We are independent of the Group in accordance with the ‘Verordening inzake de
onafhankelijkheid van accountants bij assurance-opdrachten’ (ViO, Code of Ethics for
Professional Accountants, a regulation with respect to independence). Furthermore, we have
complied with the ‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of
Ethics for Professional Accountants).
We believe the assurance evidence we have obtained is sufficient and appropriate to provide a
basis for our conclusion.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
166
NN Group N.V.
2023 Annual Report
Assurance report of the independent auditor continued
3
Furthermore, the Executive Board is responsible for such internal control as it determines is
necessary to enable the preparation of the non-financial information that is free from material
misstatement, whether due to fraud or error.
The Supervisory Board is responsible for overseeing the sustainability reporting process of the
Group.
Our responsibilities for the assurance engagement on the non-financial
information
Our responsibility is to plan and perform the assurance engagement in a manner that allows us to
obtain sufficient and appropriate assurance evidence for our conclusion.
Our assurance engagement is aimed to obtain a limited level of assurance to determine the
plausibility of non-financial information. The procedures vary in nature and timing from, and are
less in extent, than for a reasonable assurance engagement. The level of assurance obtained in
a limited assurance engagement is substantially less than the assurance that is obtained had a
reasonable assurance engagement is performed.
We apply the ‘Nadere Voorschriften Kwaliteitssystemen’ (NVKS, Regulations for Quality
management systems) and accordingly maintain a comprehensive system of quality
management including documented policies and procedures regarding compliance with ethical
requirements, professional standards and applicable legal and regulatory requirements.
Our assurance engagement included among others:
— Performing an analysis of the external environment and obtaining an understanding of
relevant sustainability themes and issues, and the characteristics of the company.
— Evaluating the appropriateness of the criteria applied, their consistent application and related
disclosures in the non-financial information. This includes the evaluation of the company’s
materiality assessment and the reasonableness of estimates made by management.
— Obtaining through inquiries a general an understanding of the internal control environment,
the reporting processes, the information systems and the entity’s risk assessment process
relevant to the preparation of the non-financial information, without obtaining assurance
information about the implementation or testing the operating effectiveness of controls.
— Identifying areas of the non-financial information where misleading or unbalanced information
or a material misstatement, whether due to fraud or error, is likely to arise. Designing and
performing further assurance procedures aimed at determining the plausibility of the non-
financial information responsive to this risk analysis. These procedures consisted amongst
others of:
- Obtaining inquiries from management at corporate level responsible for the
sustainability strategy, policy and results.
- Obtaining inquiries from relevant staff responsible for providing the information for,
carrying out internal control procedures on, and consolidating the data in the non-
financial information.
KPMG Accountants N.V., a Dutch limited liability company registered with the trade register in the Netherlands under number
33263683, is a member firm of the global organization of independent member firms affiliated with KPMG International Limited, a
private English company limited by guarantee.
Limited assurance report of the independent auditor on non-financial information
To: the General Meeting of Shareholders and the Supervisory Board of NN Group N.V.
Our conclusion
We have performed a limited assurance engagement on the non-financial information in the
annual report 2023 of NN Group N.V. ('the Group’) based in Amsterdam and headquartered in
The Hague.
Based on the procedures performed and the assurance information obtained nothing has come to
our attention that causes us to believe that the non-financial information in the accompanying
annual report does not fairly present, in all material respects:
— the policy with regard to sustainability matters; and
— the business operations, events and achievements in that area in 2023,
in accordance with the applicable criteria as included in the section ‘Criteria’.
The non-financial information is included in the following sections of the annual report:
— ‘1 About NN’;
— ‘2 Our operating environment’;
— ‘3 Our strategy and performance’;
— ‘4 Creating value for our stakeholders’;
— ‘5 Managing our risk’; and
— ‘7 Facts and figures’ (with the exclusion of the section ‘EU Taxonomy Disclosures’).
Basis for our conclusion
We performed our limited assurance engagement on the non-financial information in accordance
with Dutch law, including Dutch Standard 3810N ‘Assurance-opdrachten inzake
duurzaamheidsverslaggeving’ (Assurance engagements relating to sustainability reporting). Our
responsibilities under this standard are further described in the ‘Our responsibilities for the
assurance engagement on the non-financial information’ section of our report.
We are independent of the Group in accordance with the ‘Verordening inzake de
onafhankelijkheid van accountants bij assurance-opdrachten’ (ViO, Code of Ethics for
Professional Accountants, a regulation with respect to independence). Furthermore, we have
complied with the ‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of
Ethics for Professional Accountants).
We believe the assurance evidence we have obtained is sufficient and appropriate to provide a
basis for our conclusion.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
167
NN Group N.V.
2023 Annual Report
Assurance report of the independent auditor continued
4
- Reviewing the suitability of assumptions and sources from third parties used for the
calculation underlying the impact data as included in section ‘7 Facts and figures’ and
integrated within the report’.
- Obtaining assurance evidence that the non-financial information reconciles with
underlying records of the company.
- Reviewing, on a limited test basis, relevant internal and external documentation;
- Considering the data and trends.
—
Reading the information in the annual report which is not included in the scope of our
assurance engagement to identify material inconsistencies, if any, with the non-financial
information.
—
Considering the overall presentation and balanced content of the non-financial information.
—
Considering whether the non-financial information as a whole, including the sustainability
matters and disclosures, is clearly and adequately disclosed in accordance with applicable
criteria.
We communicate with the
Executive Board and the Audit Committee of the Supervisory Board
regarding, among other matters, the planned scope and timing of the assurance engagement and
significant findings that we identify during our assurance engagement.
Amstelveen,
20 March 2024
KPMG Accountants N.V.
D. Korf RA
KPMG Accountants N.V., a Dutch limited liability company registered with the trade register in the Netherlands under number
33263683, is a member firm of the global organization of independent member firms affiliated with KPMG International Limited, a
private English company limited by guarantee.
Limited assurance report of the independent auditor on non-financial information
To: the General Meeting of Shareholders and the Supervisory Board of NN Group N.V.
Our conclusion
We have performed a limited assurance engagement on the non-financial information in the
annual report 2023 of NN Group N.V. ('the Group’) based in Amsterdam and headquartered in
The Hague.
Based on the procedures performed and the assurance information obtained nothing has come to
our attention that causes us to believe that the non-financial information in the accompanying
annual report does not fairly present, in all material respects:
— the policy with regard to sustainability matters; and
— the business operations, events and achievements in that area in 2023,
in accordance with the applicable criteria as included in the section ‘Criteria’.
The non-financial information is included in the following sections of the annual report:
— ‘1 About NN’;
— ‘2 Our operating environment’;
— ‘3 Our strategy and performance’;
— ‘4 Creating value for our stakeholders’;
— ‘5 Managing our risk’; and
— ‘7 Facts and figures’ (with the exclusion of the section ‘EU Taxonomy Disclosures’).
Basis for our conclusion
We performed our limited assurance engagement on the non-financial information in accordance
with Dutch law, including Dutch Standard 3810N ‘Assurance-opdrachten inzake
duurzaamheidsverslaggeving’ (Assurance engagements relating to sustainability reporting). Our
responsibilities under this standard are further described in the ‘Our responsibilities for the
assurance engagement on the non-financial information’ section of our report.
We are independent of the Group in accordance with the ‘Verordening inzake de
onafhankelijkheid van accountants bij assurance-opdrachten’ (ViO, Code of Ethics for
Professional Accountants, a regulation with respect to independence). Furthermore, we have
complied with the ‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of
Ethics for Professional Accountants).
We believe the assurance evidence we have obtained is sufficient and appropriate to provide a
basis for our conclusion.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
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accounts
9 Other
information
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2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
8 Annual accounts
169
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Consolidated annual accounts 168
Consolidated balance sheet 170
Consolidated profit and loss account 171
Consolidated statement of comprehensive income 173
Consolidated statement of cash flows 174
Consolidated statement of changes in equity 176
Notes to the Consolidated annual accounts 178
1 Accounting policies 178
2 Cash and cash equivalents 187
3 Investments at fair value through other
comprehensive income 187
4 Investments at cost 190
5 Investments at fair value through profit or loss 192
6 Investments in real estate 192
7 Investments in associates and joint ventures 194
8 Property and equipment 198
9 Intangible assets 200
10 Assets and liabilities held for sale 203
11 Other assets 203
12 Equity 203
13 Insurance contracts 209
14 Investment contracts 223
15 Reinsurance contracts 224
16 Debt instruments issued 227
17 Subordinated debt 227
18 Other borrowed funds 228
19 Customer deposits 228
20 Derivatives 229
21 Other liabilities 230
22 Insurance income 231
23 Insurance expenses 232
24 Investment result 234
25 Finance result 236
26 Fee and commission result 236
27 Non-attributable operating expenses 237
28 Discontinued operations 239
29 Earnings per ordinary share 240
30 Segments 242
31 Insurance contracts by segment 248
32 Principal subsidiaries and geographical information 257
33 Taxation 259
34 Fair value of financial assets and liabilities 262
35 Fair value of non-financial assets 270
36 Hedge accounting 273
37 Assets by contractual maturity 275
38 Liabilities by maturity 277
39 Assets not freely disposable 279
40 Transferred, but not derecognised, financial assets 279
41 Offsetting of financial assets and liabilities 279
42 Contingent liabilities and commitments 282
43 Legal proceedings 283
44 Companies and businesses acquired and divested 284
45 Structured entities 285
46 Related parties 286
47 Key management personnel compensation 287
48 Fees of auditors 290
49 Subsequent and other events 290
50 Risk management 291
51 Capital and liquidity management 317
52 Other IFRS 9 and IFRS 17 transition disclosures 327
Authorisation of the Consolidated annual accounts 333
Parent company annual accounts
Parent company balance sheet 334
Parent company profit and loss account 335
Parent company statement of changes in equity 337
Notes to the Parent company annual accounts 338
Authorisation of the Parent company annual accounts 344
Independent auditor’s report 345
Appropriation of result 362
Other information
Our response to the Task Force on Climate-related Financial
Disclosures (TCFD) 364
Glossary 365
Contact and legal information
373
Annual accounts contents
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
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accounts
9 Other
information
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| Consolidated balance sheet | ||||
| 31 December | 31 December | 1 January 2022 | ||
| notes | 2023 | 2022 (Restated) | (Restated) | |
| Assets | ||||
| Cash and cash equivalents | 2 | |||
| Investments at fair value through OCI | 3 | |||
| Investments at cost | 4 | |||
| Investments at fair value through profit or loss | 5 | |||
| Investments in real estate | 6 | |||
| Investments in associates and joint ventures | 7 | |||
| Derivatives | 20 | |||
Investments | ||||
| Insurance contracts | 13 | |||
| Reinsurance contracts | 15 | |||
Insurance and reinsurance contracts | ||||
| Property and equipment | 8 | |||
| Intangible assets | 9 | |||
| Deferred tax assets | 33 | |||
| Assets held for sale | 10 | |||
| Other assets | 11 | |||
Other | ||||
Total assets | ||||
| Equity | ||||
Shareholders’ equity | ||||
Minority interests | ||||
Undated subordinated notes | ||||
| Total equity | 12 | |||
| Liabilities | ||||
| Insurance contracts | 13 | |||
| Investment contracts | 14 | |||
| Reinsurance contracts | 15 | |||
Insurance, investment and reinsurance contracts | ||||
| Debt instruments issued | 16 | |||
| Subordinated debt | 17 | |||
| Other borrowed funds | 18 | |||
| Customer deposits | 19 | |||
Funding | ||||
| Derivatives | 20 | |||
| Deferred tax liabilities | 33 | |||
| Liabilities held for sale | 10 | |||
| Other liabilities | 21 | |||
Other | ||||
Total liabilities | ||||
Total equity and liabilities |
References relate to the notes starting with Note 1 ‘Accounting policies’. These form an integral part of the Consolidated annual accounts.
Reference is made to Note 1 ‘Accounting policies’ for the impact of the adoption of IFRS 9 and IFRS 17. Comparative information was
restated accordingly, as explained in Note 1 ‘Accounting policies’ and Note 52 ‘Other IFRS 9 and IFRS 17 transition disclosures’.
Consolidated balance sheet
Amounts in millions of euros, unless stated otherwise
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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figures
1 About
NN
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accounts
9 Other
information
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| 2 Our operating | 3 Our strategy and | 4 Creating value for | 5 Managing | 6 Corporate | |||
| environment | performance | our stakeholders | our risks | governance | |||
| Consolidated profit and loss account | |||||||
| Consolidated profit and loss account | 2022 | ||||||
For the year ended 31 December | notes | 2023 | (Restated) | ||||
Release of contractual service margin | |||||||
Release of risk adjustment | |||||||
Expected claims and benefits | |||||||
Expected attributable expenses | |||||||
Recovery of acquisition costs | |||||||
Experience adjustments for premiums | |||||||
Insurance income Premium Allocation Approach | |||||||
| Insurance income | 22 | ||||||
Incurred claims and benefits | |||||||
Incurred attributable expenses | |||||||
Amortisation of acquisition costs | |||||||
Changes in incurred claims and benefits previous periods | - | ||||||
(Reversal of) losses on onerous contracts | |||||||
Insurance expenses Premium Allocation Approach | |||||||
| Insurance expenses | 23 | ||||||
Net insurance result | |||||||
Net reinsurance result | - | - | |||||
Insurance and reinsurance result | |||||||
Interest income | |||||||
Realised gains (losses) on investments at cost and at fair value through OCI | - | ||||||
Gains (losses) on investments at fair value through profit or loss | - | ||||||
Gains (losses) on investments in real estate | - | ||||||
Share of result of investments in associates and joint ventures | - | ||||||
Impairments on investments | - | - | |||||
Other | - | ||||||
| Investment result | 24 | - | |||||
| Finance result on (re) insurance contracts | 25 | - | |||||
Result on investment contracts | |||||||
| Finance result other | 25 | ||||||
Finance result | - | ||||||
Net investment result | |||||||
| Fee and commission result | 26 | ||||||
Result on disposals of group companies | - | ||||||
| Non-attributable operating expenses | 27 | - | - | ||||
Other | |||||||
Other result | - | - | |||||
Result before tax from continuing operations | |||||||
| Taxation | 33 | ||||||
Net result from continuing operations | |||||||
Net result from discontinued operations | |||||||
Net result from disposal of discontinued operations | |||||||
| Discontinued operations | 28 | ||||||
Net result from continuing and discontinued operations |
7 Facts and
figures
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NN
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| Net result from continuing and discontinued operations | |||
| 2022 | |||
For the year ended 31 December | 2023 | (Restated) | |
| Net result from continuing and discontinued operations attributable to: | |||
Shareholders of the parent | |||
Minority interests | - | ||
Net result from continuing and discontinued operations | |||
| Net result from continuing operations | 2022 | ||
For the year ended 31 December | 2023 | (Restated) | |
| Net result from continuing operations attributable to: | |||
Shareholders of the parent | |||
Minority interests | - | ||
Net result from continuing operations | |||
| Net result from discontinued operations | 2022 | ||
For the year ended 31 December | 2023 | (Restated) | |
| Net result from discontinued operations attributable to: | |||
Shareholders of the parent | |||
Minority interests | |||
Net result from discontinued operations | |||
| Earnings per ordinary share from continuing and discontinued operations | 2022 | ||
For the year ended 31 December and amounts in euros per ordinary share | notes | 2023 | (Restated) |
Basic earnings per ordinary share from continuing and discontinued operations | 29 | ||
| Diluted earnings per ordinary share from continuing and discontinued operations | 29 | ||
| Earnings per ordinary share from continuing operations | 2022 | ||
For the year ended 31 December and amounts in euros per ordinary share | notes | 2023 | (Restated) |
Basic earnings per ordinary share from continuing operations | 29 | ||
| Diluted earnings per ordinary share from continuing operations | 29 | ||
| Earnings per ordinary share from discontinued operations | 2022 | ||
For the year ended 31 December and amounts in euros per ordinary share | notes | 2023 | (Restated) |
Basic earnings per ordinary share from discontinued operations | 29 | ||
| Diluted earnings per ordinary share from discontinued operations | 29 |
Reference is made to Note 29 ‘Earnings per ordinary share’ for the disclosure on the Earnings per ordinary share.
Consolidated profit and loss account continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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figures
1 About
NN
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accounts
9 Other
information
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2023 Annual Report
| Consolidated statement of comprehensive income | ||||
| 2022 | ||||
For the year ended 31 December | 2023 | (Restated) | ||
Net result | ||||
– finance result on insurance contracts, recognised in OCI | - | |||
– finance result on reinsurance contracts, recognised in OCI | - | - | ||
– revaluations on debt securities at fair value through OCI | - | |||
– revaluations on loans at fair value through OCI | - | |||
| – realised gains (losses) transferred to the profit and loss account | - | |||
– changes in cash flow hedge reserve | - | - | ||
– share of OCI of investments in associates and joint ventures | - | |||
– foreign currency exchange differences | - | - | ||
Items that may be reclassified subsequently to the profit and loss account | - | |||
– revaluations on equity securities at fair value through OCI | - | |||
– revaluations on property in own use | - | |||
– remeasurement of the net defined benefit asset/liability | - | |||
Items that will not be reclassified to the profit and loss account | - | |||
Total other comprehensive income | - | |||
Total comprehensive income | - | |||
| Comprehensive income attributable to: | ||||
Shareholders of the parent | - | |||
Minority interests | - | |||
Total comprehensive income | - |
Reference is made to Note 33 ‘Taxation’ for the disclosure on the income tax effects on each component of comprehensive income.
Consolidated statement of comprehensive income
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
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accounts
9 Other
information
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2023 Annual Report
| Consolidated statement of cash flows | ||
| For the year ended 31 December | 2022 | |
| 2023 | (Restated) | |
Result before tax | ||
| Adjusted for: | ||
– depreciation and amortisation | ||
– changes in (re) insurance and investment contracts | - | |
– realised results and impairments on investments | - | |
– other | ||
Net premiums, claims, and attributable expenses on (re) insurance contracts | - | - |
Tax paid (received) | - | - |
| Changes in: | ||
– derivatives | - | |
– investments at cost | - | - |
– other assets | - | |
– customer deposits | ||
– other liabilities | - | |
Net cash flow from operating activities | - | |
| Investments and advances: | ||
– group companies, net of cash acquired | - | - |
– investments at fair value through OCI | - | - |
– investments at cost | - | |
– investments at fair value through profit or loss | - | - |
– investments in associates and joint ventures | - | - |
– investments in real estate | - | - |
– other investments | - | - |
| Disposals and redemptions: | ||
– group companies | ||
– investments at fair value through OCI | ||
– investments at cost | ||
– investments at fair value through profit or loss | ||
– investments in associates and joint ventures | ||
– investments in real estate | ||
– other investments | ||
Net cash flow from investing activities | ||
Repayments of undated subordinated notes | - | |
Proceeds from issuance of subordinated notes | ||
Repayments of subordinated notes | - | - |
Repayments of debt instruments issued | - | - |
Proceeds from other borrowed funds | ||
Repayments of other borrowed funds | - | - |
Dividend paid | - | - |
Purchase (sale) of treasury shares | - | - |
Coupon on undated subordinated notes | - | - |
Net cash flow from financing activities | - | |
Net cash flow | - |
Consolidated statement of cash flows
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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figures
1 About
NN
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accounts
9 Other
information
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2023 Annual Report
| Included in Net cash flow from operating activities | ||
| 2022 | ||
For the year ended 31 December | 2023 | (Restated) |
Interest received | ||
Interest paid | - | - |
Dividend received | ||
| Cash and cash equivalents | 2022 | |
For the year ended 31 December | 2023 | (Restated) |
Cash and cash equivalents at the beginning of the year without held for sale | ||
Cash and cash equivalents at the beginning of the year classified as assets held for sale | ||
Cash and cash equivalents at the beginning of the year | ||
Net cash flow | - | |
Effect of foreign currency exchange differences on cash and cash equivalents | - | - |
Cash and cash equivalents at the end of the year | ||
Consolidated statement of cash flows continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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figures
1 About
NN
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accounts
9 Other
information
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2023 Annual Report
Consolidated statement of changes in equity (2023)
| Total | |||||||
| Shareholders’ | Undated | ||||||
| Share | Share | equity | Minority | subordinated | Total | ||
| capital | premium | Reserves | (parent) | interest | notes | equity | |
Balance at 1 January 2023 (Restated) | |||||||
| Finance result on insurance contracts | |||||||
recognised in OCI | - | - | - | ||||
| Finance result on reinsurance | |||||||
contracts recognised in OCI | - | - | - | ||||
Revaluations on debt securities at fair value through OCI | |||||||
Revaluations on loans at fair value through OCI | |||||||
Realised gains (losses) transferred to the profit and loss account | |||||||
Changes in cash flow hedge reserve | - | - | - | ||||
Share of OCI of investments in associates and joint ventures | - | - | - | ||||
Foreign currency exchange differences | - | - | - | ||||
Revaluations on equity securities at fair value through OCI | |||||||
| Remeasurement of the net defined | |||||||
benefit asset/liability | - | - | - | ||||
Revaluations on property in own use | - | - | - | ||||
Total amount recognised directly in equity (OCI) | |||||||
Net result for the period | |||||||
Total comprehensive income | |||||||
| Issuance (redemption) of undated | |||||||
subordinated notes | - | - | |||||
Changes in share capital | - | ||||||
Dividend | - | - | - | - | |||
Purchase (sale) of treasury shares | - | - | - | ||||
| Employee stock option and share | |||||||
plans | |||||||
| Coupon on undated subordinated | |||||||
notes | - | - | - | ||||
Changes in the composition of the group and other changes | - | - | - | ||||
Balance at 31 December 2023 | |||||||
Consolidated statement of changes in equity
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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figures
1 About
NN
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accounts
9 Other
information
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2023 Annual Report
Consolidated statement of changes in equity (2022) (Restated)
| Total | |||||||
| Shareholders’ | Undated | ||||||
| Share | Share | equity | Minority | subordinated | Total | ||
| capital | premium | Reserves | (parent) | interest | notes | equity | |
Balance as reported at 31 December 2021 | |||||||
Impact (net of tax) of IFRS 9 | |||||||
Impact (net of tax) of IFRS 17 | - | - | - | - | |||
Balance at 1 January 2022 (Restated) | |||||||
| Finance result on insurance contracts | |||||||
recognised in OCI | |||||||
| Finance result on reinsurance contracts | |||||||
recognised in OCI | - | - | - | ||||
Revaluations on debt securities at fair value through OCI | - | - | - | - | |||
Revaluations on loans at fair value through OCI | - | - | - | ||||
Realised gains (losses) transferred to the profit and loss account | - | - | - | ||||
Changes in cash flow hedge reserve | - | - | - | ||||
Share of OCI of investments in associates and joint ventures | |||||||
Foreign currency exchange differences | - | - | - | ||||
Revaluations on equity securities at fair value through OCI | - | - | - | ||||
| Remeasurement of the net defined | |||||||
benefit asset/liability | |||||||
Revaluations on property in own use | |||||||
| Total amount recognised directly | |||||||
in equity (OCI) | - | - | - | - | |||
Net result for the period | - | ||||||
Total comprehensive income | - | - | - | - | |||
Changes in share capital | - | ||||||
Dividend | - | - | - | - | |||
Purchase (sale) of treasury shares | - | - | - | ||||
Employee stock option and share plans | - | - | - | ||||
Coupon on undated subordinated notes | - | - | - | ||||
Changes in the composition of the group and other changes | |||||||
Balance at 31 December 2022 (Restated) | |||||||
Reference is made to Note 52 ‘Other IFRS 9 and IFRS 17 transition disclosures’ for the reconciliation of the restated consolidated
statement of changes in equity 2022.
Consolidated statement of changes in equity continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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figures
1 About
NN
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accounts
9 Other
information
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Notes to the Consolidated annual accounts
1 Accounting policies
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
179
NN Group N.V.
2023 Annual Report
1 Accounting policies continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
180
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2023 Annual Report
1 Accounting policies continued
• Discount rates to discount the expected future fulfilment cash flows are determined using a liquid risk-free curve to which an
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
181
NN Group N.V.
2023 Annual Report
1 Accounting policies continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
182
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2023 Annual Report
1 Accounting policies continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
183
NN Group N.V.
2023 Annual Report
1 Accounting policies continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
184
NN Group N.V.
2023 Annual Report
1 Accounting policies continued
Material accounting policies and significant judgements
Reference is made to Note 50 ‘Risk management’ for a sensitivity analysis of certain assumptions.
General accounting policies
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
185
NN Group N.V.
2023 Annual Report
1 Accounting policies continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
186
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2023 Annual Report
Notes to the Consolidated annual accounts continued
1 Accounting policies continued
Maximum credit risk exposure
The maximum credit risk exposure for items on the balance sheet is generally the carrying value for the relevant financial assets.
For the off-balance sheet items, the maximum credit exposure is the maximum amount that could be required to be paid.
Reference is made to Note 42 ‘Contingent liabilities and commitments’ for these off-balance sheet items. Collateral received is not
taken into account when determining the maximum credit risk exposure. The manner in which NN Group manages credit risk and
determines credit risk exposures is explained in Note 50 ‘Risk management’.
Statement of cash flows
The Consolidated statement of cash flows is prepared in accordance with the indirect method, classifying cash flows as cash flows
from operating, investing and financing activities. In the net cash flow from operating activities, the result before tax is adjusted
for those items in the profit and loss account and changes in balance sheet items, which do not result in actual cash flows during
the year.
Cash and cash equivalents comprise balances with less than three months maturity from the date of acquisition.
Investments qualify as a cash equivalent if they are readily convertible into a known amount of cash and are not subject to
significant risk of changes in value.
Cash flows arising from foreign currency transactions are translated into the functional currency using the exchange rates at the
date of the cash flows.
The difference between the net cash flow in accordance with the statement of cash flows and the change in ‘Cash and cash
equivalents’ in the balance sheet is due to foreign currency exchange differences and is accounted for separately as part of the
reconciliation of the net cash flow and the balance sheet change in ‘Cash and cash equivalents’.
Cash flows arising from the issue of mortgage loans held in the banking operations are recognised under Net cash flows from
operating activities, whereas cash flows related to mortgage loans held as investment in the insurance operations are recognised
under Net cash flow from investing activities.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
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accounts
9 Other
information
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2023 Annual Report
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
188
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
189
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
190
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
191
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
4 Investments at cost continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
192
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2023 Annual Report
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
193
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
6 Investments in real estate continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
194
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
6 Investments in real estate continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
195
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7 Investments in associates and joint ventures continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
196
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
197
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
7 Investments in associates and joint ventures continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
198
NN Group N.V.
2023 Annual Report
7 Investments in associates and joint ventures continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
199
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
8 Property and equipment continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
200
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
8 Property and equipment continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
201
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
202
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
9 Intangible assets continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
203
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
204
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
12 Equity continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
205
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
12 Equity continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
206
NN Group N.V.
2023 Annual Report
12 Equity continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
207
NN Group N.V.
2023 Annual Report
12 Equity continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
208
NN Group N.V.
2023 Annual Report
12 Equity continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
209
NN Group N.V.
2023 Annual Report
12 Equity continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
210
NN Group N.V.
2023 Annual Report
13 Insurance contract continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
211
NN Group N.V.
2023 Annual Report
13 Insurance contracts continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
212
NN Group N.V.
2023 Annual Report
13 Insurance contracts continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
213
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
214
NN Group N.V.
2023 Annual Report
13 Insurance contracts continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
215
NN Group N.V.
2023 Annual Report
13 Insurance contracts continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
216
NN Group N.V.
2023 Annual Report
13 Insurance contracts continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
217
NN Group N.V.
2023 Annual Report
13 Insurance contracts continued
Disaggregation of the contractual service margin by transition approach (2023)
2023
Contract issued
after transition
and
retrospective
approach
Modified
retrospective
approach
Fair value
approach
Total General
Model and
Variable Fee
Approach
Opening balance 1,707 977 4,166 6,850
– insurance contracts initially recognised in the period 673 673
– changes in estimates that adjust the contractual service margin -50 12 229 191
Changes that relate to future service 623 12 229 864
– release to profit or loss -335 -154 -289 -778
Changes that relate to current service -335 -154 -289 -778
Finance result through profit or loss 27 9 31 67
Other movements 7 41 48
Foreign currency exchange differences -46 -20 -13 -79
Closing balance 1,983 824 4,165 6,972
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
218
NN Group N.V.
2023 Annual Report
13 Insurance contracts continued
Disaggregation of contractual service margin by transition approach (2022) (Restated)
2022 (Restated)
Contract issued
after transition
and
retrospective
approach
Modified
retrospective
approach
Fair value
approach
Total General
Model and
Variable Fee
Approach
Opening balance 1,099 1,194 3,935 6,228
– insurance contracts initially recognised in the period 803 803
– changes in estimates that adjust the contractual service margin 94 569 663
Changes that relate to future service 897 0 569 1,466
– release to profit or loss -231 -188 -352 -771
Changes that relate to current service -231 -188 -352 -771
Finance result through profit or loss 14 12 36 62
Foreign currency exchange differences -70 -41 -24 -135
Closing balance 1,709 977 4,164 6,850
Contractual service margin by remaining term
2023
2022
(Restated)
Less than 1 month 80 66
1-3 months 116 124
3-12 months 502 528
1-2 years 586 607
2-3 years 528 529
3-4 years 479 475
4-5 years 436 427
5-9 years 1,373 1,327
Over 9 years 2,872 2,767
Total 6,972 6,850
The contractual service margin by remaining term provides the expected maturity of the balance sheet amount of the contractual
service margin at the end of the period. The actual release of the contractual service margin that will be recognised in the profit
and loss account in future years will differ as the release in future years will be impacted by the future development of the
contractual service margin due to new contracts sold, interest accreted and changes in estimates.
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
219
NN Group N.V.
2023 Annual Report
13 Insurance contracts continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
220
NN Group N.V.
2023 Annual Report
13 Insurance contracts continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
221
NN Group N.V.
2023 Annual Report
13 Insurance contracts continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
222
NN Group N.V.
2023 Annual Report
13 Insurance contracts continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
223
NN Group N.V.
2023 Annual Report
13 Insurance contracts continued
Gross claims development table
Accident year
2018
1
2019 2020 2021 2022 2023 Total
Estimate of cumulative claims
At the end of accident year 1,358 1,217 1,535 1,378 1,556 1,410
1 year later 1,341 1,324 1,436 1,364 1,515
2 years later 1,403 1,332 1,440 1,310
3 years later 1,437 1,338 1,380
4 years later 1,401 1,323
5 years later 1,372
Estimate of cumulative claims 1,372 1,323 1,380 1,310 1,515 1,410 8,310
Cumulative payments -1,253 -1,154 -1,184 -1,064 -1,121 -666 -6,442
119 169 196 246 394 744 1,868
Effect of discounting -12 -17 -20 -25 -35 -48 -157
Liabilities recognised 107 152 176 221 359 696 1,711
Liabilities relating to accident years prior to
2018 and liability for incurred expenses 584
Risk adjustment 43
Total liability for incurred claims and benefits
Premium Allocation Approach
2
2,338
1 NN Group does not disclose claims development for years prior to 2018.
2 The claims development table includes the liability for incurred claims related to non-life contracts accounted for under the Premium Allocation Approach. Uncertainty about the amount and
timing of the incurred claims for life contracts and non-life contracts accounted for under the General Model is typically resolved within one year, thus there have not been included in this
table.
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
224
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
225
NN Group N.V.
2023 Annual Report
15 Reinsurance contracts continued
Reinsurance contracts held under General Model (2023)
2023
Estimates of
the present
value of future
cash flows
Risk
adjustment
Contractual
service margin
Total General
Model
– opening balance presented as assets 23 138 383 544
– opening balance presented as liabilities 234 -9 -2 223
Net opening balance -211 147 385 321
– reinsurance contracts initially recognised in the period -179 168 11 0
– changes in estimates that adjust the contractual service margin -148 -25 173 0
– changes in estimates that do not adjust the contractual service margin 1 1
Changes that relate to future service -326 143 184 1
– release to profit or loss -16 -40 -56
– experience adjustments not adjusting the contractual service margin -2 -2
Changes that relate to current service -2 -16 -40 -58
– changes in reinsurance recoveries previous periods -4 -4
Changes that relate to past service -4 0 0 -4
– finance result through profit or loss 31 1 3 35
– finance result recognised in OCI -48 15 -33
Finance result from reinsurance contracts -17 16 3 2
– reinsurance recoveries received -1,142 -1,142
– reinsurance premiums paid 1,243 1,243
– changes in the composition of the group and other changes 2 2
Cash flows 103 0 0 103
Other movements 1 1
Foreign currency exchange differences -20 -20
Net closing balance -477 291 532 346
– closing balance presented as assets -266 281 475 490
– closing balance presented as liabilities 211 -10 -57 144
Net closing balance -477 291 532 346
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
226
NN Group N.V.
2023 Annual Report
15 Reinsurance contracts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
227
NN Group N.V.
2023 Annual Report
16 Debt instruments issued
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
228
NN Group N.V.
2023 Annual Report
17 Subordinated debt continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
229
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
230
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
231
NN Group N.V.
2023 Annual Report
21 Other liabilities continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
232
NN Group N.V.
2023 Annual Report
22 Insurance income continued
23 Insurance expenses
(Reversal of) losses on onerous contracts General Model and Variable Fee Approach
2023
2022
(Restated)
Losses on onerous contracts initially recognised in the period 37 51
Changes in estimates not adjusting the contractual service margin 198 61
Release of risk adjustment attributed to the loss component -3 -1
Expected claims and benefits attributed to the loss component -5 -11
Expected attributable insurance expenses attributed to the loss component -18 -10
(Reversal of) losses on onerous contracts General Model and Variable Fee Approach 209 90
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
233
NN Group N.V.
2023 Annual Report
23 Insurance expenses continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
234
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
235
NN Group N.V.
2023 Annual Report
24 Investment result continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
236
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
237
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
238
NN Group N.V.
2023 Annual Report
27 Non-attributable operating expenses continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
239
NN Group N.V.
2023 Annual Report
28 Discontinued operations
As of 2021, NN Group’s asset management activities executed by NN Investment Partners are classified as discontinued
operations. Reference is made to Note 44 ‘Companies and businesses acquired and divested’. Net result from discontinued
operations consists of the net result (after tax) of the businesses classified as discontinued operations and is presented
separately in the profit and loss account for the first half year of 2022. No gain or loss has been recognised in the profit and
loss account upon the classification as held for sale and discontinued operations; upon closing of the transaction a gain of
EUR 1,062 million was recognised.
Net result from discontinued operations
2023
2022
(Restated)
Total income 110
Total expenses 74
Net result from disposal of discontinued operations 1,062
Result before tax from discontinued operations 0 1,098
Taxation 9
Net result from discontinued operations 0 1,089
The activities of NN Investment Partners were reported in the segment Asset Management before these were classified as
discontinued operations and held for sale. The segment Asset Management ceased to exist in 2021, following the classification
as discontinued operations, as all activities previously included in this segment became discontinued operations. The sale
of NN Investment Partners was completed in April 2022. Reference is made to Note 44 ‘Companies and businesses acquired
and divested’.
Net cash flow from discontinued operations
2023
2022
(Restated)
Operating cash flow 94
Investing cash flow -2
Net cash flow from discontinued operations 0 92
27 Non-attributable operating expenses continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
240
NN Group N.V.
2023 Annual Report
29 Earnings per ordinary share
Earnings per ordinary share from continuing and discontinued operations
Amounts
(in millions of euros)
Weighted average
number of ordinary shares
(in millions)
Per ordinary share
(in euros)
2023
2022
(Restated) 2023
2022
(Restated) 2023
2022
(Restated)
Net result from continuing and discontinued
operations 1,172 1,634
Coupon on undated subordinated notes -51 -58
Basic earnings per ordinary share from continuing and
discontinued operations 1,121 1,576 277.3 295.5 4.04 5.33
Dilutive instruments
– Share plans 0.2 0.2
Dilutive instruments 0.2 0.2
Diluted earnings per ordinary share from continuing
and discontinued operations 1,121 1,576 277.5 295.7 4.04 5.33
Earnings per ordinary share from continuing operations
Amounts
(in millions of euros)
Weighted average
number of ordinary shares
(in millions)
Per ordinary share
(in euros)
2023
2022
(Restated) 2023
2022
(Restated) 2023
2022
(Restated)
Net result from continuing operations 1,172 547
Coupon on undated subordinated notes -51 -58
Basic earnings per ordinary share from continuing
operations 1,121 489 277.3 295.5 4.04 1.66
Dilutive instruments
– Share plans 0.2 0.2
Dilutive instruments 0.2 0.2
Diluted earnings per ordinary share from continuing
operations 1,121 489 277.5 295.7 4.04 1.65
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
241
NN Group N.V.
2023 Annual Report
29 Earnings per ordinary share continued
Earnings per ordinary share from discontinued operations
Amounts
(in millions of euros)
Weighted average
number of ordinary shares
(in millions)
Per ordinary share
(in euros)
2023
2022
(Restated) 2023
2022
(Restated) 2023 2022
Net result from discontinued operations 1,087
Basic earnings per ordinary share from discontinued
operations 0 1,087 0 295.5 0 3.68
Dilutive instruments
– Share plans 0.2
Dilutive instruments 0.2
Diluted earnings per ordinary share from discontinued
operations 0 1,087 0 295.7 0 3.68
Diluted earnings per share is calculated as if the share plans had been exercised at the beginning of the period and assuming that
the cash received from exercised share plans was used to buy own shares against the average market price during the period.
The net increase in the number of shares resulting from exercising share plans is added to the average number of shares used for
the calculation of diluted earnings per share.
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
242
NN Group N.V.
2023 Annual Report
30 Segments
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
243
NN Group N.V.
2023 Annual Report
30 Segments continued
Result by segment (2023)
2023
Netherlands
Life
Netherlands
Non-life
Insurance
Europe Japan Life Banking Other Total
Profit margin 180 315 156 652
Technical result 60 26 22 107
Service expense result -14 -9 7 -16
Other (re) insurance result -1 -1
(Re) insurance result 225 0 331 185 0 0 742
Investment result 1,278 163 49 1,491
Other results – insurance businesses -109 -88 -37 -233
Operating result insurance businesses 1,395 0 407 197 0 0 1,999
Operating result non-insurance
businesses -5 61 56
Operating result non-life 364 364
Operating result banking 226 226
Operating result other -117 -117
Total operating result 1,390 364 468 197 226 -117 2,528
Non-operating items of which:
– gains (losses) and impairments -311 -14 -5 -12 -4 -345
– revaluations 225 1 -79 -73 -8 28 94
– market and other impacts -68 -4 -182 17 -21 -14 -272
Special items -413 -7 -23 -1 -1 -17 -462
Acquisition intangibles and goodwill -2 -27 -29
Result on divestments 19 19
Result before tax 823 340 196 129 196 -152 1,532
Taxation 166 91 38 32 51 -30 348
Minority interests -1 14 -1 12
Net result 657 235 158 97 146 -121 1,172
Special items in 2023 mainly reflect a provision of EUR 360 million related to the final settlement with interest groups on unit-
linked insurance products and project expenses.
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
244
NN Group N.V.
2023 Annual Report
30 Segments continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
245
NN Group N.V.
2023 Annual Report
30 Segments continued
Income by segment (2023)
2023
Netherlands
Life
Netherlands
Non-life
Insurance
Europe Japan Life Banking
Other and
eliminations Total
Insurance income 4,164 3,843 1,830 590 26 10,453
Investment income 5,700 174 1,488 107 1,068 128 8,665
Income by segment (2022) (Restated)
2022 (Restated)
Netherlands
Life
Netherlands
Non-life
Insurance
Europe Japan Life Banking
Other and
eliminations Total
Insurance income 4,048 3,837 1,693 648 41 10,267
Investment income -2,942 84 -537 70 623 -234 -2,936
Interest income and interest expenses by segment (2023)
2023
Netherlands
Life
Netherlands
Non-life
Insurance
Europe Japan Life Banking
Other and
eliminations Total
Interest income 2,384 156 394 164 1,096 26 4,220
Interest expenses -372 -36 -19 -1 -651 46 -1,033
Interest income and interest expenses by segment (2022) (Restated)
2022 (Restated)
Netherlands
Life
Netherlands
Non-life
Insurance
Europe Japan Life Banking
Other and
eliminations Total
Interest income 2,214 148 375 178 555 -9 3,461
Interest expenses -269 -29 -14 -2 -303 28 -589
Total assets and Total liabilities by segment
Total assets Total liabilities Total assets Total liabilities
2023 2023
2022
(Restated)
2022
(Restated)
Netherlands Life 130,428 116,120 128,002 114,518
Netherlands Non-life 8,672 7,069 9,025 7,325
Insurance Europe 26,962 23,240 24,828 21,484
Japan Life 15,562 14,344 17,781 16,458
Banking 25,016 24,097 23,967 23,181
Other 32,656 11,784 35,867 15,098
Total 239,296 196,654 239,470 198,064
Eliminations -30,355 -8,832 -32,446 -12,141
Total assets and Total liabilities 208,941 187,822 207,024 185,923
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
246
NN Group N.V.
2023 Annual Report
30 Segments continued
Administrative expenses
2023
2022
(Restated)
Staff expenses 1,680 1,558
Other operating expenses 2,832 2,468
Total IFRS operating expenses (before attribution) 4,512 4,026
Presented in insurance expenses and commissions 1,263 1,242
Presented in insurance acquisition expenses 510 465
Presented in non-operating items (including special items) 479 142
Other adjustments 54 39
Administrative expenses 2,206 2,138
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
247
NN Group N.V.
2023 Annual Report
30 Segments continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
248
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
249
NN Group N.V.
2023 Annual Report
31 Insurance contracts by segment continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
250
NN Group N.V.
2023 Annual Report
31 Insurance contracts by segment continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
251
NN Group N.V.
2023 Annual Report
31 Insurance contracts by segment continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
252
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
31 Insurance contracts by segment continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
253
NN Group N.V.
2023 Annual Report
31 Insurance contracts by segment continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
254
NN Group N.V.
2023 Annual Report
31 Insurance contracts by segment continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
255
NN Group N.V.
2023 Annual Report
31 Insurance contracts by segment continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
256
NN Group N.V.
2023 Annual Report
31 Insurance contracts by segment continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
257
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
258
NN Group N.V.
2023 Annual Report
32 Principal subsidiaries and geographical information continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
259
NN Group N.V.
2023 Annual Report
NN Group will be subject to the requirements of the International Tax Reform – Pillar Two Model Rules once these become
effective. NN Group currently expects the Pillar Two minimum taxation requirements to be applicable to most of its operations, but
does not expect significant impact in any of the jurisdictions in which it operates. Also no significant impact on the effective tax
rate is currently expected.
Deferred tax (2023)
Net
liability
2022
(Restated)
Changes
through
equity
Changes
through
net result
Changes in the
composition of
the group and
other changes
Foreign
currency
exchange
differences
Net
liability
2023
Investments -3,158 953 -3 55 1 -2,152
Investments in real estate 1,162 -151 2 1,013
Fiscal reserves 36 36
Insurance contracts 1,572 -923 150 -197 -8 594
Cash flow hedges 1,005 -15 990
Unused tax losses carried forward -131 -3 -134
Other 43 -5 -56 84 66
Deferred tax 493 10 -27 -56 -7 413
Presented in the balance sheet as
Deferred tax liabilities 624 559
Deferred tax assets 131 146
Deferred tax 493 413
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
260
NN Group N.V.
2023 Annual Report
33 Taxation continued
Deferred tax (2022) (Restated)
Net
liability
2021 (Restated)
Changes
through
equity
Changes
through
net result
Changes in the
composition of
the group and
other changes
Foreign
currency
exchange
differences
Net
liability
2022
(Restated)
Investments 4,103 -7,219 -145 110 -7 -3,158
Investments in real estate 1,172 -10 1,162
Fiscal reserves 91 -91 0
Insurance contracts -7,866 9,004 569 -124 -11 1,572
Cash flow hedges 3,068 -2,063 1,005
Unused tax losses carried forward -88 -48 5 -131
Other 270 -54 -116 -57 43
Deferred tax 750 -332 159 -66 -18 493
Presented in the balance sheet as
Deferred tax liabilities 781 624
Deferred tax assets 31 131
Deferred tax 750 493
Deferred tax on unused tax losses carried forward
2023
2022
(Restated)
Total unused tax losses carried forward 757 716
Unused tax losses carried forward not recognised as a deferred tax asset -186 -196
Unused tax losses carried forward recognised as a deferred tax asset 571 520
Average tax rate 23.4% 25.1%
Deferred tax asset 134 131
Total unused tax losses carried forward analysed by term of expiration
No deferred tax asset recognised Deferred tax asset recognised
2023
2022
(Restated) 2023
2022
(Restated)
Within 1 year 18 4
More than 1 year but less than 5 years 32 49 171 9
More than 5 years but less than 10 years 5 7 15
Unlimited 131 136 385 511
Total unused tax losses carried forward 186 196 571 520
Deferred tax assets are recognised for temporary deductible differences, for tax losses carried forward and unused tax credits
only to the extent that realisation of the related tax benefit is probable.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
261
NN Group N.V.
2023 Annual Report
33 Taxation continued
NN Group N.V., together with certain of its subsidiaries, is a part of a fiscal unity for Dutch income tax purposes. The members of
the fiscal unity are jointly and severally liable for any income taxes payable by the Dutch fiscal unity.
Reference is made to Note 32 ‘Principal subsidiaries and geographical information’ for more information on the taxation
per country.
Reconciliation of the weighted average statutory tax rate to NN Group’s effective tax rate
2023
2022
(Restated)
Result before tax 1,532 648
Weighted average statutory tax rate 24.7% 24.2%
Weighted average statutory tax amount 378 157
Participation exemption -49 -124
Other income not subject to tax and other 22 -11
Expenses not deductible for tax purposes 8 30
Impact on deferred tax from change in tax rates -4
Deferred tax benefit for previously unrecognised amounts -2 5
Tax for non-recognised losses 2
Write-off (reversal) of deferred tax assets -6
Adjustments to prior periods -5 55
Effective tax amount 348 108
Effective tax rate 22.7% 16.6%
In 2023, the effective tax rate of 22.7% was lower than the weighted average statutory tax rate of 24.7%. This was mainly a result
of tax exempt investment results.
In 2022, the effective tax rate for continuing operations of 16.6% was lower than the weighted average statutory tax rate
of 24.2%. This was mainly a result of tax exempt investment results. This was partly offset by a tax expense following a
reassessment of prior year tax liabilities.
Taxation on components of other comprehensive income
2023
2022
(Restated)
Finance result on (re) insurance contracts recognised in OCI 917 -8,921
Revaluations on debt securities and loans at fair value through OCI -816 7,204
Realised gains (losses) transferred to the profit and loss account -84 8
Changes in cash flow hedge reserve 15 2,063
Remeasurement of the net defined benefit asset/liability 5 -24
Income tax 37 330
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
262
NN Group N.V.
2023 Annual Report
9 Other
information
263
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
264
NN Group N.V.
2023 Annual Report
34 Fair value of financial assets and liabilities continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
265
NN Group N.V.
2023 Annual Report
34 Fair value of financial assets and liabilities continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
266
NN Group N.V.
2023 Annual Report
34 Fair value of financial assets and liabilities continued
1 About
NN
8 Annual
accounts
9 Other
information
267
NN Group N.V.
2023 Annual Report
34 Fair value of financial assets and liabilities continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
268
NN Group N.V.
2023 Annual Report
34 Fair value of financial assets and liabilities continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
269
NN Group N.V.
2023 Annual Report
34 Fair value of financial assets and liabilities continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
270
NN Group N.V.
2023 Annual Report
35 Fair value of non-financial assets
The following table presents the estimated fair value of NN Group’s non-financial assets that are measured at fair value in the
balance sheet. Reference is made to Note 1 ‘Accounting policies’ in the sections ‘Real estate investments’ and ‘Property and
equipment’ for the methods and assumptions used by NN Group to estimate the fair value of the non-financial assets.
Fair value of non-financial assets
Estimated fair value Balance sheet value
2023
2022
(Restated) 2023
2022
(Restated)
Investments in real estate 2,620 2,754 2,620 2,754
Property in own use 92 97 92 97
Fair value of non-financial assets 2,712 2,851 2,712 2,851
The fair value of the non-financial assets were determined as follows:
Methods applied in determining the fair value of non-financial assets at fair value (2023)
2023 Level 1 Level 2 Level 3 Total
Investments in real estate 2,620 2,620
Property in own use 92 92
Non-financial assets 0 0 2,712 2,712
Methods applied in determining the fair value of non-financial assets at fair value (2022) (Restated)
2022 (Restated) Level 1 Level 2 Level 3 Total
Investments in real estate 2,754 2,754
Property in own use 97 97
Non-financial assets 0 0 2,851 2,851
Changes in Level 3 non-financial assets (2023)
2023
Real estate
investments
Property
in own use
Level 3 non-financial assets – opening balance 2,754 97
Amounts recognised in the profit and loss account during the year -276 -9
Purchase 193 3
Revaluation recognised in equity during the year -1
Sale -50
Changes in the composition of the group and other changes -1 1
Foreign currency exchange differences 1
Level 3 non-financial assets – closing balance 2,620 92
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
271
NN Group N.V.
2023 Annual Report
35 Fair value of non-financial assets continued
Changes in Level 3 non-financial assets (2022) (Restated)
2022 (Restated)
Real estate
investments
Property
in own use
Level 3 non-financial assets – opening balance 2,719 71
Amounts recognised in the profit and loss account during the year -8 -2
Purchase 136 1
Revaluation recognised in equity during the year 3
Sale -100 -1
Changes in the composition of the group and other changes 7 25
Level 3 non-financial assets – closing balance 2,754 97
Level 3 – Amounts recognised in the profit and loss account during the year on non-financial assets (2023)
2023
Held at balance
sheet date
Derecognised
during the year Total
Investments in real estate -275 -1 -276
Property in own use -8 -1 -9
Level 3 Amounts recognised in the profit and loss account during the year on non-financial
assets -283 -2 -285
Level 3 – Amounts recognised in the profit and loss account during the year on non-financial assets (2022)
(Restated)
2022 (Restated)
Held at balance
sheet date
Derecognised
during the year Total
Investments in real estate -8 -8
Property in own use -2 -2
Level 3 Amounts recognised in the profit and loss account during the year on non-financial
assets -8 -2 -10
Real estate investments
Key assumptions
Key assumptions in the valuation of real estate include the estimated current rental value per square metre, the estimated future
rental value per square metre (ERV), the net initial yield and the vacancy rate. These assumptions were in the following ranges:
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
272
NN Group N.V.
2023 Annual Report
35 Fair value of non-financial assets continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
273
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
274
NN Group N.V.
2023 Annual Report
36 Hedge accounting continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
275
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
276
NN Group N.V.
2023 Annual Report
37 Assets by contractual maturity continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
277
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
278
NN Group N.V.
2023 Annual Report
38 Liabilities by maturity continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
279
NN Group N.V.
2023 Annual Report
40 Transferred, but not derecognised financial assets
The majority of NN Group’s financial assets that have been transferred, but do not qualify for derecognition, are debt instruments
used in securities lending. NN Group retains substantially all risks and rewards of those transferred assets. The assets are
transferred in return for cash collateral or other financial assets. Non-cash collateral is not recognised in the balance sheet.
Cash collateral is recognised as an asset and an offsetting liability is established for the same amount as NN Group is obligated to
return this amount upon termination of the lending arrangement.
Transfer of financial assets not qualifying for derecognition
2023
2022
(Restated)
Transferred assets at carrying value
Investments at fair value through other comprehensive income 8,994 8,701
Investments at fair value through profit or loss 8 2
Associated liabilities at carrying value
Other borrowed funds 250
The table above does not include assets transferred to consolidated securitisation entities, as these related assets are not
transferred from a consolidated perspective. Reference is made to Note 45 ‘Structured entities’.
39 Assets not freely disposable
The assets not freely disposable of EUR 95 million (2022: EUR 118 million) relates to the mandatory reserve deposit at De
Nederlandsche Bank and cash balances held at BNG Bank.
Assets relating to instruments lending are disclosed in Note 40 ‘Transferred, but not derecognised financial assets’. Assets in
securitisation programmes originated by NN Bank are disclosed in Note 45 ‘Structured entities’.
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
280
NN Group N.V.
2023 Annual Report
41 Offsetting of financial assets and liabilities continued
Financial assets subject to offsetting, enforceable master netting arrangements and similar agreements (2023)
Related amounts not offset
in the balance sheet
2023
Balance sheet line item Financial instrument
Gross financial
assets
Gross financial
liabilities
offset in the
balance sheet
Net financial
assets in the
balance sheet
Financial
instruments
Cash and
financial
instruments
collateral Net amount
Derivatives Derivatives 2,447 2,447 -1,172 -1,273 2
Derivatives 2,447 0 2,447 -1,172 -1,273 2
Other items where
offsetting is applied in
the balance sheet
Other assets where
netting is applied in the
balance sheet
404 404 -350 -53 1
Other items where
offsetting is applied in the
balance sheet 404 0 404 -350 -53 1
Total financial assets 2,851 0 2,851 -1,522 -1,326 3
Financial assets subject to offsetting, enforceable master netting arrangements and similar agreements
(2022) (Restated)
Related amounts not offset
in the balance sheet
2022 (Restated)
Balance sheet line item Financial instrument
Gross financial
assets
Gross financial
liabilities
offset in the
balance sheet
Net financial
assets in the
balance sheet
Financial
instruments
Cash and
financial
instruments
collateral Net amount
Derivatives Derivatives 2,405 2,405 -1,642 -735 28
Derivatives 2,405 0 2,405 -1,642 -735 28
Other items where
offsetting is applied in
the balance sheet
Other assets where
netting is applied in the
balance sheet 158 158 -110 -48 0
Other items where
offsetting is applied in the
balance sheet
158 0 158 -110 -48 0
Total financial assets 2,563 0 2,563 -1,752 -783 28
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
281
NN Group N.V.
2023 Annual Report
41 Offsetting of financial assets and liabilities continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
282
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
283
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
284
NN Group N.V.
2023 Annual Report
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
285
NN Group N.V.
2023 Annual Report
45 Structured entities
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
286
NN Group N.V.
2023 Annual Report
45 Structured entities continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
287
NN Group N.V.
2023 Annual Report
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
288
NN Group N.V.
2023 Annual Report
47 Key management personnel compensation continued
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50 Risk Management
This note explains details with regard to the risk profile of NN Group. For certain disclosures in the chapters ‘Managing our risks’
and ‘Corporate Governance’ of this Annual Report it is indicated in a footnote that those disclosures are an integral part of the
Consolidated Annual Accounts and are in addition to the sections below part of the disclosures to which the audit opinion relates.
Topics described in this section include:
• Partial Internal Model (PIM) (including assumptions and limitations)
• Solvency Capital Requirement of NN Group
• Risk profile, risk mitigation of and risk measurement of the main types of risks: Market risk, Counterparty default risk, Liquidity
risk and Non-market risk
1. Partial Internal Model (PIM)
The Solvency Capital Requirement (SCR) is calculated based on the actual NN Group risk exposure. Under Solvency II, the SCR
is the capital required to ensure that the (re) insurance company will be able to meet its obligations over the next 12 months
with a probability of at least 99.5%. The risk-based framework for calculating Solvency Capital Requirements at NN Group is a
combination of an Internal Model (IM) and Standard Formula (SF) components, the so-called Partial Internal Model (PIM). The major
Dutch insurance entities use an internal model for modelling SCR for Market, Counterparty default, Business risks, and Insurance
risks. The determined SCR is used for both, local reporting and group consolidation purposes. For the EU-based international
insurance businesses and smaller insurance undertakings in the Netherlands, NN Group uses the Solvency II Standard Formula
to calculate the SCR for local reporting and for Group consolidation. The capital requirement for Operational risk is based on the
Standard Formula approach across the Group.
The non-insurance businesses (e.g. Pension Funds, NN Bank) and international insurance undertakings not based in the EU (e.g.
Japan, Turkey) are consolidated in the group SCR based on the local applicable (sectoral) capital requirements. The Solvency
II concept of (provisional) Equivalence is granted to capital frameworks that are deemed to have similarity with the Solvency II
framework and/or principles and as such can be relied-upon to assess capital requirements, at NN Group this applies to Japan.
The total group SCR is obtained from the Internal Model and Standard Formula capital requirements using EIOPA’s integration
technique 3 and the capital requirements for non-insurance businesses and international insurance undertakings not based in
the EU.
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The choice for a Partial Internal Model is based on the conviction that an Internal Model in general better reflects the risk profile
of the major Dutch (re) insurance entities and has additional benefits for risk management purposes, whilst the Standard Formula
adequately captures the risk profile of the international businesses and smaller Dutch entities:
• An Internal Model approach can better reflect the specific assets and therefore the Market risk in the portfolio of Dutch
businesses e.g., sovereign and other credit spread risks.
• The approach used for most significant Non-market risks within the Life businesses such as longevity (trend uncertainty)
and expense risk and within the Non-Life business can be better tailored to NN Group’s specific portfolio characteristics.
Diversifications effects inherent to the business model can be captured in a more adequate way.
• The granularity of the PIM and close alignment of the modelling techniques and parameters to NN’s risk management approach
also means that it can support a wide range of business decisions.
2. Assumptions and limitations
2.1 Risk-free rate and Volatility Adjustment (VOLA):
The assumptions used to determine the risk-free curve are important, as this curve is used for discounting future cash flows and
to calculate transfer value of liabilities. For determining valuation of liabilities on Solvency II balance sheet, NN Group uses the
methodology prescribed by EIOPA for the risk-free rate including the Credit Risk Adjustment (CRA) and the Ultimate Forwards Rate
(UFR). Where appropriate, the risk-free rate is adjusted with the Volatility Adjustment (VOLA) for the calculation of Own Funds.
2.2 Valuation assumptions – replicating portfolios:
For SCR calculations, NN Group uses replicating portfolio techniques to represent the insurance product-related cash flows,
options and guarantees by means of standard financial instruments. The replications are used to determine and revalue insurance
liabilities under a large number of Monte Carlo scenarios.
2.3 Diversification and correlation assumptions:
As for any integrated financial services provider offering a variety of products across different business segments and geographic
regions, and investing into wide range of assets, diversification is key to NN Group’s business model. The resulting diversification
reflects the fact that not all potential worst-case losses are likely to materialise at the same time. The Internal Model takes
diversification effects into account when aggregating required capitals for different risk types as well as at Group level.
Diversification benefits result from diversification across regions, Business Units and risk categories.
Where possible, correlation parameters are derived through statistical analysis based on historical data. In case historical data or
other portfolio-specific observations are insufficient or not available, correlations are set by expert judgement via an established,
well-defined and controlled process. Similar to other risk models, correlations and expert judgements are also monitored
for appropriateness given availability of more recent data, and are subject to regular development, validation and regulatory
oversight. Based on these correlations, industry- standard aggregation approaches such as Gaussian copula and VaR–CoVaR
approach are used to determine the dependency structure of quantifiable risks.
2.4 Model limitations
NN Group’s Partial Internal Model (PIM) set-up resulted from managing a balancing between (1) an easy-to-communicate
methodology and (2) efficient calculations with appropriate accuracy and granularity to reflect the underlying risks.
Despite several limitations stemming from this, the PIM is considered to be adequate to assess NN Group’s risk profile, to
determine Solvency Capital Requirements and be used in key decision making processes (use test).
As a result of the granular modelling approach and the wide variety of NN Group’s assets and liabilities, the PIM is more complex
than the Standard Formula.
Inherent model limitations of the PIM are related to the calibration of 1-in-200-year stress event for a full spectrum of Market and
Non-market risks, which are based on sometimes limited historical data. Limitations also relate to the overall aim of determining
forward-looking distributions of risk factors under stress based on historical data as well as the use of modelling assumptions and
expert judgements.
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Risks that cannot be directly modelled in the same way as Market risk or Insurance risk, for example Strategic, Reputational and
Model risks, and also Emerging risks are managed through qualitative risk assessments and in respective processes. In addition,
and as part of the ORSA, NN Group holistically assesses its risk exposure to both quantifiable and non-quantifiable risks in order to
outline mitigating actions as required.
The components of NN Group’s PIM for Market and Counterparty default risk and the models for risk aggregation and replication
have been developed and is run centrally, and thus carry an inherent risk that the developed models include aspects which
might be less appropriate for individual entities. On a regular basis the Business Units perform ‘Fit For Local Use’ assessments.
Models also undergo regular reviews and monitoring, under agreed governance, and in addition, model validations are performed
by independent model validation team. Such reviews can result in additional monitoring and/or locally calculated and further
centrally processed adjustments.
The Risk Management Function informs the Management Board and Supervisory Board on an annual basis on the performance of
the Internal Model.
3. Solvency II 2020 review
On 22 September 2021, the European Commission (EC) published, as part of the Solvency II 2020 Review the proposed Level I
texts (Directive) and insights in the upcoming Level II (Delegated Acts) regulations. In June 2022, the Council reached consensus
on their view on the Solvency II 2020 review. This position is broadly similar to the EC proposals. The economic committee of the
European Parliament (EP) reached consensus in July 2023 and the final vote in the European Parliament took place in September
2023. Compared to the EC, the position of the EP is more leaning to some of the positions of the insurance industry, for example,
with respect to the cost of capital rate used for the valuation of the risk margin and the calibration of the risk correction which is
relevant for the Volatility Adjustment (both in terms of balance sheet valuation and SCR). The EC proposal formed the basis for the
political process, which has led to a compromise position as agreed by the trilogue parties on 13 December 2023.
Actual implementation of the changes is currently not expected before 2026. The details of the agreement are not fully known yet
and some key aspects in the agreement will not be detailed out in Level I, but will be clarified later in the process (part of Level II).
The trilogue compromise position forms the basis for the upcoming legislative process, which can take a long time and can lead to
further changes.
4. Solvency Capital Requirement
4.1 Solvency II ratio of NN Group
The following table shows the NN Group Solvency II ratio as at 31 December 2023 and 31 December 2022, respectively.
Solvency II ratio of NN Group
2023
2022
(Restated)
Eligible Own Funds 17,691 17,822
Solvency Capital Requirement 8,990 9,040
NN Group Solvency II ratio (Eligible Own Funds/SCR) 197% 197%
The SCR is based on NN Group’s PIM. This comprises Internal Model calculation for all risks, except for Operational risk for NN
Life, NN Non-life, NN Re and the main holding companies owned by NN Group N.V. and SF calculation for ABN AMRO Life and
ABN AMRO Non-life, NN Insurance Services and the international insurance entities of NN Group in Europe. SCR for Operational
risk is calculated using the Standard Formula for all Solvency II entities. The capital requirements of non- Solvency II entities, in
particular NN Life Japan, Pension Funds, and NN Bank are calculated using local sectoral rules.
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4.2 Solvency Capital Requirement
The following table shows the NN Group SCR as at 31 December 2023 and 31 December 2022, respectively.
Solvency Capital Requirements
2023
2022
(Restated)
Market risk 6,602 6,724
Counterparty default risk 129 163
Non-market risk 4,773 5,070
Total BSCR (before diversification) 11,504 11,957
Diversification -2,659 -3,065
Total BSCR (after diversification) 8,845 8,892
Operational risk 560 560
LACDT -1,780 -1,867
Voluntary Prudency Margin 0 116
Other 4 -24
Solvency II entities SCR 7,629 7,677
Non Solvency II entities 1,361 1,363
Total SCR 8,990 9,040
The Solvency II total Basic Solvency Capital Requirement (total BSCR after diversification) includes both the PIM businesses’ BSCR
and the Standard Formula businesses’ BSCR. This figure also reflects the diversification benefits between the Business Units
using Internal Model and Standard Formula.
The general developments of the Basic SCR (BSCR):
• Lower Market risk SCR (mainly due to model refinements, partially offset by market movements, mostly interest rates)
• Lower Counterparty default risk SCR (various portfolio developments)
• Lower Non-market risk SCR (mainly driven by longevity reinsurance at NN Life, partially offset by model refinements and
decrease in interest rates)
• Note that the Voluntary Prudency Margin at NN Group level is released along with Non-market risk SCR model refinements)
The breakdown of the Market and Non-market risk SCR in specific risk types and explanations for the most important changes in
the risk profile and Basic Solvency Capital Requirement over the year 2023 are presented in the next sections.
SCR for Operational risk is stable. The offsetting effect of Loss Absorbing Capacity of Deferred Taxes (LACDT) decreased mainly
due to a lower effective tax rate.
In the above table, ‘Other’ includes loss-absorbing capacity of technical provisions (LACTP) and capital for non-modelled Solvency
II entities.
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4.3 Solvency II ratio sensitivities
Along with the SCR, NN Group regularly calculates the sensitivities of the Solvency II ratio under various scenarios, by assessing
the changes for both Eligible Own Funds and SCR. The Solvency II ratio sensitivities are primarily designed to support the NN
Group Management Board and the Risk Management functions in having a forward-looking view on the risks to solvency of
the company, and to analyse the impacts of market or other events. The sensitivities are selected to reflect plausible, realistic
scenarios that could materialise within the foreseeable future and are not calibrated on a pre-defined confidence interval or
time horizon.
The effect on the Solvency II ratio is calculated based on applying an instantaneous stress on the balance sheet, and on ceteris
paribus basis. For all SII insurance entities, NN Life Japan and NN Bank, the after stress Own Funds are calculated for each of
the sensitivity scenarios; the impacts on SCR are recalculated for the BSCR and Operational risk SCR components. LACDT is
recalculated keeping the LACDT percentage fixed. ‘Other’ SCR components including the LACTP are kept constant.
The Solvency II sensitivities are disclosed for the main Market risks in the below sections.
Main types of risks
In the next sections the main risks associated with NN Group’s business are discussed. Each risk type is analysed through the
risk profile, risk mitigation and risk measurement. For Market and Non-market risks more detailed quantification of risk exposures
are provided.
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8. Non-market risk
Within the SCR Partial Internal Model a differentiation is made for the classification of Non-market risks for different NN Group
entities depending on the model applied.
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For the Business Units applying Partial Internal Model, Non-market risks are split between:
• Insurance risk: is the risk related to the events insured by NN Group and comprise Actuarial and Underwriting risks such as
Mortality risk (including Longevity), Morbidity risk, and Property & Casualty risk which result from the pricing and acceptance of
insurance contracts
• Business risk: is the risk related to the management and development of the insurance portfolio but exclude risks directly connected
to insured events. Business risk includes Expense risk, Persistency risk, and Premium re-rating risk. Business risks can occur because
of internal, industry, regulatory/political or wider market factors. Persistency risk is the risk that policyholders use options available in
the insurance contracts in a way that is different from that expected by NN Group. Depending on the terms and conditions of the
insurance policy, and the laws and regulations applicable to the policy, policyholders could have the option to surrender, change
premiums, change investment fund selections, extend their contracts, take out policy loans, and make choices about how to continue
their annuity and pension savings contracts after the accumulation phase, or even change contract details. Policyholder behaviour
therefore affects the profitability of the insurance contracts. Changes in tax laws and regulations can affect policyholder
behaviour, particularly when the tax treatment of their products affects the attractiveness of these products for customers
For the Business Units applying Standard Formula, Non-market risks are split between:
• Life risk: the life portfolio is mainly attributed to the individual and group business in the international entities of NN Group
(mainly Belgium, Spain Life, Poland). This risk comprises the Mortality, Longevity, Disability-morbidity, Expense, Lapse, and Life
catastrophe risks
• Health risk: this covers the Similar to Life Techniques (SLT) Health portfolio risk (comprising mortality, longevity, disability-
morbidity, expense and lapse risks), the Non-SLT (NSLT) Health portfolio risk (comprising premium and reserve risk and lapse
risk), and the Health Catastrophe risk. Within NN Group, the health risk stems from morbidity riders in Belgium, Czech, Poland,
Slovakia, Romania, from the yearly renewable health insurance portfolio of Greece and Hungary
• Non-life risk: this covers non-life portfolio mainly contributed by ABN AMRO Non-life. This risk covers the Premiums and reserve
risk, Non-life catastrophe risk, and Lapse risk
8.1 Risk profile
The table below presents the Non-market risk SCR composition at the end of 2023 and at the end of 2022, respectively. The main
changes in the risk profile are explained in the subsequent section of this document.
Non-market risk capital requirements
2023
2022
(Restated)
Insurance risk (IM entities) 2,480 3,069
Business risk (IM entities) 1,846 1,698
Life risk (SF entities) 1,190 1,162
Health risk (SF entities) 289 263
Non-life risk (SF entities) 89 121
Diversification non-market risk -1,121 -1,243
Non-market risk 4,773 5,070
The Non-market risk SCR decreased from EUR 5,070 million in 2022 to EUR 4,773 million in 2023.
The decrease is predominantly driven by longevity reinsurance at NN Life, partially offset by decreased interest rates that led to
higher technical provisions and therefore more severe stress scenarios.
8.2 Risk mitigation
Proper pricing, underwriting, claims management and diversification are the main risk mitigating actions for insurance risks.
NN Group Insurance risks are mainly managed on Business Unit level. Insurance liabilities cover multiple geographies, product
benefits, lengths of contract and both Life and Non-life risk, NN Group reduces the likelihood that a single risk event will have
a material impact on NN Group’s financial condition. Risks not sufficiently mitigated by diversification are managed through
concentration and exposure limits and through reinsurance: retention limits for Non-life insurance risks are set by line of business
for catastrophic events and individual risk.
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The risks that are not sufficiently mitigated by diversification are managed through concentration and exposure limits and
through reinsurance:
• Retention limits for Life insurance risks are set per insured life and significant mortality events affecting multiple lives such
as pandemics
• Retention is used to manage risk levels (such as non-life reinsurance and morbidity reinsurance in Japan Life)
• Retention limits for Non-life insurance risks are set by line of business for catastrophic events and individual risks
For NN Non-Life natural catastrophic events are a major risk. One of the main natural catastrophe threatening the Netherlands
is storms causing severe wind damage. NN Non-Life has a reinsurance programme in place, offering protection against severe
storms and other natural perils. In addition, reinsurance contracts per risk group are in place, covering NN Non-Life against large
one-off events such as fires.
The reinsurance programmes are facilitated by NN Re. In addition, reinsurance creates Credit risk which is managed in line with the
Reinsurance Standard of NN Group.
8.4 Business risk
Business risk include risks related to the management and development of the Insurance risk, Persistency risk, and Expense risks.
These risks occur because of internal, industry, regulatory/political, or wider market factors.
8.4.1 Risk profile
The table below presents the Partial Internal Model business risk SCR for the Dutch NN insurance entities of NN Group as at
31 December 2023 and 31 December 2022, respectively.
Business risk capital requirements
2023
2022
(Restated)
Persistency risk 632 698
Premium risk 1 9
Expense risk 1,564 1,388
Diversification Business Risk -351 -397
Business risk (IM entities) 1,846 1,698
The Persistency risk SCR decreased from EUR 698 million in 2022 to EUR 632 million in 2023 primarily due to model improvements
and assumption changes at NN Life and NN RE.
The risk that policyholders maintain their contracts longer than NN Group has assumed is specific to the variable annuity business
when guarantees are higher than the value of the underlying policyholder funds, the pension business in the Netherlands, and the
older, higher interest rate guaranteed savings business in Europe. The risk that policyholders hold their contracts for a shorter
period than NN Group has assumed relates to the life business in Japan and the unit-linked businesses in Central and Eastern
Europe. Within NN Group NN Re reinsures parts of the life business in Japan and Central and Eastern Europe.
The SCR for Expense risk increased from EUR 1,388 million in 2022 to EUR 1,564 million in 2023. The increase due to model
refinements. This risk relates primarily to the variable part of NN Group’s expenses and is the risk that future actual expenses
exceed the expenses assumed. Total administrative expenses for NN Group for 2023 were EUR 2,206 million compared with
EUR 2,280 million in 2022. Parts of these expenses are variable, depending on the size of the business and sales volumes, and
parts are fixed and cannot immediately be adjusted to reflect changes in the size of the business.
Expense risk of NN Group mainly comprises the Expense level and Expense inflation risks in NN Life. A significant portion of it
is incurred in the closed block operations of Netherlands Life, where NN Group is also exposed to the risk that the expenses
will not decrease in line with the gradual decrease of the in-force book, leading to a per policy expense increase. Furthermore,
Expense risk is also driven by the Group pension business in the Netherlands which includes long-term best estimate expense
assumptions, discounted over a long period of time.
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8.4.2 Risk mitigation
Persistency and Premium risks are managed through the product development, product approval and review processes and by
ensuring that appropriate advice is given to the customer, not only at the point of sale but also during the lifetime of the product.
The policyholder behaviour experience of in-force policies is assessed at least annually.
As part of its strategy, NN Group has put several programmes in place to improve the customer experience. These programmes
improve the match between customer needs and the benefits and options provided by NN Group’s products. Over time, NN
Group’s understanding and anticipation of the choice policyholders are likely to make, will improve, thereby decreasing the risk of
a mismatch between actual and assumed policyholder behaviour.
Ongoing initiatives are in place to manage Expense risk throughout NN Group, especially in the Netherlands where company
targets are in place to reduce expenses, thus, lowering Expense risk going forward. These initiatives seek to reduce expenses
through the number of underlying contracts in place. This is particularly relevant for the Dutch individual life closed-block business
that can only reduce in number of contracts. Besides the already described mitigating actions, proper pricing, underwriting, claims
management, and diversification are also risk mitigating actions for business risk.
8.5 Life risk
Life risk includes risks arising from the underwriting of life insurances of the Business Units applying Standard Formula and is split
into Mortality risk, Longevity risk, Disability/Morbidity risk, Persistency risk, Expense risk, Revision risk, and Catastrophic risk.
These risks refer to the adverse deviation from the best estimate liabilities due to the perils covered, policyholder behaviour and
the processes used in the conduct of business.
8.5.1 Risk profile
Life risk capital requirements
2023
2022
(Restated)
Mortality risk 99 126
Longevity risk 57 84
Morbidity risk 14 11
Expense risk 361 372
Lapse risk 897 836
Catastrophe risk 110 132
Diversification life risk -348 -399
Life risk (SF entities) 1,190 1,162
As shown in the table above, the Life risk SCR for the SF Business Units increased slightly from EUR 1,162 million in 2022 to
EUR 1,190 million in 2023 mainly due to some model refinements at Spain Life and Belgium Life.
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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50 Risk Management continued
8.5.2 Risk mitigation
The majority of Life risk is comprised of Lapse, Expense and Mortality risks (in Standard Formula entities) mainly from the
international NN Group entities (Belgium, Poland, Spain).
The NN Group Standard Formula entities manage the Expense risk through detailed budgeting and monitoring the costs using
activity-based costing.
Lapse risk management serves an important objective for NN Group entities. When deviations from assumed lapse rates
are observed over a prolonged period of time, a product review and further management actions are taken to address the
underlying reasons.
8.6 Health risk
Health risk arises from issuing health insurance contracts, which is divided in Similar to Life Techniques (SLT) risk, Non-Similar to
Life Techniques (NSLT) risk and Catastrophe risk. SLT risk is associated to health obligations pursued on a similar technical basis to
that of life insurance, while NSLT risk applies to health obligations not pursued on a similar technical basis to that of life insurance.
These risks refer to the adverse deviation from the best estimate liabilities due to the perils covered, policyholder behaviour and
the processes used in the conduct of business.
8.6.1 Risk profile
Health risk capital requirements
2023
2022
(Restated)
SLT 268 245
NSLT 22 20
Catastrophe risk 32 25
Diversification health risk -33 -27
Health risk (SF entities) 289 263
As shown in the table above, the Health risk SCR of the Business Units applying Standard Formula increased from EUR 263 million
in 2022 to EUR 289 million in 2023. The increase is mainly explained by Health Lapse due to lower interest rates. The discounting
curve outweighs the drop from lower future returns.
8.6.2 Risk mitigation
The majority of Health risk originates from international NN Group entities (Belgium, Poland, Slovakia and Romania). They mitigate
the risks by strict acceptance policies and stringent claims-handling procedures. An acceptance policy and internal control
processes are developed for each product line maintained by those entities.
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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2023 Annual Report
50 Risk Management continued
8.7 Non-life risk
Non-life risk involves risks arising from the underwriting of non-life insurance, which includes Premium and Reserve risk,
Persistency risk and Catastrophic risk. These risks refer to the adverse deviation from the best estimate liabilities due to the perils
covered, policyholder behaviour and the processes used in the conduct of business.
8.7.1 Risk profile
Non-life risk capital requirements
2023
2022
(Restated)
Premium and reserve risk 78 96
Lapse risk 16 21
Catastrophe risk 24 50
Diversification non-life risk -29 -46
Non-life risk (SF entities) 89 121
As shown in the table above, the Non-life risk SCR of the Business Units applying Standard Formula decreased from EUR 121 million in
2022 to EUR 89 million in 2023 mainly due to legal merger of NN Insurance Services and NN Non-Life.
8.7.2 Risk mitigation
Non-life risk is mitigated through appropriate pricing and underwriting policies and through risk transfer via reinsurance. Most of
the Non-life risk comes from ABN AMRO Non-life, and they manage the risk using various reinsurance contracts.
Within the NN Group’s non-life business, Weather-related risks are managed through the use of Catastrophe risk modelling in
underwriting and risk assessment. NN Group uses external vendor models to estimate the impact and damage caused by large
natural catastrophes such as windstorms, considered to be the main natural peril for the NN Group portfolio. Reinsurance covers
are placed with strongly capitalised external reinsurers.
Natural catastrophic losses can become more severe and more frequent because of climate change. Although most of the NN
Group’s non-life business is annually renewable, to accurately price the business it is essential to monitor and understand linkages
between natural disasters and climate change. NN Group therefore liaises with the external vendors and participates in industry
initiatives to improve the knowledge, data and models to better prepare for changing weather patterns.
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
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accounts
9 Other
information
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Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
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accounts
9 Other
information
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51 Capital and liquidity management continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
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accounts
9 Other
information
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Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
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accounts
9 Other
information
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2023 Annual Report
51 Capital and liquidity management continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
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accounts
9 Other
information
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2023 Annual Report
51 Capital and liquidity management continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
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accounts
9 Other
information
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2023 Annual Report
51 Capital and liquidity management continued
The dated subordinated notes issued in 2017 with a notional amount of EUR 850 million have a coupon of 4.625%, maturity date
on 13 January 2048, and are fully paid in. NN Group N.V. has the right to redeem these notes on the first call date on 13 January
2028 or on any interest payment date thereafter. These subordinated notes are classified as Tier 2 capital.
The dated subordinated notes issued in 2022 with a notional amount of EUR 500 million have a coupon of 5.25%, maturity date
on 1 March 2043, and are fully paid in. It was the first issuance under NN Group’s Sustainability Bond Framework. NN Group
N.V. has the right to redeem these notes on the first call date of 30 August 2032 or any other interest payment date thereafter.
These subordinated notes are classified as Tier 2 capital.
The dated subordinated notes issued in 2023 with a notional amount of EUR 1 billion have a coupon of 6.00%, maturity date on
3 November 2043, and are fully paid in. It was the second issuance under NN Group’s Sustainability Bond Framework. NN Group
N.V. has the right to redeem these notes on the first call date of 3 May 2033 or any other interest payment date thereafter.
These subordinated notes are classified as Tier 2 capital.
Eligible Own Funds
NN Group Own Funds are classified into three tiers as follows:
• The excess of assets over liabilities on the basis of consolidated accounts excluding net Deferred Tax Asset is classified as
(unrestricted) Tier 1
• The proportional share in the Own Funds of BeFrank, BeFrank PPI and pension funds in Central Europe is classified as
(unrestricted) Tier 1
• The proportional share in the Eligible Own Funds of NN Life Japan is classified as (unrestricted) Tier 1 (European Commission
recognised the solvency regime applied to the insurance undertakings in Japan as provisionally equivalent to Solvency II
according to Commission Delegated Decision (EU) 2016/310 of 26 November 2015)
• The proportional share in the Own Funds of NN Bank is classified as (unrestricted) Tier 1 with the exception of the subordinated
loans which are classified as Tier 2
• Perpetual subordinated notes are classified as (restricted) Tier 1 based on the transitional provisions (grandfathering)
• Dated subordinated debt is classified as Tier 2 including that based on the transitional provisions (grandfathering)
• The Net Deferred Tax Asset (Deferred tax assets and liabilities are offset only where such assets and liabilities relate to taxes
levied by the same tax authority on the same taxable undertaking) is classified as Tier 3
As at 31 December 2023 and 2022, NN Group had no ancillary Own Funds.
There are a number of regulatory restrictions on the amounts classified as Restricted Tier 1, Tier 2 and Tier 3 capital. The following
restrictions have to be taken into account:
• Restricted Tier 1 capital cannot exceed 20% of the total Tier 1 amount
• The proportion of Tier 1 items in the Eligible Own Funds should be higher than one third of the total amount of Eligible Own Funds
• Tier 2 and Tier 3 capital together cannot exceed 50% of the SCR
• Tier 3 capital cannot exceed 15% of the Solvency Capital Requirements
• Tier 3 capital cannot exceed one third of the total amount of Eligible Own Funds
The application of the regulatory restrictions as at 31 December 2023 is reflected in the table below.
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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51 Capital and liquidity management continued
Eligible Own Funds to cover the Solvency Capital Requirement
Available Own
Funds 2023
Eligible Own
Funds 2023
Available Own
Funds 2022
(Restated)
Eligible Own
Funds 2022
(Restated) Eligibility restriction
Tier 1 11,802 11,802 12,620 12,620
More than one third of
total EOF
Of which:
– Unrestricted Tier 1 10,388 10,388 10,904 10,904 Not applicable
– Restricted Tier 1 1,414 1,414 1,716 1,716
Less than 20% of
Tier 1
Tier 2 + Tier 3 3,873 3,775 3,098 3,098 Less than 50% of SCR
Tier 2 2,631 2,631 2,189 2,189
Tier 3 1,243 1,144 910 910
Less than 15% of
SCR; Less than one
third of total EOF
Non-Solvency II regulated entities 2,113 2,113 2,104 2,104
Total Own Funds 17,789 17,691 17,822 17,822
Transferability and fungibility of Own Funds
NN Group adjusts the group Own Funds taking into account the value of own fund items that cannot effectively be made available
to cover the group SCR. These are the own fund items of related undertakings subject to legal and regulatory constraints that
restrict the ability of those items to absorb all types of loss within the group and/or transferability of assets. Based on NN Group’s
assessment these own fund items mainly include:
• Differences between valuations of assets and liabilities based on Solvency II principles and according to principles that related
undertakings use to prepare respective local annual accounts
• For NN Life Japan, own fund items according to local rules but which are not part of shareholders’ equity
• For NN Bank, own funds covering pillar II guidance issued by regulator
• The transitional measures on risk-free interest rates and technical provisions
• Legal reserves set up according to local company law
• Any minority interest in a related undertaking
These own fund items are included in NN Group Own Funds to the extent they are eligible for covering contribution of the
respective related undertaking to the NN Group’s SCR. On 31 December 2023 excess non-available own funds amounted to
EUR 896 million. On 31 December 2022, this amount was EUR 1,415 million.
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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figures
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51 Capital and liquidity management continued
Cash capital position at the holding company
NN Group holds a cash capital position at the holding company to cover capital needs of the entities after a stress event and to
cover financial leverage costs and holding company expenses for a period of at least 12 months. Cash capital is defined as net
current assets available at the holding company. NN Group is comfortable with a cash capital position at the holding company
to be in a range of EUR 0.5 billion and EUR 1.5 billion. A related metric is the free cash flow at the holding which is defined as
the change in the cash capital position at the holding company over the period, excluding acquisitions, divestments, and capital
transactions with shareholders and debtholders.
Cash capital position at the holding company
2023
2022
(Restated)
Beginning of period 2,081 1,998
Remittances from subsidiaries
1
1,855 1,753
Capital injections into subsidiaries
2
-1,117 -545
Other
3
-267 -315
Free cash flow to the holding
4
470 893
Cash divestment proceeds 1,626
Acquisitions -20 -524
Capital flow to shareholders -1,053 -1,806
Increase/decrease in debt and loans -507 -106
End of period 971 2,081
1 Includes interest on intragroup subordinated loans provided to subsidiaries by the holding company.
2 Includes the change of subordinated loans provided to subsidiaries by the holding company.
3 Includes interest on subordinated loans and debt with external debtholders, holding company expenses and other cash flows.
4 Free cash flow to the holding company is defined as the change in cash capital position of the holding company over the period, excluding acquisitions, divestment proceeds and capital
transactions with shareholders and debtholders.
The cash capital position at the holding company decreased to EUR 971 million at 31 December 2023 from EUR 2,081 million at
31 December 2022. The decrease is mainly due to EUR 1,117 million of capital injections into subsidiaries, mainly into NN Life
and NN Spain, EUR 1,053 million capital flows to shareholders, the redemption of EUR 500 million of senior debt, as well as other
movements of EUR 267 million that include holding company expenses, interest on loans and debt and other holding company
cash flows. These are partly offset by remittances from subsidiaries of EUR 1,855 million. NN Group injected EUR 1 billion into
NN Life to cover for the provision that was recognised for the cost of the final settlement on unit-linked insurance policies, as well
as to improve the use of capital within the group by deploying the remainder according to NN Life’s strategic asset allocation over
time. Capital flows to shareholders comprise the cash part of the 2022 final dividend and the 2023 interim dividend for a total
amount of EUR 422 million, and the repurchase of EUR 631 million of own shares.
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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figures
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NN
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accounts
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51 Capital and liquidity management continued
Financial leverage
The financial leverage and fixed-cost coverage ratio are managed in accordance with a single A financial strength rating target.
Financial leverage
2023
2022
(Restated)
Shareholders’ equity 19,624 19,265
Contractual service margin after tax
1
4,861 4,858
Minority interest 79 73
Capital base for financial leverage (a) 24,564 24,196
– Undated subordinated notes
2
1,416 1,764
– Subordinated debt 2,680 2,334
Total subordinated debt 4,096 4,098
Debt securities issued 1,195 1,694
Financial leverage (b) 5,291 5,792
Total debt 5,291 5,792
Financial leverage ratio (b/(a+b)) 17.7% 19.3%
Fixed-cost coverage ratio
3
8.7x 9.5x
1 Contractual service margin after tax and net of reinsurance is included in the capital base for financial leverage ratio in the calculation based on IFRS 9/IFRS 17.
2 The undated subordinated notes classified as equity are considered financial leverage in the calculation of the financial leverage ratio. The related interest is included on an accrual basis in
the calculation of the fixed-cost coverage ratio.
3 Measures the ability of earnings before interest and tax (EBIT) to cover funding costs on financial leverage. Special items, revaluations on derivatives that are non-eligible for hedge
accounting, market and other impacts and amortisation of acquisition intangibles are excluded from EBIT.
The financial leverage ratio of NN Group decreased to 17.7% at 31 December 2023 from 19.3% at 31 December 2022, reflecting
the increase of the capital base and the decrease of the financial leverage. The financial leverage decreased mainly driven by
the redemption of EUR 500 million of senior debt on 13 January 2023. The capital base for financial leverage increased with
EUR 368 million mainly due to the 2023 net result of EUR 1,172 million and positive equity revaluations, partly offset by capital
flows to shareholders of EUR 1,053 million.
NN Group issued EUR 1 billion of dated green Tier 2 subordinated notes with a maturity of 20.5 years and a fixed coupon at 6.00%
per annum until 2033 on 3 May 2023. The proceeds of the issuance were used to repurchase EUR 665 million of dated Tier 2
subordinated notes that are first callable in April 2024 and EUR 335 million of undated restricted Tier 1 subordinated notes that
are first callable in June 2024. The transactions had no material impact on the financial leverage position.
The fixed-cost coverage ratio decreased to 8.7x at the end of 2023, from 9.5x at the end of 2022 (on a last 12-months basis),
driven by the decrease of earnings before interest and tax mainly due to negative real estate revaluations.
Proposed 2023 final dividend
At the annual general meeting on 24 May 2024, a final dividend will be proposed of EUR 2.08 per ordinary share, or approximately
EUR 570 million in total based on the current number of outstanding shares (net of treasury shares). The final dividend will be paid
either fully in cash, after deduction of withholding tax if applicable, or fully in ordinary shares, at the election of the shareholders.
Dividends paid in the form of ordinary shares will be delivered from NN Group treasury shares or issued at the expense of the share
premium reserve. To neutralise the dilutive effect of the stock dividend, NN Group will repurchase ordinary shares for an amount
equivalent to the stock dividend. If the proposed dividend is adopted by the General Meeting, NN Group ordinary shares will be
quoted ex-dividend on 28 May 2024. The record date for the dividend will be 29 May 2024. The election period will run from 30 May
2024 up to and including 13 June 2024. The stock fraction for the stock dividend will be based on the volume weighted average price
of NN Group ordinary shares on Euronext Amsterdam for the five trading days from 7 June through 13 June 2024. The dividend
will be payable on 20 June 2024. (For more information: NN Group - Dividend policy and dividend history (nn-group.com).
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
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accounts
9 Other
information
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51 Capital and liquidity management continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
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accounts
9 Other
information
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2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
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accounts
9 Other
information
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Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
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accounts
9 Other
information
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2023 Annual Report
52 Other IFRS 9 and IFRS 17 transition disclosures continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
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accounts
9 Other
information
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52 Other IFRS 9 and IFRS 17 transition disclosures continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
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accounts
9 Other
information
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Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
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accounts
9 Other
information
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52 Other IFRS 9 and IFRS 17 transition disclosures continued
Notes to the Consolidated annual accounts continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
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accounts
9 Other
information
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Authorisation of the Consolidated annual accounts
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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figures
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NN
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Parent company balance sheet
Parent company balance sheet
As at 31 December before appropriation of result notes
31 December
2023
31 December
2022
(Restated)
1 January
2022
(Restated)
Assets
Intangible assets
2 234 251 264
Investments in group companies
3 21,329 20,409 23,244
Investments in debt securities at fair value through OCI
4 1,650 2,398 3,918
Other assets
5 3,619 5,484 5,821
Total assets 26,832 28,542 33,247
Equity
Share capital 34 35 38
Share premium 12,579 12,578 12,575
Share of associates reserve 2,447 2,642 5,387
Retained earnings 3,392 2,376 45
Unappropriated result 1,172 1,634 3,579
Shareholders’ equity 19,624 19,265 21,624
Undated subordinated notes 1,416 1,764 1,764
Total equity
6
21,040 21,029 23,388
Liabilities
Subordinated debt
7 2,680 2,333 1,837
Other liabilities
8
3,112 5,180 8,022
Total liabilities 5,792 7,513 9,859
Total equity and liabilities 26,832 28,542 33,247
References relate to the notes starting with Note 1 ‘Accounting policies for the Parent company annual accounts’. These form an
integral part of the Parent company annual accounts.
Reference is made to Note 1 ‘Accounting policies’ of the Consolidated annual accounts for the impact of the adoption of IFRS 9 and
IFRS 17. Comparative information was restated accordingly.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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Parent company profit and loss account
2023
2022
(Restated)
Result group companies 1,310 1,798
Net fee and commission income -3 -3
Other income 301 116
Total income 1,608 1,911
Amortisation of intangible and other impairments 18 18
Interest expenses 248 145
Operating expenses 199 177
Total expenses 465 340
Result before tax 1,143 1,571
Taxation -29 -62
Net result 1,172 1,633
Parent company profit and loss account
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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Parent company statement of changes in equity
Parent company statement of changes in equity (2023)
Share
capital
Share
premium
Share of
associates
reserve
Other
reserves
Total
Shareholders’
equity
Undated
subordinated
notes
Total
equity
Balance at 1 January 2023 35 12,578 2,642 4,010 19,265 1,764 21,029
Finance result on insurance contracts
recognised in OCI -2,634 -2,634 -2,634
Finance result on reinsurance
contracts recognised in OCI -15 -15 -15
Revaluations on debt securities at fair
value through OCI 1,855 11 1,866 1,866
Revaluations on loans at fair value
through OCI 732 732 732
Realised gains (losses) transferred to
the profit and loss account 248 248 248
Changes in cash flow hedge reserve -53 -53 -53
Share of OCI of investments in
associates and joint ventures -9 -9 -9
Foreign currency exchange differences -80 -80 -80
Revaluations on equity securities at
fair value through OCI 270 270 270
Remeasurement of the net defined
benefit asset/liability -12 -12 -12
Unrealised revaluations on property in
own use -1 -1 -1
Total amount recognised directly in
equity (Other comprehensive income) 0 0 301 11 312 0 312
Net result for the period 1,172 1,172 1,172
Total comprehensive income 0 0 301 1,183 1,484 0 1,484
Issuance of undated subordinated
notes 0 -348 -348
Changes in share capital -1 1 0 0
Transfer to/from associates -496 496 0
Dividend -422 -422 -422
Purchase (sale) of treasury shares -632 -632 -632
Employee stock option and share plans 1 1 1
Coupon on undated subordinated
notes -57 -57 -57
Changes in the composition of the
group and other changes -15 -15 -15
Balance at 31 December 2023 34 12,579 2,447 4,564 19,624 1,416 21,040
1 Other reserves include Retained earnings and Unappropriated result.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
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Parent company statement of changes in equity continued
Parent company statement of changes in equity (2022) (Restated)
Share
1
capital
Share
premium
Share of
associates
reserve
Other
reserves
Total
Shareholders’
equity
Undated
subordinated
notes
Total
equity
Balance as reported at 31 December
2021 38 12,575 16,651 3,624 32,888 1,764 34,652
Impact (net of tax) of IFRS 9 2,623 2,623 2,623
Impact (net of tax) of IFRS 17 -13,887 -13,887 -13,887
Balance at 1 January 2022 (Restated) 38 12,575 5,387 3,624 21,624 1,764 23,388
Finance result on insurance contracts
recognised in OCI 26,025 26,025 26,025
Finance result on reinsurance
contracts recognised in OCI -143 -143 -143
Revaluations on debt securities at fair
value through OCI -14,046 60 -13,986 -13,986
Revaluations on loans at fair value
through OCI -6,695 -6,695 -6,695
Realised gains (losses) transferred to
the profit and loss account -21 -21 -21
Changes in cash flow hedge reserve -5,943 -5,943 -5,943
Share of OCI of investments in
associates and joint ventures 9 9 9
Foreign currency exchange differences -105 -105 -105
Revaluations on equity securities at
fair value through OCI -1,596 -1,596 -1,596
Remeasurement of the net defined
benefit asset/liability 68 68 68
Unrealised revaluations on property in
own use 2 2 2
Total amount recognised directly in
equity (Other comprehensive income) 0 0 -2,445 60 -2,385 0 -2,385
Net result for the period 1,634 1,634 1,634
Total comprehensive income 0 0 -2,445 1,694 -751 0 -751
Changes in share capital -3 3 0 0
Transfer to/from associates -300 300 0 0
Dividend -413 -413 -413
Purchase (sale) of treasury shares -1,391 -1,391 -1,391
Employee stock option and share plans -6 -6 -6
Coupon on undated subordinated
notes -58 -58 -58
Changes in the composition of the
group and other changes 260 260 260
Balance at 31 December 2022
(Restated) 35 12,578 2,642 4,010 19,265 1,764 21,029
1 Other reserves include Retained earnings and Unappropriated result.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
338
NN Group N.V.
2023 Annual Report
Notes to the Parent company annual accounts
1 Accounting policies for the Parent company annual accounts
The parent company accounts of NN Group N.V. are prepared in accordance with the financial reporting requirements included
in Part 9 of Book 2 of the Dutch Civil Code. The accounting policies applicable to presentation and disclosures are in accordance
with the financial reporting requirements included in Part 9 of Book 2 of the Dutch Civil Code. The principles of valuation and
determination of results stated in connection with the Consolidated balance sheet and profit and loss account are also applicable
to the parent company balance sheet and profit and loss account with the exception of investments in group companies and
Associates and joint ventures which are recognised at net asset value with goodwill, if any, recorded under intangible assets.
A list containing the information referred to in Article 379 (1), Book 2 of the Dutch Civil Code has been filed with the Commercial
Register of the Chamber of Commerce in Amsterdam in accordance with Article 379 (5), Book 2 of the Dutch Civil Code.
Changes in balance sheet values due to changes in the revaluation reserves of associates are reflected in the ‘Share of associates
reserve’, which forms part of shareholders’ equity. Changes in balance sheet values due to the results of these associates, accounted
for in accordance with NN Group accounting policies, are included in the profit and loss account. Other changes in the balance sheet
value of these associates, other than those due to changes in share capital, are included in the ‘Share of associates reserve’.
A legal reserve is carried at an amount equal to the share in the results of associates since their first inclusion at net asset value
less the amount of profit distributions to which rights have accrued in the interim. Profit distributions which can be repatriated to
the Netherlands without restriction are likewise deducted from the ‘Share of associates reserve’.
3 Investments in group companies
Investments in group companies
Interest held
2023
Balance sheet
value
2023
Interest held
2022
(Restated)
Balance sheet
value
2022
(Restated)Name Statutory seat
NN Insurance Eurasia N.V. Amsterdam, The Netherlands 100% 20,307 100% 19,548
NN Bank N.V. The Hague, The Netherlands 100% 919 100% 786
Nationale-Nederlanden ABN AMRO
Verzekeringen Holding B.V. Zwolle, The Netherlands 51% 74 51% 67
NN Insurance International B.V. The Hague, The Netherlands 100% 29 100% 8
Investments in group companies 21,329 20,409
2 Intangible assets
Intangible assets
2023
2022
(Restated)
Goodwill 148 148
Other intangible assets 86 103
Intangible assets 234 251
Reference is made to Note 9 ‘Intangible assets’ in the Consolidated annual accounts.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
339
NN Group N.V.
2023 Annual Report
Notes to the Parent company annual accounts continued
4 Investments in debt securities at fair value through other comprehensive income
Changes in Investments in debt securities at fair value through other comprehensive income
2023
2022
(Restated)
Opening balance 2,398 3,918
Additions 7,250 11,293
Disposals and redemptions -8,038 -12,813
Revaluations 3
Amortisation 37
Closing balance 1,650 2,398
5 Other assets
Other assets
2023
2022
(Restated)
Receivables from group companies 2,563 2,489
Cash 570 2,365
Investments at fair value through profit or loss - for risk of company 367 283
Other receivables, prepayments and accruals 119 347
Other assets 3,619 5,484
As at 31 December 2023, an amount of EUR 1,060 million (2022: EUR 1,838 million) is expected to be settled after more than one
year from the balance sheet date.
3 Investments in group companies continued
Changes in Investments in group companies
2023
2022
(Restated)
Investments in group companies – opening balance 20,409 23,243
Revaluations 285 -2,303
Result of group companies 1,310 1,961
Capital contributions 698 352
Dividend and repayments -1,368 -3,007
Changes in the composition of the group and other changes -5 163
Investments in group companies – closing balance 21,329 20,409
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
340
NN Group N.V.
2023 Annual Report
Notes to the Parent company annual accounts continued
6 Equity
Total equity
2023
2022
(Restated)
Share capital 34 35
Share premium 12,579 12,578
Share of associates reserve 2,447 2,642
Other reserves 4,564 4,010
Shareholders' equity 19,624 19,265
Undated subordinated notes 1,416 1,764
Total equity 21,040 21,029
As at 31 December 2023, share premium includes an amount of EUR 6,387 million (2022: EUR 6,388 million) exempt from Dutch
withholding tax.
Share capital
Ordinary shares
(in number)
Ordinary shares
(Amount in millions of euros)
2023
2022
(Restated) 2023
2022
(Restated)
Authorised share capital 700,000,000 700,000,000 84 84
Unissued share capital 415,000,000 405,000,000 50 49
Issued share capital 285,000,000 295,000,000 34 35
For details on share capital and share premium, reference is made to Note 12 ‘Equity’ in the Consolidated annual accounts.
Changes in Other reserves (2023)
2023
Retained
earnings
Unappropriated
result Total
Other reserves – opening balance 2,376 1,634 4,010
Net result for the period 1,172 1,172
Revaluations on debt securities and loans at fair value through OCI 11 11
Transfer from (to) share of associates reserve 496 496
Transfer from (to) retained earnings 1,634 -1,634 0
Dividend -422 -422
Purchase (sale) of treasury shares -632 -632
Employee stock option and share plans 1 1
Coupon on undated subordinated notes -57 -57
Changes in the composition of the group and other changes -15 -15
Other reserves – closing balance 3,392 1,172 4,564
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
341
NN Group N.V.
2023 Annual Report
Notes to the Parent company annual accounts continued
6 Equity continued
Changes in Other reserves (2022) (Restated)
2022 (Restated)
Retained
earnings
Unappropriated
result Total
Other reserves – opening balance 45 3,579 3,624
Net result for the period 1,634 1,634
Revaluations on debt securities and loans at fair value through OCI 60 60
Transfer from (to) share of associates reserve 300 300
Transfer from (to) retained earnings 3,579 -3,579 0
Dividend -413 -413
Purchase (sale) of treasury shares -1,391 -1,391
Employee stock option and share plans -6 -6
Coupon on undated subordinated notes -58 -58
Changes in the composition of the group and other changes 260 260
Other reserves – closing balance 2,376 1,634 4,010
The total amount of Equity in the Parent company annual accounts equals Shareholders’ equity (parent) in the Consolidated annual
accounts. Certain components within equity are different, as a result of the following presentation differences between the Parent
company accounts and Consolidated accounts:
• Unrealised revaluations within consolidated group companies, presented in the ‘Revaluation reserve’ in the Consolidated annual
accounts, are presented in the ‘Share of associates reserve’ in the Parent company annual accounts
• Foreign currency translation on consolidated group companies, presented in the ‘Currency translation reserve’ in the
Consolidated annual accounts, is presented in the ‘Share of associates reserve’ in the Parent company annual accounts
• Remeasurement of the net defined benefit asset/liability within consolidated group companies presented in the ‘Net defined
benefit asset/liability remeasurement reserve’ in the Consolidated annual accounts, are presented in the ‘Share of associates
reserve’ in the Parent company annual accounts
• Non-distributable retained earnings of associates presented in ‘Other reserves’ in the Consolidated annual accounts, are
presented in the ‘Share of associates reserve’ in the Parent company annual accounts
• Revaluations on real estate investments, capitalised software and certain participations recognised in income and consequently
presented in ‘Retained earnings’ in the Consolidated annual accounts, are presented in the ‘Share of associates reserve’ in the
Parent company annual accounts
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
342
NN Group N.V.
2023 Annual Report
Notes to the Parent company annual accounts continued
6 Equity continued
Undated subordinated notes
In April 2023 NN Group announced a tender for purchase by NN Group for cash of outstanding subordinated notes. The tender was
completed in May 2023 and NN Group accepted the purchase of EUR 1 billion in nominal amount. This includes EUR 665 million
of subordinated notes previously classified as liabilities in the balance sheet and EUR 335 million previously classified in equity.
Reference is made to Note 7 ‘Subordinated debt’.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
343
NN Group N.V.
2023 Annual Report
Notes to the Parent company annual accounts continued
7 Subordinated debt
Subordinated debt (2023)
Notional amount Balance sheet value
Interest rate Year of Issue Due date First call date 2023
2022
(Restated) 2023
2022
(Restated)
4.625% 2014
8 April
2044
8 April
2024 335 1,000 335 997
4.625% 2017
13 January
2048
13 January
2028 850 850 844 843
5.250% 2022
1 March
2043
30 August
2032 500 500 494 494
6.000% 2023
3 November
2043 3 May 2033 1,000 1,007
2,680 2,334
The above subordinated debt instruments have been issued to raise hybrid capital. Under IFRS-EU these debt instruments are
classified as liabilities and are considered capital for regulatory purposes. All subordinated debt is euro denominated.
8 Other liabilities
Other liabilities
2023
2022
(Restated)
Debt instruments issued 1,195 1,694
Amounts owed to group companies 1,790 3,323
Other amounts owed and accrued liabilities 127 163
Other liabilities 3,112 5,180
Amounts owed to group companies by remaining term
2023
2022
(Restated)
Within 1 year 1,790 3,323
Amounts owed to group companies 1,790 3,323
9 Other
NN Group N.V. has issued statements of liability in connection with Article 403, Book 2 of the Dutch Civil Code and other
guarantees (mainly funding and redemption guarantees) for group companies.
Reference is made to the Consolidated annual accounts for the number of employees, audit fees and remuneration of the
Executive Board, the Management Board and the Supervisory Board.
6 Equity continued
In July 2014, NN Group N.V. issued fixed to floating rate undated subordinated notes with a par value of EUR 1,000 million.
The notes are undated, but are callable after 11.5 years and every quarter thereafter (subject to regulatory approval). The coupon
is fixed at 4.50% per annum for the first 11.5 years and will be floating thereafter. As these notes are undated and include optional
deferral of interest at the discretion of NN Group, these are classified under IFRS-EU as equity. Coupon payments are deducted
from equity if and when paid or contractually due. The discount to the par value and certain issue costs were deducted from equity
at issue, resulting in a balance sheet value equal to the net proceeds of EUR 986 million.
In June 2014, fixed to floating rate undated subordinated notes with a par value of EUR 750 million were originally issued by Delta
Lloyd which are classified as equity under IFRS. The notes are undated, but are callable as from 13 June 2024 and every quarter
thereafter (subject to regulatory approval). The coupon is fixed at 4.375% per annum until 13 June 2024 and will be floating
thereafter. Coupon payments are distributed out of equity if and when paid or contractually due. These notes were recognised
upon acquisition of Delta Lloyd for an amount of EUR 778 million.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
344
NN Group N.V.
2023 Annual Report
Authorisation of the Parent company annual accounts
Authorisation of the Parent company annual accounts
The Parent company annual accounts of NN Group N.V. for the year ended 31 December 2023 were authorised for issue in
accordance with a resolution of the Executive Board on 20 March 2024. The Executive Board may decide to amend the Parent
company annual accounts as long as these are not adopted by the General Meeting.
The General Meeting may decide not to adopt the Parent company annual accounts, but may not amend these during the meeting.
The General Meeting can decide not to adopt the Parent company annual accounts, propose amendments and then adopt the
Parent company annual accounts after a normal due process.
The Hague, 20 March 2024
The Supervisory Board
D.A. (David) Cole, chair
P.F.M. (Pauline) van der Meer Mohr, vice-chair
I.K. (Inga) Beale
R.W. (Robert) Jenkins
R.J.W. (Rob) Lelieveld
C.G. (Cecilia) Reyes
J.W. (Hans) Schoen
The Executive Board
D.E. (David) Knibbe, CEO, chair
A.T.J. (Annemiek) van Melick, CFO, vice-chair
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
345
NN Group N.V.
2023 Annual Report
Independent Auditor’s Report
KPMG Accountants N.V., a Dutch limited liability company registered with the trade register in the Netherlands under number 33263683, is a member firm of the global organization of
independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.
2814028/24W00191755AVN
Independent auditor's report
To: The General Meeting of Shareholders and
the Supervisory Board of NN Group N.V.
Report on the audit
of the annual accounts 2023 included in the annual report
Our opinion
In our opinion
:
—
the accompanying consolidated annual accounts give a true and fair view of the financial
position of NN Group N.V. (‘the Group’) as at 31 December 2023 and of its result and its cash
flows for the year then ended, in accordance with International Financial Reporting Standards
as adopted by the European Union (EU-IFRS) and in accordance with Part 9 of Book 2 of the
Dutch Civil Code; and
—
the accompanying parent company annual accounts give a true and fair view of the financial
position of NN Group N.V. as at 31 December 2023 and of its results for the year then ended
in accordance with Part 9 of Book 2 of the Dutch Civil Code.
What we have audited
We have audited the
2023 annual accounts of NN Group N.V. based in Amsterdam and
headquartered in The Hague, as set
out on pages 168 to 344 of the annual report. The annual
accounts
include the consolidated annual accounts and the parent company annual accounts.
T
he consolidated annual accounts comprise:
1
the consolidated balance sheet as at 31 December 2023;
2
the following consolidated statements for 2023: the profit and loss account, the statements of
comprehensive income, cash flows and changes in equity; and
3
the notes comprising material accounting policy information and other explanatory
information.
T
he parent company accounts comprise:
1
the parent company balance sheet as at 31 December 2023;
2
the parent company profit and loss account for 2023; and
3
the notes comprising a summary of the accounting policies and other explanatory
information.
KPMG Accountants N.V., a Dutch limited liability company registered with the trade register in the Netherlands under number 33263683, is a member firm of the global organization of
independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.
2352823/23W00186489AVN
Independent auditor's report
To: The General Meeting of Shareholders and the Supervisory Board of NN Group N.V.
Report on the audit of the annual accounts 2023 included in the annual report
Our opinion
In our opinion:
— the accompanying consolidated annual accounts give a true and fair view of the financial
position of NN Group N.V. (‘the Group’) as at 31 December 2023 and of its result and its cash
flows for the year then ended, in accordance with International Financial Reporting Standards
as adopted by the European Union (EU-IFRS) and in accordance with Part 9 of Book 2 of the
Dutch Civil Code; and
— the accompanying parent company annual accounts give a true and fair view of the financial
position of NN Group N.V. as at 31 December 2023 and of its results for the year then ended
in accordance with Part 9 of Book 2 of the Dutch Civil Code.
1 the consolidated balance sheet as at 31 December 2023;
2 the following consolidated statements for 2023: the profit and loss account, the statements of
comprehensive income, cash flows and changes in equity; and
3 the notes comprising material accounting policy information and other explanatory
information.
The parent company accounts comprise:
1 the parent company balance sheet as at 31 December 2023;
2 the parent company profit and loss account for 2023; and
3 the notes comprising a summary of the accounting policies and other explanatory
information.
What we have audited
We have audited the 2023 annual accounts of NN Group N.V. based in Amsterdam and
headquartered in The Hague, as set out on pages 170 to 344 of the annual report. The annual
accounts include the consolidated annual accounts and the parent company annual accounts.
The consolidated annual accounts comprise:
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
346
NN Group N.V.
2023 Annual Report
2
2814028/24W00191755AVN
Basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards on
Auditing. Our responsibilities under those standards are further described in the ‘Our
responsibilities for the audit of the annual accounts’ section of our report.
We are independent of NN Group N.V. in accordance with the ‘Verordening inzake de
onafhankelijkheid van accountants bij assurance-opdrachten’ (ViO, Code of Ethics for
Professional Accountants, a regulation with respect to independence) and other relevant
independence regulations in the Netherlands. Furthermore, we have complied with the
‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of Ethics).
We designed our audit procedures in the context of our audit of the annual accounts as a whole
and in forming our opinion thereon. The information in respect of going concern, fraud and non-
compliance with laws and regulations, climate change and the key audit matters was addressed
in this context, and we do not provide a separate opinion or conclusion on these matters.
We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Information in support of our opinion
Summary
Materiality
• Materiality of EUR 200 million
• 1% of shareholders’ equity
Group audit
• Audit coverage of 90% of shareholders’ equity
• Audit coverage of 97% of total assets
Risk of material misstatements related to Fraud, NOCLAR, Going concern and Climate
change
• Fraud risks: presumed risk of management override of controls and presumed risk of
revenue recognition as further described in the section ‘Audit response to the risk of fraud
and non-compliance with laws and regulations’
• Non-compliance with laws and regulations (NOCLAR) risks: no reportable risk of material
misstatements related to NOCLAR risks identified
• Going concern risks: no going concern risks identified
• Climate-related risks: we have considered the impact of the risks of climate change on the
annual accounts and described our approach and observations in the section ‘Audit
response to risks of climate change’
3
2814028/24W00191755AVN
Key audit matters
• Initial application of IFRS 17
• Valuation of insurance contract liabilities for life and disability insurance contracts applying
the General Measurement Model Approach
• Unit-linked exposure
• Valuation of illiquid investments
Materiality
Based on our professional judgement we determined the materiality for the annual accounts as a
whole at EUR 200 million (2022: EUR 140 million). The materiality is determined with reference
to shareholders’ equity and amounts to 1%. We deem the increase from EUR 140 million to
EUR 200 million appropriate as the relative impact of 1% remains similar to previous years.
In 2022 we determined our materiality based on 1% of shareholders’ equity minus revaluation
reserves to take into account the valuation mismatch between insurance contract liabilities
measured at locked-in assumptions and investments measured at fair value through other
comprehensive income. This mismatch disappeared with the application of IFRS 17 Insurance
Contracts and IFRS 9 Financial Instruments in 2023 and therefore we use shareholders’ equity
(unadjusted) as from this year.
We consider shareholders’ equity as the most appropriate benchmark based on our assessment
of the general information needs of the users of the annual accounts of insurance companies.
We have also taken into account misstatements and/or possible misstatements that in our
opinion are material for the users of the annual accounts for qualitative reasons.
We agreed with the Audit Committee of the Supervisory Board that misstatements identified
during our audit in excess of EUR 10 million (2022: EUR 7 million) would be reported to them, as
well as smaller misstatements that in our view must be reported on qualitative grounds.
Independent Auditor’s Report continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
347
NN Group N.V.
2023 Annual Report
3
2814028/24W00191755AVN
Key audit matters
• Initial application of IFRS 17
• Valuation of insurance contract liabilities for life and disability insurance contracts applying
the General Measurement Model Approach
• Unit-linked exposure
• Valuation of illiquid investments
Materiality
Based on our professional judgement we determined the materiality for the annual accounts as a
whole at EUR 200 million (2022: EUR 140 million). The materiality is determined with reference
to shareholders’ equity and amounts to 1%. We deem the increase from EUR 140 million to
EUR 200 million appropriate as the relative impact of 1% remains similar to previous years.
In 2022 we determined our materiality based on 1% of shareholders’ equity minus revaluation
reserves to take into account the valuation mismatch between insurance contract liabilities
measured at locked-in assumptions and investments measured at fair value through other
comprehensive income. This mismatch disappeared with the application of IFRS 17 Insurance
Contracts and IFRS 9 Financial Instruments in 2023 and therefore we use shareholders’ equity
(unadjusted) as from this year.
We consider shareholders’ equity as the most appropriate benchmark based on our assessment
of the general information needs of the users of the annual accounts of insurance companies.
We have also taken into account misstatements and/or possible misstatements that in our
opinion are material for the users of the annual accounts for qualitative reasons.
We agreed with the Audit Committee of the Supervisory Board that misstatements identified
during our audit in excess of EUR 10 million (2022: EUR 7 million) would be reported to them, as
well as smaller misstatements that in our view must be reported on qualitative grounds.
Independent Auditor’s Report continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
348
NN Group N.V.
2023 Annual Report
4
2814028/24W00191755AVN
Scope of the group audit
NN Group N.V. is at the head of a group of components. The financial information of this group is
included in the consolidated annual accounts of the Group. The components of the Group are
structured along six segments: Netherlands Life, Netherlands Non-life, Insurance Europe, Japan
Life, Banking and Other, each comprising multiple legal entities and/or covering different
countries.
Our group audit mainly focused on significant components. These significant components are
either individually financially significant due to their relative size within the Group or because we
assigned a significant risk of material misstatement to one or more account balances of the
component. In addition, we included certain components in the scope of our group audit in order
to arrive at a sufficient coverage for all relevant significant account balances.
All components in scope for group reporting purposes are audited by KPMG member firms. We
sent audit instructions to all component auditors, covering significant areas including the relevant
risks of material misstatement and set out the information required to be reported to the group
audit team. We visited locations in the Netherlands, Spain, Belgium, Poland and Czech
Republic, where we met with local management and discussed the audit work performed with
the local audit teams and performed detailed file reviews.
With all components in scope of our group audit, we discussed the planning, risk assessment,
procedures performed, findings and observations reported to the group auditor and any
additional work deemed necessary by the group audit team was then performed.
The group audit team has set component materiality levels, which ranged from EUR 10 million to
EUR 150 million, based on the mix of size and risk profile of the components within the Group.
The consolidation of the Group, the disclosures in the annual accounts and certain accounting
topics are audited by the group audit team. The topics on which audit procedures are performed
by the group audit team include, but are not limited to, assessment of the use of the going
concern assumption, intangible assets including goodwill, equity, staff expenses and other
operating expenses in the Netherlands, centralised processes, certain elements of the risk and
capital management disclosures, corporate income tax for the Dutch fiscal unity and legal
proceedings.
By performing the procedures mentioned above at components, together with additional
procedures at group level, we have been able to obtain sufficient and appropriate audit evidence
about the Group’s financial information to provide an opinion about the annual accounts.
Our procedures as described above can be summarized as follows:
5
2814028/24W00191755AVN
Shareholders’ equity
77 %
13%
10 %
Audit of the complete
reporting package
Audit of specific
Items
Covered by additional procedures
performed at group level
Total assets
89%
8%
3%
Audit of the complete
reporting package
Audit of specific
items
Covered by additional procedures
performed at group level
Audit response to the risk of fraud and non-compliance with laws and regulations
As part of our audit, we have gained insights into the Group and its business environment and
the Group’s risk management in relation to fraud and non-compliance. Our procedures included,
among other things, assessing the Group’s code of conduct, whistleblowing procedures,
incidents register and its procedures to investigate indications of possible fraud and non-
compliance. Furthermore, we performed relevant inquiries with the Executive Board, the
Supervisory Board and other relevant functions, such as Corporate Audit Services, Legal
Counsel and Compliance and included correspondence with relevant supervisory authorities and
regulators in our evaluation. We involved forensic specialists for the execution of our audit. We
have also incorporated elements of unpredictability in our audit, such as rotation in scoping and
enquiries with officers of the Group’s Corporate Security department.
In addition, we performed procedures to obtain an understanding of the legal and regulatory
frameworks that are applicable to the Group.
As a result from our risk assessment, we identified the following laws and regulations as those
most likely to have a material effect on the annual accounts in case of non-compliance:
— Wet op het financieel toezicht (Wft) (including the European Solvency II directives);
— Financial and economic crime (FEC) related laws and regulations; and
— Data privacy regulation (GDPR).
Based on the above and on the auditing standards, we identified the following fraud risks that are
relevant to our audit, including the relevant presumed risks laid down in the auditing standards in
respect of management override of controls and revenue recognition.
Independent Auditor’s Report continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
349
NN Group N.V.
2023 Annual Report
5
2814028/24W00191755AVN
Shareholders’ equity
77 %
13%
10 %
Audit of the complete
reporting package
Audit of specific
Items
Covered by additional procedures
performed at group level
Total assets
89%
8%
3%
Audit of the complete
reporting package
Audit of specific
items
Covered by additional procedures
performed at group level
Audit response to the risk of fraud and non-compliance with laws and regulations
As part of our audit, we have gained insights into the Group and its business environment and
the Group’s risk management in relation to fraud and non-compliance. Our procedures included,
among other things, assessing the Group’s code of conduct, whistleblowing procedures,
incidents register and its procedures to investigate indications of possible fraud and non-
compliance. Furthermore, we performed relevant inquiries with the Executive Board, the
Supervisory Board and other relevant functions, such as Corporate Audit Services, Legal
Counsel and Compliance and included correspondence with relevant supervisory authorities and
regulators in our evaluation. We involved forensic specialists for the execution of our audit. We
have also incorporated elements of unpredictability in our audit, such as rotation in scoping and
enquiries with officers of the Group’s Corporate Security department.
In addition, we performed procedures to obtain an understanding of the legal and regulatory
frameworks that are applicable to the Group.
As a result from our risk assessment, we identified the following laws and regulations as those
most likely to have a material effect on the annual accounts in case of non-compliance:
— Wet op het financieel toezicht (Wft) (including the European Solvency II directives);
— Financial and economic crime (FEC) related laws and regulations; and
— Data privacy regulation (GDPR).
Based on the above and on the auditing standards, we identified the following fraud risks that are
relevant to our audit, including the relevant presumed risks laid down in the auditing standards in
respect of management override of controls and revenue recognition.
Independent Auditor’s Report continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
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We have responded as follows:
Management override of controls (a presumed fraud risk)
Risk
Management is in a unique position to manipulate accounting records and prepare fraudulent
annual accounts by overriding controls that otherwise appear to be operating effectively such as
those related to journal entries and accounting estimates which require significant judgement
such as the valuation of insurance liabilities and investments.
Response
— We assessed the design and the implementation of internal controls that mitigate the risk of
fraud such as processes related to journal entries and key estimates.
— We performed data analysis of high-risk journal entries and evaluated key estimates and
judgements for bias by the Group, including retrospective reviews of prior year’s estimates.
— Where we identified instances of unexpected journal entries or other risks through our data
analysis we performed additional audit procedures to address each identified risk. These
procedures also included testing of transactions back to source information.
— We incorporated elements of unpredictability in our audit, such as rotation in scoping and
enquiries with officers of the Group’s Corporate Security department.
— We considered the outcome of our other audit procedures and evaluated whether any
findings or misstatements were indicative of fraud or non-compliance. If so, we re-evaluated
our assessment of relevant risks and its resulting impact on our audit procedures.
We refer to the key audit matters below that provide information of our approach related to areas
of higher risk due to accounting estimates where management makes significant judgements.
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Revenue recognition (a presumed fraud risk)
Risk and response
Insurance revenue for the period based on the General Measurement Model Approach (GMM) is
to a large extent determined by the key assumptions made for the measurement of related
insurance contract liabilities. We have covered our assessment of the risk of fraudulent revenue
recognition and our response thereto in the key audit matter below “Valuation of insurance
contract liabilities for life and disability insurance contracts applying the General Measurement
Model Approach”.
We communicated our risk assessment, audit responses and results to management and the
Audit Committee of the Supervisory Board. Our audit procedures did not reveal indications
and/or reasonable suspicion of fraud and non-compliance that are considered material for our
audit.
Audit response to going concern
The Executive Board has performed its going concern assessment and has not identified any
going concern risks. To assess management’s assessment, we have performed, inter alia, the
following procedures:
— We considered whether management’s assessment of the going concern risks included all
relevant information of which we are aware as a result of our audit.
— We assessed whether the scenarios included in the Own Risk Solvency Assessment (ORSA)
and Preparatory Crisis Plan that were submitted to De Nederlandsche Bank N.V. (the Dutch
Central Bank, DNB) and other regulatory correspondence indicate a significant going concern
risk.
— We considered whether the outcome of our audit procedures on the Group’s financial position
and Solvency II capital position indicate a significant going concern risk.
The outcome of our risk assessment procedures did not give reason to perform additional audit
procedures on management’s going concern assessment.
Independent Auditor’s Report continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
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Revenue recognition (a presumed fraud risk)
Risk and response
Insurance revenue for the period based on the General Measurement Model Approach (GMM) is
to a large extent determined by the key assumptions made for the measurement of related
insurance contract liabilities. We have covered our assessment of the risk of fraudulent revenue
recognition and our response thereto in the key audit matter below “Valuation of insurance
contract liabilities for life and disability insurance contracts applying the General Measurement
Model Approach”.
We communicated our risk assessment, audit responses and results to management and the
Audit Committee of the Supervisory Board. Our audit procedures did not reveal indications
and/or reasonable suspicion of fraud and non-compliance that are considered material for our
audit.
Audit response to going concern
The Executive Board has performed its going concern assessment and has not identified any
going concern risks. To assess management’s assessment, we have performed, inter alia, the
following procedures:
— We considered whether management’s assessment of the going concern risks included all
relevant information of which we are aware as a result of our audit.
— We assessed whether the scenarios included in the Own Risk Solvency Assessment (ORSA)
and Preparatory Crisis Plan that were submitted to De Nederlandsche Bank N.V. (the Dutch
Central Bank, DNB) and other regulatory correspondence indicate a significant going concern
risk.
— We considered whether the outcome of our audit procedures on the Group’s financial position
and Solvency II capital position indicate a significant going concern risk.
The outcome of our risk assessment procedures did not give reason to perform additional audit
procedures on management’s going concern assessment.
Independent Auditor’s Report continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
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Audit response to risks of climate change
The Group has set out its commitments and ambitions relating to climate change in the annual
report. This includes the commitment to reduce greenhouse gas (GHG) emissions to net-zero in
its own operations by 2040, as well as in the investment portfolio and insurance underwriting by
2050.
The Executive Board is responsible for preparing the annual accounts in accordance with the
applicable financial reporting framework, including considering whether the implications from
climate change risks and commitments have been appropriately accounted for and disclosed.
Climate change represents a key risk for the Group through which they are exposed via both
sides of the balance sheet: through the valuation of investments on the asset side and insurance
exposures on the liability side. The Group identified the risk of climate change as an emerging
risk which is still developing and could affect the viability of the Group’s strategy.
Chapter 2 of the annual report ‘Our operating environment’ provides an overview of material
sustainability matters for the group based on a double materiality assessment and highlighting
that climate change adaption and mitigation belong to the most material sustainability topics.
Chapter 5 of the annual report ‘Managing our risks’ provides an overview of the Group’s risk
management approach to sustainability risks including the risks of climate change. Climate
change risk management is also covered in the Risk Management paragraph in Note 50 of the
annual accounts.
We have performed a risk assessment of the potential impact of climate change on the 2023
annual accounts and disclosures, including significant judgements and estimates in the annual
accounts to determine whether the annual accounts are free from material misstatement. For
that purpose we have made enquiries of the Sustainability Officer of the Management Board and
other management to understand the extent of the potential impact of climate change risk on the
annual accounts, we have evaluated climate related fraud risk factors where none have been
identified, inspected minutes and other documentation as well as external communications by
the Group regarding significant climate related commitments, strategies and plans made by
management. In performing our procedures we involved our own climate risk experts to assist
with our risk assessment.
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Based on the procedures performed above, we did not identify a risk of material misstatement
specific to the risk of climate change in the 2023 annual accounts under the requirements of the
International Financial Reporting Standards as adopted by the European Union (EU-IFRS) and
with Part 9 of Book 2 of the Dutch Civil Code and no material impact on our key audit matters.
We audited Note 50 ‘Risk Management’ of the annual accounts and assess the climate change
related disclosure as balanced.
Furthermore we have read the ‘Other information’ as included in the annual report with respect to
climate change related risks and considered whether such information contains material
inconsistencies with the annual accounts or our knowledge obtained through the audit, in
particular as described above and our knowledge obtained otherwise.
Our key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the annual accounts. We have communicated the key audit matters to
the Executive Board and the Audit Committee of the Supervisory Board. The key audit matters
are not a comprehensive reflection of all matters discussed.
These matters were addressed in the context of our audit of the annual accounts as a whole and
in forming our opinion thereon, and we do not provide a separate opinion on these matters.
With the initial application of IFRS 17 Insurance contracts as from 1 January 2023 we have
amended and updated our approach for the audit of insurance contract liabilities which resulted
in a revised key audit matter on this topic : ‘Valuation of insurance contract liabilities for life and
disability insurance contracts applying the General Measurement Model Approach’. Given the
complexity of IFRS 17 and the significant effort and management judgment required to
implement the new standard, we paid significant attention to address the risk of material
misstatement from the initial application of IFRS 17 as at 1 January 2022 (transition date) for
which we included the key audit matter ‘Initial application of IFRS 17. For our audit of insurance
contract liabilities under IFRS 17 we cover certain critical processes and controls that also form
part of the Solvency II reporting chain. For that reason the key audit matter ‘Solvency II
disclosures’ on which we reported last year has not been included anymore. Next to IFRS 17
also IFRS 9 Financial instruments has been applied for the first time this year. In Note 1
‘Accounting policies’ of the annual accounts management explained that the impact of IFRS 9 is
most relevant to the remeasurement of investments in mortgages loans by the insurance entities
from amortised cost to fair value. Our response thereto has been captured in key audit matter
‘Valuation of Illiquid Investments’.
Independent Auditor’s Report continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
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Based on the procedures performed above, we did not identify a risk of material misstatement
specific to the risk of climate change in the 2023 annual accounts under the requirements of the
International Financial Reporting Standards as adopted by the European Union (EU-IFRS) and
with Part 9 of Book 2 of the Dutch Civil Code and no material impact on our key audit matters.
We audited Note 50 ‘Risk Management’ of the annual accounts and assess the climate change
related disclosure as balanced.
Furthermore we have read the ‘Other information’ as included in the annual report with respect to
climate change related risks and considered whether such information contains material
inconsistencies with the annual accounts or our knowledge obtained through the audit, in
particular as described above and our knowledge obtained otherwise.
Our key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the annual accounts. We have communicated the key audit matters to
the Executive Board and the Audit Committee of the Supervisory Board. The key audit matters
are not a comprehensive reflection of all matters discussed.
These matters were addressed in the context of our audit of the annual accounts as a whole and
in forming our opinion thereon, and we do not provide a separate opinion on these matters.
With the initial application of IFRS 17 Insurance contracts as from 1 January 2023 we have
amended and updated our approach for the audit of insurance contract liabilities which resulted
in a revised key audit matter on this topic : ‘Valuation of insurance contract liabilities for life and
disability insurance contracts applying the General Measurement Model Approach’. Given the
complexity of IFRS 17 and the significant effort and management judgment required to
implement the new standard, we paid significant attention to address the risk of material
misstatement from the initial application of IFRS 17 as at 1 January 2022 (transition date) for
which we included the key audit matter ‘Initial application of IFRS 17. For our audit of insurance
contract liabilities under IFRS 17 we cover certain critical processes and controls that also form
part of the Solvency II reporting chain. For that reason the key audit matter ‘Solvency II
disclosures’ on which we reported last year has not been included anymore. Next to IFRS 17
also IFRS 9 Financial instruments has been applied for the first time this year. In Note 1
‘Accounting policies’ of the annual accounts management explained that the impact of IFRS 9 is
most relevant to the remeasurement of investments in mortgages loans by the insurance entities
from amortised cost to fair value. Our response thereto has been captured in key audit matter
‘Valuation of Illiquid Investments’.
Independent Auditor’s Report continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
354
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1. Initial application of IFRS 17ments
Description
IFRS 17 Insurance Contracts was implemented by the Group on 1 January 2023. This new
standard requires the Group to measure insurance contract liabilities at current values
which involves significant judgement and estimates and resulted in a significant decrease in
shareholders’ equity as of 1 January 2022 (transition date). We determined the initial
application of IFRS 17 and related disclosures in the 2023 annual accounts to be a key
audit matter because of the significance and complexity of the changes introduced by
the standard, including a number of new estimates requiring significant management
judgement such as the recognition of the Contractual Service Margin (‘CSM’).
Our response
— We assessed whether the judgements applied by management in determining their
accounting policies are in accordance with IFRS 17 and challenged significant new
accounting policies, choices and assumptions made against the requirements of the
standard.
— We assessed the appropriateness of management’s selection and application of the
transition approaches for each group of insurance contracts to determine the
transitional adjustments.
— Considering the relevance of the fair value approach for the Group at transition date in
determining the transitional adjustments, we assessed, together with our actuarial
specialists, key assumptions in the fair value of contractual cash flows, in particular the
cost of capital rate used for the measurement of the risk adjustment and the applied
discount rate.
— For the discount rate applied to determine the fair value of insurance contract liabilities
we involved our valuation specialists to assess and challenge compliance with the
requirements of IFRS 13 Fair Value Measurement. We also assessed consistency
applied by management for the elements to determine the discount rate such as the
used base curves and last liquid point.
— We assessed the selection of the General Measurement Models and Variable Fee
Approach Measurement Models and the application thereof for the groups of contracts
identified.
— We involved our actuarial specialists to evaluate the appropriateness of new
methodologies and models including estimates and discounting of the IFRS 17
fulfilment cash flows, risk adjustment and CSM. This included consideration of the
reasonableness of assumptions and judgements applied, including whether or not there
was any indication of intentional management bias.
— We compared the outcome of the insurance contract liability measurement under IFRS
17 with the best estimate liability and risk margin under Solvency 2, using
management’s analysis and we assessed differences against our expectations for
differences in measurement principles and assumptions.
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— We assessed the appropriateness of quantitative and qualitative transitional disclosures
included in Note 1 ‘Accounting Policies’ of the 2023 annual accounts, against the
requirements of the IFRS 17 standard.
Our observation
We consider the transitional impact from the initial application of IFRS 17 at transition date
and related disclosures to be appropriate. Refer to Note 1 ‘Accounting Policies’.
2. Valuation of insurance contract liabilities for life and disability insurance contracts
applying the General Measurement Model Approach
Description
Insurance and investment contract liabilities (in short: insurance liabilities) amount to
EUR 148.829 million as at 31 December 2023, or 79% of total liabilities. The valuation of
insurance liabilities involves the use of cash flow models and methodologies and requires
significant management judgement over assumptions.
Elements that give rise to a significant risk of error are the use of incorrect assumptions in
estimating the fulfillment cash flows under the General Measurement Model. Key
assumptions for the valuation of life insurance contracts relate to expenses, inflation,
longevity and the discount rate. For disability contracts key assumptions relate to morbidity
and the discount rate.
As referred to in the section ‘Audit response to the risk of fraud and non-compliance with
laws and regulations’ in this audit opinion, assumption setting inherently include the risk of
fraud that management may influence assumptions to manage the outcome of calculations
and measurements. For example as management may feel the pressure to achieve certain
key performance targets communicated internally and externally. We consider the most
critical assumptions in this regard the longevity assumption and expense/inflation
assumption for life insurance contracts and the morbidity assumption for disability
contracts.
Given the financial significance, the level of judgement required and the inherent risk of
fraud we considered the valuation of insurance contract liabilities for life and disability
insurance contracts applying the General Measurement Model Approach a key audit
matter.
Our response
Our audit approach is a mixture of controls testing and substantive audit procedures. Our
procedures over internal controls focused on testing of controls around assumption setting
and internal review procedures performed by the actuarial functions active in the
components and at Group level. We also assessed the process for the internal validation
and implementation of the models used for the valuation of the insurance liabilities.
Independent Auditor’s Report continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
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—
We assessed the appropriateness of quantitative and qualitative transitional disclosures
included in Note 1 ‘Accounting Policies’ of the 2023 annual accounts, against the
requirements of the IFRS 17 standard.
Our observation
We consider the transitional impact from the initial application of IFRS 17 at transition date
and related disclosures to be appropriate. Refer to Note 1 ‘Accounting Policies’.
2. Valuation of insurance contract liabilities for life and disability insurance contracts
applying the General Measurement Model Approach
Description
Insurance and investment contract liabilities (in short: insurance liabilities) amount to
EUR 148.829 million as at 31 December 2023, or 79% of total liabilities. The valuation of
insurance liabilities involves the use of cash flow models and methodologies and requires
significant management judgement over assumptions.
Elements that give rise to a significant risk of error are the use of incorrect assumptions in
estimating the fulfillment cash flows under the General Measurement Model. Key
assumptions for the valuation of life insurance contracts relate to expenses, inflation,
longevity and the discount rate. For disability contracts key assumptions relate to morbidity
and the discount rate.
As referred to in the section ‘Audit response to the risk of fraud and non-compliance with
laws and regulations’ in this audit opinion, assumption setting inherently include the risk of
fraud that management may influence assumptions to manage the outcome of calculations
and measurements. For example as management may feel the pressure to achieve certain
key performance targets communicated internally and externally. We consider the most
critical assumptions in this regard the longevity assumption and expense/inflation
assumption for life insurance contracts and the morbidity assumption for disability
contracts.
Given the financial significance, the level of judgement required and the inherent risk of
fraud we considered the valuation of insurance contract liabilities for life and disability
insurance contracts applying the General Measurement Model Approach a key audit
matter.
Our response
Our audit approach is a mixture of controls testing and substantive audit procedures. Our
procedures over internal controls focused on testing of controls around assumption setting
and internal review procedures performed by the actuarial functions active in the
components and at Group level. We also assessed the process for the internal validation
and implementation of the models used for the valuation of the insurance liabilities.
Independent Auditor’s Report continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
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With the assistance of our actuarial specialists we performed the following substantive audit
procedures:
— We assessed the appropriateness of assumptions used in the valuation of the
insurance liabilities for all significant components by reference to company data as well
as relevant market and industry data.
— We tested the appropriateness of the data used, assumptions and methodologies
applied in the valuation of insurance contract liabilities for all significant components.
— We assessed and tested the appropriateness of the discount rate and challenged the
methodology used to determine the discount rate, including management’s assessment
of the last liquid point and the illiquidity premium of which the unexpected credit loss
adjustment forms an integral part.
— We performed substantive analysis of developments in actuarial results and movements
in provisions, the risk adjustment, CSM and other comprehensive income during the
year and made corroborative inquiries with management and the Group Chief Actuary.
— For life insurance contracts, we also challenged and assessed:
- The data used and expert judgment applied by management in determining the
Covid-19 excess mortality impact on the level and trend of the longevity
assumptions. We also derived our own estimate for such an impact based on
publicly available mortality data and compared the outcome with management’s
estimate in order to identify potential indicators of management bias of assumptions
changes made.
- The appropriateness of management’s estimate of expense cash flow projections for
Life products, assessing the main assumptions underlying the expected wage cost
development, inflation assumptions, future savings and the appropriateness of the
allocation keys used to allocate expenses and determine the cost per policy.
- Regarding expense inflation we reperformed management’s regression analysis for
estimating the impact of current inflation levels on long term inflation expectations for
life insurance contracts. We challenged the modelling of 2022 and 2023 inflation
data and expert judgment applied by management for outliers during these years
using published authoritative available market data.
— For disability contracts we challenged and assessed the appropriateness of the
morbidity assumption and assessed that the morbidity assumption is in line with
historical data and expected developments.
Our observation
We consider the valuation of the insurance contract liabilities measured using the General
Measurement Model Approach to be appropriate. We refer to Note 13 ‘Insurance contracts’
of the annual accounts. Our audit procedures did not reveal indications and/or reasonable
suspicion of fraud that are considered material for our audit.
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3. Unit-linked exposure
Description
Holders of unit-linked products sold in the Netherlands, or interest groups on their behalf, have
filed claims or initiated legal proceedings against the Group and may continue to do so. A
negative outcome of such claims and proceedings, settlements, or any other actions to the
benefit of the customers by other insurers or sector-wide measures, may affect the (legal)
position of the Group and could result in substantial financial losses for the Group as and when
compensation would be required.
On 9 January 2024 the Group announced that it has agreed on a settlement with all interest
groups for an amount of approximately EUR 300 million. The settlement relates to unit-linked
insurance products of customers affiliated with one of the interest groups. All legal proceedings
will be discontinued and no new legal proceedings may be initiated by the interest groups and
affiliated parties. Once all details relating to the execution of the settlement are finalised,
customers will receive their individual proposal through their respective interest group. The
agreement will be final once 90% of these customers agree with their proposal. NN expects
this process to take until the end of 2024. To cover the settlement costs, a provision of
approximately EUR 300 million was recognised in 2023. An additional provision of
EUR 60 million was recognised for hardship cases and customers unaffiliated with one of the
interest groups who have not previously received compensation.
Due to the significance and judgement that is required to assess the developments with
respect to the unit linked exposure and the resultant accounting treatment we considered this
a key audit matter.
Our response
— We inspected and assessed supporting legal documentation and discussed on a quarterly
basis the evolving legal risks and proceedings with the legal counsel and its internal legal
advisors.
— This assessment took into account the interim judgment dated 26 September 2023 of the
Court of Appeal in The Hague in the collective proceedings initiated by Vereniging
Woekerpolis.nl against Nationale-Nederlanden Levensverzekering Maatschappij N.V. and
the outcome of unit linked related court activities of other insurers in the Netherlands during
the year.
— We inspected and assessed the settlement agreement with the relevant interest groups
dated 9 January 2024 and gained an understanding of the build-up and composition of the
agreed settlement amount.
— We challenged management’s assessment of the likelihood of a final settlement (90%
hurdle for the interest groups) that supports management’s recognition and measurement
of the provision of EUR 300 million in 2023.
— We assessed and challenged the documentation prepared by management to support the
recognition of the provision in 2023 for hardship cases and customers unaffiliated with one
of the interest groups who have not previously received compensation
— We assessed the unit-linked related disclosure in the annual accounts.
Independent Auditor’s Report continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
357
NN Group N.V.
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3. Unit-linked exposure
Description
Holders of unit-linked products sold in the Netherlands, or interest groups on their behalf, have
filed claims or initiated legal proceedings against the Group and may continue to do so. A
negative outcome of such claims and proceedings, settlements, or any other actions to the
benefit of the customers by other insurers or sector-wide measures, may affect the (legal)
position of the Group and could result in substantial financial losses for the Group as and when
compensation would be required.
On 9 January 2024 the Group announced that it has agreed on a settlement with all interest
groups for an amount of approximately EUR 300 million. The settlement relates to unit-linked
insurance products of customers affiliated with one of the interest groups. All legal proceedings
will be discontinued and no new legal proceedings may be initiated by the interest groups and
affiliated parties. Once all details relating to the execution of the settlement are finalised,
customers will receive their individual proposal through their respective interest group. The
agreement will be final once 90% of these customers agree with their proposal. NN expects
this process to take until the end of 2024. To cover the settlement costs, a provision of
approximately EUR 300 million was recognised in 2023. An additional provision of
EUR 60 million was recognised for hardship cases and customers unaffiliated with one of the
interest groups who have not previously received compensation.
Due to the significance and judgement that is required to assess the developments with
respect to the unit linked exposure and the resultant accounting treatment we considered this
a key audit matter.
Our response
— We inspected and assessed supporting legal documentation and discussed on a quarterly
basis the evolving legal risks and proceedings with the legal counsel and its internal legal
advisors.
— This assessment took into account the interim judgment dated 26 September 2023 of the
Court of Appeal in The Hague in the collective proceedings initiated by Vereniging
Woekerpolis.nl against Nationale-Nederlanden Levensverzekering Maatschappij N.V. and
the outcome of unit linked related court activities of other insurers in the Netherlands during
the year.
— We inspected and assessed the settlement agreement with the relevant interest groups
dated 9 January 2024 and gained an understanding of the build-up and composition of the
agreed settlement amount.
— We challenged management’s assessment of the likelihood of a final settlement (90%
hurdle for the interest groups) that supports management’s recognition and measurement
of the provision of EUR 300 million in 2023.
— We assessed and challenged the documentation prepared by management to support the
recognition of the provision in 2023 for hardship cases and customers unaffiliated with one
of the interest groups who have not previously received compensation
— We assessed the unit-linked related disclosure in the annual accounts.
Independent Auditor’s Report continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
358
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Our observation
We concur with the recognition and measurement of the provisions to cover the expected
settlement costs of the unit linked exposure and consider the disclosure on provisions in
Note 21 ‘Other liabilities’ and Note 43 ‘Legal proceedings’ to be appropriate.
4. Valuation of illiquid investments
Description
For illiquid (non-listed) investments quoted prices are not available and fair values are based
on valuation techniques which often involve the exercise of judgement by management and
the use of assumptions, estimates and valuation models. Where significant pricing inputs are
unobservable, management has no reliable, relevant market data available in determining the
fair value. For these illiquid investments the estimation uncertainty can be high, especially due
to increased market volatilities. This is mainly applicable to:
— mortgages held by the insurance entities, which following the implementation of IFRS 9 this
year are measured at fair value through other comprehensive income;
— real estate investments; and
— private equity and private debt investments.
Given the financial significance and estimation uncertainties we considered the valuation of
illiquid investments a key audit matter.
Our response
We assessed management’s approach to the valuation of illiquid investments and performed
the following procedures:
— We evaluated the Group’s processes and controls governing the valuation of non-listed
investments.
— We inspected the supporting valuation documents prepared by management’s internal and
external valuation experts.
— KPMG valuation specialists assisted us in challenging the appropriateness of the models
and methodologies used by management in calculating fair values of mortgages. We
tested the source data used and assessed the appropriateness of critical valuation
parameters. Our valuation specialists independently calculated whether the fair value for
the mortgage portfolio as a whole as determined by management is within the acceptable
fair value range.
— We involved our real estate valuation specialists in the substantive audit procedures of
selected real estate investments. We evaluated the objectivity, independence and
professional competence of external valuators engaged by management. We inspected the
valuation reports obtained, tested the source data used and the calculations made and
challenged significant assumptions such as the gross initial yield/discount rate and
estimated rental values.
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We assessed the assumptions used against available market data and object specific
underlying characteristics such as occupancy rates and contract renewals.
— We tested and challenged management’s valuation of private equity and private debt
investments by critically reviewing the minutes of the meetings of management with the
external fund managers, we tested the timeliness of such meetings and performed back
testing procedures to determine the reliability of the fair value estimates provided by the
external fund managers. We compared the movements in the valuations for the period with
available external market data and performed back testing on the prior year estimates, e.g.
by reconciliation of valuations to annual accounts of investments or comparison to sales
results.
— We assessed the disclosures in the annual accounts.
Our observation
We consider the fair value of illiquid investments to be appropriate. We observed that valuation
uncertainties in real estate investments remained significant in 2023 due to the limited number
of relevant market transactions to support the estimated yield levels that are used for valuation
purposes. We refer to Note 35 ‘Fair value of non-financial assets’ of the annual accounts in
which the real estate valuation uncertainties are disclosed.
Report on the other information included in the annual report
In addition to the annual accounts and our auditor’s report thereon, the annual report contains
other information.
Based on the following procedures performed, we conclude that the other information:
— is consistent with the annual accounts and does not contain material misstatements; and
— contains the information as required by Part 9 of Book 2 of the Dutch Civil Code for the
management report and other information.
We have read the other information. Based on our knowledge and understanding obtained
through our audit of the annual accounts or otherwise, we have considered whether the other
information contains material misstatements.
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the
Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is less
than the scope of those performed in our audit of the annual accounts.
The Executive Board is responsible for the preparation of the other information, including the
information as required by Part 9 of Book 2 of the Dutch Civil Code.
Independent Auditor’s Report continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
359
NN Group N.V.
2023 Annual Report
15
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We assessed the assumptions used against available market data and object specific
underlying characteristics such as occupancy rates and contract renewals.
— We tested and challenged management’s valuation of private equity and private debt
investments by critically reviewing the minutes of the meetings of management with the
external fund managers, we tested the timeliness of such meetings and performed back
testing procedures to determine the reliability of the fair value estimates provided by the
external fund managers. We compared the movements in the valuations for the period with
available external market data and performed back testing on the prior year estimates, e.g.
by reconciliation of valuations to annual accounts of investments or comparison to sales
results.
— We assessed the disclosures in the annual accounts.
Our observation
We consider the fair value of illiquid investments to be appropriate. We observed that valuation
uncertainties in real estate investments remained significant in 2023 due to the limited number
of relevant market transactions to support the estimated yield levels that are used for valuation
purposes. We refer to Note 35 ‘Fair value of non-financial assets’ of the annual accounts in
which the real estate valuation uncertainties are disclosed.
Report on the other information included in the annual report
In addition to the annual accounts and our auditor’s report thereon, the annual report contains
other information.
Based on the following procedures performed, we conclude that the other information:
— is consistent with the annual accounts and does not contain material misstatements; and
— contains the information as required by Part 9 of Book 2 of the Dutch Civil Code for the
management report and other information.
We have read the other information. Based on our knowledge and understanding obtained
through our audit of the annual accounts or otherwise, we have considered whether the other
information contains material misstatements.
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the
Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is less
than the scope of those performed in our audit of the annual accounts.
The Executive Board is responsible for the preparation of the other information, including the
information as required by Part 9 of Book 2 of the Dutch Civil Code.
Independent Auditor’s Report continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
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accounts
9 Other
information
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Report on other legal and regulatory requirements and ESEF
Engagement
We were engaged by the General Meeting of Shareholders as auditor of NN Group N.V. on
28 May 2015, as of the audit for the year 2016 and have operated as statutory auditor ever since
that financial year. We were reappointed by the General Meeting of Shareholders on
19 May 2022 to continue to serve the Group as its external auditor for the financial years
2023-2025.
No prohibited non-audit services
We have not provided prohibited non-audit services as referred to in Article 5(1) of the
EU Regulation on specific requirements regarding statutory audits of public-interest entities.
European Single Electronic Format (ESEF)
The Group has prepared its annual report in ESEF. The requirements for this are set out in the
Delegated Regulation (EU) 2019/815 with regard to regulatory technical standards on the
specification of a single electronic reporting format (hereinafter: the RTS on ESEF).
In our opinion, the annual report prepared in XHTML format, including the (partly) marked-up
consolidated annual accounts as included in the reporting package by NN Group N.V., complies
in all material respects with the RTS on ESEF.
The Executive Board is responsible for preparing the annual report including the annual
accounts in accordance with the RTS on ESEF, whereby the Executive Board combines the
various components into one single reporting package.
Our responsibility is to obtain reasonable assurance for our opinion whether the annual report in
this reporting package complies with the RTS on ESEF. We performed our examination in
accordance with Dutch law, including Dutch Standard 3950N ‘Assurance-opdrachten inzake het
voldoen aan de criteria voor het opstellen van een digitaal verantwoordingsdocument’
(assurance engagements relating to compliance with criteria for digital reporting).
Our examination included among others:
— Obtaining an understanding of the entity’s financial reporting process, including the
preparation of the reporting package.
— Identifying and assessing the risks that the annual report does not comply in all material
respects with the RTS on ESEF and designing and performing further assurance procedures
responsive to those risks to provide a basis for our opinion, including:
- Obtaining the reporting package and performing validations to determine whether the
reporting package containing the Inline XBRL instance document and the XBRL extension
taxonomy files have been prepared in accordance with the technical specifications as
included in the RTS on ESEF.
- Examining the information related to the consolidated annual accounts in the reporting
package to determine whether all required mark-ups have been applied and whether
these are in accordance with the RTS on ESEF.
17
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Description of responsibilities regarding the annual accounts
Responsibilities of the Executive Board and the Supervisory Board for the annual
accounts
The Executive Board is responsible for the preparation and fair presentation of the annual
accounts in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code.
Furthermore, the Executive Board is responsible for such internal control as management
determines is necessary to enable the preparation of the annual accounts that are free from
material misstatement, whether due to fraud or error. In that respect the Executive Board under
supervision of the Supervisory Board is responsible for the prevention and detection of fraud and
non-compliance with laws and regulations, including determining measures to resolve the
consequences of it and to prevent recurrence.
As part of the preparation of the annual accounts, the Executive Board is responsible for
assessing the Group’s ability to continue as a going concern. Based on the financial reporting
frameworks mentioned, the Executive Board should prepare the annual accounts using the going
concern basis of accounting unless the Executive Board either intends to liquidate
NN Group N.V. or to cease operations, or has no realistic alternative but to do so. The Executive
Board should disclose events and circumstances that may cast significant doubt on the Group’s
ability to continue as a going concern in the annual accounts. The Supervisory Board is
responsible for overseeing the Group’s financial reporting process.
Our responsibilities for the audit of the annual accounts
Our objective is to plan and perform the audit engagement in a manner that allows us to obtain
sufficient and appropriate audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means we
may not detect all material errors and fraud during our audit.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users
taken based on these annual accounts. The materiality affects the nature, timing and extent of
our audit procedures and the evaluation of the effect of identified misstatements on our opinion.
A further description of our responsibilities for the audit of the annual accounts is located at the
website of de ‘Koninklijke Nederlandse Beroepsorganisatie van Accountants’ (NBA, Royal
Netherlands Institute of Chartered Accountants) at eng_oob_01.pdf (nba.nl) /
eng_beursgenoteerd_01.pdf (nba.nl). This description forms part of our auditor’s report.
Amstelveen, 20 March 2024
KPMG Accountants N.V.
D. Korf RA
Independent Auditor’s Report continued
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
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2023 Annual Report
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Description of responsibilities regarding the annual accounts
Responsibilities of the Executive Board and the Supervisory Board for the annual
accounts
The Executive Board is responsible for the preparation and fair presentation of the annual
accounts in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code.
Furthermore, the Executive Board is responsible for such internal control as management
determines is necessary to enable the preparation of the annual accounts that are free from
material misstatement, whether due to fraud or error. In that respect the Executive Board under
supervision of the Supervisory Board is responsible for the prevention and detection of fraud and
non-compliance with laws and regulations, including determining measures to resolve the
consequences of it and to prevent recurrence.
As part of the preparation of the annual accounts, the Executive Board is responsible for
assessing the Group’s ability to continue as a going concern. Based on the financial reporting
frameworks mentioned, the Executive Board should prepare the annual accounts using the going
concern basis of accounting unless the Executive Board either intends to liquidate
NN Group N.V. or to cease operations, or has no realistic alternative but to do so. The Executive
Board should disclose events and circumstances that may cast significant doubt on the Group’s
ability to continue as a going concern in the annual accounts. The Supervisory Board is
responsible for overseeing the Group’s financial reporting process.
Our responsibilities for the audit of the annual accounts
Our objective is to plan and perform the audit engagement in a manner that allows us to obtain
sufficient and appropriate audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means we
may not detect all material errors and fraud during our audit.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users
taken based on these annual accounts. The materiality affects the nature, timing and extent of
our audit procedures and the evaluation of the effect of identified misstatements on our opinion.
A further description of our responsibilities for the audit of the annual accounts is located at the
website of de ‘Koninklijke Nederlandse Beroepsorganisatie van Accountants’ (NBA, Royal
Netherlands Institute of Chartered Accountants) at eng_oob_01.pdf (nba.nl) /
eng_beursgenoteerd_01.pdf (nba.nl). This description forms part of our auditor’s report.
Amstelveen, 20 March 2024
KPMG Accountants N.V.
D. Korf RA
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
362
NN Group N.V.
2023 Annual Report
Appropriation of result
Appropriation of result
The result is appropriated pursuant to Article 34 of the Articles of Association of NN Group N.V., the relevant stipulations of which
state that the appropriation of result shall be determined by the General Meeting, on the proposal of the Executive Board, as
approved by the Supervisory Board, having heard the advice of the Executive Board. It is proposed to add the 2023 net result less
the (interim and final) cash dividends to the retained earnings.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
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2023 Annual Report
We know that the choices we
make today impact our world
of tomorrow. In this reference
section, we show where we have
included TCFD recommendations
and we share our glossary
of definitions.
9 Other information
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
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NN Group N.V.
2023 Annual Report
Our response to the Task Force on Climate-related Financial Disclosures (TCFD)
TCFD recommended disclosures Annual report reference
Governance a) Describe the board’s oversight of
climate-related risks and opportunities.
6. Corporate Governance – Sustainability Governance,
page 104
b) Describe management’s role in
assessing and managing climate-
related risks and opportunities.
Strategy a) Describe the climate-related risks and
opportunities the organisation has
identified over the short, medium, and
long term.
Opportunities: 2. Our operating environment –
Determining our material matters – Connectivity
matrix, page 13
Risks: 5. Managing our risks – managing our risks,
strategic risks assessment, pages 67–70
Sustainability and climate change risk management,
pages 71–77
b) Describe the impact of climate-related
risks and opportunities on the
organisation’s businesses, strategy,
and financial planning.
– Corporate Governance – Sustainability Governance –
Strategy setting, page 104
– 4. Creating value for our stakeholders –Creating a
positive impact on society, pages 42–57
c) Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-related
scenarios, including a 2°C or lower
scenario.
4. Creating value for our stakeholders – Creating a
positive impact on society, pages 42–57
Risk Management a) Describe the organisation’s processes
for identifying and assessing climate-
related risks.
a) 5. Managing our risks – managing our risks, strategic
risk assessment, pages 67–70
b) 5. Managing our risks – Sustainability and climate
change risk management, pages 71–77
c) 5. Managing our risks – managing our risks, strategic
risks assessment, pages 67–70
b) Describe the organisation’s processes
for managing climate-related risks.
c) Describe how processes for identifying,
assessing, and managing climate-
related risks are integrated into the
organisation’s overall risk management.
Metrics and Targets a) Disclose the metrics used by the
organisation to assess climate-related
risks and opportunities in line with its
strategy and risk management process.
7. Facts and figures – Key financial and strategic
indicators, pages 128–133
7. Facts and figures – Carbon footprint proprietary
assets, pages 134–140
b) Disclose scope 1, scope 2, and, if
appropriate, scope 3 greenhouse gas
(GHG) emissions, and the related risks.
7. Facts and figures – Environmental indicators, page
133
7. Facts and figures – Carbon footprint proprietary
assets, pages 134–140
7. Facts and figures – EU Taxonomy disclosure, pages
141–164
c) Describe the targets used by the
organisation to manage climate-related
risks and opportunities and performance
against targets.
4. Creating value for our stakeholders – Progress net-
zero strategy, pages 48–52
We describe in this section the specific activities we undertake to manage climate and other related Environmental, Social and
Governance (ESG) risks.
We have reported on climate change since the financial year 2017 in accordance with the Financial Stability Board’s Task Force on
Climate-related Financial Disclosures (TCFD). This section shows the reference to the relevant chapters where we have included
the TCFD recommendations structured along the four TCFD pillars: governance, strategy, risk management, and metrics and
targets. For further information on NN Group’s sustainability strategy, policies and performance, please visit the NN Group website
page Our climate approach or contact us via sustainability@nn-group.com.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
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accounts
9 Other
information
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2023 Annual Report
Glossary
Annual total compensation Compensation provided over the course of a year.
Average FTE Average FTE in the business unit for whom sick leave is registered. Definition of total workdays: either 365
or the number of actual working days of the reported year for a full-time FTE.
Average years of service Average of all service years of all employees. Service years is calculated by looking at the years between
31/12/YYYY and the value of Continuous Service Years.
Base year Historical date (such as year) against which a measurement is tracked over time.
Baseline Starting point used for comparisons. In the context of energy and emissions reporting, the baseline is the
projected energy consumption or emissions in the absence of any reduction activity.
Business partner Entity with which the organisation has some form of direct and formal engagement for the purpose of
meeting its business objectives.
Business relationships Relationships that the organisation has with business partners, with entities in its value chain including
those beyond the first tier (parties we have a direct contract with), and with any other entities directly linked
to its operations, products, or services
Business travel by air Greenhouse gas emissions (GHG) based on the total distance and cabin class of business travel by air by
NN employees.
CDP A global disclosure system for companies, cities, states and regions to manage their environmental impacts,
and for investors and purchasers to access environmental information for use in financial decisions.
Carbon Footprint of corporate
investments
We account for the scope 1, 2 and 3 emissions of corporates, retrieved from external data provider ISS
Ethix-Climate Solutions. In line with PCAF methodology, NN’s financed emissions for corporates is based on
our investment value relative to the issuer’s enterprise value.
We define Enterprise Value Including Cash (EVIC) as the sum of the market value of equity and total debt
without deducting cash. Our definition of EVIC differs slightly from that of PCAF as we use the market value
of debt rather than the book value of debt in calculating the total enterprise value.
We also calculate the portfolio’s weighted average carbon intensity metric to understand exposure to
carbon intensive companies. Portfolio’s exposure to carbon intensive companies, expressed as tCO
2
e/EUR
million company revenue. This normalises each company’s emissions by its sales. The weighted average is
then calculated by portfolio weight.
Carbon footprint of
government bonds
The GHG emissions associated with NN Group’s investments in government bonds. Our methodology
for calculating the carbon footprint of government bonds follows the PCAF Standard. This approach
considers all emissions generated within a sovereign’s territorial boundaries as defined by the UNFCCC
national emissions inventory, providing a comprehensive view of a sovereign’s responsibility in
generating emissions.
To calculate financed emissions, we use PPP-adjusted GDP as a proxy for the sovereign’s total value.
We divide the total amount invested by NN Group by GDP to accurately attribute emissions to our
investments in government bonds.
We report sovereign emissions separately from corporate and real estate investments to avoid double-
counting emissions generated within countries. In addition, we report sovereign emission data including
and excluding land use, land use change, and forestry emissions to provide a comprehensive view of our
impact on carbon emissions.
Carbon footprint of
mortgages
The GHG emissions associated with the total portfolio on the NN Group balance sheet of Dutch mortgages
originated and/or serviced by our own banking business. NN also has residential mortgages on the balance
sheet from external mortgage originators which are not included in this analysis.
We account for the scope 1 and 2 emissions of each house (i.e. the natural gas used to heat the house and
the purchased electricity by the occupant of the house the energy consumed by the building occupant).
We align with the global PCAF Standard, we attribute the emissions associated with a residential mortgage
to NN using a loan-to-value (LTV) ratio. The LTV used is the current loan-to-original-market-value ratio,
which is the net outstanding mortgage amount divided by the original property value. If these original
values are not available, the latest available property value will be used as denominator. We also take into
account the latest available market value when improvements have been made to the property.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
366
NN Group N.V.
2023 Annual Report
Glossary continued
Carbon footprint of real
estate investments
The GHG emissions of NN’s investments in non-listed real estate. This portfolio consists of directly managed
properties and non-listed real estate funds. The portfolio is spread over sectors and regions in Europe.
Our reporting covers scope 1, scope 2 and scope 3 tenant emissions. NN requires all its real estate asset
managers to participate in the GRESB Real Estate assessment, and as such we gather the emissions data
from GRESB. Non-disclosure in GRESB disclosure may occur due to a grace period for first-year reporting or
no reporting due to wind-down, these investments are then not included in the calculation.
For the calculation of the carbon footprint of our real estate investments portfolio, we attribute a real estate
fund’s annual emissions based on NN’s share in the fund. To determine this attribution factor, we used the
outstanding investment amounts (Net Asset Value or NAV) for the numerator and Gross Asset Value (GAV)
of the funds as reported to us by our real estate managers for the denominator. All investment amounts,
fund values and emissions are based on the most recent available data which is trailing by one year.
Climate solutions
(definitions of)
To support our Paris Alignment strategy, NN Group has developed an internal framework to define
‘climate solutions investments’ as part of its proprietary investments portfolio. We have defined
climate solutions as investments in economic activities that contribute substantially to climate change
mitigation or adaptation.
Classifying climate solutions investments, and in line with guidance from the IIGCC Paris Aligned
Investment Initiative, we focused on SDG 7-related areas of energy efficiency and renewable
energy. Furthermore, we supported our definitions with external certifications, asset labels, and
environmental standards where possible and relevant. Our definitions are as follows including our
specification of valuations:
• Green bonds: the green bonds we invest in are in line with the NN Green, Social and Sustainability
Bond Standard which is aligned with the ICMA’s Green Bond Principles and needs to be applied in
addition to the basic Responsible Investment (RI) criteria as described in the RI Framework Policy
and related standards. Valuation of the green bonds is on nominal values.
• Renewable energy infrastructure: Investments in projects (equity/debt) for renewable energy
infrastructure, such as in solar PV, offshore and onshore wind, hydrogen, storage and energy
efficiency. Valuation for Infrastructure equity is market values and for infrastructure debt
outstanding loan balances.
• Certified green buildings: within our real estate portfolio (equity/debt), our definition is limited to
assets with at least an Energy Performance Certificate (EPC) of class A, or if EPC is not available a
high level of building certification (BREAAM or HQE certification of at least ‘Excellent’, or LEED or
DGNB of at least ‘Gold’). Valuation for Certified green buildings is for equity investments on market
value and for debt investments outstanding loan balances.
• Other: Investments that do not fall into any of the categories above, including investments in
unlisted entities. For example, impact private equity funds that target and report on clearly defined
climate impact KPIs, or funds that have a broader ESG focus, but where clean and renewable energy
projects account for a substantial part of the fund. Valuation for other is market value.
Collective bargaining All negotiations that take place between one or more employers or employers’ organisations and one
or more workers’ organisations (e.g. trade unions), for determining working conditions and terms of
employment or for regulating relations between employers and workers.
Contributions to society The Business for Social Impact (B4SI) framework offers a consistent and credible approach to reporting and
impact measurement. This helps us track our contributions to society and is fully integrated into our internal
and external reporting. We aim to contribute to communities by supporting financial, physical and/or mental
well-being of one million people by 2025 (accumulative 2022-2025) and to contribute 1% of our operating
result before tax to our communities by 2023.
Customer engagement
measured through Net
Promoter Score (NPS)
The internationally recognised Net Promoter Score (NPS) system, one of the key metrics in the Global brand
Health Monitor (GBHM), measures how likely it is that our customers recommend our products and services
to colleagues, friends or family. We use relational NPS (NPS-r) to measure the strength of the relationship
with customers and gain understanding of customer satisfaction over time.
Customer privacy Right of the customer to privacy and personal refuge.
Direct (Scope 1) GHG
emissions
Greenhouse gas (GHG) emissions from sources that are owned or controlled by the organisation.
Distance-based method Involves determining the distance and transport mode of trips and applies the appropriate emission factor
for the transport mode used in line with the applicable GHG Protocol Standards.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
367
NN Group N.V.
2023 Annual Report
Glossary continued
Due diligence Process to identify, prevent, mitigate, and account for how the organisation addresses its actual and
potential negative impacts.
EIOPA European Insurance and Occupational Pensions Authority. EIOPA focuses on providing a sound regulatory
framework for and consistent supervision of insurance and occupational pensions sectors in Europe, and is
an independent advisory body to the European Commission, the European Parliament and the Council of the
European Union.
Emissions avoided of climate
solutions – renewable energy
investments
Following the PCAF guidance, emissions avoided in this category is reported as estimated emissions
that would have happened if investments have been directed in the same attribution to the electricity
generated by the least economically efficient energy generation facility. These hypothetical emissions
by the least economically efficient energy generation facility are used as a benchmark in this category.
Emissions avoided are calculated for all renewable energy assets in our infrastructure portfolios at the
end of 2022 over 2022 based on actual or estimated P90 renewable energy production data. We report
emissions avoided by attributing for both our share in a fund and the fund’s share in the asset, depending
on if the investment is direct or indirect. We use current face value for debt investments and market
value for equity investments. To estimate the electricity generated by the least economically efficient
energy generation facility, we rely on PCAF suggestions to use the operating margin data from UNFCCC
International Financial Institution.
Emissions avoided of climate
solutions – green buildings
Emissions avoided is reported as the difference in estimated emissions from investments in climate
solutions and estimated emissions that would have happened if investments in climate solutions were
instead invested in properties from the same country and sector with an average emission intensity.
Emissions from properties from the same country and sector with average emission intensity are used as
a benchmark in this category. This follows the definition provided in the Position Paper on Green Bonds
Impact Reporting by Nordic Public Sector Issuers. Emissions avoided are calculated for all climate solutions
investments in our real estate portfolios at the end of 2022 over 2022 based on GRESB data for equity
investments in green buildings and based on the property EPC rating and PCAF European building emission
factor database for debt investments in green buildings. We report emissions avoided by attributing for both
our share in a fund and the fund’s share in the asset, depending on if the investment is direct or indirect.
We use current face value for debt investments and gross asset value (GAV) for equity investments.
Emissions avoided of climate
solutions – green bonds
Emissions avoided defined as annual CO
2
avoided and reported by bond issuers. The benchmark is
dependent on issuer methodology. Our external asset manager calculates emissions avoided by using the
portfolio level share of allocation and impact per bond. This is calculated as the percentage of a bond’s
total issuance held by NN Group on 31 December 2022 over 2022. The aggregated emissions avoided
can be derived by adding up the portfolio-level share of weighted bond emissions avoided. The manager
prorates any emissions avoided that are not based on specific financing by applying a standardised
impact intensity and cost-efficiency calculation, which is defined as emissions avoided per EUR 1 million
invested. The expected emissions avoided attributable to the bond is calculated using impact intensity, cost
efficiency and the size of the issue.
Emissions avoided of climate
solutions – other
Emissions avoided defined as annual CO
2
avoided and calculated by the asset manager or reported by the
underlying fund holding. The benchmark is dependent on asset manager or fund holding methodology.
Climate solutions investment type labelled Other include investments in unlisted entities. This primarily
involves investments in private equity funds. We report emissions avoided only for those underlying
companies for which the funds we invest in report emissions avoided. We report emissions avoided by
attributing for both our share in a fund and the fund’s share in the asset. The fund’s share in the asset is
calculated as the fund’s share in the assets enterprise value.
Employee engagement We measure employee engagement through our biannual global employee engagement survey to determine
progress against one of our key KPIs. This survey contains a broad selection of questions covering how
employees feel about the company culture, how they are managed and the direction of the company as a
whole. The scoring of these questions results in an employee engagement score, that is compared to the
finance industry benchmark from Peakon.
Employee engagement
survey
A questionnaire measuring how a company’s brand and values are experienced by its employees, how
its leaders live up to the standards the company sets, and how the company fulfils its employee value
proposition as an organisation.
Employee turnover Employees (individual who is in an employment relationship with the organisation according to national
law or practice) who leave the organisation voluntarily or due to dismissal, retirement, or death in service.
Total of HC of all terminated employees/Avg employee headcount. A termination is defined as a termination
when the following Business Processes are successfully completed: ‘End Contract Event’ and ‘Terminate
Employee Event’.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
368
NN Group N.V.
2023 Annual Report
Glossary continued
Employees covered by
Collective Labour Agreement
(CLA)
Internal employees who are covered by a collective bargaining agreement can be read as covered by a
Collective Labour Agreement contract.
Employees represented by
an employee representative
body
Internal employees who are covered by a works council, unions or other organisations
representing employees.
Employees with completed
standard performance
process
All employees that have performed all the steps in the performance process concerning the goal setting,
first snapshot, team review, second snapshot and year-end review.
Energy consumption The sum of our usage of renewable electricity (from solar, wind, hydropower or biomass), non-renewable
electricity, nuclear electricity, natural gas, and district heating in the office buildings owned (and held for
own use) or leased by NN, and renewable and non-renewable electricity from vehicles leased and owned by
NN, as expressed in MWh.
Energy reduction Amount of energy no longer used or needed to carry out the same processes or tasks.
Engagement In the context of managing climate risks, engagement means entering into dialogue with investee
companies on the risks of climate change, and the need to transition to a low-carbon economy.
Environmental laws and
regulations
Laws and regulations related to all types of environmental issues applicable to the organisation.
Environmental, social and
governance (ESG) factors
• Environmental factors: climate change, other forms of environmental degradation (e.g. air pollution, water
pollution, scarcity of fresh water, land contamination, biodiversity loss and deforestation) and animal
welfare, in addition to corrective policy actions aimed at addressing such factors. Climate change is
further divided into:
a) transitional effects resulting from the transition to a green economy, and
b) physical effects resulting from changes in weather patterns, temperature, hydrological conditions or
natural ecosystems (both acute or longer-term shifts).
• Social factors: rights, well-being and interests of people and communities, including human rights,
(in)equality, health, inclusiveness, diversity, employee rights and labour relations, workplace health
and safety.
• Governance factors: pursuing or applying proper governance practices, amongst others including
executive leadership, executive pay, audits, internal controls, responsible tax practices, board
independence, shareholder rights, anti-corruption and anti-bribery, and also the way in which companies
or entities include environmental and social factors in their policies and procedures.
Financial economic crime
(FEC)
Involvement in money laundering, the funding of terrorism or other criminal activities that could harm
stakeholder confidence in a financial services provider such as NN.
Financial sector oath
or promise
An ethical statement introduced in early 2013 for employees in the Dutch financial sector, along with the
introduction of a social charter and update of the Banking Code. It applies to employees of banks and other
financial enterprises, including insurance companies, investment firms and financial service providers.
By taking the oath, employees declare that they are bound by a code of conduct to the ethical and careful
practice of their profession.
Formal meetings held with
employee representative
bodies
Number of formal meetings are seen as how often the Executive Board has consulted with the works
council, union or other organisations representing employees.
Formal meetings held with
employee representative
bodies
Count of the number of meetings held with employee representative bodies.
Fuel-based method Involves determining the amount of fuel and electricity consumed during transportation and applies the
appropriate emission factor for that fuel or electricity in line with the relevant GHG Protocol Standards.
Full-time employee Employee whose working hours per week, month, or year are defined according to national law or practice
regarding working time. FTE is not maximised at 100% (e.g. an employee with 36 default hours and 40
scheduled weekly hours is counted as 111.11% FTE).
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
369
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2023 Annual Report
Glossary continued
General Data Protection
Regulation (GDPR)
Regulation by which the European Parliament, Council of the European Union and European Commission
aim to unify data protection for all individuals within the European Union. The GDPR came into effect on
25 May 2018.
GHG emissions of our direct
operations
Sum of our GHG emissions in scope 1, 2 and 3 in kilotonnes of CO
2
equivalent (CO
2
e). The main GHGs as
covered in the Kyoto protocol are included. The main three sources concern:
– International Energy Agency or IEA. It uses emission factors from electricity of national grids for a set of
three different gases carbon dioxide (CO
2
), methane (CH4) and nitrous oxide (N2O)
– Department for Environment, Food & Rural Affairs or DEFRA which is created for the United Kingdom,
but is used worldwide. It covers seven GHGs: carbon dioxide (CO
2
), methane (CH4), nitrous oxide (N2O),
hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6) and nitrogen trifluoride
(NF3).
– Co2emissiefactoren.nl which is specifically created by and for the Netherlands. It takes into account all
gases with global warming potential if available.
GRESB GRESB is a mission-driven and industry-led organisation that provides actionable and transparent ESG
data to financial markets. GRESB collects, validates, scores and benchmarks ESG data to provide business
intelligence, engagement tools and regulatory reporting solutions for investors, asset managers and the
wider industry.
Global Reporting Initiative
(GRI)
An international independent standards organisation that helps businesses, governments and other
organisations understand and communicate their impact on issues such as climate change, human rights
and corruption.
Grievances on labour
practices
NN’s general policy is that employees who feel they have been harmed in their work situation as a result of
an individual decision that the management has either made or failed to make, and employees who have
been confronted with behaviour they perceive to be inappropriate, should attempt to resolve their situation
by discussing their grievances. If discussions fail to render an acceptable solution, the employee has the
option of submitting a complaint or dispute to the Complaints & Disputes Committee.
Headcount The total number/headcount of all employees categorised as ‘fixed term’ and ‘permanent’ in Workday.
Human capital return on
investment
Calculated as (Operating Results Ongoing Business + Employee Expenses)/Employee Expenses.
Employee Expenses = Staff Expenses – External Staff Costs.
Male/female ratio Total headcount of all employees where gender is male or female/Total headcount of all employees.
Employee is Worker Sub Type ‘fixed term’ and ‘permanent’ in Workday.
Net-zero Reducing emissions in the real economy as close to zero as possible and remaining emissions are balanced
using carbon removal technologies. The ambition is based on the Paris Climate Agreement to limit
temperature rise to 1.5°C.
New hires Total headcount of all hired employees. A hire is defined as a hire when the following Business Processes are
successfully completed: ‘Contract Contingent Worker Event’ or ‘Hire Employee Event’.
NN Group Compliance
Function Charter
A policy set in place by NN to help businesses manage their compliance risks effectively and to set out the
responsibilities on compliance risk management for the business and the compliance function.
Non-governmental
organisation (NGO)
An organisation that is neither part of a government nor a conventional for-profit business. Usually set up by
citizens, NGOs may be funded by governments, foundations, businesses or private individuals.
OECD The Organisation for Economic Co-operation and Development, an international organisation, established
after World War II, with the aim of shaping policies that foster prosperity, equality, opportunity and well-
being for all.
Open positions filled by
internal candidates
Percentage of hires from the internal NN population for the stated period. Included in the percentage are the
categories ‘internal mobility’, ‘conversion from intern’ and ‘redundant’.
Operating capital generation
(OCG)
The movement in the solvency surplus (Own Funds before eligibility over SCR at 100%) in the period due to
operating items, including the impact of new business, expected investment returns in excess of the unwind
of liabilities, release of the risk margin, operating variances, Non-life underwriting result, contribution
of non-Solvency II entities and holding expenses and debt costs and the change in the SCR. It excludes
economic variances, economic assumption changes and non-operating expenses.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
370
NN Group N.V.
2023 Annual Report
Glossary continued
Other incidents and concerns Concerns refer to a report raised by an employee about an actual or suspected irregularity or misconduct
within NN that leads or could lead to a violation of: NN’s Values; any NN Policy; and/or any national law,
regulation or code.
Paper The usage of paper in the office buildings owned (and held for own use) or leased by NN Group, as expressed
in kilogrammes. Paper is split in eco-labelled and non-eco-labelled paper. Eco-labelled paper is either FSC
(Forest Stewardship Council) labelled or another eco-label (including recycled paper). Non-eco-labelled
paper is paper without an eco-label.
Participation in engagement
survey
Percentage of employees who filled in the engagement survey.
Part-time employees Sum of all employees who have an FTE value of <100%.
People supported Following the B4SI Guidance Manual on defining output, this is the number of beneficiaries who receive a
product or service as a result of our contribution. We divide that into two categories, which are our strategic
themes: ‘Financial well-being’ and ‘Physical and mental well-being’. Allocation to one of these categories is
based on how resources we contributed were allocated within the theme. For example, in 2023, our cash
contribution to Brand New Job is part of the ‘financial well-being’ strategic theme. The number reported is a
cumulative figure over the years 2022-2023-2024-2025.
Private real estate – portfolio
average
The GRESB Score on portfolio average of the private real estate portfolio is an overall measure of ESG
performance – represented as a percentage (100% maximum). The GRESB Score gives a quantitative insight
into ESG performance in absolute terms, over time and against peers.
Product approval and review
process (PARP)
The assessment of a product in relation to its customer suitability, financial and non-financial risks, and
profitability. NN conducts a PARP when it introduces a new product, changes the characteristics of an
existing product or reviews a product. This is to ensure the product is acceptable to our company, our
customers and society in general.
Purpose Council The Purpose Council oversees how we are upholding our purpose and progressing on our non-financial
targets. It was set up in 2019 to advise and support the Management Board in developing a new purpose
statement. Chaired by the Chief Organisation & Corporate Relations, and sponsored by the Group CEO, the
Council consists of several Management Board members, heads of relevant staff departments and business
representatives. The mandate of the Purpose Council is to support the Management Board in steering,
measuring and reporting on non-financial issues.
Ratio of CEO compensation
to the average employee
compensation
CEO compensation/Average employee compensation. The ratio of CEO compensation to the average
employee compensation refers to the pay ratio calculation method as prescribed by the Dutch Monitoring
Commission Corporate Governance. The pay ratio should be understood to mean: the ratio between the
total annual remuneration of the CEO and the average annual remuneration of the employees in which the
total annual remuneration of the CEO includes all remuneration components (such as base salary, variable
compensation in both cash and shares, social premiums, pension, expense allowances, etc.). The average
annual remuneration of employees is the total wage costs divided by the average number of FTEs during the
year. The value of the share-based remuneration is determined at the moment of grant.
Recalculation Policy for
Baseline GHG emissions
targets
In order to accurately report on the progress towards our decarboniation targets we will on an annual
basis assess whether there are significant changes that require a recalculation of our targets. A materiality
threshold is set at 10%, but we may choose to recalculate our base year for changes below this threshold
such as in case of structural changes (i.e. mergers, acquisitions and/or divestitures).
Regardless of such events NN will review and update its targets at least every 5 years. Relevant events
triggering an update of baselines and associated targets before this 5-year time horizon has passed are
amongst others (1) Structural changes to our organization such as mergers, acquisitions and divestitures
(2) Methodological changes and/or significant improvements in data accuracy (3) other changes such as the
discovery of material (cumulative) reporting errors or a material change in the scope of targets.
Report of the management
board
The NN Group N.V. 2023 Report of the management board (Bestuursverslag), as referred to in section 2:391
of the Dutch Civil Code. It includes the Annual Review and the following chapters in the Financial Report:
Financial Developments, the Report of the Supervisory Board, Corporate Governance, the Remuneration
Report, and the Dutch Financial Supervision Act and Dutch Corporate Governance Code statements.
Responsible Investment (RI)
Framework policy
Sets out NN’s vision, approach and key principles on responsible investment. NN defines RI as
the systematic integration of relevant ESG factors into investment decision-making and active
ownership practices.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
371
NN Group N.V.
2023 Annual Report
Glossary continued
Road travel GHG from transportation in vehicles leased and owned by NN. The calculation is based on the fuel (including
electricity) consumption and otherwise the distance travelled in kilometres.
Scope 1 GHG emissions Direct GHG from sources that are owned or controlled by NN.
Scope 2 GHG emissions Indirect GHG that result from the generation of purchased or acquired electricity, heating, cooling, and
steam consumed in the office buildings owned (and held for own use) or leased by NN.
Scope 3 GHG emissions Indirect greenhouse gas emissions other than those reported in scope 1 and 2 that occur in NN’s upstream
and downstream value chain.
SME Small- and medium-sized enterprise.
Spending/average FTE Total amount spent on training and development divided by the total FTE number.
Sustainability risk NN considers sustainability risks as risks related to ESG factors that can cause material negative impact to
NN’s long-term performance, reputation, value, balance sheet or operations.
Sustainable Development
Goals (SDGs)
Also known as the Global Goals, these are 17 global goals set in 2015 by the UN General Assembly to be
achieved by 2030. They form a universal call-to-action to end poverty, protect the planet, and ensure all
people can enjoy peace and prosperity.
Sustainable recovery Sustainable recovery is a way of ensuring recovery of damaged goods or property related matters by not
replacing it by fully new equipment or virgin materials but repairing it or using refurbished equipment or
circular materials.
Task Force on Climate-related
Financial Disclosures (TCFD)
An industry-led initiative of the Financial Stability Board to develop recommendations on climate-related
financial disclosures. The Task Force published its final recommendations in June 2017.
Temporary employees Temporary employees are employees with a contract for a limited period (i.e. fixed term contract) that ends
when the specific time period expires, or when the specific task or event that has an attached time estimate
is completed (e.g. the end of a project or return of replaced employees).
Total spending on training
and development
The total amount spent on facilitating training and development for employees (internal and external).
Time contributions:
volunteering hours
We account for a monetary value for our colleagues’ volunteer hours based on time contributions.
B4SI defines this as ‘… the cost to the company of the paid working hours contributed by employees to a
community organisation or activity. The term “volunteering” is often used to describe time contributions,
but it can go beyond this to include any active engagement in community activity during paid working
time. Examples include: employee volunteering, active participation in fundraising activities, longer-term
secondments to community organisations, supervision of work experience placements.’ Reference: Chapter
1.2, B4SI Guidance Manual, 2021 (p.11). As of 2022, we calculate time contribution costs based on the
average hourly rate of the previous year across NN and round down (2022: EUR 50 per hour) to be more
accurate in the actual costs. The hourly rate is calculated based on the total employee remuneration across
NN as disclosed in our Annual Report of the previous year, divided by the total number of hours per FTE (full-
time equivalents). Currently, the rate is based on 52 weeks/36 hours per week, rounded down.
UN Global Compact A UN initiative to encourage businesses worldwide to adopt sustainable and socially responsible policies,
and report on their implementation. It is a principle-based framework for business containing ten principles
in the areas of human rights, labour, environment and anti-corruption.
Voting Voting is one of the most powerful tools of active ownership and we vote at shareholder meetings on behalf
of our own assets. Our Voting Policy for Proprietary Assets guides the voting considerations on behalf of
NN Group’s proprietary equity portfolio, and we publish our voting records on our website.
Waste All types of recycled and non-recycled waste generated from operations in the office buildings owned (and
held for own use) or leased by NN, expressed in kilogrammes. This excludes wastewater.
Water The usage of water in the office buildings owned (and held for own use) or leased by NN, expressed in
cubic metres.
Weighted average carbon
intensity
We calculate this metric to understand exposure to carbon intensive companies. Portfolio’s exposure to
carbon intensive companies, expressed as tCO
2
e/€M company revenue. This normalises each company’s
emissions by its sales. The weighted average is then calculated by portfolio weight.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
372
NN Group N.V.
2023 Annual Report
Glossary continued
Whistleblower concerns filed Number of whistleblower concerns filed, of which investigated by Corporate Security & Investigations.
Women in senior
management positions
All the women in the Management Board, Management Board -1 management positions and the managerial
direct reports to all business unit CEOs (Netherlands and International Insurance business units).
Workforce The total number of employees with an employee contract.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
373
NN Group N.V.
2023 Annual Report
Contact and legal information
Prepared by
NN Group Corporate Relations
Design
Radley Yeldar | ry.com
Contact us
Commercial register no. 52387534
For further information on NN Group, please
visit our corporate website or contact us via
external.communications@nn-group.com
For further information on NN Group’s sustainability strategy,
policies and performance, please visit www.nn-group.com/in-
society.htm or contact us via sustainability@nn-group.com
Disclaimer
The 2023 Annual Report provides an integrated review
of the performance of NN Group. More information – for
example the Solvency and Financial Condition Report (SFCR),
Total Tax Contribution Report and the GRI Index Table – is
available on the corporate website in the Investors/financial
reports section.
Small differences in the tables are possible due to rounding.
Certain of the statements in this 2023 Annual Report are
not historical facts, including, without limitation, certain
statements made of future expectations and other forward-
looking statements that are based on management’s current
views and assumptions and involve known and unknown risks
and uncertainties that could cause actual results, performance
or events to differ materially from those expressed or implied in
such statements.
Actual results, performance or events may differ materially
from those in such statements due to, without limitation:
(1) changes in general economic conditions, in particular
economic conditions in NN Group’s core markets, (2) the
effects of the Covid-19 pandemic and related response
measures, including lockdowns and travel restrictions, on
economic conditions in countries in which NN Group operates,
on NN Group’s business and operations and on NN Group’s
employees, customers and counterparties
(3) changes in performance of financial markets, including
developing markets, (4) consequences of a potential (partial)
break-up of the euro or European Union countries leaving the
European Union, (5) changes in the availability of, and costs
associated with, sources of liquidity as well as conditions in
the credit markets generally, (6) the frequency and severity
of insured loss events, (7) changes affecting mortality and
morbidity levels and trends, (8) changes affecting persistency
levels, (9) changes affecting interest rate levels, (10) changes
affecting currency exchange rates, (11) changes in investor,
customer and policyholder behaviour, (12) changes in general
competitive factors, (13) changes in laws and regulations
and the interpretation and application thereof, (14) changes
in the policies and actions of governments and/or regulatory
authorities, (15) conclusions with regard to accounting
assumptions and methodologies, (16) changes in ownership
that could affect the future availability to NN Group of net
operating loss, net capital and built-in loss carry forwards,
(17) changes in credit and financial strength ratings,
(18) NN Group’s ability to achieve projected operational
synergies, (19) catastrophes and terrorist-related events,
(20) operational and IT risks, such as system disruptions or
failures, breaches of security, cyber-attacks, human error,
changes in operational practices or inadequate controls
including in respect of third parties with which we do business,
(21) risks and challenges related to cybercrime including
the effects of cyber-attacks and changes in legislation and
regulation related to cybersecurity and data privacy,
(22) business, operational, regulatory, reputation and other
risks and challenges in connection with ESG related matters
and/or driven by ESG factors including climate change,
(23) the inability to retain key personnel, (24) adverse
developments in legal and other proceedings and (25) the other
risks and uncertainties contained in recent public disclosures
made by NN Group.
Any forward-looking statements made by or on behalf of
NN Group in this report speak only as of the date they are made,
and NN Group assumes no obligation to publicly update or
revise any forward-looking statements, whether as a result of
new information or for any other reason.
This document does not constitute an offer to sell, or a
solicitation of an offer to buy, any securities.
© 2024 NN Group N.V.
2 Our operating
environment
3 Our strategy and
performance
6 Corporate
governance
5 Managing
our risks
4 Creating value for
our stakeholders
7 Facts and
figures
1 About
NN
8 Annual
accounts
9 Other
information
NN Group N.V.
Schenkkade 65
2595 AS The Hague
P.O. Box 90504, 2509 LM The Hague
The Netherlands
www.nn-group.com