Solvency Standard Formula ratio stable at 144% within target range (year-end 2016: 143%)
Life new business volume of € 119 million (3M 2016: € 132 million), reflecting discipline in defined benefits business
Combined ratio of 97.9% in line with target (3M 2016: 97.0%)
Gross written premiums (GWP) in General Insurance decreased to € 447 million (3M 2016: € 465 million), reflecting exit of unprofitable and unattractive business segments
Integration NN Group and Delta Lloyd commenced
Update on acquisition by NN Group
During the first quarter, we continued to deliver on management priorities of capital, performance and customer and also initiated high-level preparations for the integration with NN Group. On 7 April, the offer by NN Group became unconditional and following the post-closing acceptance period, 93.3% of the Delta Lloyd ordinary shares had been tendered to NN Group. On 10 April, NN Group bought the subordinated loan and related preference shares A from Stichting Fonds NutsOhra. The legal merger preparations continue and are anticipated to be completed ultimately on 3 August 2017. Delisting of Delta Lloyd shares will take place as per the date of completion of the legal merger. From the second quarter 2017, our results will be reported as part of NN Group.
In April, senior leaders from both companies were appointed to roles in the combined business. Going forward, both companies will align and integrate their operations in the Netherlands and Belgium, to fully benefit from the additional scale, capabilities, combined reach and resources.
Financial and operational performance
Over the first three months, the Standard Formula solvency ratio was stable at 144% (year-end 2016: 143%), and within our target range of 140-180%. During the quarter, available own funds were down modestly, reflecting higher interest rates and higher credit spreads, while capital requirements also reduced, reflecting higher interest rates. Together these effects resulted in an overall stable solvency ratio and a modest increase in non-eligible capital.
Volume of life new business (SII NAPI) decreased to € 119 million (3M 2016: € 132 million), mainly reflecting lower Defined Benefit business in Belgium and the Netherlands. We delivered higher Defined Contribution volumes.
The combined ratio (COR) at 97.9% was just below our target of 98% or better across the cycle. During the quarter we saw some underlying improvement compared to last year (year-end 2016: 105.4%), reflecting actions on costs, pricing and our exiting of unprofitable and unattractive business segments. However, the COR in Property & Casualty remains high at 104.8%, reflecting adverse claims experience in Fire and the brokers (beurs) channel. The COR in Income & Protection decreased by 8pp to 65.3%, due to prior year reserve releases. GWP in General Insurance decreased to € 447 million (3M 2016: € 465 million), reflecting actions to exit unprofitable and unattractive business segments.
Total assets under management were down modestly at € 69 billion (year-end 2016: € 71 billion), reflecting net outflows and the effect of higher interest rates on the fixed income portfolios. The production of new mortgages at Delta Lloyd Bank increased to € 356 million (3M 2016: € 289 million).