In the first half of this year, Delta Lloyd Group showed a sharp improvement in results both before and after taxation, by 69% to €238 million and by 120% to €180 million respectively.
- Continued low interest rates lead to adjustment of interest rate policy
Delta Lloyd Group key figures, first six months of 2005
Including Delta Lloyd Insurance, OHRA Insurance, ABN AMRO Insurance, Delta Lloyd Banking, Delta Lloyd Asset Management, Delta Lloyd Belgium, Delta Lloyd Germany and ENNIA.
- Result before taxation €238 million (+69%)
- Net result €180 million (+120%)
- Total Group income €5.4 billion (+27%)
- Total gross premium income €3.3 billion (+7%)
- Gross premium income, Netherlands €2.8 billion (+9%)
In the first half of this year, Delta Lloyd Group showed a sharp improvement in results both before and after taxation, by 69% to €238 million and by 120% to €180 million respectively. Result before taxation in the General business showed the highest growth, to €119 million (2004: €51 million). The result at Life, of €80 million (2004: €69 million) was depressed by low interest rates, requiring extra provisions. The 7% organic growth in gross premium income was supported by the Dutch and Belgian Life businesses. Premium income from General Insurance operations stabilised on sharply improved profitability, while the Health results were marginally lower. For Delta Lloyd Banking, the mortgage portfolio continued to grow and Delta Lloyd retained its market share in this competitive market. Sales of investment funds in the Netherlands via third-party distribution channels climbed 72% and gained in importance for Delta Lloyd Asset Management. Despite falling premium income as a result of a changing fiscal climate, Delta Lloyd Germany showed improved profitability.
Low interest rates have a mixed effect on the results of Delta Lloyd Group. The sharp fall in interest rates in the past year led to investment earnings on the bond portfolio. However, current long-term interest rates are too low to cover future life and pension liabilities and hence induced extra provisions for life and pension products with guaranteed contracts. Low interest rates are also reflected in the embedded value. Despite profitable new production, low interest rates cause the embedded value to rise ‘only’ 5% in comparison with last year, to €3.8 billion. Delta Lloyd Group has therefore now adjusted its interest rate policy (see page 7). The risk of interest rate reductions is partially covered by derivatives, while at the same time, the provision for insurance obligations is continually adjusted to movements in market interest rates.
Since 2005, Delta Lloyd Group has published its results in compliance with the International Financial Reporting Standards (IFRS). To this end, the results and balance sheet for 2004 were restated in line with the IFRS rules. This led to an 8% increase in the net result for 2004, to €327 million. Shareholders’ funds at year-end 2004 are 6% higher, at €2.8 billion (see also Annex 5).
For more information:
David Brilleslijper
Director Corporate Communications
tel: +31 20 594 44 88
e-mail: cc@deltalloyd.nl
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