NN Group’s deal spree is finally delivering
29/08/2023 12:00
(The author is a Reuters Breakingviews columnist. The opinions
expressed are their own.)
LONDON, Aug 29 (Reuters Breakingviews) - NN Group
NN.AS is reaping the benefits of scale in its Dutch backyard.
The 11 billion euro general and life insurer led by Chief
Executive David Knibbe saw its shares soar 10% on Tuesday after
it generated more capital than expected. Benign weather in the
Netherlands, one of the few European states to escape extreme
summer weather, helped. But the jump in the Dutch insurer’s
solvency ratio from 197% to 201% in the six months ending June
30 is more about its domestic market share.
Back in 2020, activist hedge fund manager Elliott Advisors
took a 3% stake in the life insurance group, as NN suspended
dividends and its buyback programme and struggled with a lowly
valuation. Elliott advocated job cuts and asset sales. But the
seeds of NN’s resurgence lie back in 2016 when it began a 3
billion euro deal splurge, first on domestic rival Delta Lloyd
and then VIVAT’s general insurance arm. That helped it hike a
10% share of the general insurance market to 24% as of 2021.
Greater pricing power means Knibbe reckons non-life insurance
payouts could be 91% to 93% of premiums by 2025, compared to
previous guidance of 93% to 95%.
NN has outperformed its country rival Aegon AEGN.AS ,
boosting shareholder returns by 64% since it bought Delta Lloyd
in 2016. That trend could persist. (By Aimee Donnellan)
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(Editing by George Hay and Oliver Taslic)
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