Good morning, ladies and gentlemen, and welcome to our annual general shareholders meeting at a.s.r. I wish you all a very warm welcome. Well, the last two years, we had to meet virtually, so this year is a very special year for us, and we're very happy to see you all back here at the offices of a.s.r. We decided to offer this meeting in a hybrid form as well. We wish to optimize the interaction with all of our shareholders. We believe that it is extremely important to have all shareholders be maximally involved with a.s.r. However, the opportunity to participate virtually was not taken up. It was made possible, and there's going to be a webcast, as you are accustomed to, so that people can follow what is happening.
Again, a very warm welcome to all of you here in our office building, and welcome to those listeners at the webcast. Let me now tackle a couple formalities. On behalf of a.s.r., the following people are attending this meeting. A delegation of the Supervisory Board, consisting of Herman Hintzen, the vice president in attendance here, Mrs. Sonja Barendregt, the Chair of the Audit and Risk Committee of the Supervisory Board, then Gisella van Vollenhoven, Chair of the Remuneration Committee, and I am present too, Joop Wijn, Chairman of the Supervisory Board. Furthermore, the full board of directors is present. You know Jos Baeten, obviously, the Chair of the Board, and Ingrid de Swart, our COO or CTO, and Ewout Hollegien, our CFO. I would also like to welcome representatives of the Works Council seated at the right-hand side in the middle of the audience here.
Glad to have you here. We have a couple of members of the senior management represented as well. Moreover, representatives of the media, we're very happy to welcome you as well. On behalf of the Auditor, KPMG, we have Mr. Ton Reijns and Peter Smit. Ton Reijns is going to speak under agenda item three on financials and dividends. He will give a presentation with respect to the audit and answer your questions. Diane de Groot is Acting Secretary to this meeting, and we have a notary public, Mr. Paul van der Bijl. A tape recording is made of the entire meeting, by the way, for the purpose of taking the minutes. Those minutes are then adopted and signed by Chair and Secretary.
Finally, a civil law notary, Paul van der Bijl, is present, and he, of course, is going to supervise the proper conduct during this meeting, specifically of the voting procedures. He's also present as a proxy for shareholders who have already voted by proxy before the meeting. I would just like to point out that there are agenda items that can be voted on. They are agenda item two, the remuneration report over 2021. This is an advisory vote. Agenda item three, the financial statements. This is an approval. Agenda item four, discharge. Five, extension of authorities of the executive board. Agenda item six, the possibility of cancellation of shares. Agenda item seven, composition of the supervisory board, because today we are going to put to the vote a reappointment proposal.
For those present in the room, voting will be done by way of a ballot form. You received that when you came into the meeting. It is connected to your button. If you haven't received such a form, please get one from one of our assistants in the course of the meeting. After all agenda items have been discussed, we would like to ask you to hand in your filled-in form to the notary. We're going to take a brief break to then process the votes. I also note that the meeting has been convened in accordance with law and the articles of association via an announcement on our website, as well as via the publication of a press release. The meeting documents have also been made available via a.s.r. Nederland's website. I also note that the meeting can take legally valid decisions.
I also note that shareholders have not submitted any proposals for consideration. Before we continue with the most important topic for today, Jos Baeten's presentation on the state of affairs, I'd like to give you a couple of housekeeping announcements. First of all, I kindly ask you to turn off your cell phones. Turn them to silent or off. So that there's no interference there. I've already indicated that the meeting can be followed via a webcast in Dutch and English on our website. You can also view this meeting there later. We have received a couple of questions in advance. We will address those under the appropriate agenda items. Finally, with respect to organizational issues, I would like to inform you that there will be a lunch in the lounge outside of this meeting room.
I would like to ask you if you have questions as a shareholder which don't have a shareholder's character, but if you have questions as a customer or customer-oriented questions, you can indeed ask those questions of one of the assistants hosting here, because after the meeting, we can then bring you in contact with the right person. Because we wish to answer all your customer questions, but that may be in the course of this meeting too much, and we would like to give you the appropriate person to discuss them with after the meeting. I would now like to finalize the first agenda item, the opening, and move forward to the second one about the annual report 2021. This is 2a . Jos Baeten is going to give a presentation. The annual report is quite a thick book.
Jos Baeten, on behalf of the Executive Board, is going to discuss the results, the financial ones and others, as well as the dividend policy. Jos.
Thank you, Joop. Great to see such a turnout here today. Over the past two years, we held digital meetings, and that way you talk to your shareholders in a bidimensional way. Now it's this is a tridimensional meeting, and it's great to talk to shareholders because usually, you know, you just address the camera, you have no idea who's watching you. I'll briefly comment on 2021, what happened, and our performance. It might be a good idea to just touch upon the topical matters. The world, and particularly Europe, is facing a very difficult situation. Nobody would have imagined a year ago that we would ever be faced with a war so close to home. We're dealing with that.
We see people fleeing from Ukraine to the Netherlands. Our hearts and minds are with the victims of the war in Ukraine. We truly hope that the war will come to an end shortly and that these people will be able to start rebuilding their lives shortly. As a company, this has affected us in several ways. We've got people here who work here who come from Ukraine. Also, people who have the Russian nationality work here. It hasn't led to any tensions. There've been many initiatives across the company to see what we can do to help out there. That can vary from offering insurance coverage in that area because people want to bring relief goods to Ukraine. Ordinarily, you can't get an insurance for that. Also offering financial relief.
I mean, we see that the financial markets, as a consequence, have become very volatile. If we look at share prices and fluctuations, I mean, one day they will increase 3%-4%, and the next day they will drop just as much. That has an impact on a financial institution, obviously. So far, if I can summarize this very briefly, we see that we are a well-diversified company and rather resistant to all these fluctuations, and we keep a close eye on it from day to day. It doesn't lead to any great concerns, anything our CFO would lose sleep on. We do see that this is his first time to attend an AGM. That may worry him, but he's not worried because of financial markets. This brings me to a question that was just asked.
There was someone here who said, "You used to have a great team with Annemiek van Melick, and what about the team now?" I said, "You know, ask that question at the AGM." Then the shareholder said, "No, I'm not gonna ask that question." I'm gonna solve that in a different way. I'm gonna tell you when our previous CFO decided to move to a different company. I'm really so pleased that we were able to nominate someone from the company to the AGM and to appoint Ewout as CFO. Ingrid and myself had been running the company just the two of us with the previous CFO, and I can assure you, this is a team that is really great. It's great to work on the team. We're extremely serious, but we laugh a lot, and we're very serious.
I think, 55% we're very serious and 45% we just have a great time. That is expressed by getting together at our homes. We take turns, and then someone is in charge of preparing the meal, cooking the meal, and then we try to find out who's the best cook. That's about the dynamics in the team after 2021. Looking back on that, we have a slide for that. Do I have to operate that or? Well, there we go. I just said a few words about financial markets and the Ukraine, and it seems that the topic that is, that we've been facing over the past two years as a society has more or less faded away. You hear very little about the number of infections of COVID-19.
Sometimes numbers go up and down a bit, but this is something we've been very much involved with over the past two years. Just to zoom in on the impact it has had on us, first of all, our customers. When all this started in 2020, we were very worried. What would happen? Are people gonna rescind their insurances? From the very beginning, from the word go, we tried to really support people, for instance, by expanding the coverage that we offer people, restaurants, for instance, that started to offer takeaway, but also payment arrangements because people could no longer afford to pay for their mortgages. If I look back on that and the way customers evaluated and assessed that, I see that during the COVID crisis, our customer engagement has increased and we're very, very pleased with that.
Our colleagues who deal with our customers on a day-to-day basis have been able to pull that off. That brings us to our employees. All of a sudden, we changed from a great building, working in a great building, in great teams. All of a sudden, people were stuck at home, had to homeschool their children. We looked at wellbeing for our employees. We still measure that on a weekly basis. People get an email with three questions in order to give us an idea of how our people are doing. Over the past two years, we've seen that their wellbeing is stable, 7.5 on a scale of 10, and that has really helped us. We were used to working from home.
a.s.r. employees could already work from home, so that has really helped us in that situation. Third component, perhaps important to highlight, what has the impact been on our financials? We were quite worried about that because as a financial institution, if something like that happens, you start developing scenarios. We're an insurance companies, and insurance companies always more or less start to think about doom and gloom. Things can go terribly wrong. If you look at those scenarios, I mean, there was every reason to believe that things would go terribly wrong. The first year, 2020, things were not as bad as you could expect. 2022.
2021, 2022, you saw that our performance, our financial performance overall, I'll be zooming in on parts of that, was even slightly positive, and that was particularly in non-life because there was less traffic accidents and injuries, and that is a great portion of claims. If we're looking back on this period of time, I really hope it won't come back, not as virulently as we've seen it. We really see that our employees have done a great job. Also, financially speaking, the COVID crisis has not affected our company in such a way as to really worry us. Now, with that, I'd like to proceed to the next slide and share a few words about strategy.
In 2008, we were nationalized, and since that point, we really used the time to develop our strategy, to learn from the financial crisis, and to really establish what the raison d'être is of an insurance company. Since then, it became very clear to us that we want to be a stakeholder customer. Our shareholders are incredibly important, being one of the four important stakeholders that we have as a company. Now, the big challenge we face is to balance things, to do good things for our customers, our employees, because they decide whether or not we can be successful, and to do a good job for our shareholders because you want to engage with your investors because they provide us with capital.
At the same time, we want to be a company that society considers to be a useful company society is really happy to have. That is at the heart of our strategy. Internally, we have a number of targets. Now, we want to be the best financial services provider for our customers, and we want to be the preferred employer for our employees. For our shareholders, we want to be a reliable share with a predictable, dividend flow so that they can count on the returns on their investments. A comment of Mike from the audience. There's a comment from the room the interpreters unfortunately can't hear. That's fine that someone here is looking at his screen while I'm giving the presentation, says the CEO.
As I said, for society as a whole, we want to be considered to be a useful company. Now, over the past 10 years, or actually since 2007, but it's become more visible over the past 10 years, we're really focused on sustainability. We really believe that if we want to make sure that we can continue to live on this planet, you need to deploy all financial instruments that you have to contribute to that in a positive way and in order to offset any negative impact we have. In the meantime, a.s.r. has been included in a large number of national and international ratings in terms of sustainability. To be quite honest, we are quite proud.
If you look at the eight most important ratings in the world, on all eight ratings, we have ended up in a wonderful position, sometimes the top three, sometimes top five, and that means that nationally and internationally, there is an increasing acknowledgment that this is important, an important topic to a.s.r., and that we are making headway. We will continue to work on this topic over the next few years, and we'll continue to invest in this. Recently, this was confirmed. In a topic that fortunately is getting more and more attention, biodiversity. There's been a report in the Netherlands about what financial institutions are doing in terms of biodiversity. We scored 10 points. Next slide. a.s.r.
is a brand that is becoming increasingly known in the Netherlands, and those people who watch TV, very old-fashioned, or listen to the radio, they may see commercials, but even on social media, you see more and more of this here, a.s.r. Let me just briefly highlight the rationale behind this. On the one hand, we are a company that is a result of a large number of mergers. We have many brands, Ditzo, Ardanta, Loyalis. a.s.r. is our main brand. For some of these brands, we have decided, and we also have the Amersfoortse , but we decided to migrate towards one single brand. Also, because that is better internally, and it's a better way to spend your marketing money. We've integrated a lot of these brands.
Organizationally, it's also important. We will also do that for Ditzo, the brand Ditzo and Ardanta. That means that you will see more of these brands as being part of one bigger brand. The philosophy behind this, and you'll see this expressed in our commercials, is that we always keep an eye on what is going on in society. Sometimes we see an issue, and we think, "Okay, you know, in that issue, there's something we can do there." We analyze the issue at hand, and then we see whether we can offer a solution. Can I have a bit of water, please? For instance, with respect to sustainability, we see that for the people in the Netherlands, it's sometimes very difficult to invest in the sustainability of your home.
We see this as a problem, and then we say, "Okay, we're gonna see whether in our mortgage sector we can do something, find a solution, so that people can borrow extra money in order to make their homes more sustainable." This is a philosophy that is behind our campaigns that we run, and something we will increasingly do. I see that the clock is running, and so I will proceed very quickly to the next slide. These are the financials for the past year, particularly 2021. 2021 for us, in recent history, financially speaking, was the best year ever. An operating income in excess of EUR 1 billion and at the same time, solvency that is very stable, remained very high.
A combined ratio that remained at a good level, very good level, and our non-financial targets with respect to customers, the investments that we make in or that we committed to in terms of sustainability, but also measuring our carbon footprint. We actually achieved all our footprints with the exception of one. We also had a target that said that our employees would be able to put a lot of time and energy in helping society, which was not possible over the past two years because we're all stuck at home because of COVID. Let's proceed very quickly and look at the performance in our non-life business. I highlighted it just now that we, at the end of the day, had an excellent year. EUR 84 million higher performance than the previous year in non-life.
Despite the fact that in Limburg, we had major flood problems, and we paid out about EUR 20 million to our customers as a consequence of those floods. Internally, we always say this is precisely the reason why we are in the insurance business. I would say it's not that bad. I mean, it's bad for the people, but we're not bothered by the fact that we have to pay out because that really is the reason why we exist. If we look at the growth of non-life business, this is not something that grows very fast in the market. Every year, we grew a couple of percentage points. We saw this last year. Target was 3%-5%, and we achieved that. Let me briefly take a look at the life business with you.
Very important also with respect to operating income. Here, operating income increased with EUR 33 million. Despite the fact that we have a shrinking portfolio, we saw that the margin on our investments has increased. The returns have increased. If your portfolio shrinks a bit, you don't have to keep as much capital for your life portfolio, and the interest that you have to reserve in order to pay to your customers will always, decline. We were able to improve the performance of our portfolio. The amount you had to reserve for interest and the difference between what you reserve and what you had to pay out, that difference became larger. Therefore, the result in life business, despite the shrink, improved. We saw good growth. Our pension DC position did very well on the run-up to a new pension system.
It is good to see that we have a good positioning here, and the impact of COVID in the life business was rather limited this past year. Wherever we saw a financial impact, it was due to the fact that in a number of areas in our company, the rents were lowered in our property business because we wanted to help entrepreneurs. In some companies that we invested, those companies did not pay out dividend. Those were the reasons. All in all, we're very happy with the life business. Overall operations, asset management and distribution services. Here we also see excellent growth. The target was 5%, and we grew significantly more and faster. In 2015, these two businesses didn't explicitly contribute to our operating income. Last year, they added EUR 64 million to operating income. Here, every reason to be satisfied.
Then we'll take a look at a topic that is quite relevant to you, dividend. Dividend over this past year has been established based on a dividend policy that we pursued up to 31st December 2021, which was a dividend payout of between 45%-55% of the net operational income after deduction of our hybrid charges, the rent, the interest that we have to pay on outstanding loans. We had a substantial increase of operating income. That means that dividend also increased by almost 18%, almost 19%. We will be suggesting a EUR 2.42 dividend to you. A part has already been paid, and I'm happy with that because I'm also a shareholder. EUR 1.60 is an excellent dividend.
We've also said that part of the capital will be used to pay back to shareholders. We also announced a share buyback, EUR 75 million in the first quarter. This morning, a press release was issued in which we confirmed that we have concluded the share buyback. EUR 75 million has been bought back. Later on, you will be able to cast your votes on this item. Let's proceed quickly. In December, we gave a presentation to all our shareholders in which we discussed the targets for the new period of time, 2022 up to 2024. I'm not gonna go through all this. Should you have any questions, you can raise them. Just good to highlight one thing. We just talked about dividend.
In the meantime, we have decided, in view of the introduction of IFRS 17, and therefore it'll be uncertain what the definition of the IFRS results will be. All this is moving as we speak. In theory, there could be uncertainty in terms of what the dividend basis would be. We said, let's make sure that there's no uncertainty, and let us take as a premise the dividend that we pay out in 2021. By way of new dividend policy, let's be progressive, and let's say that it is our goal to make sure that dividend increases by 2%-3% on an annual basis. You must keep in mind that we're doing that from quite a high reference, because last year was a very good year in terms of dividend.
Over and above that, we said that we intend to buy back EUR 100 million in shares. Some people sometimes say, "Well, I would prefer that you would invest it in acquisitions or takeovers." We would prefer to do that, to be quite honest. We did formulate this with the condition that if we see opportunities to grow inorganically, we would prefer to spend our capital on this inorganic growth and rather than using the money for share buyback. We're going to do the share buyback under the condition that we don't see wonderful opportunities that would, in the long term, be important for the company strategically. Then we also have a number of non-financial targets that we disclosed on seventh December last year. We are really going to focus on how customers feel about us.
It's important that our brand be recognized and that we be appreciated. That's our focus, because at the end of the day, it's the employees that make the difference. Also customer experience is very important. That is also a target. We want to be very open about how our employees see the company in the context of sustainability. We said we want to reduce the CO2 footprint of our entire investment portfolio. We'll talk about the entire investment portfolio, not part of it. This vis-à-vis 2030, starting from 2015. Reduce our CO2 footprint with 65%. This applies to all our mortgages, all our property, offices, residential property, and investments. Finally, we said the impact investments that we've got on the balance sheet are going to be extended to EUR 4.5 billion.
As far as I'm concerned, this is the last slide. We look back on 2021 and are quite pleased with what we have achieved for our employers, for customers, for society at large. We have a strong balance sheet, and I think we're offering a wonderful dividend here at this meeting. For the future, we really have a positive outlook, and I think we've expressed this in ambitious targets. Thank you.
Jos, thank you for this presentation. Next year, we'll have to check our timing, right? Because it's practically undoable, for such a great company with so many activities in so many aspects. Well, I'm afraid that if you give me more time, I'll take even more time. Indeed. This is very important, and I think the audience has listened with a lot of, satisfaction. Thank you for these explanations. We now open the floor for your questions. Last year we saw a nice video, but now it's live, and this means that we can be more interactive. There are two microphones in the room. If you wish to ask a question, please proceed to one of them.
I would like to ask you first to state your name clearly, and also, if you represent an organization, please mention that name as well so that we can minute it all accordingly. If you're okay with this structure, please stick to three questions each time it's your turn. If you have further questions, just come back in the second round because that will give everyone the opportunity to ask questions. Please keep your introductory words as brief as possible. It's not a problem for us, but it is good for everyone who wishes to take the floor. If you would start, madam, then we'll move forward to you, and I see Mr. Stevens raising his hand. That's number three. Then we'll just see who comes first. Remarks from the audience inaudible for the interpreters.
Well, thank you for this tip. We're going to follow up on it. We have number one, two, and three, and from then onwards, I'll check who comes first.
Well, thank you, Chair. I'm Gillian Gailliaert. I represent PGGM and a number of other participants, among others, ABP. I have questions about climate, diversity and inclusion. The climate-related goals for 2022-2024, we just saw them on the screen. A reduction in emissions of 65% in 2030 compared to 2016 of the internally managed assets. Which part of the total emissions of a.s.r. does this cover? And does a.s.r. contemplate to have its goals be checked by SBTi, science-based institution? In diversity, a.s.r. writes that each year you take a measurement of the progress of your organization to check whether the working surroundings are safe and secure for your employees.
What is the state of affairs, specifically with respect to employees of underrepresented groups? And which measures has a.s.r. taken after recent scandals with respect to sexual harassment and other instances?
Well, thank you very much, Mr. Gailliaert. I remember you from last year's meeting too on behalf of PGGM. Let me ask Ewout to tackle your first question.
Well, thank you. If I've understood well which part of the investment portfolio is with respect to the CO2 reduction that we've communicated, we communicated our goal 65% of our assets under management in baseline 2015. All assets on our balance are going to be declared in scope. This is more than just the share portfolio or the credit portfolio. We're going to look at our real estate and our mortgages as well.
This means that we are going to include all assets under management on our balance sheet in the scope. Second question, are you thinking of following up and including SBTi? We are quite a forerunner in our reduction of CO2 emissions. We wish to make that measurable and objective. SBTi is one of the developments to achieve that, and we are talking with them what this would actually mean if we were to take that on board. We have an intention to make it measurable and validatable, and that is certainly one of the aspects we're taking into account.
Thank you. May I follow up on the first part? I don't have the feeling that I've received an answer to my question. I'll reword it.
The emissions 1, 2 and 3, which part in Scope 3 obviously fall under your emission goal? Indeed, you're correct here. This is Scope 3 emissions. We have the PCAF standard as a goal here, where all companies we invest into, we are measuring Scope 1 and 2. Our Scope 3 measures, though, are in the scope of our goal of 65% reduction. Question, you don't have an indication which part of all emissions that is that you now wish to reduce?
Answer. If I understand your question correctly, we're looking at the ambition we have. We then measure the Scope 1 and 2 emissions of our investment portfolio. That's where we have the 65% reduction ambition. We're looking into Scope 3 measurements, but it's not yet possible to measure those emissions.
For example, for our mortgage portfolio, it's difficult to do. We're now concentrating on the scope one and two goals. Your second question, about, D&I. We measure that in the D&I scan in March of this year. We saw an improvement. A couple of aspects score quite well. What we do believe is improvable is that we need to give everyone the, feeling that they have the same opportunities for promotion. This is not yet at the level that we wish to achieve, but there is some progress. I believe that's the first step. If you look at the composition of the population at a.s.r., then looking back historically, we can, indeed, register whether someone is of female or male gender. Other features, characteristics, or, background, aspects cannot be registered.
We've also used the opportunity of anonymized data, which give us an insight into the composition of our staff. In all employed staff, we have 23% of non-Western background. In the whole of the Netherlands in a.s.r., we've grown from 15%, 16% to 18% in comparison. This is a slow growth, but we do see that we are developing in the right direction. We always say we wish to mirror the society. We believe that we're moving in the right direction. Our staff is becoming a mirror of our customers as well, and that is exactly what we wish to achieve without achieving the absolute correct parallel numbers. With respect to harassment, mobbing, discrimination, and other forms of undesirable behavior, there's a scale that we describe in our policy document on our website.
This is not a topic that has gained more attention at a.s.r. because of various incidents, because we've been very aware of it already. We believe, though, that based on societal developments, we need to improve all data that we can bring together based on our various services, our various organizational measures, the works council, et cetera. We believe that we need to collect all of that. From objectifiable data, we believe that sexual harassment or other transgressive behavior has not reached a problematic level. We also believe that we need to enable people to notify the relevant contact persons of such behavior. We also are looking into trainings, workshops in enabling our staff to address these kinds of behavior as a bystander. Those measures have been taken.
I believe it is important that we need to also lay it down in our policy that this transgressive behavior is not tolerated at all. Thank you for those questions. Mrs. Hofland.
Esther Hofland, I represent shareholders for sustainable development. Thank you and compliments for the maximum score that you indeed publish on your website. My question, which actions does a.s.r. take to follow up on its obligations for sustainability? Second question, biodiversity. The sustainability of your company assets, how are you going to measure the impact of various initiatives? Are you going to use the index that a.s.r. is developing at this point in time together with other parties? Climate adaptation. During the last shareholders meeting, you promised to more transparently report on the risks of climate change. We indeed appreciate your explanations in the annual report.
Have the extreme weather conditions, such as the floods in Limburg, led to new actions?
Thank you very much for your very clear questions. Ewout, please tackle the first one.
I hope I've I can recollect that. The first question, which actions does a.s.r. take to define their actions with respect to biodiversity? It sounds simple. Oh, indeed, the answer is going to be more complex, says the Chair. On 7 December, we've indicated that we're going to do more with respect to addressing the impact. EUR 4.5 million of our investments or are going to be in the area of impact investments. We're looking at various sustainability, climate topics, climate change, biodiversity, et cetera. We have to distribute and allocate. The reason is we wish to not take wrong decisions if under pressure.
We do have the ambition with our impact investments to indeed cover all sustainability topics. That's how we look at it. We have a strong ambition. Biodiversity is one of the important areas. We have no specific goals there, but we do deliberate whether we cover all topics sufficiently.
Jos, maybe you can talk about TNFD and how we look at that.
We follow the TNFD developments with respect to biodiversity closely, and we look into whether we can implement TNFD, and we see at the same time a lot of new metrics in the market that help reporting on sustainability. Are there possibilities to bring metrics together so that we can indeed comply with various standards? We embrace the initiative, but we are analyzing whether we can bring that together with other initiatives that help reporting on sustainability and biodiversity specifically.
Do we use the OBI, the Open Bodem Index, which is used for agricultural companies? This indeed is a metric to monitor the health of the agricultural areas. These are numbers that we look into that we see as leading for improvement measures. What we see is that we try to support this by giving a discount to those farmers who improve their agricultural land and contribute to its health. We give a discount in that respect so that we can support improvements in this index, and we can help support these improvements. That's how we deal with the OBI index. The last one, climate adaptation from the risk profile as an insurer. We've included various scenarios in our annual report.
We're also a member of a union of various other players, the Wageningen University, the Climate Institute, KNMI, in the Netherlands. The analysis and studies show where the endangered areas in the Netherlands are. If there are hail and strong rainfalls, then we understand where that is, drought, et cetera, and risks are illustrated in such a way. How do you deal with all of that as an insurance company? You wish to offer people payable premiums to insure themselves, but you also wish to minimize risks of one storm actually decreasing your baseline. Now, we have given and offered cover in 2021 in the south of Limburg, which amounted to about EUR 20 million. Those were floods of secondary waterways. They are covered in a.s.r. policies.
If the sea were to inundate the country, that is a risk that one insurer cannot carry. As insurance companies, we're together talking at the table about such risks, about tackling them together, and these are risks that we review on a yearly basis. We then establish which risks can we actually bear and which do we need to bear jointly. For example, solar panels on roofs which have to be insured. Various heating installations have now become insurable as well. These are risks that we review regularly. Where we cannot bear the burden, then we are in consultation with other Dutch players. Back to TNFD. There are various initiatives in the biodiversity area, but if you then create an overarching metrics that will then lead to a next and new initiative. Before overarching metrics are available, waiting, I don't think that's the right way forward.
I don't think that we're in the position of a waiting party. Now, if TNFD and TCFD were to come together, then you create new metrics, but you leave two behind. That's where we actually would like to move forward to. Our idea is not that we wish to wait until all of this is solved. We do try to take initiative to move it in that direction. As Ewout already said, we do believe that we need to move towards TNFD. I'm not sure whether the audience knows what TNFD is. Taskforce on nature-related financial disclosures. That's the abbreviation.
Well, we'll take that up, and I see in your expression that you're quite happy with the answers. You said you got up earlier, but Mr. Stevens rose his hand earlier, and this time it's Mr. Stevens I give the floor to.
Thank you, Chair. My name is Stevens. I'm from The Federation of Legal Protection of Shareholders. I would like to discuss the results you achieved. I have a couple of financial questions there. First, the footprint. Shall I do the financial ones first?
Whatever you wish, says the Chair. You have three questions in the first round.
Now, as we were talking about the footprint earlier on, our foundation has a different approach. I still have a farmer's heart, and I go for walks with my daughter-in-law, and during those walks, we have discussions. My daughter-in-law says, "When I was at school, acid rain was an issue, and I haven't heard about acid rain since. Nobody talks about it anymore." It's not such a problem for me because I believe nature will recover on its own force.
Now, we understand that, with respect to forests, we're learning day by day. Now, about farmers. I've understood that the farmers don't want to go into consultation with the government anymore. Only in some provinces is there still a dialogue with the local government. I want to hear from a.s.r. how you see this locked situation. With respect to the climate and climate incidents such as storm, do you reinsure those risks, and can you not join those two storms and their effects in that reinsurance? I recall from the past that this happened once already. You've bought 32 of 82 windmills. Are you responsible for maintenance, and do you continue to purchase the electricity, or who purchases the electricity? What's the business case of those windmills for a.s.r.?
That's not very clear to us. Those were our three questions.
Okay, I had to qualify them as three. I'll allow that for you. I'm good in math, but I'm bad in counting. Okay, well, the sharpness of your questions was sufficient. I would like to now hand over to Jos.
Well, let me start with your last question with respect to the windmills and the business case. Ewout, you're the one who supervises our business cases, right?
Yes, indeed. That's something that we really seriously look into.
I have to get back to the first group of questions we had, and we're very happy to contribute to energy transition, so that with the asset management portfolio we have, we also have an opportunity to play a good role here.
That's the reason why we made those investments. A second reason, the financials. If we look at revenue models, the 32 windmills. Quite high. They generate energy, and there's a contract at the base of that. We supply that energy to an energy company who actually purchases that from us, and the money we receive it leads to a certain revenue. This revenue is attractive enough to make this investment. That is the business model. You invest, you generate climate-friendly energy. That energy is supplied to an energy company. You get money for that, and that gives us a good revenue, and we're doing good by the world. Okay, now your question about reinsurance and the storms. We had three storms, actually, in a very brief period of time.
We have a reinsurance contract that pertains to all storms within a certain amount of hours that fall under the coverage, and this amount of hours is 72. In this case, that wasn't the case. Our contract is such that we can choose which of the storms fall under the 72 hours and which not. We decided to notify the reinsurer of the two largest ones. This is a contract that we have and own a sum of EUR 35 million we have to cough up ourselves, and that other follow-up damages are at the cost of the reinsurer. Between the EUR 40 million and EUR 60 million is the now estimated damage of all three storms. We expect that a maximum of EUR 40 million has to go on our own account.
The total cost will be EUR 60 million, and the EUR 20 million that remains will be reinsured. I'm sure you could follow those math, Mr. Stevens. I remember, says Stevens, that we did something comparable with two storms in the past, so the reinsurance covered that. Answer: That is correct. This method has been around for a while. The exposure on your own balance sheet is something that you have to look into and what you wish to reinsure. You know that storms are always unexpected. I think no one is able to predict them. I actually grew up in an agricultural surrounding, and my dad always said, farmers always complain. When the sun shines too much, they complain. When it rains too much, they complain. It's not easy.
Having said that, we have a good relationship to the organizations of various farmers, as well as to the farmers who lease agricultural land. We own huge parts of land, and a huge part of that is leased to our farmers. That means that they are our customers, and we try to have a good relationship with them as well. We developed the OBI, the Open Bodem Index, and we give farmers a discount to help them to finance the sustainability of their own farm. If there's a collective financial incentive, then farmers really wish to join the table. We were able to make this possible for our, let's say, 150 farmers.
We know and understand that there are irritations in the farmers' community, but I believe we can say that we are only in constructive talks with them.
Okay, next question.
I'm Jan Kleinboerhaus. I'm a private shareholder. I have a question about capital allocation. Mr. Baeten, you just explained that you wish to follow a progressive dividend policy and a buyback program of EUR 100 million per year. Question: Do you look at the share price with respect to the intrinsic value to actually prevent buybacks at higher rates? And with respect to the share price halving and the intrinsic value remaining the same, will you then decide to pay out less dividend and to buy back more shares?
Chair, the market value and the intrinsic value, comparing those, this is, of course, the question in the new IFRS system. Ewout?
Indeed, we analyze this situation. Our dividend policy has been published and announced. We look at long-term value creation in that respect. What we believe is extremely important as by in our buyback program, that we do not develop a vision on our share price development, that is not a sensible way of proceeding. What we say is that we have a good capital position. We wish to use that to invest into the growth of our company. In the past, we've shown that we can do our best for shareholders in that way as well. As soon as capital allows, we also see a reason to use part of that capital for a buyback scheme, and we actually look into whether this is attractive for shareholders as well.
At the same time, we don't wish to support that with a vision on our share price development. That's something that you shouldn't do and shouldn't wish to do as a company. Your question then, just imagine the market acts crazy. We just had the COVID-19 experience, where intrinsically the value of the company was not dented, but the stock market went wild. At that point in time, it's not really sensible as a company to speculate on whether the intrinsic value is justified in the share price. Then you will actually stick to the dividend policy as you announced it, and you don't emphasize the buyback program.
Now, our CFO hasn't been in his post for very long, but you understand now that he covers all topics.
Good morning. My name is Errol Keyner. I speak on behalf of the shareholders of VEB.
I'm not going to make a long introduction, but I would like to tackle your business model cost structure. Secondly, the strength of your principles. Now, the business model. Recently, your big brother NN made clear that they are going to sell their asset management part because they maintain that they are too small to continue that, but their asset management portfolio is 5x larger than yours. You decided to keep it in your own hands. My concrete question is, how are you going to compete in your cost structure with the large players, BlackRock, et cetera. Specifically, those ETF guys who with large volumes, low cost structures, can offer good products to customers whether they are companies or individuals.
How can you remain a relevant player and continue to be one and even earn money for your shareholders while maintaining your asset management? I'm a fan of Brand New Day in comparable parties. These modern parties based their offer on the basis of ETFs, cheap investment funds that support them. I expect that that's going to be your principle to use cheap investment funds, ETFs, as a basis for these products. If your answer is yes, how are you going to keep enough money over to make this a revenue model for your shareholders? This has to do with the business models and your principles. We can talk long and hard about this and how far are we prepared to have sustainability remain more important than long-term revenue?
In many cases, these things go in parallel. In the long term, your risks are mitigated. Maybe you can use more opportunities. Are more assets possible, then more revenue? But in other situations, this will not be possible. It will hurt. It will hurt for yourselves, for your customers and for your shareholders. How far, if such situations occur, long-term revenue, that's what I'm talking about, not short-term, if they go at the cost of your principles, and how far are you prepared to communicate that to your customers and your shareholders? I can mention two practical examples. How are you going to deal with it that you don't pay too much for the so-called green investments? Many are trying to buy up those because greenwashing is attractive. Prices will only increase.
If you buy those assets, it can happen that the revenue is quite high. The other way around is possible too. I'll give you a private example, and that's the last one, and that will give you an impression why I am asking this question. I've been investing since 35 years, and the first thing I decided was I'm not going to invest into weapons, and you don't do that either. You say you do not invest in weapon manufacturers in nuclear energy. I changed a couple of months ago because I awoke from my naïve standards. Is it correct that your principles are going to be set in stone, or are you going to reevaluate because weapons aren't only a means of aggression, but also can keep a society safe? Nuclear energy is another topic.
It's a red flag for certain people. It is also part of the solution for the climate crisis. Those were my points. Well, my goodness, these questions are extremely serious. Please do not think that our laughter pertains to them. This pertains to the creativity of your questions and your wording. These are very serious points that are, by the way, discussed in the Supervisory Board repeatedly.
We'll start with your big question about our competitors. It's not our big brother, it's our competitor, the NN Group. Ewout, we have a very clear vision on this. Please explain.
Indeed, we have a very clear vision, and it's an interesting question to answer. It's very justifiably asked. I can understand that shareholders are concerned.
I think the most important part is the following: we see our investment as an important part of our operational and steering measures and investment measures for the policy holders and the shareholders. This is part and parcel of a balanced approach. We have our investment manager right next to you. He can explain to you how he does that. On top of this, we have colleagues that are in the financial markets and follow it closely 24/7, know exactly what is happening. If anything occurs, interest movements, et cetera, then we have very short reaction periods. These colleagues know the financial markets. We shouldn't underestimate their expertise. Now, this is the operational and internal side of how we set up our asset management. The third point is we do not compete with the BlackRocks of this world.
This is a very conscious choice. With respect to funds, we don't try to do everything ourselves. We actually take up niche instruments. If we look at the funds that we manage for third parties, we are in those areas where we are established as a company in the Netherlands. Dutch mortgages, Dutch real estate, that's where we have our experience and expertise of over 100 years. That is where we can play a very prominent role and also can link Dutch institutional investors to us. The result growth for our company is an ambitious goal. We wish to grow as with our asset management as part of our fee-based business. Dutch real estate, Dutch mortgages, that's where our growth potential lies. To finish up, we benchmark whether we're efficient. We've done that only recently, and we are very efficient.
We can actually compete with the large parties because we focus on us.
I'm a man of numbers. Can you give us a number, an indication, where are the large competitors for cost structures?
Ewout, the basis points isn't something I'm fond of now, but we're in line with assets under management. We're in line with the large competitors. This is the story that we tell. This is important for us. It's part of our operational procedures. We focus on specific categories where we have expertise, where we can be efficient, where we have a proven track record, and that's what we do. In this way, the operational result of a.s.r. can only grow.
Pension question, Ingrid.
Yes. Zooming in on what Ewout more or less said in terms of his answer, but it's important for the rest of the room. We have always been successful in DC. We were shareholder in Brand New Day, and since more than a year, we are a full shareholder of Brand New Day. The brand Brand New Day went back to the founders, and we changed that into June since the first of April of this year. We are very successful because at DC, we're growing a lot of, but particularly Brand New Day. June is attracting a different kind of companies.
To zoom in on the details, Brand New Day is the only one in the Netherlands that has a very successful digital proposition and can engage with very young companies, which is rather unique because they don't really turn to a consultant or an advisor when they start growing. Obviously, there's an enormous labor shortage in the Netherlands, and companies want to recruit talent, particularly with benefits, including pensions. That means that Brand New Day is operating among these tech businesses. These tech businesses really contact them, and it's important that we have them now as part of a.s.r. They're really succeeding, engaging with young companies and benefiting from their growth. DC, which goes through our advisors, we have very healthy growth.
I mean, in both propositions, low costs are a qualifying item, but we can stand out not only with our digital propositions, but particularly the way in which we look at our assets. I'd like to highlight sustainability here, because that is becoming increasingly important for SMEs and young companies. As Ewout just pointed out, we're absolutely convinced that we can be competitive in bespoke products. We're adding a whiff of sustainability, a.s.r. sustainability to our proposition, and that appears to be a very successful combination. I see that you're nodding, so I feel free to move to question two A or B, or C. I don't know which one it was, but the question about the dilemmas that you were outlining.
Actually from the very beginning of the sustainability debate and also the war between Russia and Ukraine, this is a topic that is in fact on the table. With respect to weapons, we have given our position more clearly internally. We've excluded weapons, and we will continue to exclude weapons. Weapons not only has an impact on protecting. It's not only about protecting safety, but just look at what happened in the U.S. yesterday because they have a different policy in terms of weapons. Given the way we positioned ourselves in society, I think this really fits this decision and quite apart from the whole debate of roles in society. So far our decision is not to invest in weapons. Shall I go on with the nuclear energy, or do you wanna comment on weapons? Mr. Keyner.
Up to three months ago, I agreed with you. I'm not really talking about handguns, but I'm talking about combat helicopters. Don't you think? I mean it's not really that much of a criticism, but a.s.r., as a.s.r., we have moral principles et cetera, but we are allowing other people to do dirty work. Isn't this a type of moral that has a sort of strange edge? Well, I don't really see this as criticism. It's more of a dilemma. One of our colleagues is an ethical specialist, and he We always allow him to lead sessions about these topics so that we can look at the topic from several perspectives. This is an issue that doesn't really have an ultimate truth.
You have to consider matters, and we don't consider matters simply because we feel that we're on the higher moral ground. We aren't. I think we should look at things from all the perspectives, and this is how we came to this decision. To give you more of a background on this decision, Ingrid just talked about our positioning vis-à-vis customers. We have been dealing with this matter since 2007, and this matter was triggered by me personally as a consequence of a conversation I had with a larger NGO. War Child, let me specify. They asked us how we felt about these issues, War Child, weapons, child labor, et cetera, and that really started the whole debate.
As I said, I'll repeat myself, the weapons as far as we're concerned, the way we see the world, and it is a dilemma. I do understand. If everybody would do that, we would perhaps be facing a larger problem in the short term. That as far as that's concerned. Nuclear energy. Well, you mentioned it yourself, Errol, naive. I don't think it's naive, but it was on the basis of the knowledge you had at the time. Our position was that we didn't want to invest in it either. All large Dutch investors, as we now know, are having a debate on how to deal with nuclear energy in the long term. We are a long-term institution, and we're looking at the developments in the longer term.
Is this something we can justify for ourselves in the longer term? In the positive side, if you look at how clean nuclear energy is, if you look at that, you should start investing in that today or perhaps you should have done that yesterday. If you look at certainty in terms of security, what are we gonna do with the waste generated in the production process of nuclear energy? The dilemma then is, you know, are you gonna pass this on to future generations or generations after that? We are smack in the middle of the debate. You know, if you weigh up both things, the other interest, the price of energy that we have to cough up. Let me formulate this very carefully.
I cannot rule out that over the next few months we may take a more nuanced position in the matter. Weapons, well, we've dealt with that. We've decided on that. You call it principles. I think it's a good thing to have principles, but sometimes you have to be prepared to discuss and reconsider your principles. There have to be very compelling reasons for that. That's how we're dealing with that right now. Thank you.
The people who would like to raise questions, they could just signal me, then I know who's coming up. Please go ahead. Yes.
Over the past two years, we had to submit questions in writing, and I'd like to come back to something that was discussed earlier on, the NPS.
You're proud that it's 49, which is 5 points over and above your 45 target. Last year, I asked how can I relate that to what similar insurance companies are doing? The answer at the time was that you didn't feel that was interesting, and you only wanted to look at the development of your own score. I did think it would be interesting to see what Nationale-Nederlanden or other insurance companies do in terms of NPS. If you disclose that in your annual report, I would assume that some other insurance companies would do the same. Of course, I can look for that, and then I have to check and see whether they use the same definition and so on and so forth. There are all sorts of tricky things here, but two things.
Could you perhaps disclose more than last year how your NPS score relates to those of your competitors? Second, don't you think your target should be increased to 50? Otherwise, it wouldn't be ambitious anymore, the 44. Another point, four and a half billion euros in impact investments that you announced some time ago, and you mentioned two categories here for impact investment. First and foremost, the two wind turbine farms and the solar energy farm. I'm quoting what I read in English in your annual report, affordable houses, sustainable mortgages, and green bonds. Green bonds doesn't seem very clever to me since we're facing interest rate increases. Sustainable mortgages, I don't know about that. Affordable housing, well, that's a very broad concept. That would also require further explanation in terms of what you intend to do that.
More in general, how far have you proceeded in realizing the EUR 4.5 billion? What is the breakdown more or less? Is it 100% only the energy, the wind farms and solar energy parks, or are the other three things also growing? What about these targets in general? Should they be increased? Are you successful, or are there obstacles? Do you still have to carry out a lot of work to achieve the EUR 4.5 billion? You're not really saying very much, so I'd like to know how well you're doing. The last point I'd like to comment on is your insurance intermediary. People of my age remember him. He was at the corner of the street. He was on his own, and he knew about car insurance and home insurance and things like that.
That man no longer exists. I remember my parents talking to the intermediary, and I still remember what he looked like. You can't find them anymore. We still have the insurances, but what happened to the intermediaries? I think 20 people, 30 people work for the intermediaries nowadays. The intermediaries are located 30 km, 40 km down the road, and we have no connection with the intermediaries whatsoever. We have this trend that we want to do things online all the time. What, in your view, is the position of the intermediary? It doesn't work as it was intended to work in the past. Don't you think that you should set up your own intermediaries at a.s.r. and set up a call center or something like that?
I think we only have these intermediaries because traditionally this is what we had.
Mr. Rhein, thank you. With all due respect, this was one ABC, two ABC, three ABC. Of course, everybody's entitled to speak his or her mind, but. Well, let's proceed to the answers. Well, perhaps the first and the last question, we can have those questions answered by Ingrid first. By the way, my father was one of these men that you referred to. Ewout will answer the question in the middle. Let me start with a question about NPS. I think you are absolutely right that you want to know how our scores relate to our competitors' scores, but I'd just like to take you to the world of the insurance companies. Insurance companies are facing a problem.
We hardly ever are in touch with the customer, only when a customer enters into an insurance, and very often, if sad things happen. That is just the reason why we exist. On average, it happens one every seven years that a customer will contact us, which is a good thing because that means that there are very few sad events, but it is a problem to actually establish contact. When a customer contacts us, I can honestly tell you that the customer is happier with us than the scores our competitors have. That's good news, but we feel it's important to know how customers feel about us, not only when the customer contacts us, but that they also consider us to be relevant when they don't need us and that they do have positive views about us.
That is the reason why for the next three years, we have an NPS specific target. I'm not gonna give you a lecture on it. Let me give you a summary. We always measure the NPS-c . That is when the customers contact us, and we also measure the contacts digitally and also here. We also have the rNPS, which is the relationship NPS, which means that you measure among your customers, even when they're not in touch with you measure how they view you, what their engagement is. We compared our score over three years with our competitors, and we have quite an ambitious target here. We said that in 2024, we want the NPS rScore to be in excess of the market. Where are we now? Let me be honest.
If I want to be nice about our company, I think that we're doing pretty well because if you compare our position to our competitors that are also listed at the stock exchange and have intermediaries, we're at the top of the group. If you enlarge the group, if you look at more specialized insurance companies, particularly direct insurers, you see that we are not even close to the number that we'd like to have. We feel that we should be ambitious. We shouldn't be too nice to ourselves, and we should be quite harsh in our comparison. We set the bar at being better than the market, outperform the market of insurance companies. Which means that every year, we need to grow about two points, and in 2024, we will have outperformed the market in terms of NPS.
I hope that's an answer to your question. To a certain extent, we took your comments to heart, and we incorporated it in our targets for the next few years. The NPS-c, in fact, is a target that develops as you go internally in our measurements. We've raised the bar for the NPS-c and P, but we see the contacts are moving to digital contacts. In order to get a higher NPS in 2024, every year, we need to grow 5 points-10 points a year in the NPS-c . It may not be visible for you, but implicitly, it has been included in our measurements, so the bar has been raised.
Actually, the answer to the inaudible question is actually you measure the contacts you have with your customers, an important driver, but also in between, if a customer doesn't need the information, doesn't contact us, you also include his views of the company and also how you are perceived in comparison to your competitors. That leads to an above-market NPS. It's important we have an external agency that also looks into this. It's an extensive answer to the first question. Once again, a comment off mic. The chairman, this is a bit too technical. I think we're going to move on to the next subject.
Thank you for your understanding. Let's move to the next question. Let me answer the last question about insurance intermediaries or agents.
I have quite a bit of experience in insurance, and I remember what these offices of the intermediaries looked like, and the situation has changed. Almost half the non-life insurances are contracted by intermediaries in all shapes and forms. That could be on the street corner, but also internet, because that's often where we see these intermediaries. The rest is underwritten by bank insurance and direct insurance companies. We still have a considerable market share in the insurance part. We're in the top three for non-life private persons. When the products become more complex, we have a larger market share, and so will the agent have that. The agent will always continue to exist with respect to contacts with customers about health insurance and non-life insurance and also for entrepreneurs.
We see that these agents are indispensable for companies, and the latter are very important to this company. We also see that in non-life and in healthcare, where there's a shift towards internet, and we are anticipating on that with the Ditzo brand. Last year, we informed you that we are already considering how the brands Ditzo and Ardanta could be merged more and more towards a.s.r., and you'll see more of that next year. You'll see that we not only sell products through agents, but also ourselves through our own website. That way, we are trying to fulfill the demand of our customers because we really want to engage with our customers as much as possible. Then this intermediary question about yes.
This is a long introduction, but I understood the question to be how far have we progressed with the impact investments, and how do we break them down across the different categories? A comment off mic again. The interpreter cannot hear what is being said. Let me answer both questions. If we look at where we were year-end 2021, that was when that was the New Year's. EUR 2.4 billion in impact investments is what we had on our balance sheet, 2.4 . If you then compare that to our ambition, which that means that over the next three years, EUR 700 million a year is what we need to invest in additional impact investments in order to be able to achieve our goal. How do we break that down?
It's approximately two-thirds is what we will be investing in what we call green bonds. Later on, I'll comment on your question whether we should do that now the interest rates are increasing. One-third will be invested in the other categories that you mentioned yourself. If we then look at green bonds, it is correct that the value of bonds decreases if interest rates increase, which is the situation. We also have insurance liabilities that become cheaper when the interest rates increase, and you always hedge that. Which is why green bonds for us as an insurance company with long-term liabilities are quite sensible because that way, we're less vulnerable to interest rate developments.
It's a matter of hedging our exposure to interest rates, which is why green bonds are a very obvious investment as part and parcel of our overall impact investments. If I then look at the other categories, it's true that we focus on affordable houses, sustainable insurance, and the energy transition that you mentioned. We do more than that because sometimes we invest in health companies that develop certain drugs for certain ailments. Sustainable mortgages I think is a good thing. You look at the returns that you make there, it still is more attractive than, for instance, investments in state bonds. The great thing is that we make an additional budget available to our customers that they can specifically use to make their homes more sustainable. It's interesting for customers.
Given current energy rates, it's important and attractive to make your home more sustainable, and we also get a higher return than when we would invest in state bonds. If we then look at affordable housing, it may be a good idea to mention that the person who's in charge of real estate will be happy to give you more information. I know that for a fact. We invested more in houses in the category EUR 750-EUR 1,250 rent a month. This is an affordable category of real estate that we invest in order to make rent affordable for more people in society in the Netherlands.
We also make an excellent return there, and we can also attract other investments to our fund because they feel that this is an excellent investment on the one hand. They also are attracted by the fact that we make rent more affordable in the Netherlands. Once again, a comment from Mr. Rings, off-microphone. Yes. We clearly established the criteria for impact investments, and this can be measured in an objective way. Once again, a comment off mic. Can be measured objectively, and we started the meeting with the question whether we would introduce a certain standard in order to be able to validate it.
This is an objective measurement of our own reports, and it would be excellent, should we be able to move to a market standard so that we can validate it and have, reasonable assurance for this. I think it would be excellent to be able to return to that. What's more, says Mr. Baeten, the auditor is in the room, and he audits all of this. Well, that's an excellent, thing, point. We can move on to the next point. All your questions have been very interesting and relevant. I'd like to request you, should you wish to make use of the second round, to keep in mind what I just said. I see that there are people who would like to raise further questions. No A and B questions, no introductions unless very urgent. One shot.
We'll give you a concise answer, and then we have to proceed with the meeting. I want to do justice to everybody present here today. Having said this, is there anybody who would like to take the floor in the second round? One question, one shot. Additionally, you can always ask questions when we enjoy a cup of coffee over lunch. Mr. Stevenson.
Thank you, Mr. Chairman. Do we understand correctly that we can only ask one single question?
Indeed, you understand that correctly.
I have a number of short questions.
Well, okay, I give up. Go ahead. Thank you. Stevenson.
You were talking about takeover candidates, acquisition candidates. What type of acquisition candidates are you considering? So that's a bit difficult in life, distribution, service, et cetera.
What are you doing with the bond loans, a.s.r. 5%, the subordinated bond loans? Disability insurance. What about people who have to work at home?
Thank you for those questions, Mr. Stevenson. Is that all?
No. I have yet another question. I understand that the chairman doesn't really have an answer to that question. Perhaps I can raise that question under any other business.
No, go ahead and raise the question now.
Well, I've asked this question before, but somehow I never really got an answer. Where I live, I hear a lot that there's drought. Please, Mr. Stevenson, says the chairman. Please be concise in your question. Well, this area was planted 62 years ago. What about a.s.r.? This is just one example.
Chairman: Thank you for your question. Question is clear.
I'd like to give the floor to the executive board.
Let me start with the last question, says Mr. Baeten. I think that you want to talk about irrigation of the area, the polders, and everything that comes up there. We see that farmers deal with the problems better. There's a certificate initiative.
In order to make sure that the whole area is irrigated properly. I think the farmers are doing an excellent job. My colleagues tell me that if you fall into the water in the Netherlands into a ditch, the water in the ditches is clean. I don't know about the situation where you live, but overall, the situation in the Netherlands is improving. If you want to talk about the details, I'll bring you in touch with the people who deal with this on a day-to-day basis. Then the candidates for acquisitions or takeovers. Of course, we never give you names. We never disclose that. At the same time, there are further opportunities for consolidation in the Netherlands, and this was one of the previous questions. How do you feel about intermediaries? We call this in distribution.
We see consolidation there among intermediaries. We've carried out a number of takeovers. We still see opportunities. There's still small life insurance businesses that you could consider, and whenever we can get in touch with them, we do. The same applies for non-life. The question for the longer term in the Netherlands is, are we done with the greater consolidation? We focus on smaller and medium-sized. At the same time, if there are opportunities, we will take a serious look at that. No, no. A question from Mr. Stevens. So the chairman says, "No, no." What about distribution and service? Well, yes, distribution and service, that can include employment condition workers. What about disability insurance and working at home? The claim burden is developing positively. We don't see an extra burden.
The only answer we don't have is what long COVID will, the impact will be in the long term. We have extra provisions for that. Ewout is a specialist on the perpetual that we have outstanding. Yes, we have a number of bonds as part and parcel of our overall balance sheet, particularly at the liability side. In 2024, the first instrument will expire. This is a tier two instrument, so it will expire then. We always look at the debt on the balance sheet and how that relates to shareholders' equity. If we then look at the financial leverage position, which is the ratio that is, key here at year-end, is approximately 25%, which is a bit at the low side, at the bottom side of the range that we are focusing on.
We're very comfortable with the debt position that we have right now. Once it's 2024, given the fact that we're comfortable with the debt position, the assumption is that we will then refinance it. First we'll amortize it, and then we'll refinance it. That is the first bond that expires in 2024. That's the perpetual. Yes.
It was clubbed.
VEB, Mr. Keyner.
Yes, I have one question. If I had had 10, I would have used the opportunity. It's our right, and I'm very happy to see you again after two years. Please give us the time.
Well, indeed, we're happy to have you.
Now, one question is health. I think health insurance is 38% of growth of premium income. The concrete question is, how happy should we be with that as shareholders? If I understand the health market, I just don't understand it compared to non-life and life. It's difficult. A lot of regulation. You are obliged to offer your clients certain packages. Huge competition. Why should we be happy with this growth? How good is it for you?
Jos, we steer our business on the combined ratio. For health insurances, we have to keep a certain capital coverage.
The combined ratio can be a bit higher there. Our health department always achieves its goals in that respect. We also understand the dynamics you've described. We believe a.s.r. is a company that wants to position itself in society, not at the cost of everything. But as long as our health insurances comply with the demands and goals we have, we're happy to offer this product. Because it's a product that every Dutch person has, every young person. It's a startup. It combines often with other insurances. We look at the holistic picture for health and also in other areas. We see these as stepping stone for our growth. Again, if it were financially not viable, we would have a discussion about it. Thank you.
Well, looking into the audience, I see that there are no further questions.
We had actually promised that this meeting would close at 12:00 P.M. We're not going to make it, but Jos and I just discussed that. We enjoy these questions. It's very, very good to have this exchange. Thank you very much for that. We'll continue with agenda item 2b, the report of the supervisory board. I'm going to make this more compact than the earlier one. In section 5.2 of the annual report, you see our supervisory board report. Jos explained a lot in 2021. We discussed the existing strategy at the beginning of the year and decided to continue it, albeit with a number of minor changes. New medium-term targets were also discussed and set for the period 2022 to 2024. These were also discussed with the supervisory board and the executive board.
The supervisory board is of the conviction that these goals strike the right balance between long-term value creation, sustainable growth, and are confident that they can be achieved.
Now in 2021, the corona pandemic had a major impact on our society and economy. a.s.r.'s financial results were strong and weren't affected by this pandemic. We are very thankful to the employees whose dedication and engagement and intrinsic motivation in those difficult circumstances were admirable. We saw the operating result rise sharply and the solvency remaining as high and as comfortable as ever. As supervisory board, we also noted that despite those challenging circumstances, management and staff did their utmost to assist customers and get the NPS score up to the high level that Ingrid just expanded on. In 2021, the supervisory board discussed further topics, developments in the sector, the performance, financial and non-financial, solvency and capital, culture and customer interests. The contacts and consultations with the works council were a dominant factor, of course.
We've worked on a permanent constructive relationship with our external regulators. We also included reports of our three committees, the Audit and Risk Committee, the Nomination and ESG Committee, as well as the Remuneration Committee. You've been able to read this extensively in the annual report. Are there questions or comments on this report of the supervisory board?
That is not the case. I think you've done better than I have, says Jos.
Well, we'll continue now with agenda item 2c on corporate governance. November 2021. At that point in time, Ewout Hollegien succeeded Annemiek van Melick as CFO. Ewout had already been working for a.s.r. for quite some time, and as you were able to see for yourself in the Q&A round earlier on, this was a natural and easy transition.
The supervisory board is therefore confident that Ewout will make a lasting and valuable contribution to the further development of a.s.r. Furthermore, I took over as chair from Kick van der Pol in the supervisory board. I was able to work together with him for more than six months. That was a great opportunity. Now finally, mid-2021, it was decided to change the selection and nomination committee in both its objective and composition. We've renamed it, Nomination and ESG Committee. The main aim is structurally embedding sustainability related issues in our governance structure. The supervisory board recognizes the increased importance of sustainability for companies and for a.s.r. in particular. We are therefore pleased to note that a.s.r. is making many successful efforts in this area, both with respect to products and assets under management, which has been explained extensively in the Q&A session earlier on.
Now, these good results are reflected, among other things, in the recognition that a.s.r. receives from international benchmarks. For example, a.s.r. is included in the Dow Jones Sustainability Index, which places a.s.r. among the 10% most sustainable insurers worldwide. The members of the Nomination and ESG Committee are now Gisella van Vollenhoven, Gerard van Olphen, who couldn't be present here today, and myself as chair. Are there any questions about a.s.r.'s corporate governance as described in section 5.1 of the annual report? That is the case. Please proceed.
Thank you. Lisenne van der Knaap of PGGM. I have a question about remuneration policy. a.s.r. Nederland in 2021 did not pay out a variable remuneration to the executive board. A connection of remuneration with non-financial goals, CO2 reduction, for example, can be used as an incentive to achieve such goals.
Under CS RD, the variable remuneration has to be connected to sustainability goals as well, but material, of course, within the Remuneration Committee. Are you thinking of awarding such variable remunerations in the future?
Well, thank you for this question. Now, actually, it fits to the next agenda item when we're talking about the remuneration report. Let's do it as follows. I'll check whether there are questions about corporate governance under 2c, because this would help. And we'll answer your question then. Is that okay? Question without microphone inaudible for the interpreters. Jos, for the listeners online, this is an inaudible question. We'll repeat it. The question was, why is Mr. van Olphen not present? He was unavailable at this point in time, and we, as the Supervisory Board, thought it was not a problem for the other Supervisory Board members to answer your possible questions.
He gives you his regards, and we talked to him extensively yesterday. That was it with respect to 2c . We'll continue with 2d then, the remuneration report. By the way, this is the first agenda item that we request your advisory note vote on. Now I'd like to hand over to Gisella van Vollenhoven, the Chair of this Remuneration Committee, and she'll tackle your question, as well.
Let me give you a brief introduction on the basis of two points I would like to highlight in our remuneration report. Today's remuneration policy was decided in the shareholders meeting of 2019, and has entered into force in 2020. We've just started the evaluation process. The idea there is that in the AGM next year, we're going to give a new proposal for a possible adapted remuneration policy.
Answering your question, at this point in time, we have no variable remuneration in our policy. The question you're asking, how can you link non-financial goals? This is certainly a question we discuss in the evaluation of our policy. It may be a missed opportunity. Now, evaluation means not only the amount or height of the remuneration, but also the structure and deciding whether we need adaptations. As you know us, we indeed involve important stakeholders in that process and try to find a conclusion before we finalize anything. I hope I've answered your question in that respect. A second point I'd like to highlight, the importance for 2022. As a Supervisory Board, we chose an increase of 6% for our Executive Board members. The policy gives us the scope or range for that.
We believe that the board in the past year has achieved great results on non-financial and financial results. Only one non-financial wasn't achieved, and has a very ambitious goal for the next period, which led to our decision, this exception to the rule of 6% increase. That was my introduction. Thank you.
Have we answered your question? I see you nodding. I see a new question from the VEB. Keyner from the VEB.
I'd like to react to your explanation. The VEB is also open to including the softer, the sustainability factors as a factor in variable remuneration. One condition, please, no variable remuneration whenever financial results are disappointing. I can also live with it if no variable remuneration is paid out when sustainability isn't achieved.
Because I see some companies that are doing poorly, but do lots of good sustainability things on paper for the society, for colleagues, and that pay out very high variable remunerations. Please don't do that. It's good to include sustainability, but always under the condition that financials are achieved at a.s.r. Thank you.
Maybe we can contact you for further consultations on this. Are there any further questions on the remuneration report? I will now offer you the opportunity to fill in your voting form. I have to look into the room and check whether you have been able to finish registering your vote. Yeah.
I believe you've had sufficient time looking into the audience here, and I think that Gisella made very clear that no decisions have been taken for the future, that there's no preliminary decision in any way with respect to variable remuneration. This is still under discussion and a point which we are going to present to you as soon as appropriate. We will also reach out to a number of you to consult further on this. Thank you, Gisella. Thank you for your questions. I'd like to now hand over to Sonja with respect to agenda item three. We are looking at the annual accounts for the financial statements for 2021.
We want to put all of that to the vote, and that is why we give Sonja the floor so that we can then indeed approve the financial statements.
Thank you very much, Joop. I'd like to give you a brief information of the Audit and Risk Committee, A&R C. We have a report on pages 121 and 122 of the annual report. Now, in our committee meetings, next to results and balance sheet issues, we gave special attention, of course, to the effects of the COVID-19 pandemic. Jos and Ewout discussed that. I would like to say that the committee took this up very seriously in line with what Jos and Joop said. With respect to the low interest rate, inflation and their impact on solvency, we discussed the balance sheet and the ORSA based on risk scenarios.
As used in the ORSA, the audit and risk committee was able to discuss and establish that the solvency remains within a.s.r.'s risk appetite. This underlines a.s.r.'s robust solvency position. Next to financial goals and developments, the audit and risk committee also paid close attention to information security, cyber security risks, and compliance related topics such as CDD, the anti-money laundering and terrorism financing law, and the Sanctions Act. The committee is pleased with the steps taken within a.s.r. on these subjects. In 2021, a lot of attention was paid to implementation of IFRS 17 and 9. This is a huge project that the organization has put a lot of work into. The audit and risk committee was kept abreast of all developments in 2021, and this is also a topic on each and every one of our meetings in this year.
The external auditor and the additional engagements were reviewed on a quarterly basis. We have no findings there. Moreover, the management letter and the report by the external auditor were discussed with specific attention to reported key audit issues and controls there. The Audit and Risk Committee follows up on any measures to be taken. We always do that in a very adequate way. Furthermore, we exchanged our views with the external accountant in a very open, critical, and constructive way. That's why on behalf of our committee, I would like to thank KPMG for its audit work over the past year. Moreover, we had regular exchanges with actuarial officers on the adequacy of estimates and assumptions underlying the insurance liabilities on the balance sheet.
In each case, it was established that these estimates and assumptions were arrived at on the basis of careful and prudential decisions. I'd like to turn to the year-end of 2021. In the first quarter of 2022, the results for the full financial year were discussed in detail in the Audit and Risk Committee. This includes the press release, the annual report, the financial statements, the 2021 audit report, and the actuarial function report. This subsequently led to the Audit and Risk Committee giving a positive recommendation to the Supervisory Board regarding the annual report and accounts. The committee also explicitly complimented the structure and readability of the a.s.r. annual report, and I would now like to hand back to you, Chair.
Sonja, thank you very much. Very compact and very thorough. I'd like to hand over Ton Reijns of KPMG, the external auditor who is going to give us a brief overview of the audit work. I would also like to say that he has been relieved of his secrecy obligations for the purpose of this AGM.
Well, thank you very much. I'm happy to give a clarification with respect to the audit work we did. My name is Ton Reijns. We're the external auditor of a.s.r. Nederland. I'd like to explain our independent auditor's report in the annual report and the assurance report in the non-financial information section, as included in the annual report for 2021. I am the responsible person for these auditing activities, and I'm glad to be here live and in person with you.
As Joop already said, my confidentiality restrictions have been lifted for the purpose of this meeting. I can freely speak and answer your points. We indeed extended our independence to last year's activities, and we confirm that once again as of 22 March 2022. Let me discuss these activities. We looked into the consolidated 2021 and the single report for a.s.r. Nederland and gave our true and fair view and a positive report. You can find all of this on pages 278 - 294 of the annual report. We furthermore audited 27 non-financial KPIs and a review of non-financial information also included in the annual report. An unqualified assurance report about the independence of the auditor was given.
We would also like to refer to page 295-298 of the annual report in this respect. My presentation is going to discuss a number of topics in the audit, as included in the slide. Let me start to the right-hand upper side and then move forward clockwise. More details in our report. First subject, materiality. We set up an audit plan with the Audit and Risk Committee on 17 June 2021, and in that audit plan, we give further information about our approach, the materiality. We stick to our risk assessment with an indication of the significant risks, the scope of our audit, as well as other important subjects such as ESEF reporting, which was new for the year 2021. We determined materiality at EUR 40 million.
We based this on the average result of the last three years before taxes, about 4%. We did not deviate from the starting points that we held the year before. Some parts of the financial statements were audited at a lower materiality as reaction to the nature of certain postings. Qualitative factors, for example, which were applied in the audit under note 6.7.5, which is key management personnel remuneration. All stated misstatements in excess of EUR 2 million were reported to the Audit and Risk Committee. They were individual and in their totality, not material for the annual report. We also looked into the continuity presumption report for the first time in our audit report on this. For example, expectations for shareholders.
We looked into climate-related risks and included them as well, and are reporting for the first time this year. With respect to the continuity assumptions and climate-related risks, we found no significant findings. In the structure and execution of audit, we look into the risk of fraud. We assess the reaction of the management with respect to fraud and the functioning of the three lines of defense. In this respect, we also looked at the presumed fraud risk of the management override of control and included that in our deliberations. With respect to non-compliance with laws and regulations, the so-called NOCLAR, we looked into laws and regulations that can have a material effect on the annual accounts. For further information, I'd like to refer to our audit report.
Finally, we were able to take on the full responsibility for the group audit after having sent instructions to the accountants of various group sections to execute certain audit activities for us. We decided which entities and which materiality were at the basis of such audit measures, and we've also taken into account the impacts of COVID-19 from a risk perspective, as well as from the perspective of financial relevance for the components of the group as a whole. In the audit of all components, or practically all of them, have been done by KPMG accountants. We have a coverage of 95% of the own assets and 96% of the result before tax. If there were any specific experts necessary, we included them from KPMG in the areas of IT and actuarial issues. Let's get to our key audit matters.
We identified four of them this year. Last year, they were five. The same as this year, and we included goodwill impairment last year because that was triggered by COVID-19 especially. The key audit matters are those points that, according to our professional assessment, are most significant to report to shareholders based on our audit, and they are here on the slide. The valuation of liabilities arising from insurance contracts, the valuation of hard-to-value assets, unit-linked exposure, and Solvency II disclosure. These were key audit matters that we discussed extensively with the Supervisory Board, the Audit and Risk Committee as with the Executive Board. We discussed other matters, such as the takeover of Brand New Day PPI, COVID-19, and effects in a.s.r. Nederland based on the Ukraine and Russian crisis.
We were present at all Audit and Risk Committee meetings and at some of the supervisory board meetings. We also conducted individual talks with members of the Audit and Risk Committee and the supervisory board. We experienced an active engagement of the Audit and Risk Committee and took note that our observations were taken seriously and implemented. Before I now hand back to the chair, I would like to thank the executive board, the supervisory board, the Audit and Risk Committee, and all others present. Thank you for your attention. This is the end of my presentation. I'm available for questions.
Mr. Reijns, thank you. That was compact and complete. Great, I must say. Are there questions? Mr. Keyner. Keyner of the VEB.
Chair, I have two questions. A fundamental one with a longer introduction and a shorter concrete one.
The more fundamental one, you need to know more about me. I'm a numbers guy. I'm good at math. I'm not that good at socializing. That's just my nature. If I look at annual reports, not only for you, the same thing pertains to others such as Aegon. As a numbers guy, I have difficulty interpreting your numbers. You talk about operational results in excess of EUR 1 billion, IFRS net results somewhere else, but it's nearby, so that's very hope-giving. Next to profit and loss, we see a couple of amendments that cannot be included in the P&L because of the rules, but actually need to belong there, but the rules just don't allow it. Those adaptations aren't rounding off numbers. We see that with other listed companies.
In insurance, the adaptations are much higher than the numbers in the net results. On top of that, Solvency II, and that's capital. It's about EUR 500 million that is freely available. My fundamental question is, how far can I trust that the result that you present to me, specifically your own operational profit valuation, that gives me a trustworthy picture as shareholder? That's something that I have to look into. I mean, the whole IFRS methods are changing. I'm interested to see what's happening. If there are adaptations of plus EUR 2 billion, -3 , and the sun still shines, and it's still EUR 1 billion under, on the bottom line, how far can I trust a.s.r.'s communication with the outside world? I'm referring to your activities, but also to the auditors' ones.
Second question, I hope the auditor can do something about numbers 248. Very concrete question, please, don't worry. Sensitivity analysis. What is going to happen to your Solvency II ratio if the share markets decrease by 20%? I would expect Solvency II to decrease then too, but the contrary is the case. My question is, are you, what's your position in the market? Did you do some overhedges? I think that's easy to answer.
Chair, I'm going to chop up your question. I'm of an age of good stewardship and the external auditor that says true and fair rule. We see now different reports from auditors. And this is a personal comment, I just recognize what you're saying, just keeping up with IFRS, Dutch GAAP, international GAAP, et cetera.
I know that in the supervisory board, we have continuous professional development that is actually needed to keep up with the auditors. You're asking about the reliability of the numbers. I'd like to hand back to KPMG on that. Then you're asking some technical questions in your second question. I'd like to refer that back to the executive board, and I'd like to give, Sonja Barendregt also as Chair of the Audit and Risk Committee, the floor, how we deal with all of this as supervisory. Let me make more precise. Reliable, of course, I know the answer. According to the rules, this is what the result is. That's what you have to be satisfied with. I'm talking about what is sensible and useful for us. We know that everything is according to the rules, but in five years we'll all be much poorer than we expected.
We would, we'll then probably have overhedged, and we have all sorts of factors working against us. I'd like to prevent that, and I want to ask question here today. Answer. Those intentions are something we all share with you.
May I answer KPMG? I'd like to add to the answer that you've just given yourself. The annual report and these financial statements have been set up according to IFRS. Of course, there are additional rules that we test and assess, and we check whether what is in the financial statements is actually what reality reflects. It cannot be contrary. There are checks and balances that look into that. It isn't as far as our audit measures with respect to the financial statements.
IFRS are the rules, and the reporting are in compliance with them, and that is sufficient for the requirements with respect to the financial statements. May I now continue? Ewout is going to discuss this too. I understand your dilemma, and this is a discussion that we have a lot as well. We do a lot of roadshows and meet some investors who want to understand the IFRS results. We have more and more shareholders who actually don't even worry about IFRS anymore. Just say, "Well, this is a number that we don't even include in our spreadsheets." They want to see the free cash flow that you generate as a company and what can you do with that free cash flow. That's a criterion. Then we have internal controls. You want to steer your-
manage your whole company on metrics that people can influence, and that is through the operational results. This is the result that we achieve because we're doing well in our business. Within the shareholders, within one group, you have various views, and we just cannot suffice with only OCC or OCG, sorry, or other numbers. Each shareholder has a different perspective, and that's why we have to show all of that. Well, Ewout, please now.
At least we share the passion for numbers. I think that's important. Of course, the human side is relevant too. I'd like to discuss that some other time with you. I would like to add on to what Jos just said.
We see in the market that there are various parties who actually assess a report by an insurance company in different ways. The auditor's report and the supervisory board look into what the underlying direction of the company is. Because incidental posts, positive or negative, are then disregarded. They look at the actual underlying direction of the company. What is going on in the insurance business? What is the base for our investments, impairments, and realized added value is excluded. That keeps the bottom line understandable. If you leave in incidental items, et cetera, then you can see some divergence in the final results. I think that we were able to restrict all of that quite well.
You see what the market is like, the possibilities there to have some incidentals that don't really say very much about what the business is doing and how it is doing. They have only a one-off impact on IFRS. You have Solvency II. I understand the difficulty in comparing that. That's your concern. The IFRS, the old one, IFRS 4. But I'm afraid that IFRS 17 isn't going to make comparability optimal either. Now, but you will be able to compare all insurance companies. Other parties are also looking at Solvency II to find a way out here. There, you'll have to do a couple of adaptations to make it comparable as much as possible. OCG or OCC, organic capital creation or generation, whatever the market uses, this is freely usable capital.
I think it's also an operational profit, number, but in a more market value definition form. The tendency is that people look at that more and more. The quality of your balance sheet expressed in solvency percentages, but also the underlying free cash flow that you generate with your budget business, which is a market value reflection, in your operational results. Well, maybe I'm presenting myself as more, naive than I actually am. What I want to prevent is that, certainly, if you talk about the underlying standard operational course of, business, that in three to four years, we see and have to note that a.s.r. was underlying a very healthy company. Unfortunately, the top is over it.
People weren't able to find that in Solvency II reports, in profit and loss, in the cash flow. 200 pages on financials only, but people just cannot find out how healthy a.s.r. actually is. We have to trust what you're telling us. Operationally, we're looking at this, the underlying, how many people are looking at this. The auditor looks at IFRS and Solvency II. Are they also looking at what you internally use as a steering parameter? That's what I'm trying to get a feeling for. Jos. I can only say one thing. You don't know our risk functions. Absolutely, are we looking at that. I'm saying we're the stewards of this business, and our task is to hand over a healthy company to following generations and to our shareholders.
Of course, that isn't an answer that gives you solace, but I am convinced that all metrics that are relevant for the long-term durability of what we're doing, that we take them extremely seriously, analyze them seriously, have collected very critical people around us who look into that as well. We have all risk functions in first, second, and third line, where really people then start ringing the bell and react. I think it is quite an interesting question that the market, that shareholders actually approach us and say, "You're much too conservative. Your balance sheet is much too strong. You could actually pay out much more to shareholders." Now, I think shareholders are worthy of everything, but our firm long-term approach is to be a sound company.
Sometimes, people ask, "Aren't you presenting yourself as prettier than you actually are?" That is just not the case. We wish to find the solid procedure. We still have to trust you. There aren't any methods for me to benchmark that. We have to trust what you say.
Ewout. I'd like to answer the question that is still open of the sensitivities. Very interesting and relevant. You're talking about the reduction, the sensitive share market movements, and the effect on our solvency. We are in a standard model for shares that we have in our balance sheet.
We have to keep a certain capital, which is different from a partial model, which means that when share prices go down, as we've seen in the recent period, then on the one hand, the value of the investment goes down, but we also have to keep less of a capital coverage. The denominator has decreased in such a way that it compensates the decrease of the numerator, and that leads to a positive effect. Shareholder, I think that's still strange. Now, if the shares go down by 90%, it's great for the Solvency II. Well, why don't you send a letter to EIOPA about this? They are responsible for this mechanism.
Chair. A discussion about the intrinsic value, about the market.
Maybe it's a good idea from the governance perspective to hear more from the supervisory board. You're triggering quite a lot with your question.
To be quite honest, I really don't have that much to add to what Ewout and Jos just put forward. Every time we discuss the magnitudes you're referring to, free cash flow, OCC, Solvency II combined ratios. All this is very important, and is discussed, and we also discuss the development of the business in financial sense and all. Also all the underlying elements operating result like for like. I really feel that it does give us information. I agree with Jos that a.s.r. is rather conservative, and I agree with Ewout that IFRS 17 is going to lead to a lesser degree of comparability. We will make sure that we include proper explanations in the annual report and the financial statements.
The chairman, quite a part of all the techniques, the external auditor, the internal conversations, the ins and outs and all, how all this works, this deep sense of responsibility that Jos referred to do the proper thing for future generation, that is an overall value that we have here in this company. Are there further questions to KPMG auditors? That not being the case, I will now give you a moment to jot down your vote with respect to the adoption of the financial statements 2021. Since everybody has already filled in the voting form, the voting ballot, and understands how to proceed, I hope that I can suffice by saying that, you've been given sufficient time to fill in your ballot, and I'd like to proceed to agenda item 3b and 3c.
In view of the time, I'm going to deal with them jointly. This is about the policy on dividends, and I'm going to give the floor to Jos Baeten to explain our dividend policy.
I attempted to include that in my introduction, Chairman, unless the meeting wants further explanation. As far as I'm concerned, we can leave it at that.
I see that people here in the room agree with that suggestion. I'm just going to repeat what it is that you can cast your vote on. The proposal is for the financial year 2021 to pay out a dividend of EUR 328.6 million, which is EUR 2.42 per share in cash. After the paid interim dividend of EUR 0.82 per share, final dividend of EUR 1.60 remains.
Are there any questions on the dividend policy or dividend proposal? I note that is not the case, and I would request you to jot down your vote and to cast your vote with respect to the dividend. I see that most pens have been removed from the paper, so this takes us to item four, discharge. 4a , granting release from liability to members of the executive board. This is put to you for vote. This concerns both the current and the former members of the executive board for their performance, their duties in 2021, as shown by the 2021 annual report, including the financial statements 2021, and as shown by announcements and statements made at this meeting so far, otherwise known to the general meeting.
Are there any questions on the part of the shareholders regarding this item? Since that's not the case, we can proceed to the vote, and I request you to fill in your vote on the ballot. I can see that you have become quite skilled at this, so we can proceed to item 4b, granting release of liability to members of the supervisory board. The proposal is to grant discharge to each current or former member of the supervisory board for the performance of his or her duties in 2021, as reflected in the annual report 2021, including the financial statements 2021, and also as reflected in announcements and statements made during this meeting so far or otherwise known to the general meeting. Are there any questions?
I see that is not the case, and I would now request you to fill in your vote for 4b, which is granting release of liability to members of the Supervisory Board. I can see that you've been given sufficient opportunity to do so. Agenda item five, extension of the authority of the Executive Board. The General Meeting on 19 May 2021 granted the Executive Board three authorizations for a period of 18 months, as referred to in the explanatory notes to agenda item five. The Executive Board now proposes with the approval of the Supervisory Board to extend these authorizations with effect as of today. These new authorizations will therefore expire on 24 November 2023. These authorizations give a.s.r. the flexibility to act quickly should circumstances so dictate.
The first one is 5a, extension of the authorization of the executive board to issue ordinary shares and/or to grant rights to subscribe for ordinary shares. Under this agenda item, it is proposed to authorize the executive board as of today for a period of 18 months to issue, one, ordinary shares, and two, to grant rights to subscribe for ordinary shares up to 10% of the issued share capital of a.s.r. Nederland as of today. The executive board will only be able to exercise this authorization with the approval of the supervisory board in each case. Do you have any questions? Since that is not the case, I would request you to fill in your vote on the ballot. If you allow me, I'd like to start reading the second agenda item, 5b: authorization of the executive board to restrict or exclude the legal preemptive rights.
It is proposed to the General Meeting that the Executive Board be authorized as of today for a period of 18 months to restrict or exclude preemptive rights of existing shareholders with respect to the issue of ordinary shares or granting rights to shares based on the authorization you just granted. Again, the Executive Board may only exercise this authorization with the approval of the Supervisory Board. Do you have any questions? Since that is not the case, I would request you to cast your vote, and in the meantime, I will address agenda item 5c: proposal to authorize Executive Board to acquire own shares by the company. It is proposed to authorize the Executive Board for a period of 18 months, starting today, to acquire ordinary shares in the capital of a.s.r. Nederland through stock exchange or otherwise.
Executive Board will only be able to exercise this authorization with the approval of Supervisory Board. A maximum of 10% of the issued share capital of a.s.r. as at today may be repurchased at a price between the nominal value of the shares in question and 10% above the average closing price during a period of five days prior to the day on which the shares were acquired. Are there any questions?
Yes, says Mr. Reijns. Yes, I'd like to respond to that indeed. You can only spend your money once. Now you've got some additional cash according to the rules, and the rules can change, of course, or the interpretation thereof. You've got some cash, and you can use that cash in several ways, several possibilities. One is an acquisition. Two is making the company grow. I'm in favor of that.
Acquisitions could be dangerous if they're not responsible. The third thing you could do is expand your buffers beyond what the rules require, and I think that's great to have larger buffers as a shareholder. Now you're going to buy back shares and that decreases your possibilities to grow, and it reduces the buffers. If there would really be an excessive amount of money, I don't think that's the case, I would prefer you to increase the dividend ratio to 50%. That at the very least I'd be paid a couple of euros. I'm against this authorization and the share buyback program. I'm gonna give you one more opportunity to change your mind.
I don't think I'll be successful, but please explain to me one more time, why do you think it's such a good idea to buy back shares? Because I really want you to use the money to grow the company, and if you can't do that, because there have to be opportunities, has to be appropriate. I would prefer the buffers to be more robust. Gives me a feeling of safety. To summarize it, you're allowed to do this according to the rules, but that doesn't mean you have to do it.
Chairman, I know Jos Baeten as a man who takes every and any opportunity to explain why this authorization for the executive board is such a good idea.
Mr. Baeten, I completely agree with you, and we've expressed that our preference is to generate organic growth.
This is the most stable and value-creating growth because you can have an impact on different elements. Over the past two years, we carried out lots of accretive acquisitions, and that's the best way to use our capital. We just talked about how robust our balance sheet is, and we know it perhaps a bit too conservative. I was raised in a culture in which you actually always have to make sure that your balance sheet is very, very conservative, and if you have a headwind or a gust comes, it doesn't topple you over. That is our dilemma. That applies to our executive board as well.
Not all shareholders agree on your view, so at this point in time, we are generating much more capital than we need to grow, than we need to keep our buffers very robust and the money that we need for acquisitions, the EUR 100 million that we're reserving really, possibly to buy back shares early next year, once 2022 has also passed safely. We've always said, should we have a better destination for the money, acquisition or additional growth, we will not make use of the share buyback. It's not that we're saying we really have to do this come hell or high water, but in order to balance out all the interests of all shareholders, this is what we decided to do. Should there be a wonderful takeover opportunity, this would be the first thing.
Should it be substantial, this would be the first thing that we would strike. Comment off mic, the interpreter apologizes. We gave this some thought as well. I have said it on several occasions, we want to be predictable. This dividend, by the way, we're going from operating result related to a dividend that is progressive. The base has been EUR 242, and we said, every year we want to increase it with 2%-3%. The drawback of paying out a one-off high dividend, that is that afterwards people will complain that the dividend became lower. I'd like to have it grow in a stable way a bit every year, and then from time to time, do the share buyback. Fundamentally, I do agree with you. Comment from the shareholder off mic. The interpreter cannot hear what is being said.
I would almost say, well, why don't you join us on a roadshow and talk to all the different investors, all these different investors and their strategies, their reason to buy a share. It is absolutely impossible to do it right for all shareholders at the same time. We think that we found a good balance to serve all shareholders in a way that we feel that we are paying out a good dividend. Some shareholders say share buyback. That's what we also try to. Perhaps not always good, but we're trying to engage with all shareholders and do the right thing for them.
Chairman. Mr. Baeten really did his best. I would like to point out that this concerns an authorization. I'd just like to add that this is an authorization. Are there any further questions about this topic?
Please cast your vote and fill in your vote on the ballot. I hope you agree that I continue with item six, proposal to cancel shares held by a.s.r. Proposal to cancel shares held by a.s.r. In 2021, a.s.r. repurchased shares for an amount of EUR 75 million, and it is proposed to cancel these shares, more than 2 million, in order to clean up the capital structure of the company. There's currently no other destination for the repurchased shares. I would like to see were there any questions with respect to the proposal to cancel the more than 2 million shares which were purchased in 2021. By the way, I understand that your question was also could also be related to this topic, but the question was already raised. Right.
I see that there are no further questions, and I would request you to fill in your vote on the ballot. While you're doing that, I hope you allow me to proceed and to multitask and to proceed to agenda item seven, Composition Supervisory Board. Agenda item seven A. Proposal to reappoint Sonja Barendregt as member of the Supervisory Board. In view continuity within the Supervisory Board, Sonja was requested to be available for reappointment for a period of four years. I hope you'll understand that after she intervened just earlier on. This reappointment is in line with the Dutch Corporate Governance Code. As a member of the Supervisory Board, Sonja has made an important contribution to the development of a.s.r. in recent years. Also as Chair of the Audit and Risk Committee, her expertise and experience were very valuable.
As you've been able to read in the documents of the meeting, the Works Council has been asked to give its opinion on the nomination, and the opinion of the Works Council is positive. The Works Council has decided not to further explain its position at the annual meeting of shareholders. Before I give you the opportunity to ask questions, I'd like to perhaps briefly give the floor to Sonja.
Thank you, Joop. I've been a supervisory director for this wonderful company for four years now. For those of you who attended the AGM four years ago, at the time, I explained why I really wanted to become a supervisory director at a.s.r. That had to do with the fact that a.s.r. is an insurance company for all the insured, and sustainability is a focus.
Was a focus at the time and still is, and did very well in the benchmark with respect. I mentioned the honest insurance company selector. In the board, in both boards, people were very passionate. That was the reason for me to join supervisory board. Over the past four years, I have seen how a.s.r. has developed and grown, not only on a financial level, but also internal control, customer focus, sustainability, and also personal development of employees. What I see is that we still have a very passionate executive board and also a very passionate supervisory board. What I really enjoy is that a.s.r. represents all stakeholders and is very much a people's business and something I'm very proud of. I had nothing to do with this, by the way, but that a.s.r. responded very quickly to disasters.
I'm referring to the floods and the storms. This is something you, as a supervisory director, are very proud of. The open and transparent relationship between the executive board and supervisory board is also something I'm very proud of. I'm very willing to perform this duty for another four years.
Thank you, Sonja. Are there any questions among the shareholders? I see that that is not the case. I would request you to cast your vote or fill in your vote on the ballot form and to respond to the proposal for reappointment of Sonja Barendregt. This was the last agenda item that we needed to vote on. If you've jotted down your votes, I would request you to hand over your ballot to this civil law notary. It might be a good idea to pick them up.
I think that would be more convenient. I hope you agree with me. We are moving towards the end of the meeting. If we start walking around or going outside, we'll be losing a lot of time. A comment off mic. The interpreter cannot hear the comment made off mic. Apparently, the proposal is to count the votes against and the abstentions. Chairman, thank you for your suggestion. Legally speaking, we have to pick up all the ballots, including the votes in favor, against, and abstention. Someone will be collecting all the votes, all the ballots, and in the meantime, I will highlight that we are always open to any new suggestions. Perhaps I can briefly comment on this. Of course, we have considered working with handsets, etc. We're also trying to make sure that we take decisions in the interest of all stakeholders.
The presence of shareholders or the attendance of shareholders related to the price of re-renting the handsets was sort of out of whack. We said, "You know, this is sort of folkloric and takes us back to where we came from. Let's do this in the old-fashioned way." We did this for reasons, for financial reasons. It just costs a whole lot of money to use the handsets, so we decided to do it in the old-fashioned way. One of the shareholders would like to take the floor to comment on this. It's a comment off mic. The interpreter cannot hear what the shareholder is saying. We're going to answer your comment seriously. Well, we hardly ever print annual reports. The annual report is digital, be even more interactive next year, and indeed, we did consider.
Well, we decided we're going to print a small number of annual reports. Some people really appreciate it, having it in hard copy. 80% would say, "No, I don't need a hard copy," but there's always 20% that would like to have it in hard copy. As I just explained, we're trying to cater for the different shareholders. Some people simply do appreciate a hard copy. Thank you. More comments off mic. I'm just looking at the clock here because we had wanted to conclude the meeting around noon. It's a bit later, but it was really a pleasant meeting. In any case, that's how we experienced this. Would it be okay to proceed to any other business, and then after that, I can disclose the voting results? That's a different order of business.
Any other business, please go ahead. Please use the microphone.
Good afternoon. My name is Tey. I'm from Amsterdam. We just talked about electronic voting and how expensive it is. I wanted to ask how much it costs to vote electronically. I also attend other AGMs, smaller ones as well, and some do have this facility, being able to vote by app or a handset.
Mr. Baeten, I don't remember the exact figure. It was discussed with me some time ago. I don't really know the numbers off the top of my head, but in any case, I thought it was worthwhile not to spend that money. I'm going to look it up, and I will tell you later on. EUR 25 ,000. I prefer to serve you a good sandwich after the meeting instead of saying, bye-bye.
Chairman, I think it's a good thing we said this at the very beginning of the meeting. Talking about communication technology, we feel it's very important to have this meeting in a hybrid form, so that there are two ways to engage with a.s.r. at the meeting online and here in person and webcast. We've got that. You know, talking about communication with shareholders and the expenses involved, we always try to engage in interaction with you as best as possible. Any other question for any other business? There being no questions, I'm not gonna close this agenda item because first we will proceed to the vote. A shareholder would like to ask a question off mic. The cost of electronic voting is EUR 25 ,000. Thank you. We already talked about the relationship that we have with the farmers.
The farmers also like to cut costs, so do we. There's a conversation going on in the room. The interpreter cannot hear what's being said off mic. Chairman. Someone made a joke that a cost can always be divided by the number of shares. Yeah, well, we use that money to buy back shares. Well, to the notary, I don't think we have any more jokes. Well, just goes to show how thorough our people at the secretariat and the notary are. Ladies and gentlemen, the results of the vote. Will we be showing anything on the screen? No, we won't. There you go. You can check everything on the website, as you know. I'd like to inform you that at this meeting, 1,803 shareholders are represented.
100,458,424 votes, which is 74.64% of the number of votes. The remuneration report has been approved with the result of 77.99%. Is that correct? 97. 97.99%. You said 77%. Oh, I said 77%. I'm so sorry. Well, thank you for your 97.99% votes in favor of approving the remuneration report. 100% of you agree with the financial statements. 99.46% of you agree with the dividend. 99.35% has gone to discharge to the Executive Board and the individual members. 99.35% has gone to discharge to the Supervisory Board, that is the current and former members. 99.6% of 5A voted in favor of the entitlement authorization to issue shares.
97.8% of agenda item five-B voted in favor of 5b. Well, agreed with that. 98.19% agreed with the authorization to buy back own shares. 99.96%, isn't that interesting? Agrees with canceling the own shares, and 98.7% agrees with the reappointment of Sonja Barendregt. Ladies and gentlemen, thank you. Thank you for the way you've expressed your faith in the Executive Board, Supervisory Board, and the company as a whole. Outstanding. Still there's agenda item eight, any other business. Are there any additional questions on your part? I see that is not the case, and that brings me to agenda item nine, which is closing. I would like, on behalf of the Supervisory Board, the Executive Board, and all the employees of a.s.r., I'd like to thank you for your trust in us.
I'd also like to thank employees and executive board of a.s.r. for their commitment in this past year, which once again, was an extraordinary and eventful year. We see from the performance of the company that you deserve our acknowledgement for that. It has led to wonderful results, as Jos always says, attending to all the interests of all stakeholders. Once again, I'd like to thank you as a shareholder for your trust in a.s.r. It was wonderful to host you here again on our part. Well, we very much appreciated the questions you asked and the broad questions you asked. Just goes to show how involved you are with our company. We appreciate that. Thank you very much for coming, for attending the meeting. Outside the hall, you can enjoy the lunch that we're serving outside. Thank you very much.
Thank you for coming. The meeting is closed.