ASR Nederland N.V. (AMS:ASRNL)

AGM 2020

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May 20, 2020

I hear with open the shareholders meeting of ASR, and I would like to warmly welcome you all to this virtual meeting. Of course, we regret not being able to welcome you here in person in Utrecht. For many of us, the corona crisis is a difficult time. It is something that we have to pull through. And I realize that for many customers, for employees and shareholders, this crisis comes with serious issues such as illness or even deaths of loved ones. Furthermore, customers have been confronted with economic consequences that have been very serious with respect to, for example, unemployment or even bankruptcy. This is how we see the consequences of this crisis in very many ways. And therefore, it feels even strange to look back on the year 2019. 2019 seems so far away. And if you look at the numbers, it was one of the record years of ASR. But let me first talk you through a number of formalities. On behalf of ASR, the following people are taking part in this meeting. First, we have Mr. Cor van den Vos, who is Deputy Chair and Chair of the Audit and Risk Committee. We have Hermann Hinson, Sonja Barenrecht, Gisela von Vollenhoven, Chair of the Remuneration Committee and Gerhard von Olofen. Furthermore, the full Board of Management, Juss Parten Chair, Annemiek von Mehlich, CFO and Ingrid de Swart. On behalf of our auditor, we have the virtual presence of Mr. Martin Koning. He will discuss under Agenda Item 3, the annual accounts and the dividend. He will give a presentation and even answer some submitted questions. As Secretary of this meeting, Mrs. Diane De Haute is going to take the records. There's going to be a recording for the minutes, the minutes will then be approved and signed by the Chair and the Secretary. Because of the corona crisis, you were able to submit your votes via proxy. Our notary public, Paul van der Beel, indeed supervised the correct course of voting and is here today as your proxy holder. The agenda items that need a vote are agenda item 2, remuneration report 2019, an advisory vote here Agenda item 3, the annual accounts. Agenda item 4, discharge. Agenda item 5, extension of the authority of the management board and agenda item 7, the composition of the Board of Supervisors. I would now like to note that the convocation to this meeting has been done in accordance with the legal requirements and the statutory requirements. Furthermore, there have been no requests to add or change the agenda so we can follow it as proposed. Practically, I would like to inform you that you can follow this meeting via webcast in Dutch and in English, and you can indeed look back on the recording via our website at a later point in time. You've had the opportunity to submit questions beforehand. We have received 30 and we're going to do our very best to either cover them in the presentations or give answers after the presentations. Those who have submitted questions will then receive the opportunity to ask follow-up questions in the course of this meeting. And we again will do our very best to deal with those during the meeting and in any case, all of your questions and answers will be shown on the website after this meeting. I would like to now continue with Agenda Item 2, the annual accounts for 2019. The explanations will be given by Jos Barten in his presentation on the financial results for 2019 and he will also tackle dividend policy, which is further down on the agenda. And I expect that he will also touch upon the corona crisis. Joos? Thank you, Board, I warmly welcome you to this virtual AGM. We have decided in light of the circumstances to proceed this way, and I hope that all those who are following this meeting live or at home or in their offices are comfortable and will manage to sit through this AGM. We're going to make it as much fun as possible with the technical possibilities that we have. Having said this, today, I want to look back at 2019. Well, that feels like looking through a photo album of our youth, pondering on the beautiful years that we've passed 2019 in the light of everything that happened seems so far away. But nevertheless, that's what we are going to discuss today. Obviously, as said, it's been a good year for ASR in operating terms, in financial terms. But beyond this, we've seen many things happening. I would like to mention we've seen a significant change in the Executive Board. Chris Vigay, a colleague I've worked with for many years, at the end of the year decided to leave us. And from this particular position, I would like to thank him for everything he's done for ASR and with ASR. And at the same time, I'm very happy and very proud by now that Enric Vossoir and Jos Beaton have strengthened our team. The great thing about crisis is that a team gets attuned very quickly. And I have to say that the cooperation with ENEMIC and with Ingrid feels like we've been working together for a long time. Managing a crisis is demanding on an organization, and I'm very proud of the way our staff have been working and are working to this day to face the crisis. I'll come back to this in a moment. And I'm saying this in full awareness of the impact of the safe environment that we've decided to create for our employees being available for our customers, this is something that's been demanding and something that Kig mentioned in his introduction. For some of us, this crisis is a time of difficulties, a time of great impact where maybe friends or family members have been lost or that things you have been working for, for a year all of a sudden fall between our fingers. And we as an insurance company try and fulfill our natural role and trying to assist our customers, our clients that are facing difficult times to the best of our capacity. Having said this, I would like to ponder for a moment on our financial results for 2019. 2019 has been an excellent year for representing one of the best years in our history. We succeeded in exceeding this in absolute terms in 2019. We've had an operating result of €858,000,000 which exceeded the record year of 2018 by €109,000,000 amount. Then the return on equity amounted to way above the target. The target ratio is between 12% 14% in return on equity. So achieving 15% over estimated this rate and the combined ratio, the ratio between the premiums and expenses amounted to 90 €93,500,000 which is better than our target range of €94,000,000 And this was particularly due to the fact that we had no major non life events like the storm we've already seen in 2020. Then solvency. Solvency remained robust at 194% at the end of the year. And the solvency developments already includes our intention to pay our dividend for 2019. We had a lower UFA Incorporated, but also it reflects a development in VA in 2019. At the beginning of 2019, VA was 24 points at the end. It had decreased to 7 points. And nevertheless, our solvency at 194% remains very robust. Then the organic capital creation amounted to EUR 370,000,000 which once again is in line with our forecast, our outlook. It already includes the lower UFR and the UFR drag as a result of the ever lower interest rates we have seen throughout the past year. And it also incorporates the higher capital utilization, given the fact that we have seen a fine growth throughout the past year, particularly in the invalidity operations. Now that brings me to one of the or the disability operations, sorry. This leads me to one question by VEB. What about the definition of OCC? Well, we have adjusted definition at the end of the year. And the main reason for this was the following. We saw very frequently our shareholders and analysts ask for explanations on the reasons why ROCC seemed lower than that of other stock, other insurance companies, particularly companies in the Netherlands. The main reason was based on the assumptions we used for the investment revenues. And therefore, the main change in the definition is the adaptation of the long term expectations. For instance, for fixed income, we have moved to so called market observable spreads. And for equities and property, we have taken an absolute return assumption for equities of 5% and for property of 4.1 And for the connoisseurs, the fine connoisseurs among you who really want to And for the connoisseurs, the fine connoisseurs among you who really want to know the details of the different definitions of OCC, let me refer you to Page 12 of the analyst presentation that we conducted for the presentation of the annual results. You can actually listen to the podcast of the analyst presentation that you can find on web page where Annamiek explains the nitty gritty details of the OCC share definition change. Based on our strong performance of the past year, our initial intention was to act in line with our dividend policy of paying a progressive dividend to pay out a total dividend of €1.90 per share, which would amount to an increase of 9% in comparison with the previous year. Now I'm sure you've heard that we have decided to postpone the definition and the payout of a dividend. I will come back to this later on in my presentation. But before we move to that point, I would like to briefly address the strategic developments we've seen throughout the past year. And let me start by some words on sustainable value creation. Particularly in these times, and here I am addressing 2 questions, LaunchMyVEB, it's important for ASR to stick to our sustainability policy that we have launched. We are deeply convinced that in the long term, only companies that contribute to a more sustainable world and to decreasing the burden we are imposing on our climate, to have a reason to exist. And therefore, despite the crisis, we stick to our way of managing the company and we stick to our sustainability policy. How? Let me give you a few examples. First of all, I would like to address our business and the products we offer. We focus on sustainability. We are a main player in disability insurances. And here, we focus on sustainability, employability, where through the vitality program, we help our clients to have healthier lives, more vital lives, where at the same time, we help them integrating back to their job whenever they would fall ill. Also in mortgage operations, we see that the houses of our citizens can be made more sustainable, and therefore, loan component for making their homes more sustainable. And then in P and C, we have decided to steer, as you can see in the most recent campaign, to steer on more sustainable repair processes. So 5% of all repair operations are sustainable, and we will define a target for 2020, making sure that by 2025, we'll be able to manage specifically on having a more sustainable execution of repairs to cars and domiciles. We're also making our customer relations more sustainable. We think that long term relations with clients are good for both companies and clients. We measure this by verifying the net promoter score of our clients, and we've seen an increase of the NPS from plus 42 to plus 44. And given the fact that many of our products are distributed through intermediaries, we verified NPS there as well, and we also saw an increase of the appreciation of our products moving from plus 60 to plus 62. We are major investors. And as investors, we have defined a number of targets to contribute to a more sustainable society. First of all, we've decided that towards 2021, we want to invest at least EUR 1 point 2,000,000,000 in impact investments. By the end of 2019, this amount had grown to EUR 900,000,000. The second target is that at least 95% of all our investments in mortgages and B and C should be verified, should be checked for CO2. The current score is 8% to 9%, and we're going to attach targets to this in order to be able to manage towards a lowering of the CO2 emissions. And the acknowledgment by the surrounding world of our efforts can be seen from 2 replies, 2 reactions. VBIDEO has commended us for 2 years on a row for being one of the most sustainable investors. And also, we have shown on the most sustainable investors as insurance companies as well. Well, we also own a building, an office building, and we have our own operations. And here, we also focus on sustainable operations. We've been highly successful last year. The building, the office building from which we are conducting this meeting is now completely CO2 neutral. This summer, we have disconnected from the gas grid. We are not using any gas. All the heating cold from the earth. And electricity is fully provided by solar and wind power. The main challenge remains the reduction of commuting movements. We have defined a target stating that by 2025, the commuting burden from operations should be reduced by 50% And in the light of the fact that for 10 weeks, we have been working from home, 2020 may be a year where at least as a one off, we will reach the target. Certainly, the fact that our staff are working from home will help us achieve the target that we've defined for 2025. And besides all sustainability elements, I would like to also address a number of other strategic developments that we've seen in 2019. First of all, we're very glad that the integration of Loyales that we announced was completed on the 1st May 2019. Loyales has become a part of Loyales and it wonderfully matches our strategy, particularly on sustainable employability, helping large groups of employers and individuals through our vitality program, allowing people to live more healthy lives and to focus on prevention and reintegration. In P&C, we've also seen an important development. We believe that for the long term, it's important to have digital ways, as we've seen this crisis, to interact with our clients. Implementing our new P and C system hasn't only made our company more competitive and more efficient and hasn't only decreased our costs for in a sustainable way, it has also laid the groundwork for a more digital communication with our clients. If you look at Life, we see that past year has seen several reports on what we do. We've been migrating our LifeBooks to a new platform. We've completed this process last year. So all these 7 portfolios are now integrated or migrated to the new platform. We have less variable IT costs and lower IT costs for our life operations. And this is really important because this means that the costs of individual life policies will go down. We've also accelerated immigration. And by the end of 2020, the L'Oreales life portfolios and the VVRA life portfolios will also be operating on the new ASR platform. Then a few words about our fee based businesses. They have been performing very well as well. A good example is mortgage fund by the end of this year. We already showed a growth of €2,000,000,000 in assets under management and the milestone of €5,000,000,000 in assets under management was in sight and has now been passed. All these successful strategic developments led to a situation where we could launch a dividend proposal in our press release on the 19th February, amounting to a point in the next slide, the point being that we wanted to pay out €1.90 per share, €0.70 had already been paid as an interim dividend in 2019. Well, all of you heard the news that based on the European regulators' news and the announcements of the Dutch Central Bank, we decided to suspend payout of dividend. We've been very clear, and we've repeated our message this morning in our press release that it is our intention to payout the dividend later in later this year, and the payout will develop depend on further developments. Among other things, the financial impact of the COVID-nineteen crisis on our company. This briefly brings me to the answers to a number of questions from the side of the VEB Association and also a question by Mr. Stevenson. The postponement of the payout of dividends was not related to the context about this position with our regulators, it's been made clear to us and we understand this in the light of the experiences we have in the Netherlands in 2,008 that regulators want to know more about the short term and the midterm effect of the COVID crisis for the balance sheets of insurance companies. And in order to avoid capital being paid out like in 2008, prior to the crisis, after which companies had to apply for external support, the financial sector has been asked to be reluctant in paying out dividends. First, getting greater clarity on the financial impact of COVID-nineteen. I'll come back to that impact in a moment. And although we are confident in the strength of the balance sheet of ASR, we are certain that we have enough solvency to pay our dividend. Nevertheless, we heeded the request of our regulators. We think that the relationship with our regulator is a very precious one, and we have full understanding for the arguments that have been presented. And therefore, we suspend the payout of dividend. This also explains or shows that this Solvency II ratio allows us to pay dividends. We have in our policy now that if the Solvency II ratio is above 140%. We can pay out cash dividends. The management hurdle for solvency is 160%. And for buying back corporate shares, the solvency II ratio is above 180%. None of these three hurdles would be affected by the crisis as we can see now. And therefore, from the point of view of solvency, ASR is able to pay out dividend, and it is our clear intention, as I said before, to do so later this year. As I said before, this depends to a large extent on the further development of the financial impact of the COVID-nineteen crisis. This is why we decided to break with our habit of launching Q1 reports or why by presenting a Q1 report informing analysts of the possible results of the crisis. First of all, I want to address the effect on our clients. As it was said in our introduction, from day 1, our main focus was to assist our clients as much as possible. We prefer doing this on an individual basis. This may be in mortgage operations. This may be in PSE operations, in other operations. Whatever clients think they're getting in trouble, we encourage them to contact us, allowing us to take a case to case analysis make a case case analysis of the best way to help them forward. This proved effective. By now, we've come to arrangement with about 1,000 clients about payment holidays or about payment arrangements, about 200 mortgage clients and another number on the P&C side. And this answers to one question by Mr. Stevenson. If you compare this with our total customer base, that's not a disturbing development, but we are realistic as well. We haven't come to the end of the COVID-nineteen crisis. So I think that in the time to come, we will see an increase in these numbers. At the same time, we also see that the customer satisfaction has also increased over the recent period. And therefore, I would like to thank all the 4,000 staff working from home for the way they have proved capable to provide adequate assistance to our clients. This brings me to our employees. This is an asset that we don't show on the balance sheet, but that actually makes our company successful. From day 1, we decided to ask all employees to work from home. I'm very glad we did. And I think this gave the sense of safety to our employees, allowing them to work from a familiar environment. This is reflected in the mood monitor that we conduct on a weekly basis. Our employees tell us that they're happy. At the same time, they tell us that if you have a family, if your partner works from home at the same time, if you have to do homeschooling or if you have to be at home for 10 weeks in a row, there is an increasing risk of mental problems. And this is why rapidly after the start of this intensive period, we decided to give all our employees a possibility to disconnect for 2 hours, asking other colleagues to support customers, allowing them to focus on the well-being of their families or allowing them to provide care to elderly family members, for instance, where which might be a source of concern. We've seen that this has done good to our employees. And at the same time, we understand that if this is going to last for too long, there will be an increasing employees back employees back to their offices as soon as this is safely possible. From the point of view of our responsibility for society, we try and assist those around us as well. It may concern little things. Let me give you a few examples. All employees who have a B. I. G. Medical registration were granted the possibility to maintain their salary and to return to their previous medical jobs, providing assistance in health care or in hospitals. A group of our employees is currently assisting a platform through which families with language difficulties who have the wish to provide homeschooling receive assistance, reading stories to children a few hours a and also many of our employees living in the Utrecht region are supporting initiatives in the Utrecht province providing care. And I can give a last example, which is the fact that twice a week, we provide fresh fruit to our employees. Usually, this happens in the office. And we continue to contract providing the fresh fruit to people in hospitals at the moment. And we think that this is the most we can do to meet our corporate social responsibility. Now a few words on the financial impact in Q1. This morning, we have published a press release showing that the operating profit of Q1 is EUR 184,000,000. That's a good result, certainly bearing in mind that this and also and also taking stock of the EUR 18,000,000 related to COVID 912 in life operations, giving a small portfolio of guarantee products that we have in human linked. EUR 12,000,000 were added to the results, particularly given the enormous drop in share prices in February. Now this may change if the stock prices increase, but also we had seen €6,000,000 in the disabilities. And therefore, in the light of this, Q1 has shown a great result. You also see this in the combined ratio. Our target is to be between 94% 96%. It's 94.17%. And in the Ethiopian 2019, it was €94,300,000 And the remaining results is because of €6,000,000 on the disability side. In Q1, the combined ratio also is good. We show a good solvency to 35%. This is a result of our standard model. And that brings me to one question that was phrased by VEB. We are aware that there is a significant effect of the increased VA at the end of Q1. VA was at 46 basis point, where at the end of the year was still at 7%. If you would continue that graph towards the end of last week, then the VA would now have dropped to 33 basis points, which shows that the volatility adjuster is volatile itself. And this means that we are having no illusions. We are looking very carefully at the underlying solvency. And so far, the underlying solvency has been developing in a way that matches our solvency policy. So we see that we are on course for solvency. Now the 2 35% already takes into account our intention to pay out dividend later this year, and it also takes stock of the intention to complete the remaining €75,000,000 euros repurchase of corporate shares. Something else that is important is the development of written premiums. In Q1, we have seen a growth of 18% of gross written premiums, meaning that we've come to EUR 1,800,000,000 in the first quarter. Partly, this is related to the fact that Loyales has joined our ranks. We believe in disregarding that acquisition and only looking at organic growth as reflected in disability and B and C, I see that we show a growth of 7.6%, which is a fine performance. We have many questions now about the effects of COVID on business operations. Well, I would like to have a crystal ball that would allow me to do any kind of forecasts. However, making forecasts is very difficult, particularly about the future. And currently, I cannot give you any realistic assessment of the impact of the crisis for this year or next year. I can share some of the business dynamics that we see, giving you an impression of the areas that may or may not be affected by the COVID crisis. Let me start with life. We are a big insurance company for funerals, and we may expect increased mortality in the Netherlands also to be reflected in the operations of our funerals. We've seen this. We've seen a slight increase in report on death than the same period last year And in line with the reports of the National Institute For Public Health, we see a decrease in mortality. And we think that as we see things now, this will be more than compensated by pensions. We have increased mortality here as well, and we take stock of the so called longevity risk. And the way we see things now, the additional payouts in funerals will be compensated, will be offset by pensions not being paid out as a result of mortality. Then another development. Obviously, we see an effect on the possible downgrade of some of our investments That will not be immediately visible in operating results because that will be reflected in the IFRS results at the end of the day. But it's completely unclear what the scope will be, but we think that something that will be reflected in the operating results will be the decision of companies not to pay out dividends. If no dividend paid out, that will be reflected in the operating results. And something else is the possibility for shops in the retail front not to be able to pay the rent. The product line where there will be the most direct impact is visibility. At the beginning of the corona crisis, we saw an increase in the number of claims. Now right now, this has come to a normal standard by the end of April, beginning of May. We've seen a trend for the applications to normalize. And the challenge for us is, as a disability insurance company, to enter into a positive engagement with our clients, encouraging them to get back to work. And it's very important for labor experts to be able to visit our clients to get them back to their jobs. And as a result of social distancing, it's become obviously very difficult to send out our experts to visit clients at home. So the major effect that we expect to see is a temporary impossibility to keep the level of reintegration or the speed of reintegration on track. How fast this will normalize is something that we'll have to see in the near future. In terms of P&C and of property and casualties, in March early April, we've seen a decrease of traffic movements. And therefore, there has been a slight decrease in the traffic related claims. And at the same time, there hasn't been a full lockdown in the Netherlands. There has been traffic. And recently, we've seen actually an increase in bicycle related incidents. Nevertheless, in property and casualties, we've seen a slightly positive development compared to the year before. We have seen a slight increase increase in claims related to travel and cancellations well. Then property is still unclear. We expect to have more COVID rates of clients from clients who have been hospitalized. This is health, apologies, OFSO problems. At the same time, in the normal development of medical claims, which you see people not going to the doctors, not following treatment. And obviously, we assume that some of the medical treatment will resume later in this year. From besides the technical point of view, we also have a balance sheet and we are investors. Most of our investments amount to fixed interest investments, where beside government bonds that have AA or AAA rating, we also have a portfolio of corporate bonds and financials that the average rating will be A-. And within the corporate bond portfolio, we have a relatively small exposure to those industries that have been hardest hit in the crisis. We don't invest in oil and gas. And that is partly also related to our sustainable policies. And we have very few investments in leisure related companies. In the near future, this is a question that we receive regularly, it's not inconceivable that throughout the coming 6 months or longer, some companies will be downgraded in their ratings. We've obviously reviewed our portfolio. We obviously made an assessment of the risk that we can identify. And in order to quantify this risk, we have applied a very strict scenario, which assumes about a 20% base point drop of all our corporate bonds, a downgrade by 20%. So it's 3 notches downgrade, 3 letter downgrade. And if you look at the impact of that on our Q1 twenty twenty, the Solsys II ratio, it would be approximately a decrease of 5% point. So we think that even with such a strict, such a severe scenario, we can manage. What about our real estate portfolio? We are investors in real estate, and we're very happy that a lot of this is in land. And as we see historically, land proves to be a very stable investment asset. So we are not concerned by this portfolio. In addition, we also have a retail portfolio. This fund has always been used as a premium fund, and that means that from all the available retail in the Netherlands, more than 10% qualifies as an investment stock, mainly situated in the major cities in shopping areas on the high streets. And we also invest in shopping centers, particularly shopping centers with supermarkets. Now obviously, we cannot exclude the possibility of downgrades in this portfolio in the future. But currently, we are comfortable with the quality of our real property portfolio. Then we have a mortgage portfolio. Once again, this is a portfolio we feel comfortable about, the to value ratio of the portfolio in average is 34% currently, and about 40% of this portfolio is guaranteed by the National Mortgage Guarantee System. And if you look at the number of clients who have now applied for a payment holiday, we are not hard hit. This is about 200 cases, although we assume it may grow, but it's a small percentage of the total mortgages portfolio. So we are comfortable with the quality of our investments. And at the same time, we are realistic. We know that some downgrades may present themselves later on. And that brings me to the next slide. It's a bit too early to give a full quantitative impact of 2019. But our current take is that the overall result for 2020 will be closer to that of 2018 than to that of 2019. Why? That also was one of the questions. Well, we obviously look at all possible scenarios. Well, you have to be careful in elaborating a scenario into a forecast. We use various scenarios, and this was a question of both Mr. Stevenson and VEB. We started by looking at the scenarios of the Netherlands Bureau For Economic Policy Analysis. And we selected 3 of them, and we looked at the potential impact of those scenarios on operations. And based on this, we try and make assessments of the possible long term effect of COVID on our business operations. And this is the rationale for us to assume that the operating result will be closer to that of 2018 than to that of 2019. Obviously, we looked at our capacity here to create capital. Our best guess at this point in time is that the target that we have published, which is about €225,000,000 in this year, it doesn't seem to be in jeopardy because of COVID. So we stick to our expectations for capital grid. Now what about the operations? Well, we've seen a growth of about 7% in disability and P and C. We assume this growth will slightly decrease in the remaining part of this year. And now I come to the conclusion of my presentation. At the same time, we think that our balance sheet that proved solid in this difficult time needs to be protected by focusing on the interest of our policyholders, but also on the interest of our investors. And that means that as we announced in our press release, we reiterate our intention to pay out the 29 final dividend later this year. And this also will happen if it suits the further developments of the COVID-nineteen crisis. And as soon as we will have any developments that we consider necessary to share with the markets, we will do so. Having said this, we have already answered some of the questions by VEB and Mr. Davidson. And I'll give the floor back to you, Keg. Yes. Thank you very much for this extensive explanation. And indeed, we're happy to hear that you have tackled quite a number of questions. VEB and Mr. Stephens were mentioned quite a number of times. And therefore, I believe it's a good idea to continue with questions from the Sustainability Investors Association, VBDO. And we will discuss those now. The first one starts with the congratulations on account of ASR's leading position in the financial sector in the area of climate. VBDO does a climate benchmark every year. And in 2019, ASR was able to achieve the top position in that benchmark. For example, ASR is the very first Dutch insurance company that covers damage by flooding. And with respect to their investments, ASR works on extending their investment policies to include climate mitigation and climate adaptation. Now the questions of VBDO were what is the impact of flooding in the real estate portfolio? BBDO would like to know more about the analyses that have taken place and how they are turned into action. The second question is, will climate adaptation be added to ASR's policy? And further, will ASR develop a strategy to utilize the opportunities to indeed increase the resilience of companies, communities and regions. Well, Yoss, answers. We have indeed done quite a lot of analyses and we have now implemented actions specifically in our real estate portfolio or property portfolio. In every investment decision, whether it's purchasing or sales, we take into account the financial as well as the non financial analysis and information on this type of risks, which means that the quality of our portfolio will be directed into a more and more taking into account of objects that fulfill requirements with respect to climate adaptation. Maintenance investments, for example, in a larger property project, There, we do examine whether investments can be directed towards future climate change compliance. Now the second part of your question, how will climate adaptation be added to our existing SRI policy? Now the briefest answer I could give here is that in very many investment decisions that we take, we do use Vigayo Research on ESG. This is an integrated part of our investment policy. Now in that way, we indeed examine how climate adaptation can be stimulated in our investment portfolio. We furthermore see that the Energy Transition Score, the ETS, that this is becoming increasingly important. And we indeed include that in the assessments of our portfolio objects. And this indicator has become a full feature and parameter of our investment process. The third part of your question, let me summarize here, how can ASR utilize opportunities? A broad part of how we look at investments is based on the ESG research by Vigayo. This means that we scrutinize closely companies that score highly on important aspects, for example, listed companies and their policies as well as investments in smaller companies that indeed accommodate the trend is your friend as shareholders call it. We see opportunities there, and we follow-up on those and make them an integrated part and parcel of our investment policy. The next question from VBDO is that ASR has an inclusive policy with respect to their investment portfolio, amongst others. A selection is made on the basis of criteria for business behavior and also for the way in which a company deals with suppliers and subcontractors. The Corporate Human Rights Benchmark, for example, in its very last report says that most companies do not really follow-up on the requirements placed by the UN Guiding Principles on Business and Human Rights. VDPEDO, on the basis of this context, is asking how does ASR judge the chain responsibility of companies that it invests in? And does can ASR actually promise that those companies and suppliers improve their due diligence and bring that in line with the UN Guiding Principles? And will it report on any progress? Now let me just answer clearly, yes, and then explain how we actually implement our chain responsibility. First, again, we use the results of Vigayo Research that is relevant in this respect. We indeed also believe fully in transparency. We use research from independent sources around the potential investment candidate? What are those sources? Have, for example, trade unions said anything about the candidate? Have local journalists reported on this company? Are there any social media expressions in respect of this company matters, how we zoom in on a company from other sources as well. That's where we get our information. We believe that more transparency is crucial. That is why we are one of the investors that indeed endorse the investor statement of the Corporate Human Rights benchmark. We've cosigned that. We believe this is a standard for international companies? The second question, I can again answer with a clear yes. Since 2018, within the international social responsibility covenant in the Dutch insurance sector, the UNGPs have indeed played an important role and still do so. This is where we work together with the Dutch government and with NGOs to get an insight into the international chain and to prevent problems such as human rights violations, environmental damage and animal suffering. Well, let me just make a remark about diversity and to continue with the next So what is the reason behind that? There is indeed the context of diversity as a general topic in part in our policies. For example, and here we again report on the basis of Vigeeo research is that we've included all relevant guidelines in our recruitment, development, remuneration policy and we also look at the reports on undesirable conduct. So we take a very broad approach in this respect. Well, thank you very much. That was a clear answer. We would now like to continue with answering questions from the VEB, the Dutch Shareholders Association. We have a couple of questions for Anna Miek, our CFO. Let's start with those. In the explanation on the activities of the Audit and Risk Committee, there is a discussion of the risks of low interest rates and a more economic approach to the UFR. Now the next questions talk about this. In the presentation for analysts on the annual accounts, the so called economic UFR of 2.4% was mentioned. Now how did this percentage come about? And VB asked ASR, do you think that this is a conservative percentage? Then second question, a difference between UFR as prescribed by the EOPA and on the other hand, the market interest rates for risk free government bonds. Can ASR tell us how they determine the amount for the economic UFR between these two extremes? Well, thank you very much for this question, says Annemiek. Let me first state that all obligations up and until 20 years are valued at ASR with a curve without UFR and that economic UFR that only after 20 years, sorry, the UFR is partially used. We determine the economic UFR once a year on the basis of an extensive analysis. We look at 2 components. The first is a fundamental economic analysis of the long term interest rate, where we interpret the UFR as a risk free interest rate on the long term in a neutral scenario. Now in the economic theory, we depart from the long term relationship between, on the one hand, the long term interest and the sum of the long term growth as well as inflation. In our calculations then, we start from a long term real growth of 1.5% to actual growth of 1%, which actually led to a selection of our UFR of 2.4%. With respect to inflation, it's relevant to say that the ECB then strives to achieve an inflation rate of about 2%. We also look at a quantitative long term analysis of the surplus return of our obligations. We look at this on the basis of stochastic models. In principle, the return of our investments have to have a high amount of security to be sufficient to indeed fulfill the UFR and our obligations. Level of 2.4 for economic UFR has been chosen so that because we believe that this was a high level of certainty is possible. A second question, difference between UFR as prescribed by IOPA, 3.9% and the market interest rates that we get for risk free government bonds in Europe at this point in time. I believe that it's important to understand that today's negative yield on government bonds can be explained to a large part by the buyback program of the ECB. In earlier publications, they estimated the impact of their 10 years interest rate at minus 1.6%. In our calculations, we depart from the assumption that the impact of the buyback program in the long term, that's what we're looking at in the UFR, indeed, then will, in general, be decreased. Another question with respect to the analyst call. On the half year figures for 2019, where ASR said that there have been lessons learned with respect to Vivat and that there are opportunities to do more rerisking. There are 3 questions that pertain to this by VEB. Does ASR see any room to restructure their balance in a more aggressive form? Secondly, which changes in the investment portfolio are deliberated? How many percentage points of improvement can this lead to? Now let me start with number 1. We don't see any opportunities to take more risks, but to indeed optimize our portfolio with respect to return risk and liquidity. In this respect, we see an extension in mortgages, in optimized credits and in a minor form to other credits with strong collateral or implied investment grade. And this means that we are taking a very conservative route and that follows up on the requirements of the regulator as well. Now further questions, The evaluation of assets and liabilities of the L'Orealis portfolio, why is that different than L'Orealis' own evaluation or assessment? This actually leads to a book profit of EUR188 1,000,000. And can ASR give an explanation to their footnote 645 in the annual accounts and to the profit after the purchase. Now the purchase led to a profit of EUR118,000,000 not EUR188,000,000 And this is based on IFRS. It's not based on the perception of L'Orealis nor of ASR because purchaser and seller can have different reasons for this. Now at L'Orealis, the IFRS provisions seem to deviate from an average market player, and that's the reason for the EUR 118,000,000. Furthermore, we looked at further immaterial assets that we've included in our balance sheet, where we were looking at the brand name and the distribution contracts with APG. They were not on the balance sheet of L'Orealis. Then the specific question on the curves that we use in calculation. Now in the L'Orealis acquisition, the curve has only a limited effect because we're looking at a limited duration of including it in our portfolio. The effects of harmonization of assumptions were actually the largest effects and contribution to the book profit that I just talked about. Specifically, the question which discount rate was used by Loyales and EIOPA or an internally generated one. I can say that this was an internal one excluding the UFR, the effect is very limited, a bit lower than the EIOPA rate. Now the question with respect to the sales of banking activities to ACMEA and Van Lancelot. After this sales, there's an asset management here with a limited size. The question then is, is the size of the assets under management of about EUR 21,000,000,000 sufficient to cover costs of additional regulations? Secondly, how does ASR see the newcomers, the larger asset management companies in their market? And can ASR distinguish itself with respect to sustainability? Now the first question is whether the assets under management of €21,000,000,000 are sufficient to cover regulations. The answer is yes, because we not only have that assets under management for 3rd parties, but our own €50,000,000,000 worth assets under management and that's a combined basis that allows us to cover those costs, even the costs of additional regulation. Furthermore, ASR Asset Management, ASR Real Estate in its products for 3rd parties support those products that we have knowledge and expertise in that we can get synergies from. We're looking at real estate liability trade investments and mortgages. Now the incoming larger asset management parties in the market, we actually applaud that. We do not see that as a threat. There's a huge need with investors that want sustainability. And in addition to the product offer is only to be welcomed. We would like to modify our policy. We have an integrated SRI policy for all of our investment portfolios, not only ours, but third parties as well. We use full spectrum exclusion, engagement, best in class and impactful investments. We have far reaching non financial targets with respect to measuring carbon footprint, for example, 90% this year and a target with respect to impact investments. And we've indeed given a goal of EUR 1.2 1,000,000,000 on impact investments for 2021. Thank you very much. Now ASR champions its prudent and defensive investment policy, but the percentage of bonds with the BBB rating in ASR's bond portfolio was increased from 18% in 2018 to 22% last year. Now how far is ASR comfortable with this increase with the context of its position in today's economic cycle? And what's the expectation with respect to this percentage in the coming quarters? Now that the expectation is that many BBB bonds are going to be devalued. What is finally ASR's policy with respect to keeping non investment grade bonds and what will devaluation mean for the additional capital. Well, the increase of BBB investments in the portfolio is actually the consequence of a conscious choice to optimize between return and risk. Now this indeed improved the return on the required capital. Furthermore, we have decided to invest in less liquid categories such as mortgages private loans. We have increased the BBB exposure in fundamentally strong names so that we've looked at predominantly the BBB plus category and the BBB category and less in the BBB- category. So we believe that it's too early to say anything about the influence of the corona crisis, and we have also looked into our portfolio. We didn't have a strong exposure in the sectors that were hit most, such as leisure nor oil. We expect that we are going to have to take a couple of reassessments and possibly take some losses, but we don't expect strong deviations from the market average. We did do a sensitivity analysis. 20% of our banks and corporate bonds with a full letter code such as AA or A is going to be downgraded and then the impact by our spread risk on our solvency rate is going to be about 5%. Finally, your question on keeping non investment grade bonds, that is quite limited to EUR575,000,000, which is about 1% of our investment portfolio. Well, thank you very much. The last question for you, Annemiek. We have a couple of questions for Jos afterwards. But this is a question by VEB to all companies. And it refers to the half year figures in 2020. For investors, on the short term, it is extremely important to get a substantiated insight into the state of the company and the impact of the crisis on operations and finances. That's why VEB calls upon the companies to give their yearly transparency effort to the half year figures as well. In that publication of the half year figures, they look forward to liquidity forecasts, adaptations and financing and outlooks as well as the durability of goodwill and provisions. The VB would like to emphasize the importance of this information and of it being reviewed by the auditor. This means that the auditor will then give a review for the half year figures and will have to give a continuity report as well to declare the viability of the company in the coming 12 months. Well, thank you very much. Of course, we understand that investors want to have an insight into the impact of the crisis. That is why we published a trading statement this morning that Joost touched upon that. Irrespective of the uncertainty, we wish to give insights into our the impact of corona on our operations. Now in a half year report, we give the development of a couple of KPIs. We explain those. We also touch upon relevant other aspects such as liquidity, adaptations in financing and changes in goodwill and provisions. And for the half year accounts 2020, we, as per usual, will ask the auditor to give a review statement. And by giving that review opinion to the H1 figures, there's again an implicit confirmation of the going concern assumption. Well, thank you very much. Then we're going to talk further on the VAB questions that were submitted and Ejos is going to be asked to answer whether ASE is of opinion that the takeover strategy that has been announced is going to end because the number of potential candidates in the smaller and middle sized insurance market will decrease. How many years can ASR follow-up on the strategy? Will ASR have to change over to only organic growth? And does ASR think of taking over companies in foreign countries such as the Benelux or Germany? Well, thank you very much. First part, since our IPO, we have followed a strategy built on 2 pillars. The first is the smaller and middle sized takeovers or acquisitions where we have never though excluded any larger acquisitions and on the other hand, taking care of organic growth in our company. Of course, acquisitions are much sexier. They receive much more attention, but we are also very happy with the fact that our company is growing on an organic basis in a very healthy and solid way. Of course, it's quite difficult to indeed predict how many companies are going to be available. There are still opportunities out there in the Netherlands. We expect that, that will remain the case in the coming years. And first, we believe that there are opportunities in the Life sector. We'll have to see how those companies though come out of this crisis and whether a balance sheet that we would take over fulfills all the strict requirements, the return on equity of 12% and all the other ratios we wish to fulfill. We see in the non Life sector quite a lot of opportunities. We also understand that the digitization is increasing. You will have to continue that and make investments. That's another consideration we take into account. We do believe that on the mid term, we have a couple of opportunities, and we'll have to check whether those investments can be made. So whether we are fully dependent on organic growth cannot be set at this point in time, and we cannot set a time frame for that. We do understand that acquisitions are becoming ever more challenging. And that's why in the past couple of years, we have been managing towards organic growth, and we see a lot of opportunities in our company there. Now will you then have to look abroad? That's a question that we're being asked regularly. We have a quick question abroad is for holidays. And for roadshows is what we said until recently, we're not doing that at the moment, obviously. So we stick to abroad is for holidays. We believe that there is sufficient opportunity in the Netherlands to grow organically or via acquisitions. And furthermore, running the business abroad for a Dutch insurer is quite a challenge. Synergies are quite limited. There are different rules and regulations that apply. Regulators have a different opinion as well. So it's not on our management agenda yet to look at foreign companies. Now the next question refers to UFR. And in the answer by Annamiek, we've seen that there's a huge difference between the economic UFR used by ASR and the one that is prescribed by IOPA. Now if ASR were to follow IOPA's UFR, couldn't they be much less prudent in their policy? Now in our pricing, we look at a number of different factors. The most important starting point is the so called cost of equity that you can then compensate in the pricing of your products. Of course, we calculate on the basis of various UFRs, but not to rely in our pricing policy on that individual UFR, but indeed to look at the effects of the UFR and what we feel is responsible. Now bottom line, in each product group, we wish to achieve our 12% goal and that irrespective of the fact that we are seen as a more prudent insurer. The pricing policy indeed includes an examination of the competitors of market opportunities. All of that works quite well if you look at the organic growth that we can feature in comparison with other Dutch insurers in the past years. Next question. In the acquisition of Loyales, does ASR expect a stand alone contribution to the operational result of €30,000,000 per year, including cost synergies of €40,000,000 per year in 2022? Now in which way does ASR believe it can realize the synergy with a difference of €10,000,000 per year? Well, now the colleagues in Heerlein now understood quite clearly that the life business at L'Orealis was going to shrink and there were measures announced. So a large part of those costs are in the reduction of the Life portfolio, the fact that we are transferring that to our own platform, which works at lower costs. Further through the integration of L'Orealis, we don't need the same number of staff in the areas of HR, finances and IT, and that will be a contribution. As furthermore, another contribution will come from the separate life business of L'Orealis that we are going to indeed integrate in our platform at lower costs, but also we can stop their systems. If you add all of this together, then that brought us to the announcement that you just mentioned. Well, that was quite clear. In your annual report, ASR speaks of ethical dilemmas in applying big data and AI technology. Possibly, this will pressurize solidarity in the insurers market. The questions touch upon this. In which way do predicting algorithms contribute to a better identification of insurance risks? Can ASR give examples? And is ASR of the opinion that risk groups with disclosed higher risk profiles should automatically pay a higher premium as that is the case, for example, with smokers? And finally, does ASR expect the ethical framework that has to be developed will be followed up by other insurers as well? If not, how will ASR prevent from landing in a non level playing field? Well, let me talk about the big data first. If you use them, then in principle, you can do quite a lot with them. You can predict which policies can be released in the future. You can look at various regions in the Netherlands that have a higher risk as soon as the water level increases by a certain amount, risk for flooding and you could also predict health risks. At the same time, we are quite conscious of the fact that we have to be very prudent and careful in using big data. The basis of an insurance company is organizing solidarity. And as soon as you indeed use those lose that information for your pricing, then you look at people in a different way. You look at them on the one hand as a risk. And on the other hand, you'll have people that cannot insure themselves anymore because it becomes too expensive. So we believe this is a societal issue. We have to put it on the agenda. We have to understand very clearly what the opportunities and risks are. And we also have to understand the role and responsibilities of insurers in creating solidarity. And we have to be very prudent in applying any consequences from big data. We should rather stimulate and nudge preventive activities on the side of insured people. I know that this is a topic that is on the agenda of all insurers. And within the Association of Insurers in the Netherlands, we are very conscious of the fact that this is a relevant discussion, but also a discussion that we have to deal with very carefully and sensibly and that you do not indeed throw out the basis of our insurance companies in the Netherlands, which is solidarity by taking rash decisions. Now thank you very much. The next question. The accountant in SCARI, the auditor in his report, had a couple of remarks to make with respect to internal audit activities. So more external expertise was involved because of the pressure on the employees' caused by auditors' activities. Now this had to deal with the acquisition and integration of Generali. Please explain how it was handled. Indeed, that is correct. At the beginning of 2019, we had accumulation of activities. We had the Vivat dossier. We had the integration of Generali. A lot of our employees were very busy with all of that. And the labor market in the Netherlands was very favorable then. We indeed transferred people from Diemen to Utrecht, a couple of people that decided to leave our company earlier. And in that situation, the expertise in our company was reduced. And that's where we brought in some external help. And that's what the auditor stated in his report. In the meantime, we've taken adequate measures. We saw just before the corona crisis that it remains quite a challenge to recruit people. There's a bit of a battle around talent, specifically in the economic and financial professions. So we try to accommodate that before the corona crisis. Furthermore, the next question with respect to the external accountant as a key audit matter, they mentioned the litigation on unit linked products. Can ASR indicate what their ambitions are to indeed find closure on these dossiers? And that it has no interest in keeping them going. Indeed, I can only agree with the last statement and that was the direction and the route we took in our first contacts with our customers, who then together with us and their advisers looked at the best way forward. Was the unit linked policy going to be terminated or was a change necessary? We were able to help quite a number of customers in this respect. Furthermore, we are quite conscious of the fact that number of customers and organizations are not in agreement with the solutions found. So there are currently a number of litigation cases going on. We are trying to resolve them with either the interest organizations or with our customers individually. Sometimes aspects cannot be resolved. Then we see that customers go to Kievet and we try to solve these issues. Then with Kivit. As soon as situations arise where we cannot settle, Kivit then issues a judgment. In the meantime, they have issued a couple of guiding judgments, which help to indeed finalize other cases as well. We're looking at under 100 cases, not 100 or 1000 of them. And there have also been cases and procedures that have been judged upon where the route that we as an insurer have chosen has been supported. But we are quite realistic in all of this. There will still be a number of customers that don't agree with what we have to offer. And then there are various remedies they can take. The next question on climate obligations. In their yearly letter to companies, the VEB called upon them to give a detailed overview of risks and opportunities in the climate change situation and the influence of all of that on the business model. Today's crisis is making this ever more relevant. The VB, therefore, is expecting a company to again give a detailed overview of risks and opportunities as a consequence of climate change and with their impact on the business model. It requires companies to report on this impact for the earlier communicated climate goals. Well, thank you for this question. We have made some statements in this respect earlier on. We believe that a company that does not contribute to the Paris Golds has no viability in the long term. So we will continue to support those goals and we subscribe to the appeal made by the VEB. Thank you very much. We've tackled most of the VEB questions. We'll get on to more of them later in other agenda items. So we would now like to continue with the questions submitted by the SRB and Mr. Stevenson. A call to execute stress tests, and Jos explained that in his presentation and explained the studies that ASR is doing on the basis of scenarios and also the scenarios of the Central Planning or Assisted Bureau in the Netherlands. In detail, you can see the effects on the Q1 of this year in the press release, sorry, published this morning. And of course, Mr. Stephens couldn't have read all of that yet. Now Mr. Stephens then further asked a question about the calculation module of model of the DNB? And does ASR consider setting up their own calculation model even though that costs a lot of money and effort. It may lead to a higher solvency rate. Well, I expect that the Solvency II calculation model from the DNB is what Mr. Stevenson means. There is an option for an insurer to use their own calculation model. It's an option that we are indeed examining. We haven't decided though yet to implement it. We want to have IFRS 1 and 17 done and dusted. And if in the review that we're doing now sees a huge shift in capital requirements, then we would indeed have our own calculation model lying ready to use, but we have not decided on doing that yet. And the question behind the question that Mr. Stephens has been asking here is that we then have more capital to work with. There, we think that the regulator would not be really happy if this were the only reason to use our own calculation model. So I believe that the regulator would then be very critical of what steps we would take. So we are examining it and we are looking into when it can be sensible to use it. The next question. The sales of VIVA show that foreign parties get more return from the insurance premiums in life insurances. And this is partially because of the regulators. On the other hand, they take more risks. That is why the closed books are valued higher. You have policies which should have a higher value in the market. So the question by SRB is, have you ever thought of selling these packages to private equity party? And if you haven't thought about that, why? And if you have, when do you want to do it? Now this question indeed came up last year at the shareholders' meeting. And I just explained in an answer to a question by VB what we see are opportunities in the insurance market. We've put quite a lot of energy into making our life books more efficient. We can do that at low variable costs on the IT side. We believe that, that's the perspective. We need to indeed take over some smaller and middle sized insurers in this country. We think that at this point in time, we're the best owner of our life book. So we do not have the intention to put it out for sale because we believe that we can do it at low cost and that we can achieve a balance between return and risk so that our policy owners are in good hands with us. So we are not considering doing that. Secondly, we believe we're the best owner of the Lifebook. And third, we see ourselves as an acquirer of small and middle sized Lifebooks. Well, thank you for these questions and for the extensive answers. We may now move on to agenda item 0.2b, which is the report of the Supervisory Board. Let me refer you to the Board's report, Chapter 5 of the annual report, 5.2 actually. There's a few items we spend a lot of time on. Obviously, that was the change of the structure of the Executive Board as of February 1, 2019, and also the departure of Chris Vigay as CEO. As of February 1, 2019, we've reduced the supervisor board to 3 members, and we also set up a business executive committee. This led to very detailed selection procedures in 2019, and we're extremely glad that we could appoint 2 new members of the supervisory board, Ingrid Svaart and Anemiek van Velijk. And in addition, we could strengthen the supervisor board with Gisela van Vollenhoven and Gerhard van Ohfen. Some other points I can mention from my report. We have the closing of the acquisition of LAYALES early 2019. The integration of LAYALES is very successful, expedient and will be concluded by the end of 2020. Also halfway through 2019, we announced the acquisition of VVAA Life Insurance and Virex. For VVAA, this acquisition guarantees a sustainable access to life insurance products from its more than 120,000 members. And the acquisition of Eurex strengthens the market position of ASR in the field of visibility insurance and also gives ASR a leading position in the field of sustainable employability. We, of course, discussed many other issues, the strategy for long term value creation, solvency rather than capital, M and As, IT and innovations. Obviously, we spent a lot of time on the performance of the company on a periodical basis, financial performance, non financial performance. We always have contacts with the Works Council and external regulators, and we have given extensive time to discussing the corona crisis, although that obviously only applies to 2020. In the report of the supervisory committee, you also have a report of the 3 committees, the audit and risk committee, the selection reports. We've seen no questions, and that allows me to move on to item 2C, which is corporate governance. And as I said a moment ago, we have had some changes in the Supervisory Board and in the Executive Board. Something I can report here is that we will part with core funder Bos in a moment, who was the Vice Chairman of the Supervisory Board. We will come back to this in a moment. And I can inform you that Hermann Hintzen will take his place as Vice Chairman of the Supervisory Court and that Konja Barenrecht will take the place, of course, as Chair of the Audit and Risk Committee. Also, Gerhard van Oeltham will become a member of the Audit and Risk Committee. In the field of government, I'm happy to inform you that with the entry into force of the shareholder right directive too, we have adjusted the bylaws of the companies with current legislation. Now on governance, we have received a question from the VEB about reducing the number of parallel positions or jobs. I'm now going to quote the question. This crisis has a great impact on the involvement and the role of managers and supervisor directors. The accumulation or accumulation of jobs is now becoming a hindrance. And this is why VEB calls upon managers and supervising directors to reduce their additional jobs and ask the supervising directors to check which jobs they can give up. Well, if you talk about parallel positions, then the ASR follows the corporate governance code for supervisor directors and managing directors. And that means that for each parallel position, we try and look at possible conflicts of interest. We also try whether these jobs can be compatible and civil positions can be compatible. One of the principles of the supervisor of the Executive Board is that there can be 2 parallel functions for members of the executive board. And certainly, they cannot be purchased of a supervisory board. And we see that in practice, a limited number of ancillary positions, certainly when it applies to a member of the executive board, can be in the interest of ASR. Actually, it should never be a major burden in terms of time, but it is beneficial for them and for ASR to look around what happens in society. We monitor this very closely. We address this in our annual assessment interviews. And in practice, we do not see any impediments to their operations, but we are very strict in terms of time available. I see that we have not received any additional questions. And that brings me to item 2d, which is the remuneration report 20 19, which we'll submit to an advisory vote in a moment. As you could read in the remuneration report, throughout 2019, we applied the old remuneration policy on the 22nd May 2019. We spent a lot of time on the new remuneration policy that entered into force on the 1st January 2020. We discussed it at length at our previous AGM, but this report still reflects the results of the previous remuneration policy. And VEB has asked a general question to all companies or it has made an appeal to all companies to give up the variable denigration. Well, we can't do that because we don't have it. But it leads to our position towards variable remuneration. And that was the question of VEB. After the approval of the policy, we saw that some of the shareholders have difficulties with the policy. And we believe that it's important to take stock off the risks that they see and the question of what are the main risks that you identify? Have any new risks occurred that you haven't taken stock of in your policy? And is it possible for Esa to attract talent without bonuses or variable remuneration, certainly in asset management? Give great attention in contact with shareholders to check whether the generation policy currently is a source of concern for them. And if so, we, as a supervisor, we would, could then consult with these partners, the stakeholders. And the conclusion of these talks is that after the AGM, the interest towards this issue has gradually added the way, eased the way that now remuneration policy is no longer a point of focus. Now I expect this to come back in 3 to 4 years when we come back to an evaluation of the remuneration policy. We haven't been thinking along the lines of risks and new risks. Our expectation is that if we use this remuneration policy to attract people from the labor market, it will be successful and this proved true. If you look at the kind of talent ISR attracts and of course, I'm referring to the new members of the executive board, I mean, also referring to all the talented people we succeed in attracting, including the investment departments. We see that the labor condition package is in line with the market average. Obviously, we make sure we stay close to the median in terms of market remuneration. But also, we see what a benefit it is that the variable component is not the main part of remuneration. This is a real blessing for people. When people enter this company, they tell us they're so happy to be rid of this whole circus of bonuses they had in their previous company with their previous employer. When you talk about our investors, the striking feature was already pointed out is that financial institutions that focus on sustainable investments have a benefit in attracting expertise, attracting young people who are happy to use their expertise with ASR, making sure that they can make a contribution to a more sustainable society. In other words, I see our policy rather as a benefit on the labor market than as an impediment. I see we have no further questions. And that brings me to the outcome of the advisory vote. Okay, my iPhone starts asking question because it's scared by not having additional questions. That's the times we live in. I can inform you that at the registration date, we had 141 ordinary shares, on which more than €138,000,000 could be cast out, a bit more as a result as the buyback of shares. I'm very happy to inform you that 595 shareholders are represented through the notary, representing 95,000,000 votes and that amounts to almost 69% of the total number of votes. Now on the screen, you see the outcome of the advisory vote on the remuneration report, and this leads to the conclusion that about 84% of the votes have been cast in favor. And that brings me to item 3. This is the financial statements and dividends. 3a is the financial statements. And first of all, I'll give the floor to Cor van de Bosco, who is the Chair of the Audit and Risk Committee of the Supervisory Board. Yes, you find a detailed report of our work on the Pages 1.15 and 1.16 of the annual report. I would like to add a few words about the work of our committee in the regular meetings. Beside the discussion of the balance sheet, we have looked at risk control, the interest risk, the market risks, longevity risk and other risks. Using internal analyses and policy documents, the investment plans and other assessments, self assessments, recovery plans, etcetera, we have detailed discussions involving the executive board and management of the company. An important management question is management is information policy settings of assumptions. We discuss them regularly with the board. The same applies to preparations for IFRS 17 and IFRS 9. We've seen good progress being made by the company in 2019. And by the looks of it, the company will be ready for them in time. Other regular topics in 2019 were the acquisition and creation of L'Orealis and VVVA and Veyrix. And the same applies for the divestment of the ASR Bank. The liabilities of the bank have been covered very effectively. We gave also attention to cyber risks, and we looked at compliance risks as sanction rules and privacy laws. The control of the annual accounts of Siva IUI led to a number of differences that have been discussed at length with the auditor. All these differences were of an immaterial nature. The committee regularly at its meetings had discussions with the activity officers on the adequacy of the assumptions and the forecast that are the basis for the insurance technical obligations on the balance sheet. The conclusion always was that these assessments were the result of careful checks and had been sufficiently prudent. In the course of the past 3 months, we have given a lot of attention to the effect of the corona-nineteen crisis, the effect on the results of the balance sheet. The committee has been regularly updated by management, and the documents and discussions have shown that despite the many uncertainties of the final effect, ASR has developments under control. The committee had also meetings without management with the external auditor talking about the conclusions of the auditor on the financial statements. And me as Chair, I had several one on one discussions with external auditor focusing on finances, risk management and the assessment, the evaluation of the financial statements. My impression was that the auditor was extremely open and happy to ask critical questions. In a moment, Martin Koning from will comment on the financial statements. And we have waived his professional secrecy. To conclude, I would like to thank Warthenkonen for the way. Under his responsibility, Ernst and Young has carried out the audit of the financial statements and also for the very flexible way in which the transfer to KPMG that will be the auditor for the financial year 2020 was carried out. Thank you very much, Cor. That was very snap, very brief. So that brings me to the statement by Martin Koning, who will give some comments on his audit of the company. Excellent. Good morning, the Chairman. Thank you very much for this opportunity to address our involvement as auditors auditors virtually. Esteemed participants, my name is Martin Kong. I am an auditor with And since 2016, I've been external auditor of ASR. In my presentation, I am going to spend 10 minutes discussing the material part of our audit of the consolidated financial statements of ASR. Subsequently, the approach, a few audit matters, fraud and compliance, directors reports the outcomes of our audit. And I will address briefly communication and interaction. First of all, I want to discuss the impact of COVID-nineteen on the audit of the financial statements. COVID-nineteen, we have seen COVID-nineteen as a non adjusting subsequent event for the financial statement 2019. This is in line with the reporting requirements And therefore, ESR in the management report and in the financial statements has adequately reported. We focused on the problems in discussing and we focus also on the comments given by ESR. We developed between the dates of the statements, which is 24 March 2020 and today will not lead to any amendments to the financial statement 2019. And a few words about our audit approach. We have looked at the consolidated financial statements to check whether they meet the legal requirements and whether the content corresponds to our picture and whether it matches the knowledge we have about the company. In addition, the company has given us a number of other tasks. For instance, we have looked at the sustainability report, and we have incorporated these outcomes in a specific audit on the sustainability. We've been involved in the press reports on the annual results. And we have looked as auditors at the half year figures. In terms of strategy, the strategy has not changed significantly since last year. I can inform you that I use experts in the or or investments to look at intangible assets such as goodwill. We also use actuarions in order to evaluate the technical provisions to look at the figures. We also use experts from the fraud and integrity services in the light of our responsibility for matters of fraud and in order to check the application of legislation to the order that we've carried out. We also cooperate with the internal order department of ASR. We share the outcomes of our work. Now looking at the materiality that we use in our audits, it slightly increased in 2019 in comparison with the previous years. This reflects the increased operating results. And we have spent EUR 40,000,000 and any deviations can obvious the materiality is EUR 40,000,000 any changes can affect. This materiality is the same as in 2018. It's 5% of the operating results. At the same time, we do amalgamate smaller errors or differences. And if they are above the threshold, we discussed them with the supervisor of the Board. Now a few words now about the execution of the audit base on the immateriality and the risks that we have identified. We have carried out checks using teams that carry out targeted tasks within the company under our supervision. And that means that we give instructions to the teams and that we assess the results of their work, we assess their work, they conduct interviews and we have consultations throughout the process. In 2019, L'Orealas has been acquired. The figures for L'Orealas have been checked by KPMG. And we have given KPMG instructions, and we have also checked their work, for instance, by reviewing the files, all of this in line with the EC600 standard that is in force, Given the fact that all insurance entity and the banking authority also need to be checked on stats, the scope of the order has been very broad, and we have covered nearly 100% of the balance sheet total of the corporate equity of the bank. Now I want to dwell briefly on fraud and noncompliance with laws and regulations. Given the fact that fraud and noncompliance are the focus of society, attention of society. We have looked at it in great detail. Starting 2019, we have dwelled at length in our statement on the topic of fraud and noncompliance as well as regulations in a generic sense and also focusing on our specific customers. The scope of our work hasn't changed compared to 2018, but we have been more explicit in the way we phrase our description of the topic. And for the issue of fraud, I refer to Page 287, where we have a statement on fraud and noncompliance. We give our full risk assessments and we specifically look at financial reporting for all the risk areas. In this risk assessment, but also in the implementation of our work, we had the support by experts from the fraud department, and we discussed this at length with the ARC. In the light of loan compliance of laws, also refer to Page 287, ASR as a financial agreement falls under the law of preventing money laundering and refinancing of terrorism. Noncompliance of this law doesn't have a direct impact on the annual accounts, unless this leads to actions by regulators such as fines or remedy measures. And the financial reporting, obviously, does never direct impact, but there's a good reputation risk. Therefore, we developed detailed instructions for our control teams, The elaboration of processes, know your customers with Asia and transaction management are evaluated by our teams. We also use experts from fraud and integrity services. In addition, we check client reports. We look at the reports of the compliance officer, Intonor, Teixeira, the risk analysis system, the minutes of the executive board and discussions with regulators from the point of view of compliance. We discussed the matter with management plans and the supervisory board. And finally, we discussed compliance as a periodic item in our discussions with the Dutch Central Bank. In cases of non compliance, we assess the impact on operations and financial reporting and also the follow-up impact for the company as a whole, including impact in taking measures to stop or to prevent fraud and noncompliance. This is reported in the Annual Report, where we give comment on the compliance functions within the company. That brings me now to the key audit matters. These are the main areas of risk, the focal points in our audit, and we have defined them on a slide. I will not discuss all of them because most of them are identical to last year. But I would like to focus on one key order of matter, and this is the acquisition of L'Orealis. This is new. For this key order matter, we have looked at the acquired balance sheet and the PBA. This is the purchase price allocation of L'Orealis. And we particularly focused on the main assumption, which is the fair value valuation of the technical operations. We used our own actuaries to do this. We also looked at the IFRS 3 disclosure requirement, and we concluded that the management has given an adequate approach in assessing the acquisition balance sheet and the PPA of L'Orealis and that therefore the disclosure requirements have been observed. And we also have seen that the figures have been fairly completely reflected in the annual report of 2019 using KPMG. Finally, we have something about estimations and assumptions. In looking at the technical provisions of ASR and for Solvency II, we have to make estimations of non economic assumptions. And the most significant one for life concerns mortality and the cost of living events. And for non life, this is evaluation, revalidation, influx excellence and major claims and the patterns of covering claims. And if you look at cost 45, the assessment of cost, so we have used our actuarions in order to verify the assumptions. And they have applied benchmarking, for instance, in order to look at the likelihood. And based on our own assessments, our conclusion is that the grounds in methods and assessments of ASR in evaluating and determining the sufficiency of technical measures under IFRS and in order to determine the solvency tool requirements are, as a rule, balanced. That means that the internal challenge of the method has led to the conclusion that we have healthy and transparent discussions between the first and second line of ASR Management. For the sake of completeness, I would like to refer to paragraph 6.8 in the annual report, the risk management paragraph, in which ASR has given a detailed sensitivity analysis where there's also focus on economic functions. For instance, on the sensitivity of the insurance company for changes in the UFR, the long term interest. Then a few words about the report of management. We have verified the director's report and we didn't find any material incorrectness based on the knowledge that we have or based on any experience that we could have had in the course of our audit. As for non financial information and the time allocated, we have concluded that the EU directive 20 1495 has been observed. And also, we verified the impact of the implementation of the shareholders' rights directive on the remuneration report. Some other things, ASR as of the 1st January 2020 changed their remuneration policy. And in order to meet this directive, this has been visible in the remuneration report that is part of the annual report. And our conclusion is that all required information has been included and therefore directive has been observed. We have carried out our audit based on the standard 27 form for auditors. And our core opinion sees a reporting on this point. We had support from the reward specialists in our team. Now a few words about non financial points of information. We also sense the sustainability report, and we didn't had any grounds to conclude that the sustainability report is not a veracious reflection of the EI policies and the effects of the fields of sustainability in 2019. This is based on the selective criteria for reporting in the global reporting initiative. As for the reliability of the indicators, we assess this. This can be customer focusness, customer satisfaction and sustainable investments, but also the models for long term value creation. In 2019, ASR also wave a greater number of comments on climate effect and the impact of climate in their investment. This is also something that we have taken onboard in our audit. Our work was carried out by the experts on climate change and sustainability within Then I'll come here to come to the conclusion. The outcomes of our audits, as you have read, we have issued an unqualified audit opinion. We have found sufficient evidence in order to issue an unqualified opinion. That means that our conclusion is that the consolidated annual accounts give a reliable picture according to IFRS as approved by the EU and that these single financial statements also give a reliable impression of the company. It is in line with legislation and recommendations. We have now seen no material incorrectness. And therefore, we can issue a qualification based on the knowledge and insights we have. In terms of continuity, we have written our audit statement based on continuity with availability of work for the company, profits assessments, the funding plans, solvency and also the impact of COVID-nineteen and the analysis. We have identified no material concerns that lead to any doubts about the application of the continued principle. And in terms of the sustainability information, we gave also an unqualified opinion. Now a few words about communication and interaction with During our audit, we use the internal measures that ASR has implemented. They have internal control mechanisms in order to maintain their audit in place. We have tested and verified the system using also the work of the fee for key positions, internal audit management, internal actuarial and the compliance function. The additional conclusions on our side have been reported through supervisory board and the executive board, 5.2, there's a discussion of the content of the management letter and the governance of Board. And this is something that the supervisors the chair of the Board has already discussed. I would like to clarify these questions as fair and open and critical. We've had a good report, also good rapport with the supervisory board. We've had both oral and written exchanges. Our conclusion is that management and the supervisory board take our no consultancy work. We only worked as auditors following the recommendations of the Dutch Central Bank. And we have only provided audit related services as required by legislation or as required by some of the clients of ASR. We have started to work on the transition towards the new order in order to ensure a smooth handover of functions. And in conclusion, I would like to say the following. The past year has been a very interesting period to be the external auditor of ASR. I would like to thank ASR for the pleasant and professional cooperation. I wish ASR, its new auditor, its stakeholders all the best in the future. Thank you for your attention. And Mr. Chairman, I'm happy to give you the floor. Bedard? Thank you, Mr. Martin Koding. I would like to just add on to the introduction by Corfin and Bosch. And thank you very much for the cooperation in the past years with you. We appreciated it very much. Thank you also for your explanation on this agenda item. There are no further questions on this agenda item, and we will now proceed to the vote on the annual accounts. The vote shows that it was adopted with 100% of votes. We will now continue with agenda item 3, B and C, the dividend policy. Jos, in his introduction, extensively explained the reasons with respect to the take dividend decision. We have also heard an answer to the question by Mr. Steven Se, Ignos' introduction. This means that we can finish Agenda Item 3B and 3C and continue with Agenda Item 4, discharge of the members of the Executive Board. No questions were submitted. And therefore, I would like to put the proposal to the shareholders to discharge each member of the Executive Board for the execution of their duties in the financial year 2019 as it comes forward in the annual report for 2019 in the annual account as well as in the statements made during this AGM as well as in other forms published to the shareholders. Now this proposal has been accepted and carried by more than 99% of the votes. Therefore, this charge has been given. We now continue with Agenda Item 4B. I would like to ask you to discharge each member of the Supervisory Board for the execution of their duties in the financial year 2019 as comes forward through the annual reports, through the information given at the AGM or otherwise published. I can tell from the vote that this has been carried by 99.31 percent and the discharge has been then granted to both bodies. Now agenda item 5, extending authorities of the executive board. The AGM in 2019 has issued authorities to the Executive Board for a period of 18 months as is explained in the explanation to agenda item 5. The management board is now proposing with approval from the supervisory board to extend this authority as of today. This means that they will end as of the 20th November 2021. These authorities offer ASR the opportunity to, in a flexible and swift manner, act if circumstances so dictate. Now agenda item 5a is the proposal to extend the authority for the management board to issue shares and or to give rights to take ordinary shares with respect to a maximum of 10% of the issued share capital of ASR Netherlands as per the date of today. And this will always happen with approval of the Supervisory Board. There were no questions in this respect. 98% of the votes support this authority and that means that we can now continue with 5b, where the proposal is to extend again the authority for the management board to restrict or exempt preference rights with respect to the issuance of ordinary shares or issuance of rights on the basis on shares on the basis of this authority granted. Again, the management board will only do use this authority after approval by the supervisory board. Again, no questions were submitted. I would like to show the voting results. They say that 98% of the votes support this proposal. Agenda item 5C with the proposal to extend the authorization of the Executive Board to acquire the company's own shares for a period of 18 months via the stock exchange or in other ways, again, subject to approval of the supervisory board. And there's a maximum stated here of 10% of the share capital issued at the date of today. And this may be bought or acquired at a price between the nominal share value and 10% above an average closing price over a period of 5 days preceding the day of the acquisition of these shares. No further questions have been submitted, so we can show you the vote, which is on the screen now. 95% of the shareholders have supported this proposal, which brings us to agenda item 6A. The proposal to reappoint Jos Parten as Member and Chair of the Management Board. Jos has been responsible for the extension of ASR and the stabilization of ASR after the nationalization and disentanglement of Fortis in the past 10 years. ASR is now in private hands and JOS has indeed transformed ASR to a leading insurer with a pioneering position in very many areas, such as sustainability, as was explained today. Yossa has done this in an extremely excellent way. And that is why the Supervisory Board is very happy when we asked Jos Parten to continue for another 4 years that he did indeed confirm his willingness. We predict that in the coming period, he can be a successful leader together with Ingrid and Annemiek of this company. We have requested the advice of the works council and they have indeed given a positive advice. And after this AGM, the Supervisory Board will take a decision on the reappointment of your spot. A question was submitted by Mr. Stevenson in respect of this agenda item. He requests an extensive motivation by Mr. Barton, why is our Netherlands such an interesting company is and what motivates him to again stand as candidate for reappointment as Chair of the Management Board? Well, thank you very much, Kig. Thank you, Mr. Stevenson for this question. I'm not sure whether an extensive answer is always the best. I'm going to keep it clear and concise. Firstly, I was very happy with the question put to me by the supervisory board. It just expresses trust in me to ask me for another 4 years. And it also makes me proud that the Works Council has indeed seconded that request and has added very appreciative words. And of course, it is important how I feel in my role. This morning, I was very happy coming here in my car. The past weeks were a bit different, but still working together with all employees and colleagues at ASR gives me a lot of positive energy. It feels like a warm blanket because of all the wonderful colleagues I work together with here on a daily basis and also the cooperation with all the new colleagues and young colleagues that have come into the company in recent times. And the good cooperation with the supervisory board, all of that adds to the pride that I have had on what we have been able to realize with our associates and staff in the past 10 years And also with the projects I have in mind for the future, how can we meet and what can we offer our customers? How can we extend our position either via acquisitions or organic growth? All those challenges are extremely important to me and are interesting to work on for with my colleagues and with the staff of ASR. So I didn't have to hesitate very long when the question was asked. I talked it through with my family at home and they embraced my decision. So the past weeks, of course, made very clear that only that being at home more is good for your personal relationships, but working at your office together with colleagues is a challenge and interesting too. And all of that led me to my answer, yes. That was very clear. Thank you, Jos. With those words in mind, the Supervisory Board after this AGM will take the formal decision. And I can now close agenda item 6 and move on to agenda item 7, composition of the Supervisory Board. Let's look at the resignation of Corr van den Bosch as member of the Supervisory Board. He has been in the Supervisory Board for the past 12 years. When Avian Amaro was nationalized and Fortis Insurance had to become independent, Cor played a decisive role in the Supervisory Board and in the Audit Committee. I believe that it's no secret that when Fortis Insurance was unpacked, the situation was a quite concerning. There were various divisions, a huge group company, staff in Belgium. And to look into all of this, look into risk and personnel management, liquidity management, it was quite a task. And not only the Supervisory Board, but a number of other people worked on this day and night. And from the supervisory board, Cor has played a very important role in a very patient way, has reformed a company with a lot of things to catch up on and has then further changed it into and built up an ASR that in the areas of financial risk and in the area of consultation, communication is very much improved. Core has played a role there. Of course, Cor was quite strict and quite clear in his impact on the Supervisory Board. And Cor, I hope that we will find a good moment in time to say thank you and to say goodbye. Well, ladies and gentlemen, of course, we have sent Flowers to Cor to his home to underscore this. Let's now look at the agenda item 7B, the proposal to reappoint Herna Tinsen as a Supervisory Board member. He has been in the supervisory board earlier. He has a lot of knowledge in Capital Markets, in M and A. He has further knowledge on asset management, ALM aspects, interest sensitivity of the portfolio, reinsurance aspects. These aspects or these skills are extremely important and beneficial for a company such as ASR and are important to the Supervisory Board. The Works Council was informed of our request to appoint Mr. Hinson. The works council has taken a positive decision in this respect. And now I would like to look at the question that Mr. Stephens asked in this respect. Again, a similar question as he posed to Jos Barton, indeed to ask Mr. Hermann Hinson to tell us what his motivation is to be reappointed. Hermann, Kig, thank you very much and thank you to Mr. Stevenson, who is making it possible that for me to now sing the praise of ASR, but not too long, of course. In short, ASR is a great company to work for. I have been an advisor for the insurance industry in the whole in Europe for the past 15 years. I have a lot of material to compare with. So why am I saying that ASR is a great company? It is because it is financially robust with a strong solvency ratio as discussed, which is just as important, a very healthy capital generation in ASR, which comes forward because of the financial discipline that I find is quite progressive. There's a high level of diversification in the portfolio, a good combination of short cyclical and long cyclical cash flows. And the balance management is what I believe is of extremely high quality. What is interesting moreover is that ASR was able to position itself in the public market, in the share market as a share that is very stable, has seen a very steady growth before corona, I have to add, and that is has an intense following on the in the London market. I am very well connected there and I hear a lot of praise. It is quite interesting that ASR has been able to acquire a couple of companies in the past years and that after a year already, shareholder value can be added after such acquisitions. Those are accomplishments that I have seen quite clearly and taken into account. All of that is well, but the company culture is just as important. It is a company that puts its shoulders to the wheel, that indeed services to policyholders that is very involved in societal questions. Kig talked about sustainability. Sustainability is part of the DNA of this company. All of that has to do with the leadership from the top down a lot. The top is an example for the rest of the staff, and I believe that the leadership is very inclusive. And I'd like to add that we were able to attract 2 very able Board of Management members, Ingrid and Anna Mik, and this has an effect on others as well. There are a lot of challenges ahead, consolidation, organic growth in a closed market, digitization. I believe that this company on the financial, the cultural and the people aspects scores very high and I would like to add my contribution. Well, thank you, Hermann. There have been no follow-up questions. So we can look at the votes on this agenda item supported by more than 98% of the votes. Hermann, have you been reappointed as member of the Supervisory Board? I would like to congratulate you on that. Now after the praise for the Board of Management, we now as Supervisory Board have to add that things can always be improved and let's look forward to more progress. Thanking you, of course, Hermann, for your generous words. This means that we have now come to agenda item 8. Any other business or questions? No questions have been submitted. So this is the shortest, the briefest AOB in ASR's history. I do hope that you can live with that. We've now come to the closure agenda item 9. I would like to thank all of you for your involvement and dedication for ASR, for your virtual presence and attendance at this meeting. I do hope that you all can remain healthy and that we will all see each other again next year at the AGM here in Utrecht. I've closed the meeting now. Thank you.