ASR Nederland N.V. (ASRNL) Earnings Call Transcript & Summary

[Interpreted] Good morning. I am pleased to open our Annual General Meeting at a.s.r., and welcome you all. We enjoy your loyalty and commitment to a.s.r. very much. Unfortunately, this year, we weren't able to meet physically. So this is a very virtual meeting. We're going to try to do it in an interactive manner as much as possible. Let me start with a number of announcements. We have the full Supervisory Board present: Herman Hintzen, the Vice Chairman; Sonja Barendregt, Chair of the Audit and Risk Committee; Gisella van Vollenhoven, Chairperson of the Remuneration Committee; Gerard van Olphen; Joannes Wijn, my successor; and, as you can tell, I'm present as well. The full Management Board is present as well, consisting of your Spartan Chair, Annemiek van Melick, CFO; and Ingrid de Swart, COO, CTO. Furthermore, we have the virtual presence of the Works Council as well as the full management of a.s.r. on board. On behalf of the auditor, KPMG, Mr. Ton Reijns, is virtually present. He will give a presentation or a brief explanation on Agenda Item 3, financial statements and dividends. Diane de Groot will act as Secretary to this meeting. We will do a tape-recording of the entire meeting for the purpose of taking the minutes, and they will be adopted and signed by the Chair and the Secretary. Because of COVID-19, you've already cast your vote by proxy. Present is also notary public, Paul van der Bijl. He supervised the correct procedure of voting prior to the meeting and is present here today as your proxy for the agenda items that can be voted on. Those are Agenda Item 2, an advisory vote on the remuneration report; Agenda Item 3, annual accounts; Agenda Item 4, discharge; Agenda 5, extension of powers of the Board; and Agenda Point 6, cancellation of shares. I note that the meeting has been convened in accordance with the law and our articles of association. Therefore, the meeting can take legally valid decisions. I also note that there have not been any proposals to add agenda items, which means that we can tackle our agenda unchanged. Let me make a couple of brief announcements before we start. You will be able to find the meeting as a webcast in Dutch and English on our website, and you can indeed view it at a later point in time. You've been given the opportunity furthermore to submit questions in advance. We've received these questions, and we will deal with them under the relevant agenda item. Furthermore, a number of shareholders have registered in advance to participate in this meeting and ask questions. We will give you the opportunity in the following agenda items. So now we can look into Agenda Item 2. The 2020 annual report will start with an elaboration as well as an explanation of our dividend policy by Jos Baeten. Jos?

[Interpreted] Well, thank you, Kick, and I'm glad to have you all here. You, of course, are used to me giving you a brief report, a [indiscernible] of the past year. And it's now the Eurovision Song Festival. We see at that festival that there's a mix of live and filmed presentations. Normally, you're in our a.s.r. building with us, and to show you what a.s.r. looks like in 2020, we actually filmed a walk-through our building. So let's have a look at that first. [Presentation]

[Interpreted] Well, thank you for your patience and watching this video. I think it's a good idea to stand still with respect to the current year. The -- as you were able to read and hear, we're quite proud of our performance in 2020. The commercial and financial momentum that we experienced in 2020 actually went on in the first quarter of 2021. So standing still with respect to this year, I have to repeat that the uncertainties around the further development of COVID remain, but we do trust our performance for the further months of this year. We expect the performance to develop further. And we hope that the goals that we set for this year can be achieved. We have full confidence in that as an executive board. I'd like to hand back to the Chair now.

[Interpreted] Jos, thank you very much for your very clear explanations. We will now continue with questions that have come in, in part, in a written form beforehand. We'll read them out. And we also have questions from our virtual participants. I'd like to ask Mr. van Kuijk, representative of the Sustainable Investors Association take the floor. He has 4 questions. I would like to suggest taking the questions one by one and answering them immediately so that we have a bit of an exchange here. Mr. van Kuijk?

[Interpreted] Thank you very much. Good morning to the Executive Board, the Supervisory Board, the employees and the shareholders present at a.s.r. I am Mart van Kuijk. I'm a representative of the Association of Sustainable Investors. We're very happy to hear your explanations to -- with respect to the last year. Thank you, Mr. Baeten, for this very clear explanation. You already expanded upon a couple of topics that are relevant to us. Last year, a cooperation with ASR Bank was concluded to indeed further -- make further sustainable the nonlife part. VBDO is very much in favor of that. We would like to ask whether there is any management towards an expansion of sustainable products. That's not clear to us at this point in time. What is the scope? What are the criteria to identify sustainable and nonsustainable products? That's a question for Jos. Jos, please.

[Interpreted] Mr. van Kuijk, thank you for your question. Let me start by answering the last part. Of course, we always examine how we can report on sustainability development. It's always our goal to give our shareholders a lot and full information. With respect to the cooperation with ASN, that is very -- at a very early stage. We are going to concentrate on a number of non-life products. We've added a couple of features. For example, the possibility of recovering in a sustainable way, then a number of products for fully electrified cars. We're also looking into other products. In my presentation, I gave you the example of a sustainability mortgage. We see that there are quite a number of -- there's quite a lot of demand for that. In our pension segment, we see that large pension customers and middle-sized companies ask for pension coverage and an investment in only sustainable investment funds. We have an interesting profile and portfolio there. And we will continue to develop that and fine-tune it in the coming years. We believe this way of examining and thinking through our product is the only feasible and viable way for the future. We do take our time. We wanted to land in the DNA of our company and our employees, and we want to keep up with the demand from our customers. We noticed that demand is rising.

[Interpreted] Clear. Your second question, Mr. van Kuijk?

[Interpreted] Well, thank you very much. We look forward to those developments and to your reports about them in the next year. Second question, we saw your climate reporting in your annual report, tackling various product groups. Paragraph 4.4 discusses a number of climate scenarios without specifying nor quantifying them. We would like to ask whether ASR could go that one step further and be more transparent in which climate risks have been quantified in, for example, the mortgage business and whether that has an impact on the decision-making process?

[Interpreted] Clear. Question for Annemiek.

[Interpreted] Thank you. We indeed include climate scenarios since 2019 in our strategic asset allocation, and we indeed took a further step in the processes and transparency. In the processes, we looked into physical risks, storm, hail, floods and transition risks, what's the impact of the growth expectations of a country and the sectors in which we are active. We've increased transparency, not only by indicating return of capital but also the impact of solvency in those 3 main scenarios by indicating those as well. We are continuing our work in this respect, and we are planning to give more insight into transition risks that we take into account as well as physical risks. And of course, those scenarios are used internally for the decision-making. It's an integral part of our strategic asset allocation.

[Interpreted] Again, a promise in this answer. We're making progress. Your third question, please?

[Interpreted] Thank you very much. Compliment from our side for the fact that ASR asset management has indeed joined the asset initiative. This is important and that you need to support the scenario of the temperature increase that you do. VBDO was looking to assess the practicability of CO2 emission reduction. And we hope that ASR doesn't only want to do this on paper, reducing the CO2 emissions, but also in reality.

[Interpreted] Annemiek, again, a question.

[Interpreted] Indeed, we joined that net 0 initiative. And what we're looking at specifically here is how far the [ sign-based ] targets are actually going to lead to that reduction if we do those calculations. With the target we set and made public in July, whether those reductions will indeed be aligned with these -- this initiative. We're also going to look into the best climate path per asset. And there, we're not only looking at exclusion but also at other means that we can use to achieve that. Specifically, the carbon-intensive industry is excluded, but we're going to look into investment and transition leaders. We have an investment goal that is crucial there. Just like you are trying to do that as VBDO, we are present at shareholder meetings, and we are looking to conduct a dialogue via engagement meetings.

[Interpreted] Thank you. The fourth question now. This is about diversity. In the annual account, we see that there's a lot of employee engagement, and Jos Baeten explained that in his presentation, too. We also read that your employees believe that diversity is not really a [ forte ]. There has been some survey and examination about that. Now how can diversity and inclusion be boosted? And how can it be experienced more strongly by your staff? How will ASR continue working on it in 2021?

[Interpreted] This is an important topic. Jos?

[Interpreted] Well, in 2019, even before the renewed and enforced attention, in general, developed with respect to diversity and inclusion, we've already started to review it. In the past years, we've been doing quite a lot. We're one of the leaders when we discuss recruiting people with a distance to the labor market, also looking at the ratio between men and women in the various boards and management levels, we've been making quite some progress there. We're not at our goal yet. We're going to continue it. We also have an internal Denison scan, which we do once per year. In 2019, we've included a number of questions about diversity and inclusion. And we indeed found that not all employees at ASR have the feeling that in -- with respect to vacancies, they receive the same opportunities. For example, they have the impression that there are preferred candidates. And as an Executive Board, we said we want to break through that situation. Anyone, internally or externally, should receive the same opportunities. And first, we're not really happy to oblige people to do things, but we did set up obligatory trainings for the management and various leadership positions, additional training with respect to such unrecognized preferences that you have to deal with in recruitment situations. Now that training has been done. We've also adapted our processes in recruitment to, for example, enable candidates to apply for a vacancy anonymously. We've also added committees to interviews -- job interviews that consist of men and women in a mix, et cetera. So these are the steps that we are making -- are taking to indeed increase diversity and inclusion and also the onboarding of people with a distance to the labor market and giving people the feeling that they have the same opportunities when promotions come up.

Jos, thank you very much. Mr. van Kuijk, thank you for these questions, specifically for your last question. This is a topic that has had full attention of the Supervisory Board as well, and we were able to note that the company is working on it. I would now like to hand over to Mr. Dekker, representative of the shareholders' association, VEB. We heard that you have 6 questions. Please, one by one.

Thanks to the members of the Executive Board or Supervisory Board for this opportunity to address my questions live by a video link. Highly appreciated. My first question is the following. It concerns the mortgage products. One might state that 2020 was the year of mortgages for ASR. We see a doubling of production with already a solid base. One remark, however, is that when looking at the actions of other insurance companies, for instance, in the Netherlands, but also looking abroad at Allianz, we see that growth in market share seem to advance faster there. So my first question is the following. In the coming years, what can ASR do in order to further improve the market share and development of mortgage products?

Clear questions. Well, the easy answer is to lower prices and buy market share, but this is not how we manage our company. This is not how we look at value creation, both for customers and for shareholders. Our philosophy is value over volume as a basis. So on the one hand, we're trying to see how we can generate healthy growth. And in mortgage operations, we have really done this over the past year. Something else we really look at is the following. When we have acquired new customers on mortgages, how to organize funding? In part, this goes through our own balance sheet, and we believe that in the light of low interest, these are fine investments we can add to the balance sheet. At the same time, we have a number of institutional investors interested in the quality of the mortgages we managed to acquire from customers and, therefore, parts are added to the fund. And we don't manage on market share, but on the triangle. What is possible within the -- with the balance sheet, what are the needs of external funders and how do we make sure the production we generate is financially responsible or balanced.

Thank you for this answer. Now I have a follow-up question, if I may. The so-called pipeline. If we look at institutional players, for instance, pension funds that maybe are really eager to join one of the ASR mortgage funds. How large is that pipeline for the coming 6 to 8 months? I assume you have some kind of overview of that. Can you inform us on that?

Yes. Certainly, we have a clear picture of this. For the current year, we have defined an even higher ambition, not driven by gaining market share, but by the possibilities of their own balance sheet and the size of the pipeline. We aim for a production significantly higher than that of the previous year. And the reason for this is the fact that we have a high demand from institutional investors. We have not communicated a figure, and I will not do so today. But we assume that we have a very solid pipeline and solid ambition.

Thank you. Well, twice the word strong. Next question?

Yes. My second question concerns the impairment on life, which obviously was of great importance for the financial results. In the annual report, there's reference to the trigger report, which is connected to COVID, obviously. But our question is the following. What specific metrics have been the ground for an impairment test? I can imagine that COVID itself is already a topic that may drive such a trigger. But on the level of metrics, what were the metrics that went into the red or set of the alarms?

That's a very clear question addressed to Annemiek.

[Interpreted] Thank you for the question, Sander. We conduct impairment test twice a year, for the half year and the full year figures. And although COVID had a limited impact on life operations as such, we see the triggers through the multiples. So this is about market [ acceptable ] multiples. And they affected us in Q2 when our competitors also started changing their course. So that's a trigger that went off and that was the reason we conducted -- we decided on the impairment.

That's clear. And then a follow-up question right away. After that period, obviously, in March and April, we have seen quite solid recovery on the financial markets. And therefore, my question is the following. Haven't you been too pessimistic in the impairment test, which obviously was forward-looking? Because now we may assume that the world actually has a much more positive outlook.

Yes. At the same time, in the procedures of the impairment test, we cannot select the day and the month. So we try and see when we have to do this twice a year, including Q2. When a trigger gets off, which at multiples in this case, you also look at the cash flow-oriented models, including interest. At the time, interest was low, and there was no expectation of it going up in the near future. So that leaves very little ammunition for not conducting an impairment at such a point in time.

Next question?

Yes. The next question is about asset management. In the press, there have been many reports on other players, for instance, [ NNIP ], thinking together about a joint future for asset management, and we see the same with [ Atura ], also trying to see whether asset management can be done in a different way. How the assets can be better managed? So the question is the following. As for ASR management, which is playing at a slower -- lower scale, how can management deal with difficulties in the marketplace. Certainly, difficulties of scale. How can you operate in the long term with success?

Annemiek?

We also look at our asset management business all the time, and we do see the consolidation happening in the marketplace. For us, asset management has a double importance, first of all, because it has Solvency II knowledge and asset management knowledge expertise that is very important for us as an insurance company and, therefore, also for the balance sheet [ capitalization ] of the company and also for supporting life operations. We have competencies there that we wouldn't like to lose because they really contribute to the way we deal with the strategic asset allocation. At the same time, the asset manager over the past 5 years grew considerably also with external assets under management. We base ourselves on a niche strategy. We are not BlackRock and the niches. And what we do for third parties are in mortgages, Dutch, real properties and also the front-runner role, we always wanted to have [ in the field ] of ESG. And thanks to this niche strategy, since 2016, the assets [ managers ] grew from EUR 12 billion to EUR 25 billion in assets under management, which is a very welcome fee business. And at the same time, it's an operating result that we add. It was a bit more than EUR 30 million in 2020. It's not really sensible to -- sensitive rather to interest, and it is a welcome contribution to our strategy. So both for the skills, the expertise and for managing our balance sheet, but also making -- for making us less dependent on interest and making us more profitable, our decision is to keep the asset management operations in-house. And obviously, if we look at benchmarks at the time in 2020, we conducted detailed benchmark trying to see whether this can be done cost effectively, whether we can gain anything. And the outcomes were very positive. So, so far, no reasons to change our policies. And at the same time, we do see that consolidation of asset managers in the Dutch markets offers opportunities to our asset management operations because there is a demand for specific niches knowledge of the Dutch market, for instance, in the field of real property management.

Your next question?

Indeed. The next question concerns the topic of digital development. We see that financials, in a general sense, are looking towards platform-based companies with asset-light, for instance, products that are offered. We also read about this in ASR. Obviously, we do. So the question is this. In the light of this trend and in the light of developments within a.s.r., to which extent is it a problem that ASR has such a detailed network of intermediaries that play an essential role in the distribution process? And the benefits of the distribution network still outweigh in our digital day and age the drawbacks.

That's a wonderful question for Jos.

Yes. Thanks, Sander, for the question. Let me start by saying that we are very happy with such a detailed distribution network and the relationships we enjoy with our distributors. Looking at digitalization, something we are working on actively like many others, we rather see this as an encouragement from the intermediaries to conduct this digitalization because it simplifies processes and, therefore, the majority of intermediaries support this certainly in the light of their operations. And we owe a large part of the growth in the business segments. Everything we can digitalize in information and services is seen by them as a way to facilitate business. So it's a benefit. Also some intermediaries are concerned about this ever-advancing digitalization. And this is why we decided to make sure in all cases that information a customer shares with us directly, because he has digital access, is accessible to the intermediary, making sure they don't see us as competitors in terms of information, but that we can strengthen each other in the process. We see, and here I repeat my words, that there is growth. And that -- the negative outlook that some intermediaries have is not reflected by growth of the business because most growth comes from Dutch professional intermediaries. We're very happy with this, and we're actually quite proud of this.

Very happy to conclude this with [ Mr. Wijn ]. Next question.

The next question is the following: ASR as a sustainable player, and this is a relevant question. Under the heading Real Estate, you mentioned 42,000 hectares of land being leased for all kinds of purposes, but also in agriculture and horticulture. And therefore, the question is, do you have any expenditure or investments in the years to come that would be required to live up to the sustainability commitments that you have entered into, for instance, the pledge for by diversity, or preventing the depletion or the exhaustion of soil and to include this in the way you manage those lands?

Well, Annemiek, I think land is your business.

Indeed. Yes, we have expenditure related to this expenditure and investments, have 2 components essentially. First of all, we see a growing need for capital in the agricultural sector. As a result of aging, there is a need for capital to take over companies, but also as a result of more sustainable business operations, we ourselves have quite an agricultural portfolio, EUR 1.7 billion in value, and we see a growing need for capital. In part, we can grow here, but we also have set up the Dutch Farmland Fund that external investors can also facilitate. They can join the fund in order to grow together with us and in order to contribute to this growth, providing capital where there is a need in the market. We also have the ambition to improve the condition of our agricultural portfolio when handing it out over to the next generations. We work on this. We stimulate this by our strategy for climate smart farming. So we stimulate agricultural working in the field. So we have, for instance, the open soil policy allowing access to data on the state of soil and giving tools to improve it, then we have Transition Roundabout, which is about scalable initiatives for new technologies for growing that can be used. We also invest in studying landscape element -- landscaping elements, seeing how you can reorganize the space to have natural elements come out better. So all in all, we see opportunities in this field to contribute and to keep generating a good return on this asset class. And we are not only doing this ourselves, but also acting through the Dutch Farmland Fund allowing external funders to join.

That was a very clear answer. A brief follow-up question then. Do you see any commercial opportunities to maybe bring new products, connecting to the climate transition or the energy transition. So to cover, for instance, climate-related risks, is there maybe a new class of insurance products? I know that, for instance, and the solvency climate catastrophes are a class of their own. So I'm highly interested whether you see any opportunities for ASR in the future?

Jos, please cover this question.

Yes, very happy to do so. This, indeed, is a matter we look into. And one of the things we have already done is to look at the coverage on, for instance, fire and household insurance and to expand the coverage so those insured with us are already covered for damages related to the floods of secondary waterways. This is related to the analysis that was -- we had a question about climate risk. For the whole of the Netherlands, we look at flooding risks and what we can do for our customers. We keep monitoring this all the time. One potential solution is to give early warning to our clients for hail -- for instance, hailstorms. The association of insurance companies in Netherlands announced yesterday that we will work together more with the Dutch weather forecasts, allowing us to give early warning to customers. Obviously, the reverse side of such developments is that we face the question more and more whether the risks covered can still be covered by insurance companies or the industry as a whole. We now seen that there are some risks related to climate changes are so large that they surpass the possibilities of the Dutch or even the international reinsurance market. And therefore, through the Association of Insurance Companies, and also myself, we have issued appeals in the press that the dialogue must be conducted with the authorities, trying to see whether such a scenario that will happen one day. Let's hope we long live to see it. But we must assume it can happen that such a scenario is prepared. For instance, by having a climate-related calamity fund in place already. So we try and cover whatever we can responsibly cover from the financial point of view, but through the Association of Insurance Company, we try and see how we, as a society, can prepare for the possible climate-related damages in the future.

Thank you. That's a very interesting development, and a very clear answer.

I think you have one last question left.

Indeed, this question is about agenda Item 8. And this is about the news we recently learned through the press, which is the fact that the prosecutors offers in a criminal law investigation into the violation on the Money Laundry and Terrorist Financing Prevention Act has actually investigated 3 former members, the Board of management of ABN AMRO as suspects and Joannes Wijn is one of them. So the question is, to which extent Mr. Wijn and also ASR, in appointing him at the extraordinary AGM in October, aware of the suspicions against Mr. Wijn?

In December of 2020, we have conducted a very detailed selection interview and at that time, it was known as you could read in the press that an investigation was ongoing with ABN AMRO and that discussions were being held to come to a settlement. That was known. For us, Mr. Wijn was the best candidate to become the Chairman of the Supervisory Board. And in the interviews or during the investigations, we have seen no reasons to come to another decision then to decide to nominate him for the Supervisory Board with the intention to appoint him as Chair. We have obviously reported this to the Dutch National Bank, which, in the assessment saw no impediments for appointing him to this position. And after the announcement of the settlement, we were only informed that there would be a follow-up investigation, which has not changed anything for us. There is no criminal prosecution. There are no criminal charges. There is no court case. There simply is a follow-up investigation that we will see, and the Supervisory Board has seen no reason to come to any other decision. And that concludes your questions, I believe. Then we have other shareholders who are virtually present who have asked questions. But I think it would be fair to have a few questions, for a change, that have been submitted in writing coming from shareholders not physically present.

[ Mr. Rinks ] is the first. He asked a number of questions. Some are about discontinuing brand names. Recently, ASR discontinued the brand name, Amersfoortse. The question is, how much cost do you expect to save by discontinuing this brand name? Are there other brand names that may be terminated, such as Brand New Day? Will stopping Amersfoortse lead to products disappearing from the assortment, and will there be a simplification of the assortment of products?

For someone who used to be the Director of the Amersfoortse, that's a great question. Yes. Thank you. Well, the decision to discontinue this brand name was taken a few years ago by saying that from the moment when ASR, as a brand, in terms of reputation and notoriety will have met a few criteria, we will further simplify our brand portfolio. All the colleagues working under that brand name were already situated in Utrecht has been part of the ASR family for a long period of time. So the only feature of the brand was the use of the name. We were not investing in the brand name in terms of brand-related campaigns. So the decision to discontinue the brand was not really based on the rationale of cost saving, but rather based on our wish to further strengthen the ASR trademark or brand name. So it doesn't lead to a change in the offer of products, the products that are being offered under that name to the clients, to distribution has been transferred one-on-one. For instance, we would not have disability or health insurance, and we still don't. The question about other brands, such as Brand New Day? Well, we have purchased a PPI of Brand New Day. Brand New Day is a company that will move on with a number of services and products of its own, and they will be active in the markets and they will not be available to us. And that also means that the PPI activities of Brand New Day, so this is restricted to the PPI activities because the others are outside of our remit, will also be converted in due time to the ASR brand name. We always keep checking our brand portfolio. ASR, as a brand, has now a strong position. And anything that will strengthen it will be subject of our scrutiny, and we may make new choices about this in the future.

Next question is about the Net Promoter Score, which grew to 4% to 9%, the highest score ever. And that is something to be proud of. Now do you, therefore, intend to increase this -- your target in 2021? Are you measuring the core type of products or only for ASR as a whole? And what is the Net Promoter Score of your major competitors, Aegon and Nationale-Nederlanden? Are you now above that level?

Well, let me start by saying that we measure the Net Promoter Score for all parameters in non-life, in life, in pensions. So we don't only look at the Net Promoter Score for ASR. As a total, 49 was indeed an extremely high score we are very proud of. Part of this can be related to the fact that by the many employees and customers working from home, the contact in -- through over the phone has changed. And I think this has -- this explains partly the high outcome of the past year. As known, we have targets that will apply to the end of this year. Next year, we will publish new targets looking, among other things, at the definition of the NPS. Therefore, it's hard for me to say something now about the NPS of other insurance companies. It looks the same, but actually, there are many different ways of measuring NPS. We mainly looked at telephone communications and direct contacts of our employees with customers. You can also look at the total integrated process and therefore, in the future, we will have to review our definition of the NPS. We will probably broaden it, including more facets, therefore, and we will publish new targets that obviously will be ambitious. But right now, it's difficult for me to compare our NPS with those of other insurance companies because I don't know what exactly they measure within the NPS.

We'll continue with another topic, wind turbines. ASR took its responsibility to build a sustainable energy driven Netherlands. ASR bought a 1 turbine park in Almeerse. And how far does that match with the normal goals with respect to profitability? Are there other initiatives? Wind turbines aren't really favorites of many people who just don't want them in their backyard? And is ASR planning to buy more windmill park?

We bought a repowered wind turbine part from 1.6 to 3.8 megawatt per turbine. So this was an existing wind turbine park, and it fulfills the criteria, of course, specifically on profitability, for infrastructural projects that we have. We are monitoring the market. We don't really see a sponsor role for ASR for nonprofitable projects. And the question about the local support is certainly something that we look into. We don't develop these wind turbine parks ourselves. We do purchase them. As soon as we acquire them, we test for local support and social engagement how that came about. The expectation is, though, that in the future, we will look into further investments in either solar energy parks or wind energy parks from our investment ambition.

A couple of questions by [ Mr. Chae ]. The first one, a brief one. On Page 85, and the market share of Life is at 13.2% for 2019, but it was 14.3% in 2018. And is anything known about the market share for 2020?

Yes. Well, market share on the Dutch market is established by the union of insurance companies, which indeed brings together all the figures that are relevant. It costs a bit of time. And the market share, therefore, for 2020 is just not established, not known yet. And I would like to share it as soon as we know it. From the poll, we'll get back to this at our next AGM.

Second question by [ Mr. Chae ]. Page 22, defined benefits pension book will be formally closed on the 1st of January 2021. And on Page 27, it says this pension agreement is a result of extensive discussion between government employers and employees. It's fully in line with the fine benefit products phase out and accelerating growth in defined contribution. Does that mean that the DB products are not going to be continued, and will the premium payments stop?

The change of pensions from DB to DC, from defined benefit to defined contribution, has been going on for quite a long time. DB costs with certain guarantees and the low interest rate means that they are much too expensive for many employers looking to the future, which means that for years now, only a few DB pensions have been closed. So the cost price is so high that ASR has stopped offering these products already. Which means that older obligations remain, but there's no new inflow. To give you an overview, in the meantime, 40% of our Life segment is Pension DC, a 20% Pension DB, and we're going to reduce that in the coming years.

In this respect, [ Mr. Chae ] has a follow-up question. ASR, we doing well with DC products, compensating the decrease in DB products, but a new pension law is coming up in the Netherlands based on the new pension covenant. So every organization well shop around. And how far will current customers of ASR reconsider their pensions with us?

We think all of this will work out just fine, and there won't be that much outflow. There's no change in obligations. Now customers who couldn't choose an insurance company in the past can't do it under the new rule of law either. And for existing customers, there's no real incentive to changeover to change their pension funds. The law does enable further individualization. This is something that ASR Netherlands has been capable of already contrary to larger pension funds. This is where we see some growth for ASR as well, and that's a part of our strategy. We don't expect that it will lead to a decrease.

Thank you. Those were the questions that came in, in a written form. We would now like to continue with questions asked by representatives beforehand, the representative by -- for [ Humedion ], [ Mr. Geijar ].

Well, thank you very much. Thank you for giving us this opportunity. My name is [ Gillian Geijar ]. I am speaking on behalf of PGM and a number of other [ Humedion ] participants. We have 5 questions about 3 topics: climate, social policy and governance. The first question. ASR has a target for climate, which is 50% carbon reduction in 2030, with a baseline of 2015. On the internally managed portfolio, equities, corporate bonds and government bonds, which asset classes is ASR looking into, to reduce its footprint by 2030? And what are the targets of those other asset classes that investors can expect?

Clear question, Annemiek, could you answer?

Indeed, in July of last year, we indeed adapted the target with the baseline 2015 to 50% reduction in our own book in bonds, government bonds, et cetera. This is a new target, and we're going to see whether the method of these science-based targets is in line with the climate agreement. So we have set certain dates to evaluate that. It's a new method for us. What we would like to do is include other asset classes such as real estate and mortgages, but we're not there yet. It's a bit of a pioneering effort to be able to calculate that correctly. And the funds that we invest into and that we manage, there, we're not the only investors. We'll have to look the situation together with other investors. So I cannot really talk about a clear-cut target. I can only promise that we're looking into it, and we will give you more information when we take our next steps.

Our next question is about the annual report 2020, ASR writes that they want to remain a leader in nonfinancial reporting. In the framework of this ambition, has there been steps taken to ask the auditor about a certain extent of qualification on the 4 KPIs, employee contribution to local society, impact investing and carbon footprint of investments on the portfolio of the mortgages? And what are the next steps of ASR to remain leader in respect of this nonfinancial reporting, taking to account the existing of a level playing field in the nonfinancial reporting amongst others under asset level, DR 1 and 2?

Well, may I say first that the existence or the development of a level playing field is something that we fully support. The more other players in the market report on nonfinancials as we find them important, the better. Of course, we would like to be one of the good guys and lead this development, but the idea is that forced by legislation to everyone starts doing that. Now reasonable assurance is what we're looking at. Our financial and nonfinancial KPIs are going to end. By the end of this year, we're going to renew them. And I'm sure that the nonfinancial targets are going to strive to achieve that reasonable assurance. And we're going to fulfill the legal requirements as if we are 1 and 2 levels, as you mentioned. We're also looking at the amounts that we have in category 8, 9 of Level 1. We see some room for challenge and improvement there. Furthermore, we're working on how to communicate as straightforward and as honestly as possible in combination with legislation. Now if the gap becomes smaller because others do that, then I'm very much in favor of it.

May I continue with my next question? For PGM, social policy is important. And Mart asked a couple of questions earlier on. We have an additional question. Which specific target groups have been identified by ASR for whom diversity and inclusion has to be improved. And how do you offer those groups more opportunities?

Yes. Perhaps this is in part a repetition of my answer to Mark's question earlier on. Now in our policy for diversity and inclusion, which we published in our website, we've included goals for the various areas that we're working on. For example, the gender relationship between male and female, then people with distance to the labor market, including them in ASR up to the year 2025 were quite successful. Compared to previous years, we can see that major steps have been made. So I'm quite convinced that we can reach those goals. Now what we've looked into and measured in ASR cannot really be subdivided into groups, which wouldn't really do justice to the topic inclusion. But what has become very clear and a matter of awareness with our employees with respect to candidates for recruitment and selection and equal opportunities in internal vacancies, that is a topic that we have indeed tackled in the last year. Furthermore, we've said that we need to have a constructive dialogue about these issues within ASR. This is a subject matter that can explode into bipartisan shift. We have had a number of workshops. As I've already indicated, management was obliged to take those training so that this dialogue can come off the ground. I see this as an organic process. We're not differentiating between groups, this would not do justice to the topic at hand. But the results of our measurements have been, do you have equal opportunities in -- for a vacancy?

Your next question.

Well, 2019 the new remuneration policy for the Executive Board and the rest of the organization came into effect. Can you give us an explanation on how this panned out for the organization since then?

If we look at this remuneration policy, then we make a differentiation between the Executive Board and the rest of the organization. The shareholders' meeting in 2019 approved this policy. It has come into effect afterwards. And of course, we've selected candidates for the Executive Board since then and the remuneration policy was no hindrance or obstacle in any way. So I can only answer for the Executive Board that this remuneration policy in the selection process has done its work well. Jos, what about the rest of the organization?

Well, de facto, the same is true. Of course, we have parts where the fact that we do not pay variable remuneration makes it quite interesting to see whether we can recruit talent because the market does pay variable incentives. Furthermore, we've seen that our sustainability achievements have indeed attracted individuals who believe in sustainability and believe that others haven't been as forthcoming. So we indeed have a good remuneration policy. We were wondering whether we could attract the right talent. In the meantime, it has been proven that that is the case.

Do you have any more questions?

One last question indeed. [ Sander ] touched upon compliance within the financial sector. With ASR being negatively -- coming up negatively in publication. What about compliance culture? What about audit measures taken in this respect?

Well, we can talk at length about that. We work with 3 lines of defense. That's a model that means that in every segment of our organization, there is a responsibility, specifically in the first line. In the second line, our compliance department monitors it and follows together with legal, all legislation, and they see to it that rules and procedures are implemented on time and in full. And then we have another layer, our audit department, which, on a regular basis, does internal audit. That's the formal answer. At the same time, we are convinced that if we look at compliance, that should mean more than just complying with rules and regulations. Compliance has to do with the culture in a company. And the core of that culture is that everyone should feel free to speak up whenever they see something that they don't like. They should be able to speak up and express their grievances next to formal and so-called hard controls. We also look into the so-called soft controls. Just an example, when our audit department does an internal audit, they not only examine the hard controls, but there's also a paragraph in which they look at the soft controls, i.e., what is the behavior in a certain department with respect to a specific audit? And because of that, we have indeed recruited our own ethical expert to start the dialogue about ethical dilemmas, about questions such as which customers do you wish to service and which don't you wish to service. To have a constructive and open dialogue about this. This means that as Executive Board, we are convinced, looking at the core of the compliance culture at ASR, everything is in order. And we do report in every Audit and Risk Committee meeting as well as in every Executive Board meeting, we're also challenged. If anywhere there is some disruption that -- something that hasn't been dealt with speedily enough. So I think we have a constructive compliance culture that not only looks at rules and regulation, but also at behavior and how we deal with each other.

Thank you for the questions. Then, ladies and gentlemen, we'll now move to [ Mr. Stevens ] for the Foundation for Legal Protection of Investors. We hope that the connection is good enough. [ Mr. Stevens ], good morning.

We have 4 questions. About acquisitions and extensions of portfolios, then about real estate and the influence of interest rates. ASR looks at suitable acquisitions, but which other segments are you going to enforce through acquisitions? Are you concentrating on the Netherlands only? Or are you also looking at countries abroad? If yes, is your preference the Benelux? And how far do other factors play a role?

Well, thank you, [ Mr. Stevens ] Thank you for your question. If we look at the M&A playing field, potential takeovers in the Netherlands, then it is quite true that in the meantime, a number of larger consolidations have taken place. At the same time, we do see opportunities via M&A. We focus on organic growth, i.e., independent growth, but also on middle-sized and smaller acquisitions, which are easily integrated or more easily integrated. We see some opportunities there. We don't have much choice. But let's just imagine that we were to choose and express our preference, then our focus on -- with respect to strategic long-term perspective is on non-life, on disability. In both, we would really look forward to some more nonorganic growth. We also believe it's important to grow in the distribution area. In the world of the intermediaries, there is some consolidation going on as well. We see opportunities there and keeping an eye on it. From a more financial perspective, we're looking at consolidation opportunities in the Life segment. For all M&As we do, they have to fulfill the so-called hurdles we set, the 12%. So if in the Life segment we get such an opportunity, we'll surely examine it. Now your question about other countries, all colleagues at ASR are looking forward to go abroad for their holidays. But as ASR, we, of course, look into new road show opportunities to meet our large investors, but M&A isn't our priority there. We believe that in the Netherlands, we have enough to do, enough work ahead for organic and inorganic growth in the coming years.

That was quite clear. Mr. Stevens, your next question, please.

I also have the following question. To which extent potential start-ups may play a role in this.

Yes, my apologies, I didn't give you a complete answer [ Mr. Stevens ]. Well, you see start-ups are something we have been watching for some time. Certainly, in the light of all kind of technological developments, we indirectly invest in start-ups through a number of funds in which we participate. And whenever there are interesting developments, we are very close to the business. So whenever we see opportunities to strengthen ASR, we certainly also look at successful start-up companies. So far, that hasn't led to significant acquisitions unless you would see a brand-new day or PPI as a candidate because it's a young company. They started from scratch a few years ago, and it was very successful.

In December, the District Court of Amsterdam declared bankruptcy of one company. Well, there were 80,000 policyholders there. Is there a possibility for ASR to take some policies out of the estate of the bankrupt company?

We think it would be wonderful if we could get a transaction in Conservatrix, which is a funeral company. At the same time, in my answer to your previous question, I already indicated to that in Life and Non-life, we strictly look at some criteria that we have predetermined because we believe it shouldn't only be a good transaction for clients, but also explainable to shareholders. Currently, we have no clear view of the situation of Conservatrix. So therefore, this is in the hands of the curator and/or the state managers. So we would have to see this, but we don't think that in the light of the interest of our stakeholders, our clients and our shareholders, this could be a transaction that financially speaking would be explainable to ourselves.

I think that's a clear answer. What is your next question?

Mr. Chair, that was our thought exactly. We thought we would get this answer. Are there any developments in cattle breeding? You have a strategy. This may also lead to changes in the field environmental-friendly cattle breeding, for instance. You also see that many cattle breeders are selling directly to clients. And you see that there is a change in the field of intensive cattle breeding. So does this change the way you serve them as clients. What is the impact of this on the agricultural land property you hold?

Well, that is another question for our large-scale land owner and it is true that our land managers are very busy. From the 42,000 hectares, 60% is agriculture and 40% is cattle. And we see a lot of succession matters in both fields. We try and answer to this by our land lease products. And in both sectors, you also see sustainability as a field we try to contribute to. In an earlier question, I spoke about the investigations or the research in the roundabout and in growing technologies, we look at the open soil index, we look at the biodiversity of soils. And in cattle, also you have the attachments to the land. Sometimes you see the need to actually increase landholdings and then our land managers with knowledge of the local markets are of great importance. So yes, we are busy. And at the same time, in terms of the asset class of agricultural land, we are positive. We believe there will be still a need for land, not only because of developments in agriculture, but also in light of housing, the energy transition and also the need for land for recreation or for strengthening and developing nature. So we are positive about this particular asset class. And together with our asset manager, we try to support entrepreneurs as best as we can.

[ Mr. Stevens ], what is your next question?

I have a follow-up question on this matter, and that's the following. Do you have any influence on that management? There is a ditch in the Western B2 area that was dug out 16 years ago, and nothing was changed there. To which extent can you have any managing influence on this because this is a relevant point from the point of view of climate.

Now we have a double problem. The line has deteriorated and you stopped speaking clearly so that, combined, is not easy. I'm not quite sure I understood your question. What polder, what land were you referring to?

The polder district and the water level management in ditches?

Okay. Well, does this ring any bells, Annemiek?

Not quite, I have to confess. Not something I can immediately answer. So is this about managing the water levels in ditches?

Yes. Indeed, managing the water discharge of excess waters, particularly during time of drought. How to replenish the shortage of water?

Well, through the open store index, we try and see as best as we can what the impact on reclaimed land is and our Non-life products also look at the risks for flooding or drought. But I think it may be better to address your question directly off-line. Because here, I would have to attract the experts. I can't ask questions about specific reclaimed parts of land. And then maybe the prime concern of most of our listeners is not the water level in some ditches in the Netherlands. So we'll come back to this question outside the scope of this meeting. And then we can also come back to this next year at the AGM. Because right now, it's not sufficiently clear what answer we could give to this question. Do we have any concluding questions, [ Mr. Stevens ]?

I do. Well, inflation, it seems that the long-term interest is going up. Can you indicate what your assessment of this development is currently and to which extent it will affect the profit of ASR?

Yes, since Q1 we indeed see a interest growth. Well, there needs to be a perspective there. The interest now for 20 years is about the level in January 2020, slightly before the start of the covered crisis. And therefore, in historic perspective, interest still is extremely low also because of the comment of easing program. Still, we, as ASR, are happy about this increase in interest that we see. Usually speaking, that is positive for life insurance companies. If you look at the sensitivities that we have published for interests with the annual financial statements, you can see that with an instantaneous interest shock of 100 basis points, there would be a positive impact if it is upward and only limited negative impact downward if there is a growth of interest -- or a blocking for 10% -- for 10 years would be slightly negative. So all in all, you can say that an increase in interest would be a positive feature for ASR as an insurance company, and we usually expect that inflation will go hand-in-hand with an increase in the interest rates. We have seen that over the past years, and therefore, there should remain a net positive effect. There is the risk of them dissociating the level of inflation and the increase in interest. But all in all, we are happy about an interest growth, also pointing at sensitivities that we have published about this when we published the annual financial statement.

Thank you, Annemiek. That is a clear answer to the questions in my view. Thank you, Mr. Stevenson (sic) [ Mr. Stevense ]. I would like to also thank all those who answered questions. And that now brings me to Item 2b on the agenda, which is the report of the Supervisory Board. And in Chapter 5.2 of the annual report, you could also read in detail about this -- about the work. There's one point I would like to highlight from the report, and this is something that Jos mentioned in detail, the impact of COVID-19 on the organization. Obviously, such an event required frequent regular consultations between the Executive Board and the Supervisory Board. And we have been kept informed at all times about the impact of COVID on our customers, on our shareholders, our suppliers and our employees. And I can inform you that the Supervisory Board was highly impressed by the way in which the Executive Board and management led the company through the crisis. We were impressed by the way how, despite all this, innovation continued. Innovation across the Board was shown. Entrepreneurial skills were shown across the Board. All of this with a very human approach from management towards all those concerned. This is something I would like to highlight. In addition, we gave attention throughout the year to all the important items on the plate, which is the strategy focusing on long-term value creation, all matters of solvency and capital. The various M&A developments were closely scrutinized. We looked at IT, digital developments. We looked at the performance of the company, financial and nonfinancial. And also, we always appreciate the intensive contact with the works council throughout the year. We are highly satisfied with the way both management and the works council worked together. And we, as Supervisory Board, also had positive contact with the Dutch financial markets authority and the central bank. We have 3 committees: We have the Audit Committee, the Selection and Nomination Committee and the Remuneration Committee. And the reports of the committees can be found in Chapter 5.2 of the annual report. For as far as I can see, we have not received any questions, and therefore, we can turn now to Item 2c, which is corporate governance. We have a few points to report. After the departure of Chris Figee, we have a full board as of February 1, 2020, with the [ count ] of Ingrid de Swart and Annemiek van Melick as of February 1, 2020. So they have been working with us for about 1 year and it feels as if it was much longer. We are highly impressed by the way they have taken up their function by the dynamics in the Executive Board, by the cooperation, all that is going really well. As for the Supervisory Board, I can tell you that after departure of Cor van den Bos, Sonja Barendregt took his place as chair of the Audit & Risk Committee. And in a moment, she will share a report on this. And Gerard van Olphen joined this committee as well. In addition, there's a governance matter, the fact that Joop Wijn in the course of this year has been selected as a member of the Supervisory Board. We're happy with his coming and with the contribution already made throughout the year, and we look forward to him becoming the Chair of the Supervisory Board. That's what I wanted to communicate about governance. That brings me now to the remuneration report for 2020, which has been submitted to an advisory vote. And as I already reported a moment ago, there was a question about this. And the answer is that the remuneration policy has been readopted at the 2019 AGM. It [ entered ] into force in 2020. And the remuneration policy gives a detailed report on the implementation and shareholders have the opportunity to issue an advisory vote. So we already had some questions about the remuneration report that were answered. We see no additional questions, meaning that we can now proceed to the vote. And I can inform you, and the same applies to all the votes, that 138,714,000 ordinary shares are eligible to vote. And today, through the notary public, 98,439,028 shares are casting their vote, which is 72.15% of the shares. And I now share with you the outcome of the vote. And I conclude that with more than 90% of the votes, a positive recommendation has been granted to the remuneration report. I would like to thank you for this, and that brings me to Agenda Item 3, which are the 2020 financial statements. And I would like to invite Sonja Barendregt as the Chair of the Audit & Risk Committee to give a comment on this. Sonja, the floor is yours.

Thank you, Kick. I'm happy to give a brief comment on the work of the Audit & Risk Committee of the past year. In the Annual Report 2020, on Pages 135 and 136, you'll find a more detailed report of the work of the committee. I would like to highlight a few points. During the ordinary meetings of the committee, besides issues of the results and balance sheet over the past year, we obviously looked at the impact of COVID-19 on operations and the financial results of ASR. The Audit & Risk Committee was informed about this based on various scenarios by the Executive Board. Documents and discussions show that ASR, despite the many uncertainties about the long-term effect of the corona crisis, has closely been following developments and has carefully acted on this. As was mentioned by the Chair in the previous comments, we also had many discussions about the impact of markets and interest risks based on internal analysis and policy documents suggest the balance sheet plan, investment plans and the Own Risk and Solvency Assessment. In addition, important control matters such as data quality, validation of models and assumption definition have been regularly discussed at the meetings. The same applies to the implementation of IFRS 17 over the past years. [ In light of its ] implementation, once again, good progress has been made, including various tests. In the coming months, we will have one more dry run. We continuously looked at IT and cybersecurity risks and also compliance matters such as the Money Laundering and Antiterrorism Act, privacy legislation and outsourcing. Finally, in 2020, we gave attention to the integration of VvAA and Veherex, and to the acquisition of Brand New Day PPI. In the meetings of the Audit & Risk Committee regularly, we had discussions with the actual officers about the adequacy of the assessments and the assumptions that are based of the insurance obligations on the balance sheet. The conclusion was that these estimates and assumptions have been created with due care and sufficient prudency. 2020 was the first control year for KPMG. The handover from the previous auditor was very smooth and the audit plan and the order have been discussed. The independence of the external auditor and the additional assignments have been assessed every quarter. The management letter and the report of the external auditor discussing the main observations of internal audit have also been discussed at length, such as the key audit matters and the committee will make sure that any conclusions will be implemented. Let me add, in conclusion, that the Audit & Risk Committee has also exchanged views with the auditor in absence of the Executive Board about, for instance, the audit of the annual accounts and others. We experienced these conversations as open, critical and constructive. On behalf of the committee, I would like to thank KPMG for the audit over the past year highlighting the challenging nature of that audit, both for KPMG and us, given the fully remote working situation as a result of corona. I would like to conclude here.

Thank you, Sonja, for this very clear comment. I now turn to Ton Reijns from KPMG. Ton?

Thank you, Mr. Chairman. I'm very glad with this opportunity to comment on the audit that we have conducted. Dear shareholders, my name is Ton Reijns. On behalf of KPMG, I have signed off on the independent auditor's report to the 2020 financial statements and the assurance report of the independent auditor to the nonfinancial information as included in the 2020 Annual Report of ASR Nederland. It's the first time I have done so for ASR Nederland, and I would like to comment on this in greater detail. I have the ultimate responsibility for the audit we have conducted at ASR Nederland. I'm delighted to be able to address you, although, I, of course, regret that I can only do this through a screen. During this General Meeting of Shareholders, ASR Nederland has released me from my duty of confidentiality, and therefore, I can freely speak about the audit and its results. Since we are your new external auditor, I would like I'd like to start by discussing the transition from the previous auditor to KPMG. After this, I will give a further explanation of the audit, the audit opinion and the assurance report. That brings me to Item 2. Prior to starting our work in July 2019, we conducted works that resulted in us, KPMG and partners, that's been completely independent of ASR Nederland and its subsidiaries. We worked side-by-side with the preceding auditors from mid-July 2019 through the year-end process for the 2019 financial year to gain a better understanding of ASR Nederland, particularly with respect to the areas where significant audit judgment is required for audit purposes. We conducted file reviews with the preceding auditor, and in this way, obtained sufficient and appropriate audit evidence regarding the opening balance sheet of the 2020 financial statements. We further supplemented this with information obtained from discussions with the Audit & Risk Committee, the Executive Board, management and employees in key positions, partly in order to determine significant risk areas for our audit for the financial year 2020. That brings me to Item 3, which is our independence. As of October 1, 2019, we are independent of ASR Nederland, something we have confirmed in the Supervisory Board meeting of March 23, 2021. What have we audited? That brings me to Item 5. We reviewed the nonfinancial information and for 4 KPIs, we looked to -- or made an audit of the information is included in the Annual Report 2020. We issued an insurance report of the independent auditor in this report. We state our conclusions and opinions. Here, I can refer to Pages 116 to 119 of the 2020 annual report. And that brings me to Item 6. We have audited the 2020 consolidated and 2020 separate financial statements of ASR Nederland. Our auditor's statement on the consolidated and the separate financial statements can be found on Pages 302 to 319 of the 2020 Annual Report. As a result of our work, we have issued an unqualified auditor's opinion to these financial statements. And before I comment on other elements in the control statements -- to the financial statements, I would like to address the impact of COVID-19 on our control, Item 7. During the major part of the year, the ASR employees worked from home and we, too, largely performed our work remotely virtually. How did this affect our work? We can identify 5 elements in the process. First of all, the going concern assumption. Management prepared a going concern analysis that further substantiates the going concern assumptions underlying the financial statements. Based on our audit, we believe that this assumption has been adequately supported by management. A few words about materiality. In 2020, management had additional financial forecast based on multiple scenarios in response to COVID-19. We analyzed these scenarios and forecast. We discussed them with management, and we conclude that the financial implications for ASR Nederland are relatively limited. Therefore, we have not made any adjustments to the materiality we applied. Three, review of management estimates, including those related to the valuation of insurance liabilities, Solvency II, own funds and SCR calculations, the goodwill impairment and the valuation of investment with a focus on hard-to-value assets such as real estate. In auditing these estimates, we considered the impact of COVID-19 on the assessments of management on the assumptions, the methods and the models used and the [ limitations ] of outcomes. I will come back to this in a moment in discussing a single key audit matter that can be found in our audit report. Four, audit of disclosures in the financial statements regarding COVID-19, such as in Footnote 6.1.2, impact of COVID-19; Footnote 6.4.4, non-life ratios; Footnote 6.5.1, intangible assets; Footnote 6.5.5.1, investments available for sale; Footnote 6.6.7, net insurance claims and benefits; Footnote 6.7.1.1, fair value of the assets and liabilities; and Footnote 6.1 (sic) [ Footnote 6.8.1 ], risk management. As a result of our work, we have determined that the disclosures are adequate, including those concerning estimation uncertainties. And finally, five, gathering sufficient and appropriate audit evidence. We have adapted our audit procedures to the changing business conditions, including the timing, for instance, with respect to impairment indications and also to the nature of other procedures such as working remotely and gaining access to ASR Nederland's financial records and reports and also the depth of testing procedures, including the determination of the authenticity of certain documents. By means of file review, both virtually and remotely, we have reviewed the work of doc -- component auditors, which provided us with sufficient assurance for our own audit that allowed us to issue our audit opinions. And that brings me to the next slide and also to the next point in my presentation. With respect to the auditor's opinion, on the consolidated and separate financial statements, I would like to explain the following. First of all, materiality. We have determined materiality at a level of EUR 4 million basing ourselves on the average result before taxation for the previous 3 years, which is approximately 4%. We did not deviate significantly from the assumptions used by the previous auditors responsible for auditing the 2019 financial statements. Some parts of the financial statements have been audited with a lower materiality in response to the nature of certain disclosures. This lower materiality based on qualitative factors has been applied, for instance, in the audit of the disclosures in Footnote 6.7.5, key management personnel remuneration. All identified and unadjusted control differences beyond EUR 2 million have been reported in writing in accordance with the arrangement made with the Audit & Risk Committee of the Supervisory Board. These differences were, individually and in aggregate, not material to the financial statements. And that brings me to Point 9, the scope of the audit. In order to be able to take full responsibility for the audit of the financial statements, we sent out instructions to the auditors of group entities to perform audit work for us, the group auditor. In doing so, we determined for which entity and with what materiality this local audit was to be performed. In doing so, we also looked at the impact of COVID-19 both from the risk perspective as from a perspective of financial relevance of the components to the group as a whole. All component audits were performed by KPMG audit teams. Point 10 now. In designing and implementing the audits, we considered the risk of fraud. We assess the response of management to fraud risk and the functioning of the 3 lines of defense in this field. We also looked at the so-called presumed fraud risk of management override of controls and performed substantive order procedures such as data analysis and the analysis and the testing of high-risk journal entries. In our audits, we identified laws and regulations that might material effect on the financial statements. This is estimate based on our knowledge of the industry and also on discussions we have with internal audit, legal, group compliance, group risk management and business lines [ CFROs ], the Executive Board and the Audit & Risk Committee of the Supervisory Board, obviously. Now here, we make a difference between laws and regulations that may have a direct impact on financial statements, such as corporate income tax and reporting rules and laws and regulations that may have an indirect impact, such as the Financial provision act, Solvency II and regulations related to financial economic crime. And that brings me to Item 11. We recognize significant risks based on our professional judgment. Significant risks are risks that have a higher probability of causing a material misstatement in the financial statements. Significant risks are often linked to significant nonroutine transactions or are matters that require significant management estimates. For each of the significant risks, we have examined the design and the existence of the internal control system ASR Nederland put in place to mitigate these risks, supplemented where possible by tests of their effective operation. In addition, we performed substantive testing to obtain sufficient and appropriate audit evidence to determine that these risks did not result in any material misstatements in the 2020 financial statements of ASR Nederland. We identified 5 key audit matters as a result of the audit we conducted and have included them in our audit report. These are the following: the valuation of liabilities arising from insurance contracts, including shadow accounting and liability adequacy test; the valuation of hard-to-value assets; unit-linked exposure; Solvency II disclosure; and goodwill impairment. I want to elaborate on one key audit matter further. In the light of the financial [ side ], degree and complexity and of the extent which management judgment is required, we consider the valuation of liabilities assuring from insurance contracts including shadow accounting and liability adequacy test to be a key issue in our audit. Due to COVID-19, we saw an increased evaluation uncertainty here In addition to our audit work on testing internal controls on data reliability, governance and controls around assumption setting valuation and the implementation of models. We performed specific work together with our actuarial experts, including work on estimating non-life and health insurance contracts, the change in estimating the IBNR of disability and certain pension products, the adjustment of the mortality tables and the experience figures thereon, the adjustment in inflation expectations and the impact of COVID-19 on the assumptions used were concluded that we believe management determination of the assumptions used is reasonable and that the valuation of the insurance liabilities is acceptable. For a further explanation of the other key audit matters, I would like to refer to the text of our auditor statements as included in the 2020 Annual Report on Pages 302 to 319. And that brings me to my conclusion, Point 12. Dear, ladies and gentlemen, all our audit procedures have provided us with efficient and appropriate audit evidence to issue an unqualified auditor's opinion with the financial statements of ASR Nederland for 2020 based on the basis of which you, as shareholders, of ASR Nederland can form your own conclusions. Before I turn back to the Chairman, I would like to thank you, the shareholders, the Supervisory Board and the Executive Board and all those present for their attention. Mr. Chairman, this brings me to the end of my presentation. I'm very happy to answer any questions about the audit.

Thank you very much for this extensive explanation, Ton. I see that there are no further questions in this respect. That means that we could continue with the vote. [Voting]

I would now like to ask you to present the voting results on the screen. The -- we see that practically 100% of the votes are in approval of the annual report for 2020 So the financial statements have been adopted. We will now combine the treatment of Agenda Items 3B and 3C. This is the reserves and dividend policy explained by Jos Baeten that we are looking into now and voting on. So I can refer directly to the proposal made in the agenda to indeed for the financial year 2020 payout a total of EUR 282 million in dividend, which is EUR 2.04 per share in cash. After the paid out interim dividend of EUR 0.76, a final dividend of EUR 1.28 per share remains. I see there are no further questions so we can continue with the vote. [Voting]

The result of the vote is on the screen. I note that the suggested dividend proposal has been adopted. We will now continue with Agenda Item 4, the granting of discharge. We proposed to grant discharge to the Executive Board for their duties as shown in the annual report as well as in the information given in this shareholder meeting or otherwise. Are there any questions or remarks in this regard? That is not the case. So we will now vote on the discharge of the Executive Board. [Voting]

The voting results are on the screen. The discharge of the Executive Board has been granted, and that is for the present and former members. I will now continue with Point 4b, granting discharge to the members of the Supervisory Board. We propose to grant this charge for the performance of the duties of the Supervisory Board members as shown in the annual report or in other information that you have received as shareholders. [Voting]

I see there is no further question or comment, which means that the vote results can be presented. I see that the discharge has been approved for the Supervisory Board, which means we can continue with agenda Item 5. Here, we propose an extension of the powers of the Executive Board. Now on May 20, 2020, the general meeting granted the Executive Board 3 authorizations for a period of 18 months, as mentioned in the notes to the agenda under Item 5. The Executive Board now proposes, with the consent of the Supervisory Board, to extend these authorizations effective as per today. These new authorizations will therefore expire on the 19th November 2022. They give ASR the flexibility to act quickly whenever circumstances warrant this. So the extension of authority is proposed for the Executive Board for a period of 18 months starting today to issue ordinary shares, grant rights to subscribe for ordinary shares up to 10% of the issued share capital of ASR Nederland as per today's date. In each case, the Executive Board will only be able to exercise this authority with the approval of the Supervisory Board. [Voting]

I see there are no questions or comments in this respect, which means that the vote results can be presented on the screen. And I note that this authorization has been granted. This brings us to Agenda Item 5b, proposal to authorize the Executive Board to limit or exclude legal preemptive rights. We proposed to the general meeting that the Executive Board be authorized effective as of today for a period of 18 months to restrict or exclude preemptive rights of existing shareholders with respect to the issuance of common shares or the granting of rights to shares based on the authorization you have just given under the earlier agenda item. Again, the Executive Board may only use this authorization with the approval of the Supervisory Board. [Voting]

I see that there are no questions or comments in this respect. So the vote results can be shown on the screen. I note that this authorization have been granted, which brings us to agenda Item 5c, proposal to authorize the Executive Board to acquire own shares by the company. It is proposed to authorize the Executive Board for a period of 18 months starting today to acquire ordinary shares in the share capital of ASR Nederland through the stock exchange or otherwise. The Executive Board will only be able to exercise the authority with the approval of the Supervisory Board in each case. A maximum of 10% of the issued share capital of ASR as of today's date may be bought back at a price between the nominal value of the shares in question and 10% above an average closing price during a period of 5 days prior to the date of acquisition of the shares. [Voting]

I see that there are no further questions or comments in this respect. And this means that we can show the vote results on the screen. And I note that this authorization has been granted and approved by the shareholders meeting, which brings us to Agenda Item 6, proposal to cancel shares held by ASR. In 2020, ASR bought back shares at an amount of EUR 75 million. It is proposed now to cancel these shares, over 2.9 million of them, to clean up the capital structure of the company. At this point in time, there is no other use for the repurchased shares. Because the share buyback results in a reduction of the issued capital, ASR is running into a legal limit. By law, ASRs authorized capital may not exceed 5x its issued capital. It is, therefore, proposed to reduce the authorized capital from EUR 112 million to EUR 104 million by amending the Articles of Association. This will give ASR the scope to withdraw the repurchased shares, both this year and in the coming years. Agenda Item 6a is the proposal to cancel. [Voting]

I see that there are no questions or comments. The voting results will be put on the screen. And I note that this authorization has been granted, which brings us to Agenda Item 6b, the proposal to amend the Articles of Association. [Voting]

Again, I see there are no questions. The voting results are presented here. And I note that this authorization has been granted by the shareholders as well. Thank you. So now we have 2 agenda items left, the -- any other business and the composition of the Supervisory Board item. I will start with any other business. Is there any question remaining? That is not the case. Now this is the briefest AOB in the history of ASR. Please enjoy this brief moment. I can only advise you to do that. We have now come to agenda Item 8, composition of the Supervisory Board. We've already explained that, in the year 2020, we have looked long and hard for a successor for myself, a new Chair of the Supervisory Board. We've looked for someone who knows the insurance sector, who knows innovation, start-ups, is involved and engaged in the political and social arena because a lot of our products have to deal with legal and political situations. And we were very delighted to not only find someone who fits this extensive profile, but who also was very willing and prepared to take over the gavel. Normally, I would actually have a gavel that I can hand over, but the corona protocol dictates that I not only keep 1.5 meters social distancing from my successor, but I also do not physically touch anything that I hand over to him. So the camera can only show this disinfected Chair as gavel, and I would like to ask you, Joop, to enjoy this wonderful company, this wonderful position and wish you all success.

Thank you, Kick. It's an honor to succeed in your footsteps. Yesterday, in the meeting of the Supervisory Board, you were indeed welcomed and spoken to by all other members and we're going to, of course, have a festive dinner and express our thanks again -- you have been a Chair of the Supervisory Board for 12.5 years. That is a record. It's such a long time that I now need some more time as well to thank you even though you are such a modest person, you won't really enjoy this. You started in a very difficult time for ASR just after the nationalization in 2008. We cannot imagine nowadays how difficult those times were. IT was still in Brussels. The Supervisory Board had to be renewed completely. The balance had to be regained between the trust of the customers, the employees and the company. It's phenomenal how you succeeded in doing all of this because you played a crucial role together with all the others that helped you. Then the IPO, another complex process. You still tell wonderful anecdotes about how you enjoyed that phase. But again, it is striking that ASR had a vision at that point in time already that is still leading for today's vision. Ambitious goals were set. They have all been achieved. Kick's motto is you always fulfill your commitment or promise. Now from the first day, there was a clear balance between the interest of the stakeholders, and that balancing act was your starting point. No contradiction between customers, employees, the society and the shareholders, a good dividend is -- and being a good employer. Those were your guiding lines. You're transparent, you're direct, you want to keep things simple, you're pragmatic and positive. You're a leader in the areas of diversity, inclusion and equal opportunities. You saw as one of the first that ESG has to be achieved. But that at the same time, commercially, it's important to differentiate yourself as ASR. That's something you hammered into our minds. You have a great sense of humor. You always have a one-liner to summarize something. You always have a perspective that is original and creative that makes everyone wonder where did he come up with that. You always work on the basis of trust. That is wonderful for your direct surroundings, but it is also -- it radiates throughout the whole company. Of course, Jos is going to say something more about that. It was great and enjoyable to work together with you in the past half year. We updated the strategy. We went through the cycle of the yearly reporting. You gave me a lot of insight and context into the past, and that means that we can tell all our stakeholders that the direction of ASR, our course, will remain consistent. But we will miss your guidance and experience. What we will also miss is the way in which you chair the Supervisory Board meetings in such a easy way, allowing everyone space and room to express themselves, but being efficient at the same time. It's going to be large shoes to fill, and we learned so much from you. And I'm saying this on behalf of Sonja, Gisella, Herman and Gerard, thank you. Thank you very much for such a long time, enthusiastic and skillful dedication to this wonderful company. We'll keep contact, and we wish you all the best. And I would now like to hand over to Jos Baeten, the Chair of the Executive Board.

Kick, I'm sorry, you will have to be patient. You explained time and time again that we were supposed to be brief and concise. I decided to keep that promise because I know that you just don't enjoy lengthy speeches, and we will have time in a smaller circle to say thank you once more. Now, Kick, when you became my Supervisory Board Chair, we had our very first talk and we looked at each other across the table and I believe that we did have an opinion of each other. You thought I was quite stubborn and I thought you were quite a strange bird for the insurance business. But in the past 12.5 years that we've worked together, I've learned so much from you. And you also had an influence on my own style, which changed because you had such a background in the public domain. The way in which you look at society, at communities, at companies, that gave ASR a lot of insight into how important it is to follow up on what politicians do, what ministries do, what the dynamics are of the political settings. And specifically, during that phase when we together had so many talks at the Ministry of Finance, we profited from this perspective. And thanks to you, everyone is still astonished that within 16 months after our IPO, we were fully independent again and a fully listed company. Now the way in which I experienced you personally was not only that you're a great Supervisory Board member, but you also have the capacity to be very clear-cut in your role and you understood that an Executive Board is an Executive Board and the Supervisory Board as a Supervisory Board and that both need to communicate also outside of the formal relationship. So you said, if you want an advice from a friendly neighbor, please call me, too. So in some issues, when I thought, well, if I ask this in a formal fashion, then we're going to open up a whole can of corporate governance issues, so I called you as a friendly neighbor. Thank you very much for that because I enjoyed it and I learned a lot from it. You were also very decisive in how we deal with customers. You were the person who in implemented NPS. And if we look at that score now, then I think that all of this radiated to our employees and our managers at various business levels. So if we were to measure your NPS, I would give you a 10. I think every Dutch company in the world would need the type of Chair for the Supervisory Board as you were in the past years. Thank you. Thank you for your personal friendship, and thank you for the way in which you brought ASR and all of us forward and inspired us to make ASR what we are today on behalf of the employees and the works council.

Well, Jos and Joop, thank you so much for your immensely friendly words. I've always done this with great pleasure. The most difficult period was, of course, these last 5 minutes. You could have done this much shorter and it's all extremely exaggerated as everyone will understand. What I would like to say and end with is that I've done it with great pleasure, and I look with great trust and confidence to the future of this company. It's a company with its own very strong Executive Board; a very good management; enormously professional employees, very, very strongly dedicated; a company with a leading position in the area of sustainability; and with very good financial results to go with it. So I expect specifically under the leading of Jos and his strong Executive Board as well as under your, Joop's, leadership with the Supervisory Board, this company will have a great future. I'm going to enjoy it from the sidelines. Thank you again very much.

Well, Kick, your words underline what a great Chair you are. Thank you. Thank you, again. So ladies and gentlemen, with your support, I would now like to move forward to Agenda Item 9, which is the closure. I would like to, on behalf of the Supervisory Board, thank all employees an ASR for their great dedication and commitment in these difficult and turbulent times. Very good results have been booked, thanks to your commitment. That was not self-evident in one of the most difficult years in the history of this company. Thank you, again. We also value the loyalty and trust of our customers. And we do our best to really help them, as Jos always says, and to improve our service provision. I would also like to thank all of our shareholders for their trust in ASR. And I would also like to thank you for being present in a virtual form and your contribution to this shareholders' meeting. I wish everyone in these special times, a lot of strength and of course, health. I hope to see you again live in good health next time. I hereby close the meeting. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]