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

Ladies and gentlemen, good morning. On behalf of the entire Management Board of ASR, welcome to the 2023 Investor Update. It's always a delight to be here in London. And actually, we're glad to see so many of you attending this event in person but also, of course, those who are watching this via the webcast, a very warm welcome to you as well. I'm Michel Hülters, the Head of Investor Relations, and I'll be the moderator for today's event. Today, we're going to present our plans on how we're going to integrate the Aegon Nederland business onto our platform and create a leading insurance company in the Netherlands. I think it's really a compelling story that we have to tell and the project is firing on all cylinders. And today, we're going to lift the hood and show you how it's working. Today, the program basically consists out of 2 parts. The first part is an update on the unit-linked life insurance. I mean, you all have seen the rulings a couple of months ago, but more importantly, I would think the announcement that we made yesterday evening really is a turnaround in this file. We'll have a presentation on that and a Q&A. And after the Q&A, we will wrap up on this topic and then focus again on the main part, which is the integration. Probably between Q&A and the remainder of the program, we have a very short break just to refocus again on why we are here in the first place. But first, let me present the presenters that we have today lined up. On the left, we have the maestro, CEO, Jos Baeten. We have Ingrid de Swart, who's doing a phenomenal job as the COO, CTO, you may know her from the Capital Markets Day 2 years ago. Then we have our newly appointed member to the Management Board, I think it's a familiar face for most of you actually from Aegon. He also did a couple of years in Investor Relations at Aegon. And now, Willem van den Berg is actually the COO of the Life segment. And for me, personally, the living proof that there is a decent career after Investor Relations. So glad that you here, Willem. And on the right, last but certainly not least, we have Ewout Hollegien. He's our CFO. Some consider him the Jason Statham of the insurance industry. I know that he can torture financial data until they confess and so for all the hardcore financial analysts here in the room, he's your man. We also have 2 other members of the Management Board attending today. You may have met them already at the coffee before the program started. They'll be here for the entire day available for quick chat either during the lunch or maybe drinks afterwards. We have [indiscernible], also Investor Relations in the past. So there's opportunity here. And we have Jolanda Sappelli, CHRO, also available today for a quick chat. Now, so 2 parts. I would suggest we just start with the first part. I will talk a little bit more about the program that we have later on, which is the main part but the first part on the unit-linked file. Before we do that, I need to make -- as already presented, I need to make you aware of the cautionary note that we have regarding any forward-looking statements. It's in the back of the presentation, probably something for you to read on your way back home. And having said that, Jos, the floor is yours for the first presentation.

Thank you, Michel. And I'm, of course, honored by the way you introduced me, but you know I'm more into team and teamwork, so it is never about the CEO. It's about the team. Let me start with one remark upfront. Over the last couple of weeks, we have been very busy in trying to get an outcome, which led to the press release that we announced yesterday evening. So you can imagine that the preparation for this investor update was a bit different from other times. We actually prepared 2 presentations for the unit link, one when we had an agreement and one when we wouldn't have an agreement. So I hope you will be mild on us today on the delivery of all the messages we are going to provide to you. So having said that, happy to be here, happy to have you all in the room and of course, all the people that following us on -- in the webcast, happy to see you joining also. And before we're going to talk about the integration of Aegon, the Netherlands into ASR, from which I'm still really excited because it's still a very much appreciated transaction also by the market. I want to spend some time on the recent developments. This topic for us has actually over the last 20 years be an elephant in the room, which we didn't talk about that much. And following the ruling of the court of appeal in the Hague, we were able to engage with the different claims organizations and start the conversation whether we should continue to see each other in court or find another solution and to remove this issue from the ASR and Aegon business. And we're happy that we succeeded. Instead of having years of uncertainty for our people, for customers, but also for you as shareholder, we found a solution and with that, I think we have developed a different future for ASR as a company. And I'm sure you have all read carefully, I already had some conversations with some of you. You've all read carefully the press release and in a nutshell, this for us is a break-through agreement in the unit link and unit life insurance file, which answer dispute that already is there for over 20 years. Under this agreement, we pay an amount of approximately -- it's a capped amount of EUR 250 million. The settlement and I have to be clear about that, the settlement is not an acknowledgment of too high costs nor it is a reliable estimate of any contingent liability. We paid to the amount only to buy off the claim risk. But first, before I provide some context, let me pause again just for a brief moment and led the significance of this breakthrough sink in. The settlement and all the provisions we take means, and I truly believe this, a closure for all the ASR and Aegon unit-linked life insurance products. And as said, it's also about the Aegon portfolio, which we -- since the fourth of June also own. And let me go back a little bit in time, where did it come from? The unit linked file, the so-called [indiscernible] discussion actually is based on products sold between roughly 1990 and 2006, and it involved tax -- products that were tax deductible for customers. And all the complaints about those products were roughly about 2 issues. One issue was weren't the cost too high and the second issue was were the cost in a proper way disclosed to customers. So could the customer be aware of the fact that there were costs involved in the products? And while the topic is generally presented as a unified -- as a uniform issue, we've often read that if there is an outcome of a procedure that would be applicable to all products, that's not the case. For example, at ASR and Aegon, we have over 300 different products sold in different periods of time with different product conditions, different applicable law over time. So one can't put one number as an average number on all the products, given the fact that we have different terms and conditions of all the products. So that's somewhat complicated matter in solving an issue like this. And we already try to solve this issue 2 times before in 2008 and 2011. Aegon did the same over time and up until now, we already together paid close to EUR 2 billion to solve this issue. But despite that, new claims foundations came up started collective procedures all over and that brought us to the point where we were actually on the 25th of September. Then at the 26th of September, we saw the outcome of the court ruling and that proved again that there still is not one clear direction of how the court looks at all those products. We had some beneficial outcomes, we had some less beneficial outcomes, and that brought us to the conclusion, as I said that this is the natural moment to engage with the claims foundations and to look for an agreement. The agreement that we reached with the claims foundation and actually for ASR and for Aegon products, any cost-consuming and time-consuming proceedings going forward. All the claims organizations that are in collective procedures are involved in the outcome. So there is not one left out who can continue. So all 5 are involved in the agreement. So it's a collective agreement with all of them. It's about all the products in our portfolio. So not only the products that are involved in the different legal procedures, but all the products involved. And part of the agreement is that the claims organization well withdrawn all the enforced claims proceedings at the different courts. So they will be stopped. And we also agreed, they can't start any new ones going forward. I think that's important. And that's, for example, the difference with the past. In the past, we never made such an agreement. So now we agreed they can't start it all over again. Then also important, all the individual members of the claims foundation have to sign an agreement that it will not come up with further claims against ASR. So it's -- I think that's important. And the last thing that's important and I already got some questions on that, how realistic is that? 90% of the customers that -- of the members have to agree with the outcome. And this morning, U.K. time, 6:00, I listened to an interview with one of the claims foundations on the Dutch National Radio. And that was one of the people we negotiated with and he claimed that in earlier trajectories, they easily reach 99% of all the people that are members. So we are confident and convinced that we will be able to reach the 90% of the members that they actually, at the end of the day, can identify as a member. So in our view, this agreement marks the end of the unit-linked file for ASR in a material sense. Having said that, let's talk a little bit about what we call risk mitigation. I think the most important point in this risk mitigation are, there are no new claims by the foundations and all the ongoing claims are withdrawn from the court as well for ASR and Aegon. Individual claims -- claimants have to agree on the settlement without recourse. I think that's also important. And just in course that there are some individuals that are not member of the claims foundations, up until now, we have seen that it's about roughly 145,000 policies that the agreement is on. We have also taken an additional provision to settle with those customers that may come individually. But we think that the number of cases will be fairly low. And for that, we have taken an additional provision of EUR 50 million. So the financial impact, I think also important, EUR 250 million as a capped amount for the different foundations that includes the admin costs, an additional EUR 50 million for certain cases that may come up from individuals. The total provision and it's a pretax number, I think, important is EUR 300 million. We will take that in the last quarter of this year. Solvency impact is roughly 4%. That's a post-tax number in all grants and the capital return and dividend policy remains unchanged. I think that's also one of the positive message to the market given the fact that we have now reached this disagreement, we can stick to our capital policy. So let me summarize. It's a breakthrough agreement, which we are very happy with. It ends uncertainty and avoids time and cost consuming for the legal proceedings. All collective proceedings will be withdrawn, residual risk in material sense is eliminated and there is a benign financial impact and the strong solvency we have will maintain. And there is one thing not mentioned on the slide, I think that's important. At ASR, and hopefully, this will confirm this. If we see an elephant in the room, we dare to look the elephant in the eye, to chop it into pieces and to solve the issue. And this is how we, at ASR deal with issue. That's also the way how we will deal with the upcoming integration so the market can be confident that if we do in the integration phase certain issues, we will face them and solve them. And that's how we execute everything at ASR. And having said that, thanks, and I'd like to invite Ewout. We hardly can imagine that there are any questions. But in case there are.

Let's put the table a little bit closer. Yes. Housekeeping on the questions. So if you got a question, raise your hand, everybody is already doing that. We have an [indiscernible] with the microphones. They will come over to you. If you could then briefly state your name before asking questions. And if you could observe a limit of 2 questions per round, then everybody gets a turn. So I see this is difficult -- if you allow me just to take the first one, he is sitting here in front of me. So...

[indiscernible]. Congratulations with the settlement. I think we have all been waiting for a long time. And 2 questions on this. First of all, if everything goes according to plan, when will this all be settled? So when will the money be paid out that everything is fully sure and done? And second question is about individual cases. You talked about EUR 50 million. You talked about not many cases. Could you elaborate a little bit more on that? Are that court cases? Or what is this? And why do you feel comfortable on that part?

So to your first question, due to privacy reasons, we couldn't match the database of the foundations with our policy data. So the first thing that will happen is that all the members of the foundations will be invited to agree that the information they have provided to the organizations will be shared with us. So we can compare notes and then finalize how many identified members there are and what is the average premium paid, et cetera. And from that point in time, and that will probably take the foundations I expect that it will take because they are going to execute it. It's not executed by us, it's executed by them. And the reason for that is that we didn't want to interfere it with the integration because if we had to execute it ourselves, it probably would have interfered with the execution of the integration. They expect that, that will take summer up to March. And if the data base is ready and we have compared notes, they will start out to send out letters and the invitation to sign the agreement and normally, they will get in the first couple of weeks up to 50% and then the remaining part will take a couple of months. So this morning, the person that was on the Dutch radio set that they probably around September, will have all the agreements in and that it will be fully finalized before the end of the year. And maybe to the second question, you want to respond?

Absolutely. So what we also announced is that for people that are in distressed situations or for people that were not part of any of the associations nor did they receive any compensation in the past there. So we have, of course, already done together with Aegon EUR 2 billion in the past. They can reach out to ASA. We will write down their names and their telephone numbers and we will give them a call back when the settlement has been executed, when this has been finalized. And in the meanwhile, we can look at the individual situation, whether or not they are in a position that they can -- that they -- that they are in a position to get additional compensation from our side. And if that we believe that the amount that we've received, so the EUR 50 million that we have received for a -- for those individuals that is enough actually to deal with that. The EUR 50 million is also on top of EUR 40 million amount on technical provision that we already have in place for those people that are in distressed situations. So we still have that on the balance sheet and that will be combined. And with that, the EUR 90 million in total, we believe that there will be more than enough to actually compensate for those individuals that are -- that are in a situation that they can receive additional compensation.

I think Ashik was -- and after that, Nasib.

Ashik Musaddi from Morgan Stanley. So first of all, congratulation on the settlement. Just one question from my side is -- any color you can give on the discussion with the regulator before the settlement and after the settlement? What has been the discussion with the regulator? Just trying to understand how regulator is thinking at the moment with respect to capital, balance sheet, et cetera, given that this overhang was there.

For the regulator, this file was -- it's not a new file. It's already in the industry for over 20 years. There was no pressure from the regulator to enter into such an agreement. Of course, since we started the conversations, we kept the regulator on a daily basis up to date. It's always difficult to make comments on conversations with the regulator. So let me -- let's make it more of a personal view. I think the regulator is happy with the fact that we made this settlement and is, I think, hopeful that other companies will try to do the same because there is a huge overhang on the balance sheet of the industry. And I think this helps to take out that overhang. So I can't imagine that the regulator is not happy with this agreement.

Nasib?

Nasib Ahmed from UBS. Two questions for me. Firstly, on residual risk. What is the residual risk above the EUR 300 million or the EUR 340 million? So I'm thinking what if you get to the 90%, what about the other 10% that haven't signed on the dotted line? Or what if there's a [indiscernible] Part 2, a new claims organization or if they change their name, right? And then second question is on the number of policies that were involved in the 3 products? That was case -- that the case was on the 26th of September. Presumably, that was in the other presentation that you're not presenting. Can you give us some color on the number of policies involved?

So referring to the foundations and the remarks this morning made on -- and they also said that during the negotiations, they assume that they will get to a much higher number than the 90%. Theoretically, we have to see what happens with the remaining part. But we don't expect that, that happen -- that will happen that much. We have to take into account, it's already 20 years ongoing. I think the period that people can file new claims in the Netherlands is roughly -- it's 20 years after the contract is closed. For most policies, that period has expired by now. And that's also helpful to -- and that's why we are confident that with this, this will be a final closure of the case. But just we're often accused that we are -- that we are not aggressive enough. But just to be sure that we don't have to surprise the market again. We've said well, on top of the EUR 40 million we already have, let's take another EUR 50 million so that we are able to solve some individual problems if they may occur.

I think what was the second question, but I didn't get that fully...

That's the second question on the policies and the 3 products, if I'm correct.

The number of policies in the...

Yes. So the total number of policies that we -- so we don't know that for the foundation there because that [indiscernible] just already explained, still needs to be matched. The number of policies that we have for the active policy that we had that was part of the ruling, I think it was around 80,000 for the fund plan. And I think it was around 150,000 for the -- to other products and it's also I think important to mention when you look to that ruling, that was mostly about not agreeing on the level of the costs that were in the product. When you look to historically to the settlements that has been done in the past, that was already explicitly based on the fact that there was no agreement on the level of the cost. So also from a legal perspective, the fact that the ruling was there, it was nothing new under the sun, actually that was something that we already have seen -- already have compensated for in the past. So it doesn't say anything about financial impact if that the ruling stands.

Andrew Baker, Citi. 2, please. So just on the EUR 90 million -- on the EUR 90 million provisioning, it feels like -- I mean you're saying yourselves that, that feels conservative. Is there a point that we should expect that to be released at some point going forward if claims don't... And then secondly, just on ESG. Obviously, has a strong point for ASR. Do you think this whole debacle over the last -- I know it's been ongoing for a long time, but sort of we come into focus the last couple of months. Do you think that's going to have any impact on any of your ESG ratings or anything from an ESG perspective?

Let me first take the last one and then you probably want to comment on the first one. I think if there is any impact, it's probably a positive impact because we solved an ongoing issue with customers. And I think from a good governance point of view, but also from a social point of view, it is important that we have a lesser number of structural discussions with customers. So if there is any, I think it would be a positive one. And the first question?

Yes. Well, if I would say...

Torture the numbers.

No, I would say, yes, it is conservative, and I expect it to be released by year-end 2024. I think I would have a very difficult discussion with the accountants to get it on the balance sheet by end of 2023. So I think that's the best answer to provide.

Farooq?

Farooq Hanif from JPMorgan. I'd like to add to congratulations to everybody. But can you talk a little bit more about the philosophy, if possible, behind the EUR 250 million. Were you thinking in terms of forensically looking through what happened and admitting or not admitting but thinking that there are certain things we can do? Was it based on the level of charges? Or did you just think, look, this is an amount that we think we can close?

We have an agreement with the foundations that we will not disclose everything, but I can tell a little bit about how we, together with the different foundations, approach this. One of the important things we did is, before we started to talk about money, we agreed on a number of general outcomes that need to be there before we agree on any settlement. And for example, for us, it was important that all the foundations would be part of the agreement. So if -- so we said if one of them will drop out, we just won't go there. So that was important. Another thing was the execution of the agreement should be as simple as possible. And the third one and we had more, but I only mentioned 3. And the third one was we have to be able to explain it to our regulator, to our Supervisory Board, to our shareholders. And for them, it was important that they were -- would be able to explain it to their members. And with that said, the final outcome was that we agreed to make a number of categories with -- because it involves all the products, some categories -- one category is about the products where there is a low amount of legal discussion, but still being members. And then there is -- as a group were a bit more legal risk with a medium to high legal risk and high legal risks. And based on that, combined with the average premiums paid over time, we debated what the outcome would be and then we calculated if we add it all up. And then the number that came out was roughly the EUR 250 million, and it includes the admin cost they have to make to send all the letters, et cetera.

Can we have Jason ?

Jason Kalamboussis, ING. A follow-up question, if I may. As you're as -- as you have these discussions for the -- with all the -- you talked about the lower amount of legal discussions. I just wanted to understand and also because there are other insurers that are involved, means the elephant in the room. When you approach the associations, do you find that there was an urgency from the associations to secularly? Or do you find that what made that settlement early was mostly that you had a lot of specificities you mentioned about products, et cetera?

It's difficult to talk on behalf of them, but let us put as a personal feeling. They are already and I think they said something in the press about it already 15 years working on this. A lot of their members are already a member for a long time, and I think they already -- they also feel and felt that this is the right time to seek a solution and to end all the legal discussions. So the lesser part of the conversation was convincing each other that it's good to have a conversation with -- amongst the different parties.

And just I was -- I had something else in mind was also, can you give us any -- the range of settlement per policy, so the lower and the higher amount, if possible?

Yes, they -- it's in there. It's in their press release. It's about a couple of hundred euros on the lower side. And in some cases, it could be more than EUR 10,000. So there is a broader range and that's due to the fact that there are different categories in terms of risk.

Okay. Can we have [indiscernible]?

Iain Pearce from BNP Paribas. You just mentioned the amount was capped at EUR 250 million as opposed to is EUR 250 million. Just wondering under what scenarios, it might be less than that EUR 250 million?

If the number of -- no, maybe you should answer the question.

Yes, yes, absolutely. So we assume a level of members at the association based on the file that they have and we have to compare that with our own file. So let's assume that the over 140,000 that we use as a starting point, it turns out to be a lower amount of members. That could be a situation where that amount will become less. In all fairness, I don't expect it to be much less because they have a good file that they use to have substantiated the numbers. But that was an important assumption that we have to come up with actually the maximum amount that we wanted to pay. And we have said, yes, if that your amount of members turns out to be lower because people have right in the meanwhile or for other reasons, yes, that could be a reason to end up with a lower amount.

But I think the market should expect it's going to be EUR 250 million.

Okay. Farquhar?

Congratulations on a very, very good settlements. Just to get to understand the mechanics of that settlement. I mean I think the indication from [indiscernible] that there's probably a minimum EUR 700 million per policyholder at stake. I presume that's the low end of the risk categories you're talking. Is that right? Because obviously, they were also talking up to extreme numbers of 10,000 at the very high end. I presume that's very large policies. But -- and in terms of the categorization, is that entirely to do high categories whether specifically just the policies that we've seen litigated? Or was it broader than that? I presume within the EUR 300 million policy base that we're talking about.

I think in the press release of the different organizations, they've set a couple of hundreds. And in my definition, a couple of hundreds, is closer to EUR 300 million, then to EUR 700 million as a minimum amount. I think it's more in that range. And in terms of categorization, we have agreed that we will not further discuss how we came up to the categorization. It's fall through. And of course, we've taken into account all the legal risks we currently see and also the legal advantage they see on their side. So it's not only based on the proceedings that are ongoing but also looking into what we think -- what kind of product in our portfolio might ending up be in a higher risk category than others.

Okay. Michael, then Steven. First, Michael?

And just how much cash is left after all this?

Enough. Maybe you want to comment how much cash is left?

Cash is left. And what do you mean of cash, Michael?

[indiscernible].

Yes. No, well, I think we will not pay out cash before year-end. I'm sure we will not pay out cash before year-end 2023. So we will assume this the required amount of cash from the legal entities somewhere in 2024. We will do recognize that already in the sole position of the legal entities in 2023. The cash will only be upstreamed in 2024 because then we will only start paying out. It will not be done in 2023.

So no worries about dividends.

Steven Haywood, HSBC. What do you think this settlement does to your brand and customer franchise? How do you think that's going to impact in the Netherlands going forward? I assume there's a lot of publicity currently today.

Yes. I think all the newspapers spent time on it. It was on National Television. It was on National Radio. What it is going to do for the brand? We have to see. But given the fact that in general, this is seen as an issue that's not solve by the industry, which impacted us more or less in a negative way. Given the fact that the ASR brand is already perceived as a positive brand due to our ESG positioning. I think this will add brand value, and we have to see whether the brand value goes up with 1% or 10% or 20%. And -- so the outcome will, in all cases from our perspective to be positive.

If you allow me to add on that. So I think it's -- what is positive also is when we look to the press release of the associations, they also say ASR is taking the lead in actually solving this for customers. And that is something -- so not said by us but actually said by the foundation. And I think that also helps in -- well, in framing it positively also for ASR without us asking it, but this is the way they are actually perceiving the fact that we have been leading on this for the year for the industry.

I think what was really important in all the conversations we had with the organization is, as from the first moment, we felt that they had the intrinsic will to solve this with us, and they felt we had the intrinsic will to solve it. And I think that was important in the whole conversation that we had with them.

Okay. We have time for one final question before we take a break and then reconvene at 11:00 a.m. So we'll stop for the final question. I see Anthony should be a good one?

It's Anthony from Goldman Sachs. And congratulations for a clear sky ahead of you. Just on the -- if I may come back to the I think the range you mentioned, the low EUR 100 to EUR 10,000 per policy compensation range. What is -- at a high level, what is the input into that calculation? Is that based on the premiums they paid or something else? And then secondly, just on the residual provision that EUR 90 million. I think you mentioned the policyholders may contact you leave a number, you contact them back. Are there -- what is the -- I mean, is there like a condition where they don't qualify to claim for the potential compensation?

You want to take the last one?

Yes.

And the first one, I said we have agreed not to disclose too much on the agreement. But the basic -- the basic measurement is premiums paid, at least for some of the categories and for some of the categories, it's just a fixed number.

Yes. And also Life. Thanks for the initiation, Anthony. On the question on what is the -- what can be the reason that people don't apply for future compensation? Well, what we will look is what is the personal situation of an individual or if he is in a distressed situation due to the policy, that could be one reason. And other reason is that we will look to the policy that he has bought in the past. Also the fact -- of course, the timing that the policy has been solve and all those elements that we have discussed legally in the past before, but we also look to the compensation that we have received in the past because when we look to the Aegon ASR as combination, in the past, we have compensated for EUR 2 billion. So the Dutch association once published a report that in total, EUR 3 billion has been compensated by the industry. We as combined to a new company has done 2/3 of that. So there's already in the past a massive compensation being paid by ASR Aegon towards customers, and that has also been taken into account when we look to the individual situation. So it will all be individual base on the situation where we look to the policy, the timing of when the policy has been solved, the disclosure that has been provided in the past, but also the compensation that one has received in the past. So there will be a real tailor-made compensation by -- if there will be any, that will be to make compensation in the future.

Yes. Thanks for your questions. We'll now take -- thank you, Jos, Ewout. We'll now take a very short break, just a couple of minutes to refocus again on why we're here and let us talk about the integration. So we'll be back at 11:00 a.m. sharp. [Break]

Okay. Let's see if everybody is seated again. If you could please take your chairs. Yes, wonderful. Thank you. So the second part of the program, which is really about the integration update of the Aegon Netherlands business. I already introduced the presenters that we have today. So let me now talk a little bit about the program that we have in store for you. We'll kick it off with Jos Baeten. Jos will talk about the significant financial and strategic merits of this transaction. And he'll also give you an update on all the accomplishments that we have achieved to date. Then Ingrid, she will be the next presenter. She will talk about the top operating model and also how we will capture all of the synergies out of the non-Life business and out of the mortgage businesses. That will take us up to about noon. They will have a quick break for lunch and reconvene at 1:00 p.m. sharp again for 2 following presentations, 1 by Willem van den Berg and Ewout Hollegien. After those 2 presentations, we'll have an overall Q&A session and that's only standing between that and drinks afterwards. So that's going to be the program for today. Having said that, actually, Jos, giving you the floor again.

You don't take into account the last week, so it seems. So thank you, Michel. Let me just start off again. I'm just excited about the transaction as we were at the 27th October last year when we announced the deal. And actually, having looked into Aegon the Netherlands more precise over the last 5 months since closing, we are even more excited about the opportunity this transaction offers us. I truly believe with this transaction, we will be able to create the leading insurance company in the Netherlands. And today, we will present the integration case. And I can imagine there will be a lot of questions about capital management, et cetera. But I said before, in June, we will come up with a second CMD and then we will talk about the strategy of the combination. We will talk about the new target setting for the midterms as from 2024. And of course, by then, we will talk about capital distribution. So let's talk integration today. And the first key message I want to provide you is up to today, we are on time and on schedule with the integration and all we have seen up until now, it confirms the strategic and financial merits of the combination with Aegon NL. Because of that, we see opportunity to raise the overall target for run rate cost synergies by EUR 30 million from EUR 185 million to EUR 215 million. And we will get into the detail on this but it's a very significant cost improvement in relation to the addressable cost base and able to will talk about the addressable cost base later on. Third is we are confident that we can execute the integration plan under the leadership of a very strong and very experienced bunch of senior managers. And we pride ourselves proud that we have a significant integration track record, which over the many years have resulted in a set of golden rules and I will talk about those rules later. Just as important to have a smooth integration, it is important that we need to keep serving our customers and to make sure that we will operate under the condition business as usual during the integration. And in this respect, and I think that's important to notice, everybody should be aware, only roughly 10% of the total amount of people at ASR is involved in the integration. So 90% of the people will be able to keep on serving customers, et cetera. So now we -- before we get into detail on the integration. Let me refresh some of the points that are really significant in this deal for us. As said, it's a compelling in-market consolidation, and it's a strategic fantastic move for us as ASR. And I can -- the important summarize in 4 points. So first of all, it materially strengthens our position in the joint businesses, resulting in an overall #2 position in the Dutch market and leadership positions in a number of key product segments. Secondly, it creates an even stronger foundation for long-term sustainable growth from which all of our stakeholders, not only shareholders, but all of our stakeholders will benefit. Thirdly, the transaction offers significant synergies, as already mentioned. And fourthly with the acquisition of Aegon the Netherlands, we also acquired an internal model, and it will help us to implement the internal model for ASR as a whole, and Ewout will talk about it a bit more. So let's move to the next slide about the strategic rationale. Combination of the 2 companies is clearly strengthening our strategic position across all pillars. It delivers at all the key strategic items that we presented in 2021 to the market on our latest -- in our latest Capital Markets Day. Highlighted here on the left are some strategic topics where this transaction has the greatest impact as we have shown last year. Let me walk through a little bit. In Pensions, in particular in Pension DC, this transaction offers additional scale and skill benefits. In combination with the Dutch pension reform that's upcoming, this offers us huge growth opportunities. Integrating, and that's the second one, integrating the Life back books, obviously, will drive most -- almost 1/3 of the cost synergies we can achieve. So that's the second important one. The pension reform offers us additionally to the pension DC market, also opportunities in the buyout market in the coming years. And therefore, we are very happy with the inclusion of TKP where we can use the operational excellence of the TKP to support the growth in the pension buyout market. And of course, not only in the Life business, but also in the non-Life business. This transaction is beneficial for ASR. It's adding scale on already very efficient platforms and it reinforces our #1 position in the disability area and our strong #3 position in P&C. Lastly, in our fee-based business. So the pension and mortgage businesses, we are going to benefit from Aegon's distinct mortgage sourcing and funding capabilities. So that will be also helpful to grow the fee business over time. And with the combined mortgage books, I don't know whether you are aware of that, we are the largest provider of mortgages in the Netherlands amongst insurance companies. In addition, in the Distribution & Services segment, [indiscernible] will complement the business to increase the capital-light OCC generation. So let's move to the next slide and talk a little bit about the delivery and the progress on the KPIs. And I'll keep it brief because you -- a lot of this you already know. As you can see on this slide, we tick all the boxes that we have set upfront before announcing the transaction. Let me run through that. The consideration of EUR 4.9 billion is already financed. So we consider that as done. We are very pleased that S&P maintained our single A rating. The transaction is set to deliver approximately 16% ROE, which is significantly above our own hurdle rate and you all know our hurdle rate -- what a difficult word, is 12%. I already mentioned the uplift in the synergies to EUR 215 million and this means we are well on track to achieve the OCC uplift of around EUR 620 million. And obviously, you are aware of the fact that financing costs will need to be deducted from the EUR 620 million. The impact on OCC targets will be part of the review we do in the upcoming months as part of our multiyear budget and we will come back to that in -- on the Capital Market's Day in June next. And finally, we delivered a 12% increase in dividends per share and maintain important the mid- to high single-digit growth targets up until 2025. So frankly, quite compelling numbers and delivery to our opinion. So let's continue with our integration experience. As we show on the slide, you can see now, it's not our first migration and integration. It's clearly driven by a number of acquisitions in the past years. We have -- and therefore, we've built up a significant experience to integrate portfolios across all of our businesses. And as said in the introduction, we distilled some golden rules from that. And the most important ones are one company and one culture is on the top of the list. One culture creates actually the winning insurance company, one senior manager, one location, one IT system per business line, so there is instant clarity on the target operating model, no discussions on that. In managing change, and that's very important, we firstly stabilized the business, then harmonize the portfolios and then integrate. And after that, we start to talk about optimization of systems, et cetera. And very important also from an IT perspective, proven solutions are prioritized about -- above promised solutions. Now without a doubt, this is the largest integration we have done up until now. However, we are convinced that we can chop it into chunks that makes it manageable. And we know what's important, what's not important and what comes first or last. From that onset, we aim to reduce complexity during the integration and use knowledge throughout the whole organization. Ingrid and Willem will extensively discuss this with you in the next presentations. And I'm talking about Ingrid and Willem, I am very pleased to present the management team responsible for overseeing the whole integration on the most senior level. And as shown on this slide and read it carefully, each of the members of the Management Board have extensive industry experience as well as specific ASR or Aegon the Netherlands experience. For example, both Ingrid and Willem have been a member of the Board of Aegon NL and both known the company inside out. So we know our business and our company really well, also the new parts of the company. Each of us, all 6 of us have been through acquisitions -- through acquisitions and portfolio migrations, et cetera. So I feel comfortable and confident that with this team, we will bring the integration to a successful end. And in addition to this management board, we have the next level of leadership, our senior management, which is 70% coming from ASR and 30% coming from Aegon. So we know the company really well. And with this, we ensure that critical knowledge is preserved within ASR, and we achieved broad-based support for everything we are doing also from our employees. In this respect, it is generally a combination of business and people. So over the past year, we also have learned what can go wrong, what can possibly side tracked from a successful integration. We have developed a continuous improving capability and knowing about do's and dont's. And we jotted down some examples here, it's not necessary to go through them fully Ingrid and Willem will address them in their presentation. So let's now have a look at a run rate cost synergies, I think, very important. We believe we are well on track to deliver the EUR 250 million of run rate synergies with -- of EUR 250 million with over 70% realized by the end of 2025. So roughly EUR 150 million will be realized by the end of 2025. And please bear in mind, as we have mentioned before, this number refers to run rate cost synergies 3 years after the close, meaning that from that point in time, going forward, the costs should run at that lower level. Throughout the presentation, I will -- we'll talk about 4 different lenses to talk about synergies. And let me talk you through the 4 different lenses of synergies. First of all, a split of synergies by source, being headcount, systems and other. Secondly, a split by business segments being Life, non-Life, fee business, and holding and other. The third lens will be about how much of the synergies will be capitalized in stock and how much of the synergies will be through flow and the fourth one will be a split in terms of timing what part of the synergies will be in year 1, year 2, year 3. Having said that, let's take a closer look at the distinction between the 3 major sources driving the synergies. Reduction of head count within NewCo after a full completion of the integration will amount approximately up to 40% of the total run rate cost synergies. And within those 40%, I should stress that the fact that most of these reductions come from reducing the number of temporary employees, which equates to roughly 40% of this reduction. Second part, is another 45%. That will come from natural attrition. You should think about people that voluntarily leave because they want to have a career elsewhere or that will be in pension over time. And the last part, so being 15% will come from a number of factors, such as people leaving and applying for the social plan we have. All in all, and that's an important message, we expect that we don't have to face many of forced leavings because the 3 factors combined will deliver the synergies on a lower amount of people at the end of the integration. The second source delivering 30% of the synergies is cutting back the number of systems. Ingrid will talk about that in a couple of very compelling slides going forward, so I will not move the graph for her. And the third and final bucket is other. In this category, you should think about reduction of the number of offices, and for example, cutting down marketing expenses, if we combine the marketing expenses of the two companies, we will cut down on debt, and that will deliver the last part. And on the offices, we already announced that the office in The Hague will be closed latest at the end of 2024, and Leeuwarden will be open up until the end of 2025. And this part will bring the last 20%. So 40% from reduction of employees -- sorry, 30% from reduction of the -- of system costs and 20% other. And as mentioned, we expect 70% of the run rate synergies to be realized before the end of 2025. So if we would now allocate these cost synergies to the various business segments, then you see that there is a fairly equal split, 30% in Life, 30% in Non-life, 30% in Fee business and 10% in holding and other. Ingrid and Willem will talk about the different businesses, the 10% in holding and others will mainly come from the cost reduction with the progress of the integration in line with the reduction of the TSAs. So the agreements we have with Aegon Group on all the systems that remain in use during the integration. So the integration is a long journey with still many steps to take. However, looking back at all the milestones we already have achieved since the announcement that was actually a year ago, this is really quite an accomplishment. I don't think everybody will realize that. But having done all the marks we have set upfront and having reached them all in time and within budget that's, I think, a very strong accomplishment and a very comfortable base to face the rest of the integration. So I truly believe that we are well on track and confident that we can achieve a successful integration. So to conclude, before I hand over to Ingrid, integration process to date confirms the significant strategic merits and financial merits. Raising the target, the synergy targets were EUR 30 million to EUR 215 million and an experienced team and strong integration track record basis to enable a very smooth integration. And at the end of this process, and I think that's very important, there is a bigger and better ASR. We keep our nature of simplicity and predictability, but now on a larger and more comprehensive scale. And with that and waiting for Ingrid. She's ready now. I hand over to Ingrid.

Thank you. Thank you, Jos, and thank you all for attending us at this investor update. I'm really happy to see so many familiar faces, but also very happy to talk integration today. So I was quite disappointed what Michel told me, I only had 25 minutes, but I guess I have to deal with it. So let's kick it off with my key messages. As Jos already said, we have a clear integration plan and that's focused on reducing the current temporary level of our complexity by simplifying the organization, whilst leveraging the strength of both companies. And let me be very clear, our changed management agenda is focused on one thing only, and that's getting the integration done within set timelines. We can rely on our track record and also extensive experience in rationalization and migration and therefore, ensure a seamless integration of the Aegon the Netherlands business. And the integration will result in leading non-life propositions, also fee-based propositions that provide resilience and also diversification for the group. But we'll talk about that later on at the CMD next year. Our proven approach to IT is a driving force of efficiency across the group and is designed in a way that mitigates risk. And well integrated, well integrating, as Jos already said, we have only 10% of our people involved in integration work streams. So it means that the majority of the employees is focused on our intermediaries and also customers in the business as usual. So let's take a closer look at our integration approach on the next slide. As discussed by Jos, we have a certain set of golden rules based on our experience from previous integrations. I'm not emotional at all. It's just having this cough. Okay, I think this is better. And during an integration, some phases will be easier than others. But it's always important to make decisions early on and also important to keep moving forward while executing and then it helps get a certain momentum. It's a big organization, so we have to keep the train rolling. Our approach is to reduce interdependencies as much as possible, in order to make senior management accountable for not only business as usual, but also for the integration and delivering of the synergies. That's why we have started with the horizontal connecting functions such as HR, finance and IT. A few examples are, let me start with HR, An important milestone that we hit in time was to legally merge the holding entities. It is important. So we have 1 HR organization, but also important because of that, we have 1 works council. And in the Netherlands, you need to have your request for advice assessed by the works council in order to make organizational changes. So far, we have submitted 20 RfAs. And at this point in time, we already received 3 positive advisers on the RfAs. A second horizontal layer that's, of course, very important is finance, where the harmonization of the budgeting is done. And this is important to make sure that the senior management and business lines can actually track their performance both on business as usual, but also on delivering synergies. This also increases the accountability at the senior management level. And then, of course, third is IT. It's a key part of any organization, but particularly in the integration where 2 IT worlds come together. Generally, I think you all know, decisions around IT systems can take a lot of time, and especially in large integrations that can be a pitfall. So we stick to the principle that we learned from previous integrations, and we choose proven overpromised IT solutions. So no room for experiments. We stick to something that's running, and we move everything towards those systems. We made the decision early on. And this overall framework enables us to get the integration activities done and incorporated in the business as usual as soon as possible. So let's go to the next slide on the target operating model that you also already spoke a bit about. So quite simple and clear. We have a target operating model with 1 senior manager, 1 insurance admin and also 1 location per business line. And this will result in a clean and simple organization where accountability for results is clearly anchored. And the oversight of the whole integration is done by Willem and me in a combined compete where we keep track of all the critical milestones together with the IMO and also make use of a synergy value offers to track synergies and progress of course. During a period of integration, of course, it's important to remain focused on your employees, but also on other stakeholders, such as customers and intermediaries. For each of the stakeholder groups, we have data-driven tools in place that provides with signals and feedback so that we can respond accordingly. And also, I think important to note is that the IFA relations that Aegon and Netherlands had have a very strong overlap with ASR. So over 90% of the intermediaries were already known and a business partner relationship with ASR. So let's go to the next slide around our proven track record. We have gained a lot of experience with integrating and migrating different portfolios and systems. Our people know the drill. So our P&C teams, as you can see, they have already done it 11 times before and consider it almost business as usual. For Non-Life, we know from experience, that it's important to minimize churn and customer impact, and we do that to renew on ASR systems. And we have also completed a lot of migrations from which we learned a lot of lessons that are transferable to other sections as well. So that's very helpful in our mortgage businesses, where we have done far more growth as already, and are working together with an ASR partner, BPO partner in the Netherlands called Stater, who's very familiar with various portfolios. And also, one thing we learned early on is that it helps to be very clear what's not up for debate. We have used the time between signing and closing, around 9 months, very good to develop work assumptions. We validated those shortly after closing and made all the necessary decisions based on financial knockout criteria in the weeks after the closing. So since closing, we made a strong start and are already for the past 4 months in full execution mode. So let's take a closer look at the synergy potential. Just promised that I was going to talk about it, so I will do that. Getting back to the 30%, 30%, 30%, 10% division that Jos mentioned during his presentation, this slide covers both Non-life and Mortgages because -- and that's 30% from non-life, 30% from mortgages because the mortgages is the main segment in the fee-based business that's delivering synergies. In Non-life, the majority of the systems, as you might have expected will come from FTE reduction and also IT optimization. In fee-based business, the bulk will come from mortgages, due to the migration of Aegon's in-house system into the BPO solution that ASR already uses. And that's allowing for significant cost reductions. And also here, it's a combination of FTE reduction and also IT optimization. The timing for the run-rate synergies is similar for both non-life and mortgages were around 30% to be achieved mid next year and which will increase to around 75% 2 years after closing. So let me now run you through more detailed migration planning and state for each of the business lines. Since closing, as you can see, our non-life business has become somewhat more complex, and we will reduce that in time and in line with our target operating model. So the Aegon the Netherlands portfolio adds around EUR 400 million of non-life business in premiums, growing our market share in P&C by 1.2% (sic) [ 1.3% ] and in disability by 5.5%. So it's strengthening our non-life business. For P&C the portfolio migration, as you can see in the bottom half of the page, is expected to be completed in the second half of '24, and disability, the majority is done by the end of '24. And then somewhat time thereafter, the redundant IT systems can be decommissioned, and that will then result in just one system for P&C and 1 system for disability. The Aegon brand will be phased out during the integration and will leave ASR with only 1 brand for P&C, ASR, and 2 brands at disability, namely ASR and Loyalis. The P&C portfolio of Aegon the Netherlands consists mainly of consumer lines. We have rationalized the portfolio and assessed that 98.5% of the portfolio fits easily in ASR products. And that reduces the number of products and clauses substantially. We use technology to offer portfolio seamlessly minimizing impact not only for customers but also for the advisers. And for disability, we will migrate group disability first coming quite soon, actually, beginning of next year. Then by half of the year, we will also migrate the individual portfolio at disability. And at the end of the year, we will move and migrate the claims book. We will migrate that after rationalizing and also here, the ANL portfolio is easily absorbed in our disability business. So let's take a look at mortgages. The Aegon the Netherlands mortgage portfolio adds around EUR 60 billion of assets under our administration, and it increases our new business market share by 6%. In my time at Aegon, I was also responsible for mortgages. And back then, we already had plans to invest in the IT structure since the IT landscape and in-house system was over 40 years -- over 50 years old and not future proof. So I am glad that we can now make the necessary investments and changes in the mortgage organization to make it a more efficient business line and ready for the years to come. And this is also the reason why there's coming a huge amount of synergies out of mortgages. Migration of the Aegon portfolio is expected to be finished by the end of '25, and we do that together with our BPO partner. And since mortgages are basically long-term financial contracts, the amount of product rationalization that can be done is limited, and we will mostly migrate as is. The Aegon brand will be used for a maximum of 3 years to facilitate the transition period, of course. And in the end, also here, we will have simplified the mortgage organization to 1 brand, 1 system, 1 location, and the reduced amount of product features and also core products. The former ASI mortgage organization was tied to ASR Life and treated as a cost center. The new ASR Mortgage organization will be a separate entity and be part of the asset management segment and will be treated as a profit center -- sorry, profit center. In the end state, ASR mortgages will be cost-efficient mortgage provider, supporting today's sustainable product offering. And then on the next 2 slides, I would like to talk a bit IT with you. So let me put my CTO head on, and represent our proven approach to IT integration and which principles have led to this approach to simplify our IT landscape. Our migration principles, again, also based on previous integration experience. And also, let me state that quite clearly as well, a lot of team and expertise is still in ASR and has done this before. We have a very strong principle around the use of proven IT solutions overpromised, meaning that the end state IT system will be something that's already predominantly in use at ASR, and this reduces the integration risk substantially. These SaaS and BPO solutions are flexible and scalable. And when we are looking at the choice for the IT systems, we value cost efficiency but also variable cost platforms. Front and mid-office solutions will follow the core administration choices, which avoids rework and complexity. And there will be no mix of ASR and Aegon technology, while reusing ASR's front-end and final solutions with only one exception, that's the accession of the systems of the PIM, of course, because that was only at Aegon. And these principles really helped create our IT integration approach, which consists out of the following 3 points. We will not make use of an IT carve-out, where you basically isolate the IT system that you need for the acquired business from the sellers platform. Instead, we migrate the data directly from Aegon to the existing ASR and state systems. And this saves not only a lot of time and cost, but also reduces the integration risk. And with the TSAs in place, we secure a process of phasing out the original systems of the Aegon IT infrastructure. The portfolio conversions dictate time lines and the other related IT systems such as customer-facing portals, but also finance connections will follow. And let's go to the next slide about reducing dependency. Reducing dependency on the Aegon IT systems will drive a key part of our synergy target. As mentioned by Jos, the IT systems will deliver roughly 30% of the overall run rate synergies. And this synergy target relates for 60% to back-end systems, 20% to IT cloud solutions and the remaining 20% to IT licenses. And based on our IT approach, we are confident that we can deliver these synergies in time. And the dependency of 218 Aegon IT services will be reduced to zero. And in the meantime, we have a greater to ensure a smooth transition. The majority of the IT systems of Aegon will remain operational until the last business line has migrated. So the decommissioning of the TSAs and IT is somewhat backloaded. Given the migration plan of Life and Pensions being somewhat later than Non-life. There's a joint committee in place together with ASR and Aegon Group IT overseeing the reduction of dependencies and also make sure that the TSAs are being upheld. And bottom line is that our IT integration plan resulted in roughly 30% of the overall run rate cost synergies amounting to around EUR 65 million. So let's finish with my concluding remarks at the next slide. We have a clear integration approach, built on extensive experience. 60% of the synergies will come from non-life and mortgages based on a detailed plan to simplify the business lines. Responsibility for achieving the synergy initiatives is in the businesses, and Willem and me keep oversight where we keep a close eye on not hitting -- not only hitting the milestones but also on early warning signals and will immediately if necessary, to make sure the integration keeps its momentum. Use of a proven IT approach that supports cost-efficient and scalable platforms will minimize risk, rework and complexity. And as Leonardo da Vinci already said, simplification is the ultimate sophistication. And together with the senior management team of ASR, we will simplify and build an even stronger ASR. So with that, I would like to thank you for your attention. Looking forward to take your questions later on during Q&A. And I will hand over to Michel.

Thank you, Ingrid, for your presentation.

Thank you.

So ladies and gentlemen, that basically concludes the first part of the program that we have for today in the morning. We now have lunch break. We'll reconvene again at 1 p.m. sharp. So enjoy your lunch. Welcome back again to the ASR investor update. Good afternoon. We have 2 presentations. Left, we'll start off with Willem de Berg, who's going to present on the synergies within the Life segment. And then we have Ewout Hollegien and he's going to talk a little bit further on the synergies that we have. He will talk about the implementation of the partial internal model and also a little bit about the balance sheet and the investment portfolio of the combined entities. After that, there's Q&A and drinks afterwards. But first, Willem, may I invite you to the podium?

Thanks, Michel. Welcome back from lunch. It's a pleasure to present to you, and I was already looking forward to it. But I must say I'm more excited now that I've seen you again in person, a lot of familiar faces. And with many of you, I've had many contacts in the cost and I realize I've missed that for the past 5 years. So it's really great to be back. And thank you, Michel, for hiring me into Aegon Investor Relations 20 years ago because if it wasn't for you, I would not be standing here. At the Management Board of ASR, I'm responsible for the life insurance and the pensions business. They are all long-duration capital-intensive businesses that throw of capital that can fund growth elsewhere in the group. I'm proud of having the opportunity of leading the integration of these businesses and make use of my experience at Aegon to make this integration a success. The coming 20 minutes or so, I will share our plan of how we will execute the integration. And I'll first start with our approach towards the integration and our experience. And then secondly; how we will implement; and thirdly, what synergy benefits it will yield. And these are the key items that I would like to address today. By combining 2 already strong franchises on a stand-alone basis, we're strengthening our position in the Dutch life and Pensions market. Economies of scale are driving operational efficiency that will lead to lower cost per policy, while we actually maintain high levels of customer service. And to me, having teams with thorough experience in product rationalization, will make this integration a success as this is a key asset for the company. However, there's not only a change within the company, there's also a change in the outside world. For one, its pension reform in the Netherlands. So the sector has a big task in implementing that, and ASR is ready for the challenge. And lastly, while we're modeling, the shop remains open. We are 100% focused on the commercial opportunities in the market, especially in the pensions business. Let's first talk about the integration approach. Jos and Ingrid have already mentioned it, and specifically asked me to mention Jos and Ingrid because we form a big team, and he wants to well get the proof of that. So here we are on your is my command. They already talked about the golden rules that we apply for this integration based on the past experience. We aim to keep things simple, which is why we need to target operating model that supports clear tasks and responsibilities. On the right, you can see the basic principles that Jos and Ingrid also talked about. Our end state model is 1 with 1 senior manager, 1 insurance administration system based in 1 location because our end goal is to create 1 culture. It sounds very simple, but I can tell you from experience, it is really not. Clear-cut choices have implications for people, which make it difficult to implement. But we've ripped the band-aid by making clear who will lead which organization -- which part of the organization, which business line, I should say, which target architecture we are going to use for that business and in which location it's going to be based. We've clearly communicated it. And of course, this is a process that needs to be carefully managed because key personnel, we want to retain in order to ensure business continuity. It's our approach to organize the business lines such that the managers have end-to-end responsibility, including sales and operations. The simplicity and the clarity in the way we organize our business does not only apply to the normal way of working, but also towards the integration. It will help us to focus on customers and intermediaries next to the integration activities. Based on our a broad experience in performing integrations, we apply 4 proven sequencing stages. First, we identify and discontinue overlapping product offerings. Secondly, we rationalize and simplify the products. Thirdly, we migrate policies onto the target system. And fourthly, we switch off the IT systems that we no longer need. This way, we get to our ultimate goal of decommissioning all the systems, and that is really important in the integration because the redundant systems are costs -- are not very cost effective. And ultimately, we want to achieve our full run-rate savings. As you know, both ASR and Aegon have a strong history in migrating portfolios. So where does this expertise come from? It started with ASR almost 10 years ago when we started converting a series of individual life portfolios. And over the years, this has added up to around 1 million policies that have been migrated onto our current target architecture. For the funeral insurance business, there is currently no integration task as the Aegon funeral insurance portfolio has already been acquired by ASR and incorporated into our funeral business. Aegon successfully finished the migrations of its insured DC and DB portfolios already to the IT landscape and the operational landscape of TKP. TKP is our pension administration hub that serves around 3.6 million customers in the Netherlands, and we will go into more detail at our Capital Markets Day next year. The fact is that we're already benefiting from proven integration capabilities. For example, decisions in product rationalization are efficiently organized already and the algorithms that help us prepare migrations are continuously improved. Also, we created robust processes and problem-solving skills for execution of data migrations. This limits time lines and secure reliable migrations, and we've set ourselves 3 years to execute of the program, so that's very important. Looking at the planned migrations on the right-hand side here on the slide, for the coming years, you can see that we have a challenging task of migrating over 1 million policies in just 3 years. Based on our past experience, we're confident that we can migrate these portfolios successfully and within time. Now how are we going to implement? Let's move to the next slide. For me, simplification is the key word for the Life business. As you all know, the individual life portfolios in the Netherlands are Service books or closed books. So there's very little new business compared to the in-force portfolios. Today, we still operate under 2 brands, and as we migrate policies onto the new target architecture and we merge legal entities, we will also rebrand policies to the strong ASR brand. Moving to systems. As you might remember, Aegon made a choice a couple of years ago to outsource its legacy systems, it's individual legacy systems to IBM, and they jointly -- and we jointly set up a new platform to migrate the policies onto the platform. We were only -- well, we only just started to do that and only 10% of the portfolio had been migrated to IBM. We took the decision together with IBM, we split basically on good terms to move back the policies from the new platform on to our current legacy systems, to move all the policies on the legacy systems onto the ASR target system. And the resources that go with it will be in-sourced again by the end of the first quarter of next year. We decided to stick to our of proven overpromised and select the current ASR platform as our target architecture because it is cost efficient and it offers a high level of reliability of operating cost. And this will significantly improve the cost per policy, which is key for our book that's gradually shrinking. Let's look at the product features. The number of product features in the Aegon portfolio is very high with 700 features, different features because the portfolio has never been rationalized before. What we intend to do is to bring this back from 700 to just 15 product families. This will result in cost efficiency and lower maintenance costs going forward. And as you can see on the bottom of the slide, we plan to complete this migration in just 2.5 years, and then we can decommission the Aegon systems in the first half of 2026 in order to realize all the synergy benefits. So by that time, we will operate from 1 location with 1 system and 1 brand. So how are we going to get from the 700 product variants of Aegon to the 15 product variants of ASR? If you take a look at the funnel on the right-hand side, you can see how it works. So today, we operate 2 different systems. The Aegon legacy systems which in itself, of course, is already not very efficient. And we developed a simple process, but very decisive process for the rationalization to minimize the number of product features, and ASR has done this before already. As I demonstrated on the previous slide, rationalizations and migrations are well embedded within the teams and have become part of our normal way of working. The cornerstone of this process is what we call the rationalization board. It's a multidisciplinary team that can make swift decisions in order to implement this. For each of the policies with similar attributes, we can decide what feature changes needed to be done in order to make it fit within the 15 categories. And as a core principle -- a core principle is that the customer is never worse off from any of these changes. So most of the changes relate to a small component that will be deleted in exchange for, well, monetary value or other benefits. The majority of the changes can be taken by ourselves, and sometimes the customer will need to sign off. This is a streamlined process that enables us to rationalize the portfolio and to reduce the number of product features significantly. This will not be a walk in the park because every integration will have its difficulties. But the capabilities that were built from the previous initiatives to migrate the many ASR individual life books onto the current platform gives us the confidence that we can bring down the cost per policy and just as important, make the cost variable. So let's turn to the pension business and highlight what's going on there. As with the Aegon brands, the other Aegon branded products, also for the pension business, we will move to the ASR brand. It will take some time. But within 3 years, we will move to 1 brand as well. From a systems perspective, we made a clear choice of administering our DB books at TKP and our DC selling propositions at our new platform, Plexus. And although product features is not really a big driver for the pensions business, we do look at our product portfolio to ensure that we can run efficient processes and offer attractively priced products. Basically, the DC business will be administered in Utrecht at ASR and the DB business will be administered by TKP at Groningen. And we firmly believe that the combination of these actions will reduce cost, and moreover, complexity. So let's go to the next slide and see how we build our future proof pension organization. This is what the change journey looks like. In the green dotted frame, you can see 2 migration programs that relate to the integration of Aegon the Netherlands. First, we will migrate the current selling DC propositions, also known as Aegon Capital onto the SaaS solution of ASR. This ensures that all the DC selling propositions are administered on just 1 platform. Second, we will bring the DB pension portfolio over to TKP so we can decommission the ASR, the current ASR DB solution. And in the black dotted frame, you also see a migration program. This is independent of the integration of the Aegon businesses as it was already running, and it's a program to move all the DC businesses, all the selling propositions onto the 1 platform over the course of the next couple of years. Well, as you can imagine, this new open book platform administration system needs to be a very cost-efficient solution. It also offers modern features which allow us to digitally communicate with both employers, participants and also advisers. So where does all this change bring us? Our future-proof pension organization will continue to serve both our DB and our DC clients and, of course, with more emphasis on the later. The combination of ASR and Aegon will be a market leader in DC with a 40% market share. And in the DB space, we'll have 30% market share. Our product offering in the open book covers both DC and immediate annuities. We expect strong growth in both market segments. Our service book also remains open as we expect to continue to do indexations on current reserves. We help obviously, move clients from DB solutions onto DC solutions, and we're open in the market for buyouts as Jos highlighted before. I must say, value over volume here remains very important. So as you can see, we have a strong proposition, and we're an all-round player in the Dutch Pension market. If you look at the combination our DC and DB books cover over 2 million participants with 40,000 employers as a client, roughly EUR 80 billion of assets, of which EUR 20 billion sits already in the DC propositions and is growing fast. Our operational excellence will give us a competitive advantage in the market. We gained cost efficiency by the combination and we're able to offer new products, and we remain highly valued by pension advisers, clients and by participants. And at our Capital Markets Day, of course, we will next year go into more details about the future of our pension business. So now we get to the slide that you're all really interested in, the numbers. So in the individual life business and the pensions business jointly will deliver 30% of the savings, which equals to around EUR 65 million of the total. As it is complex and takes time to integrate the individual life and the pensions business, the savings will be delivered gradually. And by the end of 2026, we think we have we have reached our full run-rate savings by the end of 2026. If you look at mid-2025, we will have reached 60% of the savings, which is only 2 years after closing of the transaction, and with these complex businesses, quite an achievement. The drivers behind the savings are, as Ingrid already mentioned, mostly in IT systems, the reduced number of IT systems, reduced IT support and also the termination of IT supplier contracts, which allow us to achieve the cost savings. The cost synergies in the Life segment will be capitalized through its impact on the best estimate liability calculation, and Ewout will tell you more about that in a minute. So in conclusion, and to wrap up my presentation, I would like to go to the next slide. We have significantly strengthened our position in the Dutch Life and pensions market with this transaction. We're leveraging on our extensive migration and portfolio rationalization experience. We're building a future-proof pension organization that can capitalize on commercial opportunities in the market and we're driving synergies out of the organization at a high pace, enabled by operational efficiency. And I'm confident that together with the management team and our strong senior leadership teams in the businesses, we will achieve our plans and deliver the synergies, and ultimately built, I think, the best insurance company in the Netherlands. So thank you. And with that, I would like to hand it over to Ewout, and then we will jointly take the Q&A afterwards. So thank you.

Thank you, all, Willem. Thank you. So I can have the opportunity and the honor to sum it all up. So please allow me to reconfirm the financial highlights of the deal. Today's detailed integration plan will deliver significant synergies of EUR 250 million across the combined businesses with almost 50% cost reduction of Aegon NL addressable cost base. Synergies build for 40% be recognized in stock and for 60% recognized in flow. ASR's balance sheet is strong and with a pro forma financial leverage in the ratio -- in the low 20s and an affirmed single A rating by S&P. The PIM implementation is accelerated and set to deliver significant reduction of the required capital in 2 years from now, and that will further strengthen our balance sheet. The combined balance sheet offers ASR potential for asset optimization and has lower market sensitivities compared to ASR stand-alone had before. And let's go to the next slide to further explore these remarks. So what has already been mentioned, the synergies target increased by EUR 30 million to EUR 250 million. And the uplift is materially coming from a stronger reduction of our overhead cost, better-than-expected contract negotiation with multiple IT and other suppliers and stronger reduction in external staff costs. The timing of the run-rate synergies will be realized in roughly 1/3 per year with around 30% being realized in 2025. So 30% already in 2 years from -- after the closing. The cost synergies can be divided in 2/3 indirect costs and 1/3 direct cost synergies. And with the majority coming from indirect cost expenses, the total staffing related costs will be lowered to 25% compared to 30% pre-integration. And that lowering the overhead contribution also helps us going forward to be more competitive for new business. And with that, and despite strong market position we already have, we believe we can keep the commercial momentum and continue our growth in Pension DC, in P&C and in disability. To land at the addressable cost base of Aegon NL, you should adjust for the complementary business of elements of Aegon NL on which no synergies can be realized. And that mainly relates to Aegon Bank to TKP and to the D&S to distribution entity Robidus. And this adjustment would roughly be EUR 275 million. And with the uplift in synergies that we announced today, the overall synergies would represent almost 50% of the addressable cost base, which is very ambitious, but achievable synergy targets. Including the non-addressable cost base, it would have been 29%. And I kinda mention that your question is why is it possible to save almost 50% of the addressable cost base? And the answer is actually quite simple, by creating 1 organization out of 2 and stripping out all the overlaps both companies are having. In the business, we move to 1 system, 1 location, 1 senior manager. I think Ingrid and Willem explained that. but also on staff functions like marketing, HR, finance, risk, we can reduce department size and their IT. And in addition to what Ingrid mentioned, we have a synergy value office in place that will track the different synergy initiatives in the business lines, and that will be done in close cooperation with the leading -- with the leaders of those business lines. And let's go to the next slide to see how the synergies impacting both Solvency II and IFRS in a manner of stock versus flow. As a reminder, the synergy target of EUR 215 million is related to the run rate cost synergies, so run-rate cost synergies. So we will only see the full impact in the following reporting period. And since you already know and following the insurance industry for quite some time, you know that we like to have certain complexity in our reporting. And luckily, it is no different with regards to how these synergies will impact our results. As mentioned before, part of the synergies will be capitalized. This mainly relates to the cost synergies in the Life segment and parts of Disability and asset management, which includes mortgages. Last year, we gave an indication that it would be roughly 50% of the synergies that would be capitalized. But after running a more detailed multiyear budgeting process, we can now be more precise and allocate the expected indirect cost synergies across the different business lines, including the holding. The capitalization of cost synergies will be done in a couple of phases related to the progress of the integration. The EUR 700 million benefit in stock, we mentioned last year increases to roughly EUR 800 million as a consequence of higher synergies. And we now expect this to be recognized somewhere around 25% to 1/3 per annum, in line with the synergy realization that has been presented already. For Solvency II -- then this means that the best estimate liabilities will be lowered together with a small required capital impact, resulting a positive impact on the solvency ratio of around 12%. So somewhere 10% to 13%, around 12%. For IFRS 17, the capitalization will result in an increase in which will translate into higher earnings over time, bearing in mind that this is a long-term business. So it in slowly. For the remaining part, the synergies of roughly EUR 125 million will be reflected in the P&L after these have been realized. And for Solvency II, the difference is that the OCC is a post-tax figure leading to approximately EUR 20 million additional OCC compared to the EUR 70 million that you all know and that we have announced last year. By the way, the uplift still fits within the roughly EUR 1.3 billion guidance from last year. And on our Capital Markets Day in June, we will get back to you on our medium-term expectations and the capital return policies, also incorporating the new market circumstances, business plans that we have the growth plans that we still have at that moment in time. Let me now turn to the next slide to provide an overview of the pro forma balance sheet. A lot of information on this slide, right? And I believe the most of it, you already know. But good to go shortly through it and recap what has happened. Starting with the pro forma solvency ratio on the top left-hand side. As disclosed during our H1 the pro forma ratio was above 185%. This is a touch lower than the 190% we mentioned a year ago, and that is related to a couple of elements. One, on funding. We issued less Solvency II eligible capital than anticipated, which had a minus 3% impact on the solvency ratio compared to what we assumed when we the 190%. And within day 1 impact bucket, we experienced a negative impact from market movements, mainly related to real estate, partly offset by high diversification benefits between PIM and standard formula than we have anticipated. And overall, we are very happy with the quality and the excellent starting point to further strengthen our balance sheet and remain flexible with regard to our capital position. As said, S&P reaffirmed our single A rating with a stable outlook post deal. And the pro forma leverage ratio is in the low 20s, where the exact number will be dependent on the final PPA, so the opening balance sheet outcome. Together with that maturity schedule and ample Solvency II headroom, there is a lot of flexibility towards our debt position, where the use of non-Solvency II compliance instruments can also be used given the low financial leverage position. And let me now move to the internal model implementation on the next slide. The first challenge that we have when it comes down to the Partial internal model was after the announcement was to get approval of the use of Aegon Life's PIM for -- within the ASR Group. And the PIM approval was part of the DNO processed by DNB, which you all know has been finalized by the beginning of July. This approval also resulted, as said, in some additional capital synergies from the diversification benefit between standard formula and the internal model. And currently, we are working hard to get the PIM implemented for ASR's Life portfolio. And I -- to let you know that we have all decided to come to combine Phase II with Phase I, and that means that we will expand also the scope of Aegon's model to better represent the characteristic of ASR's Life portfolio. So very happy that we've been able to combine those 2 phases together. And this is the expansion of the Aegon's internal model is mostly related to the real estate model including for instance, are famous rural real estate portfolio. And we still estimate that it will take until full year 2025 to get this really reflected in the Solvency II figures. In parallel, we will work on Phase III. Now we're into Phase II to the development of the non-life PIM modules. And this phase will help in better management decisions going forward, but also improved pricing competitiveness. And besides that, and that's good to mention here, the expected timing of completion remains unchanged in 2027 and also the expected benefits, as mentioned before, somewhere between 10 to 15 solvency points off at group level has not changed at this moment in time. The following slide is for those people that like to have a better understanding on how a PIM actually looks like and how it works. For those who like to remain a bit more high level, I'm done in a minute. The slides provide an overview of the modules within the SCR model of Aegon Life that are on the partial internal model, partially on a partial internal model or fully on the standard formula. And what I do want you to remember is actually the following: the internal model helps us to take better risk management decisions as capital is better representing the underlying risk profile of the company. The PIM of Aegon was implemented in 2016, and it took them 4 years to make it mature. And since 2020, we have seen them shifting from model development to model maintenance. And I think that's important. So it took years to become stable, and they are now in a stable phase. PIM is not only about lowering capital. For example, government bonds are not charged in standard formula, but you have to hold capital for government bonds under an internal model. And that also means that it does not necessarily mean that PIM modules have a lower gross required capital charge compared with standard formula, but due to additional diversification benefit that is something -- that is achievement create in sub-modules, it will result in overall SCR reduction compared to the standard formula. It's not the cross SCR that will always be lower. But at the end of the day, you will see a lower capital charge because of the diversification. And next to diversification, the modules that are really driving the capital benefits are longevity risk and real estate. Let me now go to the next slide. Related to the Partial internal model, we also see some changes in the Solvency II market sensitivities. At the bottom part of the slide, you can see the pro forma Solvency II sensitivities based on a simple add-on calculation per end of Q2. And this should help you in estimating the market movements from time being until we publish our official new group sensitivities at our full year results. Those will then be bottom-up calculated. This is a simple add up, but it gives at least a sense of the direction of travel. And I think a few sensitivity stands out. The spread and the VA sensitivities are helped by the dynamic volatility adjusted and the fact that for instance, government bonds have an SCR charge, as just discussed on partial internal model, which helps actually to mitigate the rate of impact in the spread widening scenario. Equity sensitivity is lower due to a relative low equity exposure of Aegon and now the current balance sheet, and the real estate sensitivity increased somewhat due to lower SCR charge under the PIM and therefore, impacting the ratio more when valuation goes down. But also when it goes up, you actually see more benefit in the solvency ratio. So our combined balance sheet also held by PIM shows on average a lower market sensitivity compared to ASR stand-alone. And the diversification of the businesses is also visible in our asset portfolio. Because the combined pro forma asset portfolio based on half year 2023 figures is on a high-quality balance sheet with a few single-digit percentage deviations compared to ASR stand-alone asset mix. The biggest difference, as you all know, is related to mortgages, where ASR stand-alone is around 25% on the balance sheet that has now been increased to 30%. And and that is still a manageable amount of a low-risk asset class that fits well with our liability profile. The increased allocation to mortgages comes at the cost for example, fixed income bonds, real estate and also equities. Within fixed income, we see an increase of government bonds and alternative fixed income assets. And currently, we are performing a full strategic asset allocation study and the early insights confirm my earlier statements that we see room for further optimization of the balance sheet. Focus there will be on optimizing within the credit portfolio and by shifting a bit towards equities. And I've said that before, this is something that will be done gradually. And over time, and we will take a responsible and most important and economic approach to actually do that. And that concludes this part. And now we'll go to summarize actually the slides that I've just presented. Today's detailed integration brand will deliver significant synergies of EUR 250 million across the combined businesses with almost 50% cost reduction of Aegon's addressable cost base. These upgraded synergies will positively impact both stock and flow. ASR's balance sheet remains strong post integration, pro forma leverage ratio, low 20s and in the firm single A rating by S&P, and the PIM implementation is accelerated and set to deliver significant reduction of required capital in 2 years from now. And the combined balance sheet offers a high-quality asset portfolio and has lower market sensitivities than ASR's stand-alone had before. And with that, I would like to hand over my presentation and go back to Michel.

So that ends the presentation, and we'll start the Q&A.

So again, some housekeeping on that one. So please briefly introduce yourselves before asking the question, limit yourself to 2 questions. Sorry? Oh, yes. More people stay here, yes. So...

Otherwise, I have to do all the -- otherwise, I have to do all the work.

You were really waiting for my cue for this?

Yes. You're the master -- so we...

Okay. Benoit first, and then we'll have David.

Benoit Petrarque from Kepler Cheuvreux. So -- yes, on the M&A front, a large one done, obviously, I was wondering on your individual life -- sorry, individual life book if you are planning to add more closed blocks, if you have an ambition to consolidate more and how much room you see to get there? And also, in the past, we talked about funeral consolidation. I was wondering if this is still something you expect. The second one is on the pension reform, pension buyouts. I think you mentioned EUR 20 million, EUR 30 billion buyout pipeline potentially for the coming years. I think you referred not to value over volume. So how much return on capital employed do you have on this business? Could you get a bit of granularity on that? And the last one is on PIM. 10% to 15% touch point impact positive, having done some math already, I guess. Is that still something you have in mind for the future?

So I've heard 3 questions. Maybe Willem will answer the one on the buyout. I'll take M&A and maybe you want to kick off with PIM and then we do it in a reverse way. PIM, buyout, M&A.

Yes. So -- so the 10% to 15% stands. So what I also mentioned is what we have seen is that there's an opportunity to accelerate, actually, so to bring Phase II into Phase I, take 2.5 years to realize that. That means by the end of 2025, we expect that it will be, for the first time, being represented in the combined figures. Phase III being the nonlife business is now -- will now become Phase II. And when we have realized that, probably we believe we can go to the upper end of that range, but the number itself has not changed.

Can you give us some 25% to 30%...

[indiscernible] That will be in feasible. That would be a realistic number, absolutely, yes.

And on the buyouts.

Yes. So what we've seen in the last couple of years is that the market expectations and also our own expectations we're building. We got back into the buyout market. But at the same time, pensions legislation was being postponed. So nothing much was happening in the market. What we now see pensions legislation is being confirmed. It has come through the house. It has been approved by the Senate. So we have more clarity, and that means that we -- our expectations are, and it's also what we noticed in the market that advisers and employers are becoming more active and looking at solutions. We have not seen big deals yet, but we are obviously looking at it and engaging with the big advisers to see what's possible in the market. And I made the comment about value over volume because that is something that we -- as an ASR has been saying all along, and it's no different from other new business that we do. So it also goes for the pension buyouts. And maybe you want to say something about target returns.

Yes, absolutely. So the target return is -- so we always want to achieve an IRR of 12%. That is what we always have said around the buyout market. We see reinsurance, longevity reinsurance as an instrument actually also to make that possible despite the competition that we have -- that we see in the market. What we also see on the capital chart is that when we -- roughly EUR 1 billion of AUM in the buyout market will cost probably around 1.5% solvency points. I think it will be a bit lower when you -- when you use reinsurance, it will be just above that number when you don't use your reinsurance, but around the 1.5% is the percentage point is the impact of -- on the balance sheet.

And that's a beautiful bridge to M&A because we consider buyouts as a kind of an M&A transaction, and that's why we apply the 12% there also. And our general view on do we see opportunities to further do M&A. The focus today is on getting the integration kicked off and delivering on all of the promises. So as Ingrid mentioned, for the non-life business, we tend to be ready before the end of next year. Also disability, except maybe shutting down the systems that might take a quarter longer. So if and when those 2 are done, and we would be able to further consolidate especially the P&C market, we would be open for that. The total P&C market is now dealt through 3 to roughly 25 insurance companies. The top 3 already serves around 70%, 75% of that market. So there is a tail of roughly around the 20 companies from which we expect that some of them will need to find a safe home in the P&C business. So there, we would be as from the finalizing of the integration open for business. In disability, our market share already comes close to 40%. So their inorganic growth will be roughly impossible. So there the growth has to come from organic growth. Then in the Life business, our funeral department is not involved in the integration because they didn't come any funeral business, even when there is appetite for sellers to sell funeral books, we would be open for that from, let's say, mid next year -- we want to kick off really all the integrations. And we still do see opportunities there. I think there are some books in the market, which may need to find a safe home in the future. So there we would be open from mid-2024. And in Individual Life, I think it's wiser to finalize first the ongoing integration before we add complexity to that. And even when at the end of 2026, when the individual Life integration is done, portfolios would be available. We're always open for business if the return is above the 12%.

Okay. David...

David Barma from Bank of America. Coming back on synergies. So you mentioned on the asset mix that you see room in equity to add in equities. Our real estate is also an area we're looking to grow. And with the interest rate environment we're at now, what kind of OCC benefit can we get from moving to a spread to fixed assumptions? And secondly, on capital synergies. On the bank side, there's a lot of excess capital at the bank. Is that an area where we can expect some excess capital to come back in the next few months?

To start with the -- sorry, the first question was on the...

Asset mix.

Asset mix, yes, on real estate. On real estate, so I think when we started the -- when we announced the transaction in an environment where we were at that moment in time, we actually were thinking about how can we optimize the asset portfolio. And without doing a full bottom-up strategic allocation study, we had the thinking that we could optimize it by going a bit more into real estate and especially other real estate asset classes and to go more into the equity area. Since that moment, market developed, and that's why I say you always have to take an economic approach. And when we look now to the balance sheet of the combined entity, we don't think that real estate is at this moment in time, the category to invest in, but that the opportunity is much more there still in equities, but also on the other hand, more in optimizing the credit portfolio. And that is actually the categories where we are looking at in optimizing it. It will take time to do it in an economic sensible way and the upside that we see. And that, of course, will cost capital is still around the EUR 50 million number, but it will take time on a run rate basis. It will take time, at least 3 years to actually come to that number. That's the way we are looking at it at this moment in time.

It's 5-0, not 1-5. 5-0.

Did I say EUR 15 million?

No. You said it right, but if somebody listening quite well, it could also have heard 15, so -- being clear on that.

Yes, happily. We have that knows the numbers.

Yes. Not all the...

On the bank, yes. So the bank is very well capitalized. That's correct, David. On the other side, it's relative small bank in the Dutch banking landscape. And what you do see with a smaller bank is that you also have to hold a bit more capital, for example, than a large bank as to hold. So yes, we are -- they are now on a capital ratio of 23%. But that's not all -- it's not all excess capital compared to a level of 14% or what you see at large bank. I think their target level in the medium term is more around the 20% level. So yes, there is excess capital from a stand-alone perspective, but will be compared to, I think, a 20% level, that's a realistic mark to look at. Yes, yes. That's great. on the midterm.

Okay. Cor first, and then Ashik.

Cor Kluis, ABN AMRO ODDO. A question about market effects in the second half of the year, markets, especially on the real estate side, the housing prices are rising again. You own quite a lot of that. So could you give some idea about what the market effects have been since the last time you reported figures for equity real estate and rates maybe. Second question is about hybrids. You have, I think, EUR 1.6 billion capacity in hybrids. That's 20 percentage points on the solvency ratio. What you view about issuing Tier 1 hybrids going forward because that's an unused capacity at this moment in the new environment of rates, of course.

Okay. I think the question is also for myself. Let's start with the hybrids. I think a couple of months ago, I would have said that Tier 1 is at this moment in time, absolutely not a category to invest in. We, of course, have seen that of last month that rates went out again quite significantly, so 50 basis points down compared to Q3 almost. So with that, with lower rates of firemen, maybe that could be an investable of category again, first of all, at least to issue hybrids in that category. So if we have room to do so, currently, absolutely not our plans to do so given the high rates of -- and also the spread that are paying there. But the capacity is there. And if that market remains open at fair prices, then it would be in a category to issue again in, but not the first priority of -- not the base case where we are looking at when we want to issue hybrid capital. Then on the market movement. I think real estate, yes, what we see is that houses are going up again. So that's house price going up again. That's a positive one. You do see that the external value rate that we use are always a bit behind the curve. So they were always a bit behind when markets go down, probably were also a bit behind the market when markets go up. So whether we see that in the Q4 valuation, I'm not that sure yet. So mostly they are always lagging a quarter and always a bit hesitating in moving a bit too fast with the market. But there's definitely a positive development when it comes down to the house prices. So we have seen a dip per H1. And since that moment in time, every month, the house prices are going up in the Netherlands. And by the end of the day, you will see that reflected in the prices. Not sure whether that will be in Q4 already. Overall, real estate, what I said, I think also during the H1 call, can be a minus 1, can be a minus 2, but much more than that, I don't expect that to be on -- in solvency points, so more or less neutral, how we look to the real estate investment category. When it comes down to rates, I think a month ago, rates were much higher than they are today. So rates dropped, I think, over the last month with what I said, more than 50 basis points. So -- and are getting closer to the H1 levels actually. So that's what we did. It's a movement what we see now. And that's also driven by lower inflation expectation across Europe. I think that's what we see today. And I think on equities because as the last part of the asset side, equities have gone up. So I think we now see positive momentum and you all know positive momentum on the equity side.

It's actually today some equity.

Yes. AX is doing very well. There's 2 issues leading -- companies leading. But also in general, we see that the equity markets are going up and also our equity portfolio benefits from that, which comes, of course, always with a bit higher capital charge, but that's -- well, that's all -- that's the normal change that we see. So all in all, very much pluses and minuses when it comes down to the solvency ratio.

Ashik and then Hadley , please.

Just a couple of questions. I mean, on sensitivities, the sensitivities to mortgage spreads went down. I mean, you mentioned it is to do it dynamically. Can we get a bit more explanation on that because I would have thought that Aegon was already applying dynamic VA. So why would that change? Are you applying dynamic VA to your book as well? Same goes with interest rates as well. So why has the sensitivities to these 2 things have gone down, so that would be good to know. And on strategic asset allocation, when do you plan to start moving into that new asset allocation? So that's the second one. And one question to Willem. I mean Willem, you mentioned that when you move that 700 applications to 15 applications or products...

Products features.

Products features, I mean, is there any risk of value creation? You mentioned that value for share customers will still be higher. So how will that be done? So you will be saving some cost and then giving some benefits to customers. So how will that mechanism work would be helpful to know.

Maybe we should start with the last one and Ewout can think about the answer to the...

Sorry, more questions.

It's moving from product features to product families. So it does not mean that we basically got 700 different product features into just 15. But what we try to achieve is that by policies that are look-alikes from each other and it maybe have a different name, a little specific different feature is that we take away 1 or 2 of those features and basically make the product similar as to other products so that they fit in one product group that we can more easily administer. And by reducing the cost of administration, more than that actually, we give back to the clients, we can actually fit it into those 15 categories. So it's a win-win situation. The client gets a product which is still as good as it was or better. And for us, it's easier to administer. And these books are very long. So I think the last policy probably lapses in 2070, so '70 or whatever. So we need to make sure that we can administer this on our platform for the foreseeable future and thereafter. It's very important to rationalize the portfolio.

And then on the start with mortgage sensitivity. So I think the question is when we look at the slide and the sensitivity slide, the sensitivity -- the market sensitivity of the combined entity is lower than it was for ASR standalone. That was the slide where we are looking at it. So then the question is why is that the case because Aegon has a larger mortgage book. So you would actually expect that the sensitivity increase. And that has to do with the determining adjustment that is in the partial internal model and now it become very technical. But I think in the past, we have spoken a lot about the sensitivity of mortgage spreads, and that Aegon in their internal model has a determining adjustment, which actually makes that in the moment that spreads are widening. You actually see that the determining adjustment works in favor. So the SCR will be reduced. And at the other hand, you will see a decline of the valuation of mortgages. That's actually what -- so that's actually the mechanism behind the lower sensitivity. So when mortgage spreads widen, you see -- at one end, you see valuation goes down. But then because of the widening of the mortgage spread, you can reflect that via the required capital, via the determining adjustment that is in the internal model of Aegon, and that makes that you have become less sensitive for mortgage spread movements than on a stand-alone basis.

But are you applying that for your own book as well?

Yes. So we will now apply that for our own book as well. When we look to the AOPA 2020 review, this is one of the items that is under discussion. So the question is whether that will also be the situation after the AOPA 2020 review. But at the same time, the determining adjustment is now a negative in your solvency position. So because of -- actually, you see that spreads are widened across all asset class which actually determining adjustment is a negative one in your solvency ratio. We have the assumption that we can apply it also for ourselves, but when that will be reduced, there will actually be an uplift in the solvency position. And then the second one is on the strategic asset allocation study very surely when will it start there. So we finalized that this month, so in December -- well, next month in December. And then we will start with that -- by the 1st of January, but as said, different sensible and economic approach and not just because it really sells in a higher OCC. No, you also -- they also have to make sense.

Yes. Hadley first and then Michael.

Hadley Cohen, Deutsche Bank. First question on the life side, please. So Willem, I think it was before your time, but it used to feel like the ASR stand-alone business was always sort of running fast to stand still. In terms of as the portfolio is running off, looking to re-risk and reduce the fixed cost per policy level to sort of keep profitability stable. I'm just wondering, given all this resource that's going towards the integration right now or how we should think about the underlying profitability of the ASR book? And is the sort of run hard to stand still philosophy, how we should think about the overall life portfolio post integration? Second question, Jos, around the political backdrop in the Netherlands right now. I mean, there's a lot of noise and what have you in terms of the buyback tax and builders trying to build a former government and I think I've read somewhere that he was looking to abolish the pension reform, even though it's already started. I'm just wondering how you're thinking about how the political backdrop will play out and what the risks are to ASR and the insurance industry? And then just a very, very quick clarification point, sorry, for about the fifth just -- I think I'm right, but the EUR 50 million that you're talking about, the potential rerisking benefit, that's not included in the EUR 1.3 billion number that you described...

Correct, not included, yes. Willem?

Can I start? Yes. Running to stand still is kind of what it is with the life business. There's very little new business. The portfolio is shrinking by on average, let's say, 8% per year. So what we need to do is find cost savings every year, reduce the number of people that's working on it, ensure that we're on a very effective IT platform, which we are. What you need to realize is that the ASR portfolio is running to stand still and reducing the cost in line with the shrinking of the portfolio. The Aegon portfolio was being replatformed onto this new IBM platform, which we stopped. So the people that were doing one migration from the Aegon legacy systems onto the IBM platform for them also when the announcement was made that we were going to be taken over Aegon by ASR, they said, yes, for us, it doesn't really matter whether we do change to the left or change to the right, we're just going to refocus and not do the migration from the Aegon legacy systems onto the IBM platform. We're just going to do the migration from the legacy systems onto the ASR platform, and that's what's going to happen. So it doesn't really change the dynamics. Ultimately, we end up with a cost-efficient platform that will serve us over 1 million policies, which we can run down effectively. Jos already commented on the potential for adding to that. And I think with the size of the portfolio and the system that we have, we are very well positioned to do that efficiently.

And then the other question was a question for...

Political.

Oh, no, The political one. Yes, yes, of course. Well, in all honesty, the situation at the moment is a little bit blurred. We have a clear winner of the elections. Today, one of the other winners, the new party of Peter OnShift announced that they are hesitating to enter a government with the winners, the PVV. [indiscernible] already said that. So I think the first question is how long will it take to form a new government, and it's really unclear. On a personal note, I wouldn't be surprised that it's going to take a very long time before the conclusion is it's not possible to form a government in the Netherlands. And I don't know whether that worse or good. I think the old government will continue to run the business, and that's not bad at all at the moment. I wouldn't be surprised that we end up in new elections or have a new government for a very short term because the differences between the winners are so huge, if you look into their programs that we probably will end up with new elections, but that's more on a personal note, nobody knows actually. To your -- to the second part of the question, given the fact that some of those winners have made comments on the pension reform, if you really read through those -- to those comments, one party says, well, we should get rid of it. That will not happen. The law is accepted by parliament. It has been a proper process and changing that will be hardly impossible. We might see some small changes, and that will be more towards the pension funds in the current law, the Boards of the pension funds can decide whether they move to which part of the new system they will move. And what one of the parties have said, we want the member -- the pensioners of a pension fund to have an involvement in a final choice in what direction the pension obligations will go into -- in what way they will feed into the new system. That could be a change in the law that would happen. Will that affect us? I don't think so. It may affect maybe the time needed before pension funds start to decide on what they do with their in-force pension obligation and whether they end up doing a buyout. But at the end of the day, we don't expect that the number of buyouts and the volume of buyouts will be influenced by that possible change in the future. It's mostly for the larger pension funds or the sector-related pension funds with the companies that are obliged to take part in those kind of pension funds that might be affected by that. So all in all, political situation is a bit uncertain. But historically, the number of parties in the Netherlands at the end of the day, we always end up somewhere in the middle. And I think that's good.

So Michael, and then for Rob, please.

Michael Huttner from Berenberg. I had 2 questions. One is for Ingrid and the other one is a very cheeky one for Ewout. I think we were speaking earlier about retention ratios and the assumptions and your experience. So maybe you could just remind us of what you're assuming for P&C and disability and also what have the numbers instead of your assumptions were your experience, how much more money we could get? And the second is you've never mentioned dividend. You said all the numbers are going up, but we haven't seen the dividend going up. Can you say maybe what -- how much...

You missed -- you missed the 12%. Dividend has gone up with 12%. So...

Yes, I understand 12% this year, but I'm thinking of the -- what is it mid- to high single digit going forward? Maybe I was thinking skip away the mid...

Maybe we first should finalize the year and then wait for the final outcome is, and then we will come up with dividends. So that part is already covered. So...

So for the non-life and P&C business, we have seen in previous integrations that the maximum churn that we have is 10%. And I think, to be honest, that P&C in disability because of the long-term contracts that you have, we don't see a lot of churn. And 10% is the absolute max of what we would expect. We've seen other integrations where we only had churn around 5%. And that's 5% of EUR 187 million in GWP in P&C coming in from Aegon So on the large number of P&C in total, it's really a small part.

Sorry, you asked this one.

No, but you mentioned all these wonderful things you said about costs like the IBM contract or other stuff like that.

So what is the question about the IBM contract?

You're cutting it, right? So they'll say, we want some compensation. Presumably other people want compensation. I don't know.

Well, the idea about joining up with -- teaming up with IBM was that they would -- we would together build this platform. We would have a modern technology, get rid of the Aegon systems, variabilize the cost, which is, of course, important for the best estimate liabilities. And then they would attract other companies to also administer for them. That never happened in the past couple of years. So also from an investment perspective, from an IBM perspective, if the business case is not going to fly, then it's easier to take the decision to part your way. So I think we got a good deal. And both parties are happy that we took this decision. So no heart feelings on the IBM side. We are still a large insurance company that needs IT, right, Ingrid. We have a good relationship with IBM. So no worries there.

Farooq?

Farooq Hanif from JPMorgan. I wanted to focus a little bit about the competitive advantages you now have with this low cost base, both in pensions and in non-life. So firstly, on pensions, I mean, it sounds like in a world where everybody is going to be forced to move to DC for new accruals, at least, you've got a very competitive offering. So have you rethought what your potential grabbable addressable market is now in terms of the total? Because I think preassessments we've seen from one of your competitors seemed quite small around that, which I was surprised by. And whether the fact that you have a low cost actually helps that. And same for non-life, do you think you have pricing power now that changes the dynamics in the Netherlands, and I'm thinking of other markets are very, very concentrated. I know you talked about the tail, but it feels like you're really, really big in certain areas. What does that mean for you? And then one final, really, sorry, question on the 12% IRR. Is that a minimum capital or policy capital level?

Maybe we should start with the last one. That's the shortest one and done Ingrid and then Willem on the pension business.

What we see as a minimum when we calculate the miles...

With the capital [indiscernible] with minimum solvency.

Oh minimum dividend level. Yes.

Yes. And I think, so for non-life, of course, this will be one of the subjects for the CMD next year, right? So then we can comment a bit more about the propositions feeding forward. At this point in time, we don't have any problems to have the 3% to 5% growth that we promised. But we do see some benefits coming in from costs, obviously, but I would like to take that to next year, June to comment a bit more. So if you are okay with that, please come to the CMD next year.

Yes, exactly. Also, if you're not okay, was it to come to this CMD next year, and so the same goes for the pension business, we'll talk about our ambitions and what we think we can achieve in the market there. From a cost perspective or margin perspective, I don't think that the Netherlands is any different from the U.K. market in that perspective. So the margins on administration are thin. But of course, there's the asset management component. So as a company, we look at the chain of where we can make money in products. And obviously, that's where in the pension business, the margin is.

Nasib and then Jason, please.

Nasib Ahmed from UBS. So first question on capital management. Does the dividend level still stay at [ 175 ] post payment implementation as well? What are your thoughts on that? And secondly, trying to address the second elephant in the room, if you were to hypothetically sell the bank, what would be the uses of the cash that you get from it? Would you repay down the bridging loan, share buyback? What would you do with the cash?

Let me answer the last one and then Ewout will take the first one. I have learned that you never should answer hypothetical questions because now it is hypothetical and in the next coming report, it's a prediction. So I think we have to pass on that one. We always answer every question, but I think we have to pass on this one. And then on the dividend, Ewout?

Yes. No, we pass it through. I would be -- no, what we said -- so the capital framework stands as it is today. So we will not change that. What we also have said and that's a serious commitment is that we will also come back on the capital framework in the CMD of 2024. And then we will have an integral approach about how we look to the OCC, how we look to business plans, how they're flowing to OCC, what that means whether your capital management framework. And then we will have an integral view on that and not only as a kind of a one dimension element that we then would now change because of one thing happened. And so we come back to that on the CMD.

Yes. Maybe to give some color on the why of that because you know as we actually always answer every question, but we're now in the middle of running a multiyear budget for the next coming years. Ewout already mentioned the PPA. That's -- at the end of the year, we have more clarity on that, then we can finalize the multiyear budget and then we can start to work on the numbers to set the new targets going forward. So we want to be a little bit careful to throw around numbers on parts of that multiyear budget. Yes, we already do have a view on it. but I think it's just too early. And if we promise to the market that we are going to deliver x percent growth, then we want to deliver that. So -- and before doing that, we want to be sure that it's an affordable number.

Jason and then Anthony, please?

Jason Kalamboussis, ING. Okay. I'm going to keep any questions on now then moving to the next one. There are a couple of things. The first one is on the Slide 5. I think Ewout, you addressed the RT1. I mean, and you show the pro forma is to headroom. How will this will evolve with PIM, notably thinking Tier 2, Tier 1? Presumably this will come lower. So if you could clarify and then where you would be looking at. And if the second question is on the dividend. If we -- you have the DPS growing mid- to high single digits. Now if I focus only on the dividends, so forget about the share buybacks. How do you see it growing? I mean if we go back to 2018, '19, you were at 4% to 5%. Then you know M&A helping you move to the 6%, 7%. So if we go beyond the next 3-year period, do you think still as an underlying for the market of 4% to 5%? Or do you think actually you're thinking about it higher?

If you take the first one, I'll take the second one.

So the question was on how the part internal model would influence the headroom, if I understand it correctly. I think on the RT1, it will not change a lot because what you will see is that -- the PIM itself mostly impacting the denominator or the required capital in your solvency ratio. What we do see is that your Tier 2 headroom is related to the required capital. But we will -- we believe that we will still have enough headroom for the current positions that we are having today. Also taking into account what I've already mentioned on the elements where we want to grow. So we want to grow in non-life, which also cost of capital. We want to grow in. We want to do buyouts. We also want to do, for example, the rerisking part. And if you take that into account, we believe there will remain ample headroom when we look to the current exposure that we are having.

Yes. And on the second question, in my part of the presentation, I mentioned that the mid- to high single-digit growth will be up until 2025. There was a deliberate period because that's a period we can oversee. As said earlier, we want to grow into the balance sheet over the next couple of years due to the fact that we have done a big transaction. Currently, the payout ratio on the -- compared to OCC will be roughly 60% to 65%. Next year, it might be a little bit lower. But at the end of the day, we want to grow back to a return of roughly 70% to 75% of the OCC. And as said, in June next year, we will come up with a new capital management guidance, and then we also will decide whether which part of that 70% to 75% will be more structural as part of dividend and which could be more in other ways of returning capital if we can't spend it for business growth.

Anthony, and then Ian, please.

Anthony from Goldman Sachs. The first question just clarifying the timing of that 12% Solvency II benefit. I'm just looking at Slide 39. Should I expect -- I should assume like 30% of that happens in, say, like 2024 and then 60% then 2025 and then like that? And the second question is just on the -- coming back to the -- your strategic asset allocation. You mentioned the equity rerisking. Can I ask why don't ASR considered rerisking into Dutch mortgage isn't that -- doesn't that have more like risk -- favorable risk -- there?

On the timing of synergies, I think it's indeed fair to assume a 25% to 30% -- 1/3 being reflected in the Solvency position so -- per annum. So with that, so in a couple -- in 3 years, actually, we expect that to be recognized. I think on the mortgage side, it's interesting to mention. So when you look to the return on capital in your asset allocation, the mortgages is the most attractive category. I think from -- also from a risk profile, mortgage is the most attractive category. Only what you also see is that the spread in itself on mortgages is not superb. I mean it's a fair spread that you received, but it's not super. When you want to grow OCC and you only allocate to mortgages, which is very effective, but you are actually the excess return that you can realize on your portfolio is then also kept at a certain amount. And that's why we said we do not only want to invest in mortgages, but also we also want to face in other categories that offers decent -- that also offers these higher spreads, cost in capital. But in total, you are just as efficient, but it in total, a higher spread level, but it also, of course, cost also more capital. That's the way we are looking at it. So how can you optimize actually the spread in the portfolio and not only going into mortgage because that is kind of a liquidity a restricting factor.

Ian, please.

And it was also...

Yes. In the cost savings in the staff segment, quite a lot of that seems to be coming from non full-time consultant FTEs. Just wondering what those people are working, why that number is so high, why there's sort of EUR 50 million of cost in consultants already? And why there will be no impact on the business going forward from people who are in those sort of projects. And then on the split of synergies by segment, obviously even split between non-life life fee business. Obviously, the business you're acquiring isn't split like that in terms of the sizes of those businesses. So when we think about addressable cost base, why is the Life business so much lower in terms of probably the portion of the addressable cost base, which is going to fall away.

You want to answer that, Ingrid, also the first one on the temporary workers, et cetera. I can do it, but -- I still take it. Okay. On the 40% of staff reduction, out of that 40% is temporary people. We call that the flex force because you want to brief in your company is -- economy is going down, then you want to scale down. It's not only consultants in that area. It is also, for example, in the mortgage area in terms that there is a lot of business. We have more temporary workers in mortgages. And if we add all the temporary people in the combined business, then it's over 1,500 people. And that's why we said, well, going forward, when we have integrated the business, we will not need such a large flexible workforce, and that's why a significant part is coming from that reduction. And then on the split, are you okay? On the split -- on the -- maybe, Willem, you want to comment on that or...

Yes, I want to...

Or I can do it but I don't want to do everything on my own. Go and then I'll just add to...

Yes. So the question was also on the -- why is the life -- relatively low. So what you actually see? So also in life, so the expense level in the businesses, for example, in life, it's not really high. It's also a lot about the stuff actually that is around. So there you see the high cost savings that you can achieve. But in itself, the -- we had a workforce that you need to actually run the individual life portfolio as an example, is not that high. And that is also the reason that you see that the cost savings in that area is not at a maximum amount. I think when it comes down to pension because that's the other important element. You see cost savings potential on moving the DB book towards take [ P ] platform. So there's synergies that we can achieve. But when we look, for example, to the Pension DC business, yes, that's still a growing business, and that's also taken into account when you can -- whether or not you are able to achieve a lot of those cost synergies. So that is the reason why, for example, in life, when you look purely to life, the savings are not at that high level, but there are also a lot of staff expenses allocated to that. And there, you do see the cost saving potential.

Andrew?

Andrew Baker, Citi. Two, please. The first one on the 12% Solvency II benefit from the capitalized expense synergies. My understanding is you have some discretion on when this can be booked. So it's pretty clear that you're confident in achieving the expense synergies from today. So why not just book that upfront and why are you facing that over time? And then secondly, on the transition service agreement. So quite long, especially on the systems side. Clearly, you've got good alignment with Aegon as they're still a 30% owner or so. If we did see Aegon sell down over the next couple of years, while the TSAs are still in place, what sort of protections do you have in place to ensure that those service levels continue? And I guess, do you see that as a risk, if you model that?

Shall I take the last question first?

Yes.

Sorry for my voice, but I really have a tough call. So I'm sorry about that. So we spent quite some time, almost 9 months to get the TSAs done together with Aegon. Because it was really important for them to really know for sure that after 3 years, we would have moved all our data towards our systems, of course. And for us, it was really important that they couldn't share us with all the TSAs that we need until the last policy really goes from Aegon to us. So we have -- so we also took within the deal that the Aegon the Netherlands business on IT that are very used to communicating and having service level agreements with the Aegon GTS, which actually in the U.S., right? And those people are still managing like they did before, the relationship, the operational things that are going on. There so we have -- the business as usual is still going on. And what we do is we have weekly meetings between the teams, and we have monthly meetings where I'm personally involved as well to see whether the operations run smoothly, which is the case, but also where we do a lot of interaction around the migration that we will perform. So we have like 2 or 3 meetings together with GTS. That's the name of the Global Technology Service from Aegon to rehear and make sure what we are going to do. So -- and of course, they are being paid for it, right? So at this point in time, I don't see any issue at all. But if and when, it's a contract like we have with all kinds of providers and also with GTS.

And that contract is fully unrelated to the shareholders. There is no relation between the GTS contracts and their shareholders.

So we treat them -- so Willem already mentioned IBM. Of course, the mainframe for Aegon Netherlands business is with GTS, and we look at them as the same kind of provider as IBM is. So that's basically what it is. So I think, heavily involved together to make this work, and there it also works that it's an interest for everyone that we keep it moving.

And then the 12%, Ewout?

Yes. The second question that you raised about provision release, Andrew. So let's be careful now. I have to rotate the auditor in a couple of years from now. So please let's have an open line on this because on the serious note, what we always have done in the past is that we are having a conservative approach about recognizing future cost savings in the -- in our technical provision. And that is also what we want to do when it comes down to integration. That doesn't mean that we will wait until we are finalized. But -- so we will not wait too long, but we -- but I also believe that we have some -- we need some proof points before we can recognize those cost savings. And I think that is a fair and reasonable approach to have. So when the proof points kicks in, and we are already seeing them, that can also be a moment that we say, okay, we start recognizing at least parts of that.

Okay. We'll take one final question from the room, then we'll have drinks. We'll be around for further questions in the room next to this where we have drinks.

Let's take 2 because there are 2 people in...

You're the boss.

I'm a commercial guy, so always customer-friendly.

Steven Haywood, HSBC again. It's not 2 questions. It's sort of 2 points of clarification, if you can. Last year, you said about a 20% levered return on investment. And now you said a 16% prudent levered return on investment. Can you just clarify what the difference is between those 2 numbers? And then secondly, I'm sure you've mentioned this previously, maybe not today, but if you can tell us Aegon Bank, what is the capital that is backing Aegon Bank on a solvency requirement? And also, what is the yearly run rate of earnings currently for Aegon Bank?

So I do start with the -- so on the bank, the question is what's the required capital that we are actually seeing. So maybe...

On the earnings as well.

In the earnings -- so maybe a more easy answer. I think the impact of the bank on the balance sheet, on the solvency ratio of ASR Group is roughly 6% to 8%. That is the amount of the impact of the solvency ratio. So required capital, I think, is close to EUR 600 million. They have a book value of around EUR 800 million. That's the marks that we are looking at. And the net earnings, yes, that is -- they are benefiting a lot from the higher rates of the firm. I think we discussed that also in -- during the H1 call. We see that they are actually -- they are doing very well. They benefit on the net interest margin a lot. They are gaining a lot of customers, especially on the self employed base. And with that, they are -- yes, they are positioned actually to attract customers and on the customers base that they have and the growing customer base that they have able to actually realize a decent amount of earnings. I think when we look to Q3, I think it was around EUR 60 million that we have seen in a quarter -- in earnings. But of course, it also comes at a certain amount of capital as they are growing their business there. So that's also that should be taken into account. And we do see -- and that's good to mention. I think there was -- there were -- Q3 was kind of a perfect momentum from a savings bank as they are. We have also deposits on it, you do see that, of course, from a societal perspective, and that's also what we have said in the past. You do see that, well, there is an increased demand from the society to increase also the -- at least the rates on savings, a bit less on the deposit side. But because of that, you also see more flowing from deposits towards savings, and that is also a way of reason that the net interest margin will come down in the future. So don't expect this to be there going forward, but Q3 in itself was a good quarter.

And on the...

And then on the 16% return compared to the earlier mentioned 20%, I think the difference is in the PIM. Because the 20% was including the move to the PIM and the 16% is the number before moving to the PIM. So it actually moved up from by heart 14%, what we said earlier to 16% now.

And then final question on the -- you're pointing at that way. So as the final question on -- Jason?

Jason Kalamboussis, ING. Yes, it's a bit dangerous to be standing between a room full of people and drinks on the other side. So I'm going to keep it very -- just the participation, when you -- you always said that you like to participate in the sell-down -- eventual sell-down of the Aegon stake. And if you look at as a reference, post IPO with the participation that ASR had was in a range of 10% to 12% -- to 14% from memory. So should we take that -- this as roughly a guidance that a 10% to 15% is what you consider to be participating in the sell-down from...

It's, of course, going to depend on if and when Aegon decides to start to sell down. We're really not aware of that. It's also a listed company, so they can't be clear on that. That's -- I think that's justifiable. When the government stepped down, we always try to take part of sell-downs and we have learned that a percentage of a parcel sell-down of 10% to 15%, trying to adopt that to where share buyback has worked quite well for the capital market. So if and when we've grown into the balance sheet, all things being equal, that's at least our thinking if there is a chance, we would love to participate up to 10% to 15%. But it's, of course, going to depend on if and when Aegon would decide to sell-down, how that would look like, whether it's truly open market or not, that's up to them.

Okay. So that concludes the Q&A. Thank you for answering all the questions. And yes, maybe as a final point, would you like to wrap up?

To wrap up the whole day. I think we discussed 2 important topics today. First of all, the integration. And I think you have learned that the 4 of us, but also the 2 colleagues sitting in the back -- we are very pleased that the integration is on track that we are going to deliver on the targets set. We've increased the targets from [ 185 to 215 ], and I think that's good news. We're confident that this team, together with the senior management will deliver on all the targets. And on the second file, the unit-linked file, I think we learned today that also the investor community is like we are very happy that all the collective proceedings are stopped, that the residual risk is meaningful, reduced going forward due to the agreements we have that the total financial impact is benign. So all in all, we are very happy with this day with your attendance. Thanks for that. I'd like to thank also the teams that organized this Investor Day. We didn't make it easy for them. We started with only an investor update on the integration and then decided, well, let's make also a clarifying presentation on what's going -- what's happening in the Netherlands on the unit-linked file. And over the last couple of days, say, well, let's skip the last one, and let's develop a new presentation on how the discussions with the different organizations ended up. I think at the end of the day, we've done well. So thanks, Michel, you and your team, all the people that we haven't seen today, but that have been very helpful in organizing this grateful for that. And finally, of course, you as our customers today and also the people looking online. Thanks for joining us. Thanks for being the whole day with us. The bar is open. So run before it's empty.