When financial markets fell this spring, many individuals saw this as an opportunity to start investing. They weren't alone. Insurance company NN Group, one of the largest investors in the Netherlands, also saw and seized this opportunity, says CEO David Knibbe.
NN Group, active in eighteen countries, owns, among others, Nationale-Nederlanden. It invests about 280 billion euros. These are partly premiums from policyholders. In addition, it also invests for other investors such as pension funds. The vast majority of the money is in bonds, loans to governments and companies that can be traded. In addition, a part is in mortgages and a small part in shares.
"When we saw that markets were falling sharply, we made additional investments." David Knibbe, NN Group
Due to the panic this spring, interest rates on many bonds rose. Interest and value move in opposite directions, which meant that prices fell sharply. At the same time stock prices fell. "When we saw that markets fell sharply and interest rates rose, we made some extra investments. We bought additional high-quality bonds but also for a piece of equities. We thought: this is a good time," says Knibbe.
That turned out to be correct. Shares have risen almost in a straight line since then. Interest rates also quickly fell back to normal levels of a few percent. Good timing from NN? "We're going to see. We are really a long-term investor, we don't want to look at it over three or six months."
Impact on insurance is neutral
For the insurer, the impact of the crisis is also easy to oversee. This is partly because the consequences for the different types of insurance are canceled out, explains the chairman of the board.
"We see a bit more pressure on insurance due to disability and illness. On the other hand, there was less car driving. So on the one hand you see some upward pressure, on the other hand some downward pressure due to fewer claims. The effect is all together. neutral."
At the same time, Knibbe sees the consequences of the corona crisis and the lockdown for customers. Many restaurants, for example, have insurance with Nationale Nederlanden. "Suddenly they all started making deliveries and many were not insured for that. We therefore expanded the cover for free."
"If you say that you are there for all stakeholders, now is the time to show it." David Knibbe, NN Group
Not through the crisis yet
In addition, NN Group helps customers who are at risk of having payment problems. These are both policyholders and home owners who have a mortgage with Nationale-Nederlanden Bank. "If they have less income, we give a longer period of payment deferment where necessary. This is how you try to help everyone through this difficult period. If you say that you are a company that is there for all stakeholders, now is the time to to show that. "
The number of customers that run into problems is still not that bad, says Knibbe. The impact of the crisis has not yet really materialized. That could change, he says. "I think it will be even more exciting once the government measures end. We are still a long way through."