FINANCIALS: NN Group: Solid Credit Metrics, Credit Neutral Results Overall

NN Group (NNGRNV: A-/A) results include solid credit stats and good operating fundamentals, ex-some revaluations which are likely to be questioned on the call. Spreads have broadly tracked peers into these results, and we see little here to change that – broadly credit neutral, in our view.

• Credit stats: solvency II ratio came in 2pp better than consensus (at 192%) with operating capital generation adding 11pp during the period. Rate and spread sensitivities are up a touch from Dec-23 but mortgage, equity, real estate and UFR gearing are all lower. The UFR drag in OCG is also lower, so final rate impacts have clearly been moved with an eye to Euro rates rolling over. 
• Gross premium income is 7% ahead of consensus, with operating income 5% ahead, driven by NL non-life (even with higher claims costs) and Insurance Europe. Revaluations mean that pre-tax has missed but consensus only has 3 contributors and revaluations are similar to prior half.
• The 2025 OCG target (of EUR1.9bn) is reaffirmed but the slides do indicate the company being ahead of run-rate in NL non-life and banking. Our sense is that the company is massaging expectations higher here.

Conf call is 0830 (London time) at: https://nn-group.nngroup-webinars.com/1h24-results-analyst-investor-call