Summary of financial statement

Abridged version

This report is a translation of the dutch abridged version of the annual report, which includes a summary of the statutory financial statement which was composed as follows: the original balance sheet from 31 December 2018 and the operational income statement over 2018 were copied integrally from the statutory financial statement. The statutory financial statement is based on Title 9 Book 2 of the Dutch Civil Code (BW). This summary suffices with repeating the principles for the material financial statement items. The notes that are required based on Title 9 Book 2 of the Dutch Civil Code are included in a simplified version, taking into account the intended purpose of these summarised financial statements. The summary also includes comparative figures. Consulting this summary cannot replace consultation of the statutory financial statement over book year 2018 as various simplifications are made in the summary.

Readers who would like more information can download a copy of the statutory financial statement via the website jaarverslag2018.dela.nl (only available in dutch). All other chapters have been copied integrally from the original annual report.

Consolidated balance sheet as on 31 December 2018

After appropriation of results, amounts x €1,000

  Ref.   31-12-2018   31-12-2017
           
ASSETS          
           
Intangible fixed assets 4.1   88,133    92,063 
           
Investments 4.2        
Real estate   1,213,934    1,136,402   
Participations   1,003    579   
Other financial investments:          
- Shares and other variable-yield securities   1,956,842    2,184,927   
- Bonds and other fixed-interest securities   1,645,147    1,790,319   
- Receivables from mortgage loans   283,116    284,840   
- Receivables from other loans   171,914    65,666   
- Infrastructure   40,534    13,936   
- Investments in liquidities   30,007    30,120   
- Derivatives   80,905    27,289   
- Other financial investments   262,912    208,067   
      5,686,314    5,742,146 
           
Other receivables 4.3   194,221    82,916 
           
Other assets 4.4        
Real estate in own use   67,447    71,311   
Other intangible assets   26,730    27,405   
Stock   2,124    1,955   
      96,301    100,671 
Accruals          
Rent and interest yet to be received   1,214    1,796   
Other accruals   12,741    13,486   
      13,955    15,282 
           
Cash and cash equivalents     79,867    78,037 
       
TOTAL ASSETS     6,158,791    6,111,115 
  Ref.   31-12-2018   31-12-2017
           
LIABILITIES          
           
Group equity          
Equity 4.5 1,048,474    1,251,400   
Minority interest 4.6 3,350    1,035   
      1,051,824    1,252,435 
           
Provisions 4.8   188,001    205,627 
           
Technical provisions 4.9   4,584,184    4,291,492 
           
Long-term liabilities 4.11   151,236    149,098 
           
Short-term liabilities and accrued liabilities 4.12   183,546    212,463 
       
TOTAL LIABILITIES     6,158,791    6,111,115 

Consolidated operational income statement 2018

Segment information

Amounts x €1,000

      2018   2017
           
INSURER          
           
Revenu          
Premium revenu   450,782    434,773   
Investment revenu   130,314    124,624   
Other turnover   109    3,418   
      581,205    562,815 
Costs          
Underwriting costs   411,858    395,089   
Personnel costs   59,010    47,754   
Acquisition costs   44,295    39,031   
Other operational costs   23,405    23,481   
      538,568    505,355 
Operating result insurer     42,637    57,460 
           
FUNERAL COMPANY          
           
Revenu          
Revenue funeral company   241,155    237,110   
Direct costs funeral company   ‑108,559    ‑109,567   
      132,596    127,543 
Costs          
Personnel costs   86,218    77,749   
Other operational costs   54,540    51,532   
Financial costs   ‑1,319    ‑158   
      139,439    129,123 
Operating result funeral company     ‑6,843    ‑1,580 

Segment information, continued

Amounts x €1,000

      2018   2017
           
Operating result          
Operating result insurer   42,637    57,460   
Operating result funeral company   ‑6,843    ‑1,580   
      35,794    55,880 
Other revenue and costs          
Other incidental revenu   4,204    ‑   
Other incidental costs   ‑10,738    ‑21,729   
Donation DELA charity fund   ‑690    ‑887   
Goodwill amortisation   ‑12,769    ‑7,545   
      ‑19,993    ‑30,161 
Available for appropriation of profit          
Revenue investments available for distribution of profit and capital gain   ‑265,091    305,148   
Distribution of profit   ‑42,321    ‑17,753   
      ‑307,412    287,395 
Result before taxes     ‑291,611    313,114 
           
Taxes     88,462    ‑78,395 
           
Minority interest     ‑243    162 
       
Result after taxes     ‑203,392    234,881 

Notes on the consolidated balance sheet and operational income statement

1. General notes

1.1. Activities

The activities of DELA Coöperatie U.A. (‘the DELA cooperative’), with its statutory office in Eindhoven, Oude Stadsgracht 1, CoC number 17012026, and its group companies (‘the Group’) involve insurance, investments and funeral services. The insurance products involve funeral insurance, life insurance and savings insurance. The insurance activities take place in the Netherlands, Belgium and Germany. The funeral services take place in the Netherlands and Belgium.

The summarised 2018 financial statement of DELA Coöperatie U.A. in Eindhoven, comprising the summarised balance sheet as on 31 December 2018 and the summarised profit and loss accounts over 2018 with the associated notes, was based on the audited 2018 formatted annual statement of DELA Coöperatie U.A.

Any events occurring between publication of the statutory financial statement and this summarised financial statement have not been taken into account.

1.2. Consolidation

The consolidation includes the financial data of the DELA cooperative, its group companies and other legal persons over which it has decisive control and central management. This summarised financial statement includes segmented statements to provide better insight into the individual operational activities of the insurer and the funeral Company. For the result statement based on the Annual Accounts Formats Decree, we refer you to the statutory financial statement.

 

2. Principles for balance sheet determination

2.1 General

The consolidated financial statement was drawn up in accordance with the statutory provisions of Title 9 Book 2 of the Dutch Civil Code (BW) and the Dutch Guidelines for Annual Reporting (RJ). All amounts are provided in thousands unless indicated otherwise. There are no generally applicable criteria for summarised financial statements in the Netherlands. The criteria applied by the Board and the aggregation level of this financial statement are tailored to the desired goal of the summary.

The valuation and determination of the results are based on historical costs unless indicated otherwise. Revenue and costs are assigned to the year to which they relate. Profits are only included insofar as they were realised on the balance sheet date. Obligations and any losses that originated before the end of the reporting year are taken into account insofar as they were known when the financial statement was drawn up.

2.2 Discretionary profit distribution

Profit distribution is calculated actuarially and has a provisional character. The processing of the discretionary profit distribution takes place via the technical provisions item. The addition of the amount the Group has appropriated for discretionary profit distribution under the technical provisions is charged to the result.

2.3 Technical provisions

Insurance contracts
The determination of the technical provisions is a process that naturally involves a lot of uncertainties. The actual payments depend on factors such as social, economic and demographic trends, inflation, investment yields, policy-holders’ behaviour and assumptions on mortality development. The use of other assumptions for these factors than the tariff rates now used in the annual accounts could have a material effect on the technical provisions and underwriting costs (also see ‘adequacy test’).

Funeral insurance at own expense and risk
For payments based on insurance policies that are expected to be made in the future, an obligation is included as soon as the policy is implemented. The obligations for funeral insurance at own expense and risk consists of the (with tariff interest) discounted value of the expected future payments (including already awarded profit shares) to policy holders or other beneficiaries, minus future premiums.

The majority of the technical provisions for funeral and life insurance at own expense and risk as established in the Netherlands are calculated in accordance with the pure net method at an interest of 2.75% and based on the GBMV 1995-2000 mortality table as published by the Actuarieel Genootschap, using the principles related to mortality and interest.

The majority of technical provisions for funeral and life insurance at own expense and risk as established in Belgium are calculated in accordance with the pure net method at the usual interest from the moment of implementation and based on the HD or MK-FK mortality table, using the principles related to mortality and interest. The expected payments are based on the principles of the rate as determined when the policy was signed.

The technical provision for life insurance as established in Germany is calculated in accordance with the pure net method at an interest of 3% and with a mortality rate based on 46% of the ‘DAV2008T NR/R, 2. Ordnung’ table as produced by the Deutsche Aktuarvereinigung.

For the DELA LeefdoorPlan (life insurance plan), the technical provision is calculated in accordance with the pure net method at an interest of 3% and based on the prognosis tables as published by the Koninklijk Actuarieel Genootschap when the rate was introduced.

For the DELA Spaarplan (savings plan), the technical provision is calculated in accordance with the built-up policy value based on the paid savings premiums, the already allocated profit shares and the interest rate linked to the rate.

The premiums include surcharges for the coverage of the costs. When the premiums are received or have become claimable, the surcharges are released and made available for the coverage of the actual costs, which includes ongoing costs and acquisition costs. Different principles are used for some of the smaller technical provisions.

The deferred acquisition costs are subtracted from the provision.

3. Principles for the determination of result

The result is determined as the difference between the turnover (consisting of premium revenue, investment revenue and revenue from funeral services) and the payments, costs and other liabilities over the year. The revenues and costs are allocated to the book year to which they relate. Losses can be realised as soon as they are foreseeable.

4. Financial instruments and risk management

The Group identifies risk exposures using periodical Asset & Liability Management (ALM) studies with the aim of realising long-term investment results that exceed the interest obligations based on insurance contracts and deposits. The main investment goal in the insurance company is the maximisation of the expected yield within the permitted risk framework.

5. Statement of changes in equity

Statement of changes in equity

Amounts x €1,000

Statement of changes in equity
    2018  2017     
           
Balance as on 1 January   1,251,400  1,015,744     
           
From allocation result book year   ‑203,392  234,881     
Revaluation real estate   466  732     
Other changes   ‑  43     
       
Balance as on 31 December   1,048,474  1,251,400     

Proposal for the appropriation of results 2018
It is proposed to withdraw the negative result after taxes of €203,392 from the other reserves.

In anticipation the general meeting’s decision, this proposal has already been processed in the financial statement. 

Result appropriation 2017
The 2017 financial statement was determined in the general meeting of 26 May 2018, which determined the appropriation of the result in line with the proposal.

6. Solvency

The Group determines the solvency based on Solvency II. These are European calculation rules in which the determination of the solvency takes into account the risks included in the insurers’ balance sheet. The Group applies the so-called Solvency II standard model in its calculations. This is based on an interest term structure published by European supervisor EIOPA (including Ultimate Forward Rate and Volatility Adjustment) as by the end of 2018.

Solvency

Amounts x €1,000

Solvency
    31-12-2018 31-12-2017    
           
Required solvency   442,412  551,351     
Actual solvency   1,651,909  1,703,865     
Solvency ratio   373% 309%    

7. Technical provisions

Technical provision, progress

Amounts x €1,000

Technical provision, progress
    2018  2017     
           
Book value on 1 January   4,291,492  4,062,701     
           
Additions charged to the profit and loss account          
- From premiums   342,556  327,002     
- Interest   129,019  123,763     
- Distribution of profit   42,415  17,753     
- Takeover/conversion portfolio   26,878  ‑     
- Payments   ‑123,364  ‑119,513     
- Shared premium for death   ‑114,548  ‑109,515     
- Withdrawal for costs   ‑6,600  ‑5,817     
- Other mutations   623  26     
- Deferred acquisition costs   ‑4,287  ‑4,908     
       
Book value on 31 December   4,584,184  4,291,492     

Technical provisions, specification

Amounts x € 1,000

Technical provisions, specification
    31-12-2018 31-12-2017    
           
Gross technical provisions   4,674,166  4,373,066     
Reinsurance share   ‑18,305  ‑16,304     
Surplus interest sharing   600  2,720     
Deferred acquisition costs   ‑72,277  ‑67,990     
       
Total   4,584,184  4,291,492     

The total technical provision can be considered long-term. The takeover included in the overview involves the Hooghenread portfolio.

8. Net turnover

Turnover, by geographical location

Amounts x €1,000

Turnover, by geographical location
      2018    2017 
           
Premium revenu          
Premium revenue Netherlands   341,580    335,860   
Premium revenue Belgium   108,905    98,913   
Premium Revenue Germany   297       
      450,782    434,773 
Revenue funeral company          
Revenue funeral company Netherlands   188,635    182,508   
Revenue funeral company Belgium   52,520    54,602   
Internal turnover -/- 127,680    121,028   
      113,475    116,082 
           
Revenue from investments     ‑139,287    422,973 
           
Other turnover insurance company     109    3,418 
           
Total     425,079    977,246 

Of the total premium revenue in 2018, €4.1 million consists of single premiums (2017: €4.3 million).