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Third Quarter 2014 Trading Update VIVAT Verzekeringen and SRLEV NV

Thursday, November 6, 2014

SNS REAAL hereby provides the following trading update for its insurance activities:

Third quarter 2014 results vivat reflect trends in the first half of 2014
Results of VIVAT Verzekeringen (VIVAT) remained under pressure in the third quarter of 2014. Market shares of both the life and non-life insurance activities were broadly in line with those of the first half year.

Due to an addition to the technical provisions of € 144 million related to the IFRS LAT shortfall, primarily driven by the decline in long term interest rates, VIVAT posted a net loss of € 112 million in the third quarter. Excluding this addition, VIVAT realised a net profit of € 32 million. As a result of a further derisking of the investment portfolio, realised gains on the equity portfolio again supported net profit: excluding one-off items and the impact of the investment portfolio and hedges, the underlying profit was €2 million. Positive underlying results at the operating entities Reaal Life, Zwitserleven and ACTIAM were largely offset by an underlying loss at Reaal Non-Life, driven by high claims at fire and motor.

Solvency ratios vivat negatively impacted
Solvency ratios of VIVAT (REAAL NV) and SRLEV NV (the legal entity comprising the life insurance activities of VIVAT) declined in the third quarter, driven by the impact of unfavourable movements in yield curve and credit spreads and by increased volatility of interest rates. Regulatory solvency of VIVAT decreased from 163% at the end of June 2014 to 156% at the end of September 2014. At SRLEV NV, regulatory solvency dropped from 173% at the end of June to 164%. As reported earlier, SRLEV NV provided a loan facility of € 200 million to VIVAT, to be deducted from the solvency capital of SRLEV NV in as far as the facility has been used. At the end of September, € 25 million was used, unchanged compared to the end of June 2014. It is expected that VIVAT will further draw upon this facility in the fourth quarter of 2014. Full use of the facility will reduce solvency of SRLEV NV by an additional 12%-points.

At Reaal Non-life, regulatory solvency declined from 235% at the end of June to 222%, due to the net loss.

Further derisking of the investment portfolio in the third quarter, with the objective to protect solvency against market and interest rate risk, has substantially reduced the scope for improvement of solvency.

Sales process VIVAT
The process aimed at the sale of VIVAT, as required by the European Commission, is on schedule. Taking market valuations of insurance companies and the continued pressure on earnings and solvency in the fourth quarter into consideration, a sale of VIVAT, if and when materialised, is expected to result in a significant book loss.

For more information please contact

Corporate Communications

Marcel Paapst

Marcel Paapst

+31 (0)6 - 30 89 74 32

corporatecommunicatie@snsreaal.nl

Hilbert Bredemeijer

Hilbert Bredemeijer

+31 (0)6 - 13 88 03 81

corporatecommunicatie@snsreaal.nl

 

Investor Relations

Jacob Bosscha

Jacob Bosscha

+31 (0)30 291 42 46

jacob.bosscha@snsreaal.nl

Kagan Köktas

Kagan Köktas

+31 (0)30 291 42 47

kagan.koktas@snsreaal.nl