PERFIL DEL CONSUMIDOR

REAAL Life posted a net loss of € 439 million with both 2012 and 2013 impacted by significant negative one-off of items, mainly consisting of impairments of intangible assets. One-off items in 2013 amounted to € 563 million negative, consisting of a VOBA impairment of € 392 million net, a goodwill impairment of € 150 million net, an additional € 15 million net charge related to the unit-linked policies settlement and a € 6 million loss due to the expropriation of a subordinated bond of SNS Bank which was included in the investment portfolio.

One-off items in 2012 consisted of a partial impairment of goodwill of € 141 million net and an impairment of € 18 million net related to REAAL Life’s distribution network. Finally, one-off items in 2012 included an additional € 56 million net charge related to the unit-linked policies settlement reached in 2008.

Adjusted for one-off items, REAAL Life’s net profit decreased sharply to € 124 million. This was due to the total net impact from realised gains, losses and impairments on the investment portfolio and hedges which decreased sharply to € 36 million, mainly driven by a lower contribution from interest rate derivatives. Also, underlying net profit of REAAL Life showed a considerable decrease to € 115 million driven by lower direct investment income due to lower reinvestment yields and an additional cost allocation from SNS REAAL holding.

Table 16: Underlying result REAAL Life

In € millions 2013 2012 Change

Net result for the period (439) 72 (710%)

Impact of one-off items (563) (215) (162%)

Adjusted net result for the period 124 287 (57%)

Gains, losses and impairments on equity portfolio 34 18 89%

Gains, losses and impairments on fixed-income securities 45 65 (31%)

Result on financial instruments 16 79 (80%)

Changes in insurance contracts due to movements of fair value items (59) (20) (195%)

Total net impact investment portfolio and hedges 36 142 (75%)

Amortisation VOBA and other intangible assets (27) (38) 29%

Underlying net result REAAL Life 115 183 (37%)

Results on equity hedges are included in gains/losses on equity portfolio instead of result on financial instruments.

Changes in insurance contracts due to movements of fair value items includes releases of/additions to provisions for interest rate guarantees in unit-linked portfolio and separate accounts and the impact of shadow accounting.

The total net impact from gains, losses and impairments on the investment portfolio and hedges decreased to € 36 million positive compared to € 142 million positive for 2012, mainly driven by a sharply lower result on financial instruments. In 2012, the result on financial instruments had been positively impacted by high gains on interest rate derivatives due to the strong decline in interest rates.

Gains, losses and impairments on the equity portfolio increased from € 18 million positive to € 34 million positive. This was due to lower impairment charges and higher realised gains.

The impact of gains, losses and impairments on fixed-income securities decreased from € 65 million to € 45 million due to lower realised gains on bonds.

Changes in insurance contracts due to movements of fair value items mainly consisted of the impact of shadow accounting, which (partly) shadows the results on realised gains of fixed-income securities and results on financial instruments, the latter mentioned due to the amortisation of current and historical results on interest derivatives.

Amortisation of VOBA and other intangibles decreased from € 38 million to € 27 million following impairments of VOBA in 2012 and 2013.

9.4 Income

Regular life premiums showed a marked decline, mainly driven by the indemnification of unit-linked policies and transfers of part of the portfolio from REAAL Life to Zwitserleven. In a shrinking Dutch market, the market share of new individual regular premiums increased to 19.3% compared to 18.2% in 2012, supported by term life insurances.

Single life premiums were in line with 2012 and the market share in this segment was at 7.9% above the 2012 level (5.5%), due to pro-active offers to clients in compliance with protecting profitability.

As a consequence of lower regular life premiums, New Annual Premium Equivalent (NAPE) decreased from € 41 million to € 34 million.

Reinsurance premiums paid were higher, due to the in 2013 expanded reinsurance contract to cover a larger portion of the portfolio.

Table 17: Breakdown Investment income for own account REAAL Life

Gross amounts in € millions 2013 2012 Change

Total investment income 925 1,051 (12%)

Realised gains/losses on equities 47 41 15%

Realised gains/losses on fixed income securities 87 107 (19%)

Other realised gains/losses 11 5 120%

Realised gains/losses 145 153 (5%)

Unrealised gains/losses (26) (15) (73%)

Direct investment income 806 913 (12%)

Direct investment income consists of interest, dividend and rental income.

Total investment income for own account showed a marked decrease due to lower direct investment income and lower realised gains on fixed-income securities, partly compensated by higher realised gains on equities. The significant decline in direct investment income was driven by lower reinvestment yields, the transfer of assets and capital of € 900 million to Zwitserleven in April 2013 and a lower investment portfolio due to transfer of part of the portfolio from REAAL Life to Zwitserleven.

Investment income for account of policyholders was significantly lower, due mainly to the negative revaluation of fixed-income securities following the increase in interest rates, partly offset by higher dividend income.

9.5 Expenses

Technical claims and benefits showed a limited increase. A VOBA impairment of € 523 million gross, was largely compensated by lower technical claims and benefits for own account due to the decrease in premium income, conversion of part of the portfolio to Zwitserleven and the impact of a reinsurance transaction. Technical claims and benefits for account of policyholders were lower, corresponding to the decreased investment income for account of policyholders.

Acquisition costs for insurance operations decreased strongly mainly due to the absence of commission fees of new production. This was due to legislation changes related to commission fees for independent financial advisors (Customer Agreed Remuneration).

Table 18: Breakdown impairment charges REAAL Life

In € millions 2013 2012 Change

Impairment charges on equities 4 17 (76%)

Impairment charges in fixed income securities 6 9 (33%)

Impairment charges of intangible assets 152 186 (18%)

Other impairment charges 14 16 (13%)

Total impairment charges 176 228 (23%)

Impairment charges (excluding the VOBA impairment, which is included in technical claims and benefits) showed a strong decline compared to 2012 mainly due to lower impairments of intangible assets, the remaining goodwill of REAAL Life (€ 150 million) was impaired, while in 2012 there had been impairments of goodwill (€ 162 million) and the distribution network (€ 24 million).

Impairment charges of equities were lower supported by higher equity markets in 2013. Impairment charges of fixed-income securities decreased and included the impairment of a subordinated bond of SNS Bank due to the expropriation.

Other impairment charges were also lower and consisted mainly of an impairment of a private loan to a property development company. In 2012, they consisted mainly of impairments of property for own use.

Operating expenses were slightly lower to 2012, despite the impact of an additional cost allocation from

SNS REAAL holding of € 18 million. Excluding this impact, operating expenses decreased by € 21 million (-13%) driven by cost reduction measures. Both 2012 and 2013 were impacted by costs related to the implementation of the agreement on cost loadings of investment-based life insurance policies. The operating cost/premium ratio increased from 9.2% to 10.3% due to the decrease in gross premium and the additional cost allocation.

Other interest expenses increased by € 72 million, wholly due to a reinsurance transaction. The higher interest expenses due to the reinsurance contract were compensated by lower technical claims and benefits.

In total, the reinsurance transaction had a net negative effect on the result of € 9 million (2012: € 7 million negative). In 2013 the reinsurance contract was expanded to cover a larger portion of the portfolio, resulting in a decrease in required capital, which positively impacted the solvency ratio.