Nationale Nederlanden's 1H 2022 Results Appear a Little Weak on Revaluations. Shares Fairly Valued.

Nationale Nederlanden has reported slightly disappointing results for the first half of 2022, delivering an operating profit of EUR 983 million. This puts the business below our forecasts. The lower operating result of today's numbers has primarily come from the nonlife division. While earned premiums have remained broadly steady, claims have risen. This seems to be largely a result of the February storms and takes the firm’s nonlife numbers back to pre-COVID-19 levels. The operating result of the local life business is largely in line, but the bottom line has been hit by market revaluations. Netherlands life investment margin has improved as the business is benefiting from higher returns on invested assets. Fee income has also risen and according to Nationale Nederlanden this is because the business has benefited from higher average defined contribution values. From what we can tell, this is a margin not an asset story. Expense control has not been enough to offset lower gains on publicly traded bonds and equities. Higher interest rates resulted in a substantial loss on derivatives used for hedging, negative EUR 586 million.