Bond ASR Technologie 5.125% ( XS1293505639 ) in EUR

ASR Technologie

100 % ▲

Netherlands

XS1293505639 ( in EUR )

5.125% per year ( payment 1 time a year)

28/09/2045

Prospectus brochure of the bond ASR XS1293505639 en EUR 5.125%, maturity 28/09/2045

100 000 EUR

500 000 000 EUR

29/09/2026 ( In 233 days )

Automatic Speech Recognition (ASR) is the process of converting spoken language into text.

The Bond issued by ASR Technologie ( Netherlands ) , in EUR, with the ISIN code XS1293505639, pays a coupon of 5.125% per year.
The coupons are paid 1 time per year and the Bond maturity is 28/09/2045

PROSPECTUS DATED 25 SEPTEMBER 2015

ASR Nederland N.V.
500,000,000 Fixed to Fixed Rate Subordinated Notes due 2045

The 500,000,000 Fixed to Fixed Rate Subordinated Notes due 2045 (the Notes) are issued by ASR Nederland N.V. (the
Issuer).
The obligations of the Issuer under the Notes in respect of principal and interest constitute direct, unconditional, unsecured
and subordinated obligations of the Issuer, ranking pari passu without any preference amongst themselves and (a) junior to
the claims of all Senior Creditors of the Issuer, (b) pari passu with any Parity Obligations and (c) in priority to claims in
respect of (i) any Equity Securities and (ii) any Junior Obligations.
The Notes will bear interest (i) from (and including) 29 September 2015 (the Issue Date), to (but excluding) 29 September
2025 (the First Call Date), at a fixed rate of 5.125 per cent. per annum, payable annually in arrear on 29 September in each
year, commencing on 29 September 2016 and (ii) from (and including) 29 September 2025, at a reset rate per annum
calculated once every five years on the basis of the mid swap rates for euro swap transactions with a maturity of five years
plus a margin of 5.20 per cent., payable annually in arrear on 29 September in each year, commencing on 29 September
2026. Payment of interest on the Notes may be deferred at the option of the Issuer, or shall be deferred under certain
circumstances, as set out in Condition 3.7 (Interest - Interest Deferral) in Terms and Conditions of the Notes. Any interest not
paid on an Optional Interest Payment Date or a Mandatory Interest Deferral Date and deferred in accordance with Condition
3.7, together with any other interest deferred on any previous Interest Payment Date, shall, so long as the same remains
outstanding, constitute Arrears of Interest and shall be payable in accordance with Condition 3.7(iii) (Interest - Interest
Deferral) in Terms and Conditions of the Notes.
The Issuer will have the right to redeem the Notes in whole, but not in part, on the First Call Date or on any Interest Payment
Date thereafter, as defined in Condition 4.2 (Redemption and Purchase Optional Early Redemption as from First Call Date)
in Terms and Conditions of the Notes. The Issuer may also, at its option, redeem the Notes upon the occurrence of a Gross-
Up Event, a Tax Deductibility Event, a Regulatory Event or a Rating Methodology Event, at any time if permitted under the
then Applicable Regulations, and in certain instances exchange the Notes or vary their terms, as further described in
Condition 4 (Redemption and Purchase) in Terms and Conditions of the Notes.
This Prospectus has been approved by the Netherlands Authority for the Financial Markets (Stichting Autoriteit Financiële
Markten) (the AFM), which is the Netherlands competent authority for the purpose of Directive 2003/71/EC as amended
(which includes the amendments made by Directive 2010/73/EU to the extent that such amendments have been implemented
in a relevant Member State of the European Economic Area) (the Prospectus Directive) and relevant implementing
measures in the Netherlands, as a Prospectus issued in compliance with the Prospectus Directive, Commission Regulation
809/2004, as amended, and relevant implementing measures in the Netherlands for the purpose of giving information with
regard to the issue of the Notes. Application has been made for the listing and trading of the Notes on Euronext in
Amsterdam (Euronext Amsterdam) with effect from 29 September 2015. Euronext Amsterdam is a regulated market for the
purposes of Directive 2004/39/EC (the Markets in Financial Instruments Directive).
The Notes are expected to be assigned, on issue, a rating of BBB- by Standard & Poor's Credit Market Services Europe
Limited (S&P). S&P is established in the European Community and registered pursuant to Regulation (EC) No 1060/2009 of
the European Parliament and of the Council of 16 September 2009 on credit rating agencies, as amended by Regulation (EC)
No 513/2011 of the European Parliament and of the Council of 11 March 2011. A credit rating is not a recommendation to
buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the relevant rating
organisation.
The Notes will be issued in bearer form and shall have denominations of 100,000 and integral multiples of 1,000 in excess
thereof, up to and including 199,000. The Notes will initially be represented by a temporary global note (the Temporary
Global Note), without interest coupons, which will be deposited on or about 29 September 2015 (the Closing Date) with a
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common depositary for Euroclear Bank S.A./N.V. (Euroclear) and Clearstream Banking, société anonyme (Clearstream,
Luxembourg). Interests in the Temporary Global Note will be exchangeable for interests in a permanent global note (the
Permanent Global Note and, together with the Temporary Global Note, the Global Notes), without interest coupons, on or
after 9 November 2015 (the Exchange Date), upon certification as to non-U.S. beneficial ownership. Interests in the
Permanent Global Note will be exchangeable for definitive Notes only in certain limited circumstances. See Summary of
Provisions relating to the Notes while in Global Form.
An investment in the Notes involves certain risks. Prospective investors should have regard to the factors described
under the heading Risk Factors starting on page 4.
Structuring Adviser
UBS Investment Bank
Joint Lead Managers
BNP PARIBAS
Deutsche Bank
HSBC
Rabobank
UBS Investment Bank
2

TABLE OF CONTENTS
Table of Contents .................................................................................................................................... 3
Risk Factors ............................................................................................................................................. 4
Important Information ........................................................................................................................... 28
Documents Incorporated by Reference ................................................................................................. 30
Overview of Principal Features of the Notes ........................................................................................ 31
Terms and Conditions of Notes ............................................................................................................. 37
Summary of Provisions relating to the Notes while in Global Form .................................................... 54
Use of Proceeds ..................................................................................................................................... 57
ASR Nederland N.V. ............................................................................................................................. 58
Taxation ................................................................................................................................................. 72
Subscription and Sale ............................................................................................................................ 78
General Information .............................................................................................................................. 80
3

RISK FACTORS
Prospective investors should carefully consider the risk factors set out below, together with the other
information contained in this Prospectus (including but not limited to the audited consolidated
financial statements with the related notes), before making an investment decision with respect to the
Notes. If any of the following risks should actually occur, the business, revenues, results of operations,
financial condition and prospects of the Issuer and its subsidiaries (together, the Group) could be
materially adversely affected, which could result in an inability of the Issuer to pay interest and/or
principal and could negatively affect the price of the Notes.
Although the Issuer believes that the risks and uncertainties described below are the material risks
and uncertainties, they are not the only ones faced by the Group. All of these factors are contingencies
which may or may not occur. Additional risks and uncertainties not presently known to the Issuer or
that the Issuer currently deems immaterial may also have a material adverse effect on the Group's
business, revenues, results of operations, financial condition and prospects, which could result in an
inability of the Issuer to pay interest and/or principal and could negatively affect the price of the
Notes.
Prospective investors should carefully review the entire Prospectus, and should form their own views
before making an investment decision with respect to the Notes. Before making an investment decision
with respect to the Notes, prospective investors should also consult their own financial, legal and tax
advisers to carefully review the risks associated with an investment in the Notes and consider such an
investment decision in light of the prospective investor's personal circumstances. The sequence in
which the risk factors are presented below, and any quantitative historical impacts and sensitivities
included, are not indicative of their likelihood of occurrence or the potential magnitude of their
financial consequences in the future.
Words and expressions defined in "Terms and Conditions of the Notes" below or elsewhere in this
Prospectus have the same meanings in this section, unless otherwise stated.
FACTORS THAT MAY AFFECT THE ISSUER'S ABILITY TO FULFIL ITS OBLIGATIONS
UNDER THE NOTES
The following risk factors relate to the Issuer and to the Group. The Issuer is the holding company of
the Group.
Risks related to the general economic and financial environment
The Group's results can be adversely affected by general economic conditions and other business
conditions. These conditions include changing economic cycles that affect demand for insurance
products. Such cycles are also influenced by global political events, such as terrorist acts, war and
other hostilities, as well as by market-specific events, such as shifts in consumer confidence, industrial
output, labour, or social unrest and economic and political uncertainty.
Over the past few years, global financial markets have experienced extreme and unprecedented
volatility and disruption, which have had, and may continue to have, a material adverse effect on the
Group's revenues, results and financial condition. Renewed significant downturns in equity markets,
further downward appraisals of property values and/or significant movements of interest rates and
credit spreads could have a material adverse effect on the Group's capital and solvency position and
results. Economic downturns could also result in increased incidence of internal and external fraud,
including fraudulent claims by customers, theft, corruption and insider trading.
As a result of the most recent economic downturn, which has driven many countries into recession,
there have been increasingly high levels of unemployment. Bank lending has been severely reduced
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and the housing markets in Europe and North America have declined. In addition to the other risks
described in this section, these conditions have resulted, and may continue to result, in a reduction in
demand for the Group's products, as well as a reduction in the value of its assets under management.
The Group has experienced, and may continue to experience, more fluctuations in claims, policy
lapses and withdrawals. Any reduction in demand for the Group's products, decline in the market
value of its assets under management or an increase in policy lapses or withdrawals, would result in a
reduction in the fee and premium income generated by the Group.
The Group is particularly exposed to the economic, market, fiscal and regulatory conditions in the
Netherlands and is highly susceptible to changes in any of these conditions.
As elsewhere in Europe, economic conditions have been difficult in the Netherlands in recent years.
Any further deterioration in these conditions or a long-term persistence of these conditions could result
in a downturn in new business and sales volumes of the Group's products, and a decrease of its
investment return, which, in turn, could have a material adverse effect on the Group's growth,
business, revenues and results.
Risks related to the Group's business
The Group is exposed to financial risks such as credit risk, default risk and risks concerning the
adequacy of its credit provisions, any of which could have a significant effect on the value of the
Group's assets
Credit risk refers to the potential losses incurred by the Group as a result of debtors not being able to
fulfill their obligations when due, or a perceived increased likelihood thereof. Losses incurred due to
credit risk include actual losses from defaults, market value losses due to credit rating downgrades
and/or spread widening, or impairments and write-downs. The Group is exposed to various types of
general credit risk, including spread risk, default risk and concentration risk. Third parties that owe the
Group money, securities or other assets may not pay or perform under their obligations. These parties
may include customers, the issuers whose securities are being held by the Group, trading
counterparties, counterparties under swaps and other derivative contracts, clearing agents, exchanges,
clearing houses and other financial intermediaries. These parties may default on their obligations to
the Group due to bankruptcy, lack of liquidity, downturns in the economy or real estate values,
operational failure or other reasons.
The business of the Group is also subject to risks that have an impact on the adequacy of its credit
provisions. These provisions relate to the possibility that a counterparty may default on its obligations
to the Group which arise from financial transactions. Depending on the actual realisation of such
counterparty default, the credit provisions may prove to be inadequate. If future events or the effects
thereof do not fall within any of the assumptions, factors or assessments used by the Group to
determine its credit provisions, these provisions could be inadequate.
The Group is also exposed to concentration risk, which is the risk of default by counterparties or
investments in which it has taken large positions. A single default of a large exposure could, therefore,
lead to a significant loss for the Group. More insight into this risk can be provided by explaining the
single obligor limits of the Group, which are part of the Group's investment framework. The single
obligor limits, which are set in accordance with Solvency II guidelines, apply to the total investment
portfolio and cap the total exposure per counterparty name. The Group applies a limit on maximum
exposure of 700 million for counterparties with a single A rating and higher and 350 million for
counterparties with a BBB rating. The concentration risks are monitored on a monthly basis; as at 30
April 2015 all exposures were well within the limits. Although the single obligor limits mitigate
concentration risk to a certain degree, default by one or more counterparties or investments in which
the Group has taken large positions could have a significant effect on the value of the Group's assets.
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The Group is exposed to counterparty risk in relation to other financial institutions. Deteriorations in
the financial soundness of other financial institutions may have a material adverse effect on the
Group's business, revenues, results and financial condition
Due to the nature of the global financial system, financial institutions such as the Group are
interdependent as a result of trading, counterparty and other relationships. Other financial institutions
with whom the Issuer or its subsidiaries conducts business act as counterparties to the Group in such
capacities as borrowers under loans, issuers of securities, customers, banks, reinsurance companies,
trading counterparties, counterparties under swaps and credit and other derivative contracts, clearing
agents, exchanges, clearing houses, brokers and dealers, commercial banks, investment banks, mutual
and hedge funds and other financial intermediaries. In any of these capacities, a financial institution
acting as a counterparty may not perform its obligations due to, among other things, bankruptcy, lack
of liquidity, market downturns or operational failures, and the collateral or security it provides may
prove inadequate to cover its obligations at the time of the default. The interdependence of financial
institutions means that the failure of a sufficiently large and influential financial institution due to
disruptions in the financial markets could materially disrupt securities markets or clearance and
settlement systems in the markets. This could cause severe market declines or volatility. Such a failure
could also lead to a chain of defaults by counterparties that could materially adversely affect the
Group. This risk, known as "systemic risk", could adversely impact future product sales as a result of
reduced confidence in the insurance and banking industries. It could also reduce results because of
market declines and write-downs of assets and claims on third parties. Despite increased focus by
regulators around the world with respect to systemic risk, this risk remains part of the financial system
in which the Group operates and dislocations caused by the interdependency of financial market
participants could have a material adverse effect on its business, revenues, results and financial
condition.
The Group's exposure to fluctuations in the equity, fixed income and property markets could result in
a material adverse effect on its returns on invested assets and the value of its investment portfolio or
its solvency position
The returns on the Group's investments are highly susceptible to fluctuations in equity, fixed income
and property markets. The Group bears all the risk associated with its own investments. Fluctuations
in the equity, fixed income and property markets affect the Group's profitability, capital position and
sales of equity related products. A decline in any of these markets will lead to a reduction of
unrealised gains in the asset or result in unrealised losses and could result in impairments. Any decline
in the market values of these assets reduces the Group's solvency, which could materially adversely
impact the Issuer's financial condition and the Group's ability to attract or conduct new business.
Interest rate volatility and sustained low interest rate levels could have a material adverse effect on
the Group's revenues, results and financial condition
Interest rate risk results from movements of interest rates, either upwards or downwards, and a
mismatch in the duration of assets and liabilities. Interest rates are highly sensitive to many factors,
including governmental, monetary and tax policies, domestic and international economic and political
considerations, fiscal deficits, trade surpluses or deficits, regulatory requirements and other factors
beyond the control of the Group. The value of the Group's liabilities with respect to certain products,
notably annuities, varies as interest rates fluctuate. While the value of fixed income assets and
derivatives is also affected by fluctuations in interest rates, the impact of such fluctuations on assets
and liabilities may be different due to factors such as differences in volume and duration. Furthermore,
interest rates of different maturities can also fluctuate relative to each other. This results in a
steepening or flattening of the yield curve. This may have a material adverse effect on the Group's
revenues, results and financial condition.
6

A significant risk for the Group is the relatively low interest rate environment resulting in lower
reinvestment income. A high inflation, high interest rate risk environment with low economic growth
will result in a lower reported solvency position and higher required liquidity. The risk to interest rate
developments is amongst others a result of the ultimate forward rate (UFR), since under Solvency II
life liabilities are discounted with a curve including the UFR. Assets are valued at market value which
implies valuation on an economic curve excluding UFR. Therefore, an increase in interest rates could
impact assets more than liabilities and the use of the UFR (4.2%) in the calculation of the Market
Value Liability influences the reported interest rate sensitivity of a.s.r. The Group uses derivative
instruments such as interest rate swaps and swaptions to mitigate its exposure to interest rate volatility.
Any mismatch between the interest rate used for discounting the liabilities and the hedged interest rate
could render the hedge unsuccessful and expose the Group to unexpected losses and volatility in
results.
Prolonged investment underperformance of the Group's funds under management may cause existing
customers to withdraw funds and potential customers not to grant investment mandates
When buying investment products or selecting an investment manager, customers (including pension
funds and intermediaries) typically consider, among others, the historic investment performance of the
product and the individual who is responsible for managing the particular fund. This also holds true in
relation to certain investment products sold by the Group's life assurance and pension business, such
as life pensions. In the event that the Group does not provide satisfactory or appropriate investment
returns in the future, underperforms in relation to its competitors, does not sell an investment product
which a customer requires or loses its key investment managers, existing customers may decide to
reduce or liquidate their investment or, alternatively, transfer their mandates to another investment
manager. In addition, potential customers may decide not to grant investment mandates. Such a
prolonged period of investment underperformance could have a material adverse effect on the Group's
business, revenues, results and financial condition.
Illiquidity of certain investment assets could prevent the Group from selling investments at fair prices
in a timely manner
Liquidity risk is inherent to much of the Group's business. Each asset purchased and liability sold has
unique liquidity characteristics. Some assets have high liquidity meaning that they can be converted
into cash relatively quickly, while other assets, such as privately placed loans, mortgage loans,
property and limited partnership interests, generally have low liquidity. Market downturns aggravate
low liquidity. They may also reduce the liquidity of those assets which are typically liquid, as has
occurred with the markets for asset-backed securities relating to property assets and other
collateralised debt and loan obligations. Since 2007, illiquidity has generally been higher than before
in all fixed income classes, particularly in asset-backed securities. Due to illiquidity in the capital
markets for certain asset classes, the Group may be unable to sell or buy assets at market efficient
prices and may therefore realise investment losses or be obliged to issue securities at higher financing
costs.
As result, the Issuer may not be able to fulfil its obligations under the Notes in a timely manner.
Changes in longevity, mortality and morbidity may materially adversely affect the results of the Group
The Group is exposed to longevity risk (the risk the insured party lives longer), mortality risk (the risk
the insured party dies sooner) and morbidity risk (the risk the insured party falls seriously ill or is
disabled).
Annuities and other life insurance products are subject to longevity risk, which is the risk that
annuitants live longer than was projected at the time their policies were issued, with the result that the
7

insurer must continue paying out to the annuitants for longer than anticipated (and therefore longer
than was reflected in the price of the annuity and in the liability established for one policy).
Although the Group believes that its established provisions are adequate, due to the uncertainties
associated with such provisions (in particular the risk of future life expectancy increasing at a faster
rate than expected), there can be no assurance that such provisions will indeed be adequate. Should the
provisions appear to be insufficient, the Group's business could suffer significant losses that could
have a material adverse effect on its business, revenues, results and financial condition.
The Group's life insurance business is also exposed to mortality risk, especially in term life insurance
and pension contracts where the surviving partner is the beneficiary.
The Group's insurance business is exposed to morbidity risk, in particular the risk that more
policyholders than anticipated will suffer from long-term health impairments and the risk, in the case
of income protection or waiver of premium benefits, that those who are eligible to make a claim do so
for longer than anticipated (and therefore longer than was reflected in the price of the policies and in
the liability established for the policies). Improvements in medical treatments that prolong life without
restoring the ability to work could cause these risks to materialise.
Adverse experience compared to the assumptions used in pricing products, establishing provisions
and reporting business results could have a material adverse effect on the Group's business, revenues,
results and financial condition
The Group's financial results from its operations and its embedded value depend to a significant extent
on whether its actual experience is consistent with the assumptions and models used at the time the
policy was underwritten, when setting the prices for products and establishing the provisions for future
policy benefits and claims. These assumptions are estimates based on historical data and statistical
projections of what the Group believes will be the settlement and administration of its liabilities. Such
assumptions are applied to arrive at quantifications of some of the Group's risk exposures.
Although the Group monitors its actual experience against the assumptions it has used and refines its
long-term assumptions in accordance with actual experience, it is impossible to determine the precise
amounts that are ultimately payable. Statistical methods and models may not accurately quantify the
Group's risk exposure if circumstances arise that were not observed in the historical data or if the data
otherwise proves to be inaccurate.
Lapse risk, which is the risk of policy lapses or withdrawal increases beyond expectations, is another
important variable for the Group's business as the Group is not always able to fully recover the up-
front expenses incurred in selling a product. This may force the Group to sell assets at depressed
prices. Lapse risk could have a material adverse effect on the Group's fee income, revenues and
results.
The Group is also facing the consequences of external developments related to the distribution fees of
insurers. This includes new legislation on the prohibition of retrocession fees for brokers that became
effective on 1 January 2013 for complex financial products such as life insurance, occupational
disability insurance and mortgages as further described below. (See Strategic Risk: The Group relies
strongly on its network of intermediaries in the Netherlands to sell and distribute its products and may
not be able to maintain a competitive distribution network below.)

In addition, certain acquisition costs related to the sale of new policies and the purchase of policies
already in force are deferred and recorded as assets on the Group's balance sheet and are amortised
into income over time. If the assumptions related to the future profitability of these policies (such as
assumptions related to future claims, investment income and expenses) are not realised, these costs
8

could be amortised faster or written off entirely if deemed unrecoverable. Accelerated amortisation or
write-off could have a material adverse effect on the Group's results.
Reinsurance may not be available, affordable or adequate to protect the Group against losses, and
reinsurers may default on their reinsurance obligations
As part of its overall risk and capacity management strategy, the Group purchases reinsurance for
certain risks underwritten by several of its business lines. Market conditions beyond the Group's
control determine the availability and cost of reinsurance. The Group may therefore be forced to incur
additional expenses for reinsurance or may not be able to obtain sufficient reinsurance on acceptable
terms, which could materially adversely affect its ability to write future business and expose it to
higher levels of losses.
As the life and non-life businesses of the Group are subject to claims resulting from unforeseeable
and/or catastrophic events, which are inherently unpredictable, the actual claims amount of the Group
may exceed its established reserves or the Group may experience an abrupt interruption of activities
In its life and non-life businesses, the Group is subject to losses from natural and man-made
catastrophic events. Such events include, without limitation, weather and other natural catastrophes
such as wind and hailstorms, floods, earthquakes and pandemic events, as well as events such as
terrorist attacks. The frequency and severity of such events, and the losses associated with them, are
inherently unpredictable and cannot always be adequately reserved for. In accordance with industry
practices, reserves are established based on estimates using actuarial projection techniques. The
process of estimating is based on information available at the time the reserves are originally
established. Although the Group continually reviews the adequacy of its established claim reserves,
and based on current information the Group believes its claim reserves are sufficient, there can be no
assurances that its actual claims experience will not exceed its estimated claim reserves. If actual claim
amounts exceed the estimated claim reserves, the Group's earnings may be reduced and net profits
may be adversely affected. In addition, because unforeseeable and/or catastrophic events can lead to
abrupt interruption of activities, the Group's insurance and other operations may be subject to losses
resulting from such disruptions. Losses can relate to property, financial assets, trading positions and
also to key personnel. If its business continuity plans are not able to be put into action or do not take
such events into account, losses may further increase.
Strategic Risk
The Group's performance is subject to a changing environment that could adversely affect its results
of operations
Changes in customer behaviour and the distribution channel, the diminishing insurance market, the
current economic situation (low interest rates) and changing legislation will require the Group to
adapt. In addition, the current market is characterised by fierce competition and by growing customer
attention to prices. This pressure can manifest itself in an increase in non-life policy cancellations, loss
of retention in the life business, a drop in sales of new insurance contracts and limited scalability of
departments.
It will be an increasing challenge to make timely adjustments to the product portfolio and distribution
channel and to realise the intended cost reductions with the decrease in premiums. This challenge will
put the Group's margins (profitability and solvability) and premium income under pressure.
The recent economic downturn has resulted in important changes in the competitive landscape in
which the Group operates and further changes can be expected. The financial distress experienced by
certain financial services industry participants in the Netherlands (including some of the Group's
major competitors) as a result of recent market and economic conditions have led and may lead to
further consolidation in both the insurance and banking markets through acquisitions, forced takeovers
9

and the formation of new alliances. An increased level of consolidation could enhance the competitive
position of some of the Group's competitors by broadening their product and services ranges,
increasing their distribution channels and their access to capital. Although the Group will continuously
evaluate its opportunities for acquisitions, joint ventures, alliances or investments that may arise as a
result of such consolidation, any failure by Group to successfully identify suitable transactions,
properly value transactions, complete transactions or otherwise respond to changes in the competitive
landscape could harm the Group's competitive position, and its ability to maintain or increase its
market share and profitability.
The Group relies heavily on its network of intermediaries in the Netherlands to sell and distribute its
products and may not be able to maintain a competitive distribution network
The Group has a strong position due to its gross written premiums in the Dutch insurance market and
an extensive distribution platform. Since distribution in the SME segment mainly takes place via
intermediaries, in this area of business the Group relies on its network of intermediaries. In the retail
segment, customers' preferences are shifting to hybrid distribution (i.e. direct channel in addition to
the intermediary channel), for which the Group has positioned Ditzo. However, the majority of the
products and services of the Group is distributed through its network of intermediaries.
The intermediaries in the Netherlands are independent of the Group. In addition, the Group does not
have exclusivity agreements in place with Dutch intermediaries so they are free to offer products from
other insurance companies as well, and there is no obligation for them to give precedence to the
Group's products. An intermediary assesses which companies are suitable for it and its customers by
considering, among other things, the security of investment and prospects for future investment returns
in the light of a company's product offering, past investment performance, financial strength and
perceived stability, ratings, the amount of initial and recurring sales commission and fees paid by a
company and the quality of the service provided to the intermediary. An intermediary then determines
which products are most suitable by considering, among other things, product features and price. An
unsatisfactory assessment by an intermediary of the Group and its products based on any of these
factors could result in the Group generally, or in particular certain of its products, not being actively
marketed by intermediaries to their customers in the Netherlands.
On 1 January 2013, new legislation on the prohibition of commissions for intermediaries for complex
financial products like life insurance, pensions, mortgages and occupational disability insurance came
into force. Further cancellation of profit commission and bonuses for underwriting agents also appears
to be in progress. Such developments may lead to unrest and uncertainty for the intermediaries and in
such circumstances they will have to adapt their business models quickly. The risk for the Group is
that its collaborating agents may no longer be viable and overall activity levels and portfolio size could
significantly decrease.
The Group is exposed to the risk of damage to any of its brands or its reputation, which could have a
significant impact on the financial condition of the Group
The Group's success and results are, to a certain extent, dependent on the strength of its brands and the
Group's reputation. The Group and its products are vulnerable to adverse market perception as it
operates in an industry where integrity, customer trust and confidence are paramount. The Group is
exposed to the risk that litigation (such as on mis-selling), employee misconduct, operational failures,
the outcome of regulatory investigations, press speculation and negative publicity, amongst others,
whether or not founded, could damage its brands or reputation. Any of the Group's brands or the
Group's reputation could also be harmed if products or services recommended by the Group do not
perform as expected (whether or not the expectations are founded) or the customer's expectations for
the product change. Any damage to the Group's brands (or brands associated with the Group) or
reputation could cause existing customers or intermediaries to withdraw their business from the Group
and potential customers or intermediaries to be reluctant or elect not to do business with the Group.
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