5 Condensed financial statement

The activities of DELA Coöperatie UA (‘DELA cooperative'), with its statutory office in Eindhoven, Oude Stadsgracht 1, CoC number 17012026, and its group companies (‘DELA Group’) involve insurance, investments and funeral services. The insurance products involve funeral insurance, life insurance and savings plans. The insurance activities take place in the Netherlands, Belgium and Germany. The funeral services take place in the Netherlands and Belgium. Investment activities for the DELA Group are managed centrally from the Netherlands.

The consolidation includes the financial data of the DELA cooperative, its group companies and other legal persons over which has decisive control and central management.

The DELA Group was also affected by the COVID-19 pandemic.

1.3.1 Operational management

The insurance company continued its services.

For the funeral company, the high mortality rate and peak periods during the first and second wave in particular placed significant pressure on the organisation. Throughout the year, however, the company showed its ability to cope with this pressure.

1.3.2 Impact on financial result

Insurer: the higher mortality rate in 2020 resulted in higher pay-outs. The investment results are likely to be affected by the global consequences of COVID-19 as well, although it is impossible to be precise as to the extent.

Funeral company: the effects of COVID-19 increased the turnover. The higher figures and increased working from home also had a positive effect on the equipment costs.

1.3.3 Impact on valuation

In terms of assets, the global effects of COVID-19 will impact the value of the investments. The extent of this impact will only become clearer later. 

With regard to liabilities, the technical provision at the end of 2020 is somewhat lower than expected. The developments have not resulted in any new insecurities for this item.

1.3.4 Impact on continuity

The effects of the COVID-19 pandemic are not endangering the continuity of the DELA Group. The Solvency II ratio was at 270% at the end of 2020 where the minimal required solvency percentage has been set at 150%.

There has been a negative effect on the operational result in 2020 but the consequences are not expected to be long term, nor is there any risk to the organisation’s liquidity position. At the end of 2020 the balance sheet included over €2.3 billion in liquid investments which can be directly deployed in case of an emergency.

A detailed analysis of the impact of COVID-19 on the DELA Group is included in the company’s statutory financial statement.

The consolidated financial statement was drawn up in accordance with the statutory demands 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 unless indicated otherwise. 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.

Investments are valued at current value with the exception of the mortgage loans and the art collection. The mortgage loans are valued at amortised cost. The art collection is part of the other financial investments and valued at cost price. Both unrealised and realised profits and losses due to the sale and value change of investment are accounted for in the income statement. Transaction costs related to the purchase sale of investments are directly accounted for in the income statement.

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 DELA Group has appropriated for discretionary profit distribution under the technical provisions is charged to the result.

2.4.1 General

Determining the technical provisions is a process that by its very nature involves uncertainties. The actual payments depend on factors such as social, economic and demographic trends, inflation, investment returns, the behaviour of policyholders, and assumptions about mortality developments. Any application of different assumptions for these factors than the tariff principles currently used in the financial statement could have a material effect on the technical provisions and underwriting costs.

2.4.2 Funeral insurance

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 appropriated profit distribution) to policyholders or other beneficiaries, minus future premiums.

The majority of the technical provisions for funeral 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 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 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 funeral insurance as established in Germany is calculated in accordance with the pure net method at an interest of 2%. The mortality rate is based on mortality tables as produced by the Deutsche Aktuarvereinigung.

2.4.3 Life insurance

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 tables as published by the Koninklijk Actuarieel Genootschap when the rate was introduced.

The technical provision for life insurance as established in Germany is calculated in accordance with the pure net method at an interest rate of 3%. The mortality rate is based on mortality tables as produced by the Deutsche Aktuarvereinigung.

2.4.4 Savings plan

For the DELA CoöperatiespaarPlan (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.

2.4.5 Premiums

The premiums include surcharges for the coverage of the costs. When the premiums are received or 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.

2.4.6 Acquisition costs

The deferred acquisition costs are subtracted from the provision.