August 15, 2019 / 5:52 AM / 6 days ago

UPDATE 1-Dutch insurer NN Group second-quarter operating profit falls

(Adds details of earnings)

AMSTERDAM, Aug 15 (Reuters) - NN Group NV, the biggest Dutch insurer, on Thursday reported a 12.3% drop in second-quarter operating profit, days after Chief Executive Officer Lard Friese said he was stepping down to join U.S.-focused rival Aegon NV next year.

The operating profit was 445 million euros ($496 million), down from 508 million euros in the same quarter of 2018. Analysts polled by Refinitiv had forecast the figure at 483 million euros.

David Knibbe, the leader of the insurer’s Dutch operations, will take Friese’s place.

Chief Financial Officer Delfin Rueda said in a statement that NN Group remains committed to meeting current financial targets, including 400 million euros in cost cuts from 2016 levels by 2020.

“However, we don’t expect expense reductions to be linear going forward,” Rueda said.

NN has completed 306 million euros of that so far, Rueda said.

Falling profit at NN biggest operating unit, Dutch life insurance, highlighted the quarterly results, outweighing improvements in both the Japanese life, Dutch non-life and European insurance operations.

NN pegged weakness in the Dutch life operations to a lower investment margin.

Among other key metric’s, NN’s solvency under Europe’s Solvency II regime fell to 210 percent from 213 percent in the same period a year ago, reflecting low interest rates.

NN Group in June agreed to buy the Netherlands damage subsidiary of rival Vivat, then owned by China’s Anbang , for 416 million euros.

NN said the deal will add annual free cash flow of 50 million euros by 2022.

Following Friese’s departure, NN said it would push a capital markets day meeting with investors scheduled for December to mid-2020.

$1 = 0.8969 euros Reporting by Toby Sterling; Editing by Rashmi Aich, Bernard Orr

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