* NN Group’s Q1 operating result up 50% at 468 mln euros
* Profit surge helped by Korean dividend and other one-offs
* Analysts say underlying result disappoints
* Shares drop 2% (Recasts with share price move, analysts reaction)
By Bart H. Meijer
AMSTERDAM, May 16 (Reuters) - Dutch insurer NN Group reported on Thursday a better-than-expected 50% surge in first-quarter earnings, but saw its share price slip as analysts said most of the gains were incidental.
The largest insurer in the Netherlands said its operating profit rose to 468 million euros ($525 million) in the first three months of 2019, comfortably beating the 415 million euros forecast by a Reuters poll of analysts.
Profit growth was helped by a one-off 63 million euro dividend from NN’s stake in a South Korean life insurance business, while results a year ago were hit by 89 million euros in damages from a severe storm that hit Europe in January 2018.
NN shares were down 2 percent at 36.05 euros by 0913 GMT in Amsterdam, as analysts said the one-time effects made the insurer’s profit look better than it actually was.
“This was not the best quarter on an underlying basis, even though the bottom line is exceptionally high,” KBC Securities analyst Jason Kalamboussis said, as he lowered his rating for the stock from ‘buy’ to ‘accumulate’.
ING analyst Albert Ploegh said earnings adjusted for one-offs were 1-2% lower than expected.
The year “2019 started off well”, NN Chief Executive Lard Friese said, as he singled out a 72% increase in new sales from the same period a year earlier.
All business segments contributed to this increase, Friese said, especially in Japan, where NN benefited from changing tax rules for corporate-owned life insurance.
Operating profit at its life insurance business rose 26% in the Netherlands and 28% abroad, helped by the Korean dividend.
Lower fees, however, decreased core profit at NN’s asset management business by 12% to 36 million euros, while pension reforms in Romania took a bite out of the profit of its European insurance segment.
The company’s 2.5-billion-euro takeover of smaller Dutch rival Delta Lloyd, completed in May 2017, drove down costs by 20 million euros in the first quarter, keeping total reductions on track for the 400 million euros NN has promised to deliver by 2020.
NN Group’s capital adequacy measure under Solvency II rules dropped to 213% at the end of March, from 230% three months earlier, due to a 500 million euro share buyback programme and persistently low interest rates. ($1 = 0.8921 euros) (Reporting by Bart Meijer; Editing by Sherry Jacob-Phillips and Susan Fenton)