Acquired value of in-force business (AVIF)

The present value of future profits on a portfolio of insurance and investment contracts acquired, either directly or through the purchase of a subsidiary, is recognised as an intangible asset.

Acquisition costs

Fixed and variable costs arising from writing insurance contracts.

Actuarial gains and losses

These comprise experience adjustments (the effects of differences between the previous actuarial assumptions and what has actually occurred); and the effects of changes in actuarial assumptions.

Amortised cost of financial asset or financial liability

The amount at which the financial asset or financial liability is measured at initial recognition; less any principal repayments; plus or minus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount; and minus any reduction (directly or through the use of an allowance account) for impairment or uncollectability.

Asset and liability management (ALM)

The process a company uses to gain insight into mutual dependencies in the development of its assets and liabilities, with the aim of limiting market risks while at the same time achieving the highest possible return within those limits.


Entities over which Delta Lloyd Group has significant influence but does not control. Generally, it is presumed Delta Lloyd Group has significant influence where it has between 20% and 50% of the voting rights.

Available for sale (AFS)

This is a category of financial assets, other than derivative financial instruments, designated as available for sale or which are not classified as loans, held-to-maturity investments, or financial assets at fair value through profit or loss. They are measured at fair value with gains and losses recognised through equity.

Claims ratio

The claims ratio is claims, including claims handling costs, expressed as a percentage of net written premiums.

Collateralised AAA curve

The discount curve used to calculate the insurance liabilities of Delta Lloyd Group, being the yield curve derived from collateralised AAA euro zone bonds.

Collateralised debt obligation (CDO)

The general term for a type of debt obligation secured on collateral consisting mainly of receivables, such as a group of mortgages.

Combined operating ratio

A measure of profitability used by an insurance company to indicate how well it is performing in its daily operations. A ratio below 100% indicates that the company is making underwriting profit while a ratio above 100% means it is paying out more money in claims that it is receiving from premiums. The combined operating ratio is calculated by taking the sum of incurred losses and expenses and dividing this by earned premium.

Commercial paper

A tradable loan issued by a financial institution or large enterprise with a term of usually less than two years, and in general between one and six months, and which is not secured.


The power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

Credit default swap

A contract between two parties under which the credit risk is transferred from a third party.

Credit risk

The risk that one party to a financial instrument will cause a financial loss for the other party by failing to fulfil an obligation.

Currency risk

The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

Deferred acquisition costs (DAC)

Costs directly attributable to the acquisition of new business for insurance and participating investment contracts are deferred provided they are covered by future margins on these contracts. Acquisition and selling costs for non-participating investment contracts and investment management contracts that are directly attributable to securing investment management services are also deferred.

Defined benefit obligation (DBO or DB)

Pension plan other than a defined contribution plan. The amount to be paid for the pension entitlement is set using a formula that is usually based on the employee's income and/or length of service.

Defined contribution plan (DC)

Pension plan under which an entity (a company) pays fixed contributions into a separate entity (a fund) and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to meet its obligations to its current and future beneficiaries.

Delta Lloyd Group (DLG)

Delta Lloyd NV and its subsidiaries.

Derivative financial instruments

Derivative financial instruments include foreign exchange contracts, interest rate futures, currency and interest rate swaps, currency and interest rate options (both written and purchased), swaptions and other financial instruments that derive their value mainly from underlying interest rates, foreign exchange rates, commodity values or equity instruments.

Diluted earnings per ordinary share

This is calculated by dividing the net result for the period attributable to holders of ordinary shares by the weighted average number of ordinary shares in issue adjusted for dilutive potential ordinary shares, such as convertible bonds and share options.


A reduction in earnings per share or an increase in loss per share resulting from the assumption that convertible instruments are converted, that options or warrants are exercised, or that ordinary shares are issued subject to the satisfaction of specified conditions.

Discretionary participating contracts

Contracts with discretionary participating features (DPF) are contracts in which policyholders are assigned, in addition to their entitlement to a guaranteed element, an entitlement to a profit share whose timing and/or level is at the insurer's discretion. Delta Lloyd Group is entitled to decide whether this additional return is distributed to the policyholders or the shareholders, subject to the contract terms and conditions.

Earnings per ordinary share

This is calculated by dividing the net result attributable to holders of ordinary shares after deduction of the preference share dividend for the period by the weighted average number of ordinary shares in issue during the period, excluding the weighted average number of ordinary shares purchased by Delta Lloyd Group and held as treasury shares.

Economic capital

Unlike external minimum capital requirements, such as those imposed by regulators, economic capital refers to the amount of capital that Delta Lloyd Group needs, according to its own insights, to absorb economic risks. The economic capital is the total capital employed according to a valuation of assets and technical obligations based on economic principles. The required economic capital is the required solvency, based on the internal models of Delta Lloyd Group, to meet the obligations over a one-year period with at least 99.5% probability.

Effective interest method

A method of calculating the amortised cost of a financial asset or a financial liability and allocating the interest income or interest expense over the relevant period.

Embedded value (EV)

Embedded value comprises the market value of the freely distributable shareholders' funds (net worth) and the present value of the expected future results on the life insurance portfolio itself (value of in-force).

Euro OverNight Index Average ( Eonia

Eonia is the one-day interbank interest rate for the euro zone. Hence it is the rate at which banks provide loans to each other with a duration of one day.

Equity method

A method of accounting whereby the investment is initially recognised at cost and adjusted thereafter for the post-acquisition change in the investor's share of net assets of the investee. The profit or loss of the investor includes the investor’s share of the profit or loss of the investee.

Fair value

The amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.

Financial reporting risks

Risks that inherently have a ‘reasonably possible’ likelihood of causing a material error in Delta Lloyd Group’s financial statements. The term ‘reasonably possible’ goes further than ‘modest’.


The positive difference between the cost of an acquired activity and Delta Lloyd Group’s share in the fair value of the assets, liabilities and contingent liabilities of the acquired subsidiary on the acquisition date.

Gross written premiums

Total premiums (earned or unearned) in a given period on insurance and reinsurance contracts (including deposits for investment contracts with no or limited life insurance features).

Gudrun index

An index used to value commercial property in Belgium

Incurred but not reported ( IBNR ) provision

A provision for claims that have occurred by the reporting date but have not yet been reported to the insurer.

INK model

The plan cycle model used by Delta Lloyd Group, based on the Dutch Quality Institute model (Instituut Nederlandse Kwaliteit model).

Insurance contract

A contract under which one party (the insurer) accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects the policyholder in exchange of a premium.

Insured event

An uncertain future event that is covered by an insurance contract and creates insurance risk.

Interest rate risk

The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates or the collateralised AAA curve.

International Financial Reporting Standards (IFRS)

Reporting standards and interpretations for companies adopted by the International Accounting Standards Board (IASB). These comprise:

  • International Financial Reporting Standards (IFRS);
  • International Accounting Standards (IAS); and
  • Interpretations by the International Financial Reporting Interpretations Committee (IFRIC) or the former Standing Interpretations Committee (SIC).

Joint control

The contractually-agreed sharing of control over an economic activity that exists only when the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control.

Joint venture

See joint control.

Lapse risk

The risk that policyholders will terminate their insurance contracts earlier or, more often, before the expiry date. The stress test assumes an increase in the lapse rate, meaning a decline in future profits and earlier benefit payments. This only affects the Life business, due to the permanent character of Life contracts. General insurance contracts are short-term contracts (usually one year).


An agreement where the lessor transfers the right to use an asset for an agreed period to the lessee in return for a series of payments.

Legal and regulatory risk

The risk of not complying with laws, regulations and Delta Lloyd Group’s own policies and procedures, including risks related to legal proceedings, compliance and tax.

Liquidity coverage ratio

A ratio showing in case of a stress situation (e.g. mass lapse, catastrophe) how sufficient the liquid stock of assets is.

Liquidity risk

The risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial assets

Longevity risk

The opposite effect of mortality risk. The effects of a further improvement in life expectancy over and above the expected improvement already built into the current prognoses. These effects lead to higher benefit costs for annuities and lower payments under term life policies.

Market risk

The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk.

Mortality risk

The opposite effect of longevity risk. The mortality figure may undergo an extreme increase as a result of external factors (e.g. a worldwide pandemic). This leads to accelerated payment of traditional life insurance policies, an increase in payments under term life policies and a possible decrease in benefits paid under annuities.

Mortgage-backed securities (MBS)

Mortgage-backed securities are securities where the cash flows are covered by the principal and/or interest payments in a portfolio of mortgages.

Net investment income

Investment income consists of cash and stock dividends, interest and rental income receivable for the year, fair value changes in investments through profit or loss, impairment charges on available-for-sale investments, impairment charges on loans and receivables at amortised cost, and gains and losses on the sale of investments.

Net written premiums

Gross written premiums less reinsurance premiums paid in a given period.

Non-controlling interest

That portion of the profit or loss and net assets of a subsidiary attributable to equity interests that are not owned directly, or indirectly through subsidiaries, by Delta Lloyd NV.

Operational risk

The risk that losses may occur from the inadequacy or malfunctioning of internal processes or systems, human error, criminal behaviour or external events and risks relating to matters such as fraud and crime prevention, personnel, IT/infrastructure, business protection, projects and programmes, business processes, third parties and distribution.

Over-the-counter (OTC) instrument

Non-standard financial instruments that are not exchange traded but negotiated directly between market parties.

Performance share plan (PSP)

The long-term incentive plan for members of the Executive Board and directors under which equity-settled conditional Delta Lloyd NV shares are granted.

Phantom option

A conditional option that entitles the holder to receive in cash the increase in value of a ‘performance unit’ measured from the date of grant until the date of exercise.

Phantom Performance Share Plan (PPSP)

The long-term incentive plan for eligible managers under which cash-settled conditional phantom shares are granted.

Premiums earned

The portion of net written premiums in the current and previous periods that relate to the expired part of the term or the policy, calculated by deducting movements in the provision for unearned premiums and unexpired risks from the net premiums.

Provision for unearned premiums

The proportion of written premiums, gross of commission payable to intermediaries, attributable to subsequent periods.

Proxy curve

The curve composed on the basis of credit curves with similar credit rating in the same industry sector and industry group.

Realistic net asset value

The value of shareholders’ funds when all assets and liabilities have been measured on an economic basis.

Receiver swaption

A receiver swaption entitles the buyer to enter into a swap where a fixed interest rate is received on a principal sum and a variable interest rate is paid on the same principal sum. The seller of a receiver swaption undertakes, upon the exercise of the swaption by the buyer on the exercise date, to enter into a swap where the seller pays a fixed interest rate on the principal sum in exchange for a variable interest rate on the same principal sum. The seller receives a premium for entering into the swaption.


Contract under which parties commit to sell bonds or equities to each other at a given time and to trade those securities in the opposite direction in the future.

Share premium

Calls paid on shares in excess of the nominal value.

Significant influence

The power to participate in the financial and operating policy decisions of an entity, but not to exercise control over those policies. Significant influence may be gained by share ownership, by law or under an agreement.

Stadim index

An index used to value residential property in Belgium

Strategic risk

The risk that targets are not achieved because the business units of Delta Lloyd Group fail to respond, or respond inadequately, to changes in the business environment and risks related to matters such as mergers and acquisitions, brands and reputation, risk management, audits, corporate social responsibility, climate, customers and communications.


Some insurance contracts allow Delta Lloyd Group to pursue third parties for payment of some or all costs (income from subrogation).


An entity, including an entity without legal personality such as a partnership, over which another entity (the parent) exercises control.

Ultimate forward rate (UFR)

The UFR is the fixed forward discount rate, after the last liquid point in the swap futures

Unit-linked contracts

Contracts where savings are invested in investment funds. The savings are used to purchase units. There is often a choice between equity, bond and mixed funds.

Vesting conditions

The conditions that must be satisfied for the counterparty to become entitled to receive cash, other assets or equity instruments of the company, under a share-based payment arrangement. Vesting conditions include service conditions, which require the other party to complete a specified period of service, and performance conditions, which require specified performance targets to be met.

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