Executive Board report

Being at the heart of society means we are keen to contribute to a better world. We make socially responsible choices as we strive to pass on the cleanest and fairest possible world to future generations. At the same time, societal developments can influence DELA’s activities and sometimes even have a considerable impact.

Our broad financial and practical service provision in the fields of funerals and insurance allows DELA to support members, policyholders and the bereaved in word and deed. We take an engaged, honest and proactive approach to protecting the various interests at play. Our value creation model shows how we use each of the six types of capital of the IIRC framework (financial, intellectual, human, social and natural & produced) to realise our goals. We also show the value we create with our core activities and the impact thereof.

Members are represented via the general meeting and the online cooperative panel. The general meeting has the final say over the general policy of the DELA cooperative, which means its members help determine the future of DELA.

Until 2022 only Dutch policyholders could be members of DELA cooperative. Those with a DELA Uitvaartplan insurance policy in the Netherlands and their co-insured automatically become members when the policy is opened. 

On 5 February 2022 the DELA general meeting opened the door to membership in Belgium. Belgian members initially become part of the Eindhoven geographical department which will represent them in the general meeting. DELA Belgium launched the cooperative membership in October last year, and new policyholders can now become members. In the coming year we also hope to welcome existing clients who already have an insurance policy with DELA Belgium.

Providing high-quality services is key to DELA’s operations.

We measure the satisfaction of our customers at various times along the customer journey, and these measurements form the basis for our management, learning and improvement in this area.

DELA measures customer satisfaction via the Net Promotor Score (NPS). A common indicator that shows the extent to which customers would recommend products and services to others, the NPS shows that customer satisfaction is increasing in the Netherlands and Germany. In the Netherlands it went up to 58 (2021: 56) and in Germany to 51 (2021: 49). The highest score was achieved in Belgium, where it remained stable compared to 2022 with a score of 69 (2021: 70). Weighed by respondents, DELA’s score saw a fractional fall to 63 (2021: 64).

DELA has a robust and strong reputation and our activities are partly focused on maintaining and strengthening this reputation.

Since 2021 we measure our reputation among members and non-members in the Netherlands via the Stakeholder Watch system. This includes extra questions about how membership is valued, and the expert role of DELA in the ‘saying goodbye’ domain. Over 80 percent of members value DELA membership and clearly see us as an expert. In the ‘Financial support (insurance)’ sub-domain, members give DELA a score of 78 and for ‘goodbyes and funerals’ an 87.

Our reputation in Belgium also grew. Here we measure it as ‘prompted awareness’ to the question: “Do you see DELA as the funeral specialist?” The already high score of 73 percent in 2021 increased to 76 percent in the year under review.

There were almost 170,000 deaths in the Netherlands in 2022 (2021: 171,000). DELA Netherlands arranged some 39,800 funerals (2021: approx. 36,200), and around 43,000 cremations (2021: 32,700). This increase is partly due to the Yarden takeover.

We did not reach our goal in the Dutch market in 2022 for the share of free market funerals (when the deceased is not insured with DELA). The high workload in the funeral company, partly due to high mortality rates, the Yarden integration and the tight labour market, all played a role herein. On balance, DELA Netherlands arranged some 8,400 funerals in this segment – approximately 35 percent more than in the previous year (2021: approx. 6,200). This increase is entirely due to the Yarden takeover.

Belgium recorded over 116,000 deaths in 2022, compared to some 112,000 in the previous year. In the reporting year, DELA arranged approximately 12,800 funerals (2021: approx. 12,000) and around 7,300 cremations (2021: approx. 7,700). The funeral company in Belgium is mainly focused on funerals for non-insured people as DELA Belgium has yet to achieve national coverage. This is why the acquisition of funeral companies is part of our strategy here. In addition, DELA Belgium aims to strengthen cross-pollination with policyholders as DELA can arrange funerals upon their deaths.

The hardest period for bereaved relatives often starts after the funeral. In addition to processing their grief they are faced with numerous practical, financial, legal and administrative tasks. A helping hand is always welcome at this time and that’s where DELA comes in, offering practical support and tips based on individual situations. Aftercare is a standard element for policyholders in the Netherlands and for all funerals arranged by DELA. Aftercare is also a standard part of the DELA Uitvaartzorgplan in Belgium and of all funerals arranged by DELA.

The size of our total portfolio, measured by the number of people insured, is a major spearhead for DELA. Our growth in 2022 resulted from expansion in all three countries.

The DELA Uitvaartplan in the Netherlands saw further growth. The net growth was lower in 2022 than in 2021 and 2020 when the demand for funeral insurance peaked during the pandemic. Most cancellations normally occur in the first years after the insurance was started and this also partly explains why the net growth in 2022 was lower than in the two previous years. The increased number of deaths resulted in a lower net growth than in previous years.

As Yarden policies are no longer being sold, they only involve natural losses and termination via buyouts.

Net growth in life insurance policies was negative in the Netherlands where there are many providers of this type of insurance. In addition, the fact that life insurance is no longer required for new and existing mortgages by the Dutch Mortgage Guarantee Scheme (NHG) and lenders, means fewer new insurance policies. An increase in mortgage switches and people trading up using their excess value also played a role in the reduced demand for life insurance. 

In addition, DELA offers a savings plan on the Dutch market with a fixed interest rate of 2.0 percent.

The market for funeral insurance in Belgium is still developing. At the time of writing, just 11 percent of the Belgian population has funeral insurance. Maintaining growth over multiple years is difficult, as is realising synergies between insurance and funeral care. DELA is unique in Belgium for the way it both insures and arranges funerals. DELA Belgium is actively selling a capital insurance. Our insurance company pays out upon death, although it isn’t a matter of course that our funeral company then arranges the funeral as this doesn’t involve a package (Natura) policy and people are free to use the funeral company of their choice.

The net growth of insured persons in the active insurance portfolio in Belgium was lower in 2022 than in 2021, when it was around 36,400. We especially saw a drop in the brokers’ channel, while the online channel grew.

DELA Germany offers funeral insurance and life insurance. The German market is large and still growing. On 1 November 2022 DELA acquired the German portfolio from competitor Monuta, which included nearly 130,000 policyholders. DELA Germany’s funeral insurance covers funeral costs and comes with a profit-sharing scheme that gives policyholders the same benefits as Dutch members of the cooperative. DELA Germany is aiming for growth via brokerages and online.

DELA is committed to ensuring that our employees reflect the full diversity of the society in which we operate, that everyone has equal opportunities and feels able to be themselves. DELA-wide, some 66 percent of all DELA Group employees are female. In leadership positions, the 30 percent minimum rule for women and men is easily achieved. When personnel changes occur, we always take increased diversity into account. 

Based on well-publicised social developments in the Dutch media landscape, DELA Netherlands carried out an internal study into diversity, inclusion and respecting boundaries. Formulating a vision related to psychological security, collecting data and guaranteeing safety is the basis for our personnel policy. In addition, good practices were mapped out and aligned throughout the organisation. This resulted in 32 good practices for diversity and inclusion, and 16 good practices for respecting boundaries.

Major changes to the overall package of employment conditions at DELA Netherlands came into force on 1 January 2022. These included offering an individual budget for choices and the option to take a sabbatical. Employees who joined the workforce from 1 January 2022 are subject to a new pension scheme. And we also introduced an individual fitness budget to benefit employees’ health and personal development. Customer-orientedness is a core value of DELA and to achieve this we create a climate in which learning and performing is a matter of course. Following a culture survey, our organisations in the Netherlands and Belgium set up a learning and performance programme. Together we aim to grow, work in a result-oriented way, and enhance the strength of our people and teams. We stimulate employees to make the most of themselves on a daily basis. In this framework, we provide a dedicated portfolio of training courses and workshops. After the introduction of the new programme the decision was taken to end the variable remuneration approach. A limited variable remuneration is still available in Belgium. 

The working conditions in Germany remained largely the same as in 2021.

In 2022, DELA was awarded the World-class Workplace label in the Netherlands and Belgium, an annual excellence-in-employership label awarded to high performing organisations based solely on the opinion of employees. We achieved an exceptional performance in the ‘enthusiasm’ theme and also scored highly on themes such as ‘meaningful work’, ‘how employees fit into the organisation’ and ‘how teams contribute to the success of the organisation’.

Note: 1 non-binary employee in the Netherlands was included in the totals, but not under male or female.

The tightness of the labour market also plays a role in absence due to illness. We are seeing that it is becoming more difficult to attract people, and the time that vacancies are left unfilled is increasing. This does not just apply to DELA but to the entire market. It also makes it more difficult to find temporary employees, which in turn puts extra stress on our permanent staff. Training new people also takes a lot of effort, while new staff are unable to work fully during that time. The resulting pressure further increases absenteeism. 

We also took some general measures to tackle the staff shortage, which included expanding the team of recruiters in the Netherlands and in Belgium. It is obviously important to attract and select the right people and retain and engage the staff we already have. Various initiatives were started that will also be continued in 2023. Colleagues are stimulated to contribute to finding new staff by a reward scheme. Another move involved making an appeal for staff to increase their contract hours and/or continue working after retirement where possible. We are also increasing the workforce potential by exploring how we can employ people who are distanced from the labour market, and we started the establishment of an internship agency – both for students and for residence permit-holders or people from other companies who cannot reintegrate into their own work or company. We are intensifying personnel recruitment campaigns as well, and, focusing on growth and development in our learning and performance programme. By growing together and working in a result-oriented way, we can enhance the strength of our people and teams. 

Digital developments at DELA revolve around keeping the IT landscape up-to-date and secure while providing even more quality and custom solutions to members, policyholders and the bereaved. An important aspect herein is to communicate with members in a personal, empathic and appropriate way. New digital channels should complement trusted forms of communication. Digitisation affects the entire organisation within DELA and the large amount of assignments involved require major investments in systems, processes and, most importantly, people. Systems are replaced step by step as the interdependence of projects is considerable. To ensure continuity, we are renewing the applications for the insurance chain first. 

New systems are built to better address the needs of members, policyholders and the bereaved. In the Netherlands, we had three priorities in 2022: 1) the Yarden integration, 2) the migration of the deposit product, and 3) the migration of the DELA Coöperatie Spaarplan to a new platform.

We have made considerable strides in the IT project related to the integration of Yarden. The line organisation is performing many of the daily activities. This finalisation means that former Yarden locations and staff are now working with DELA systems. The cooperation with and high level of engagement from the Yarden staff have led to a successful end result. Distributing work across the existing IT teams in accordance with the portfolio management process proved fruitful. The migration of the deposit product has been concluded, and the migration of the DELA Coöperatie Spaarplan to the new platform which was to take place in late 2022 will be completed in 2023. The projects required a great deal of time and effort from the (IT) organisation.

In Belgium, the IT project Coöperatie went live in 2022. One of its goals was to allow the registration of Belgian customers. We also started preparations for a new CRM system, which is expected to be introduced in 2023. Another focal point was the further improvement of compliance related to data quality and process management, including stricter compliance with the storage times. The decision was taken at the group level in 2022 to transfer the full IT management from DELA Belgium to DELA Group in Eindhoven. This is expected to be realised in 2023.

In Germany the IT focus was on the technical support for the timely integration and administration of the Monuta portfolio acquired by DELA Germany.

DELA was established based on the strength of the collective and the concept of taking care of each other. We make responsible choices that help us leave the planet as clean and fair as possible to future generations. Our goal for 2030 is to have a net positive impact on people and the environment with our products, services and operations.

To realise this ambition, we have set ourselves five goals: 

• Reducing our own CO₂ emissions.
• Increasing the sustainability of our investments. 
• Greater use of sustainable materials. 
• Stimulating inclusivity.
• Being a sector leader for sustainable funerals.

Below we highlight the main results per goal.

Our scope 1 and 2 CO₂ emissions are primarily caused by transport and energy consumption in our buildings and installations. The main measures that contribute to a reduction of scope 1 and 2 CO₂ emissions are:

• The purchase of green power from Dutch solar & wind energy and natural gas compensated by forests. The share of green power in 2022 was 52 percent, and this will increase in the coming years when contracts are renewed. 
• Energy savings in buildings and processes.
• Replacing gas cremation furnaces by electric furnaces; five of the 46 cremation furnaces in the Netherlands are electric. 
• Generating our own green power; solar panels have been installed at 6 locations.

Our scope 3 CO₂ emissions are mostly due to the products and services we use for our operations and the funerals we arrange. The main measures that contribute to a reduction are:

• FSC solid spruce casket included in the insurance package.
• Changing the catering range to more plant-based and local & seasonal products. 
• Electric hearses instead of diesel vehicles; EVs are the standard offer in 7 of the 15 regions in the Netherlands.
• Electrification: 38 percent of the lease fleet in the Netherlands was electric at the end of 2022, 9 percent in Belgium.

The CO₂ footprint fell by 14 percent in 2022 compared to 2021. The reduction of scope 1 and 2 emissions is mainly due to a lower consumption of natural gas and electricity in our buildings. Both the upstream and downstream scope 3 emissions also went down, which was largely due to a reduction in transportation costs such as hearses, funeral vehicles and for visitors.

In addition, a route map was drawn up for DELA Belgium and DELA Netherlands in 2022 to make CO₂ reductions in the period until 2030. This provides a concrete plan of how further reductions can be achieved in the years ahead, and focuses on the main contributors to the CO₂ footprint on which DELA can have an impact, such as energy procurement, energy generation, energy savings in buildings and processes, transport, and funeral-related products and services.

DELA takes the environment, social issues and good corporate governance into account in its investments. In addition to the abovementioned exclusion of companies and sectors, we apply various other instruments.

ESG integration
ESG stands for environmental, social and governance. The external capital and fund managers we use must take our sustainability ambitions and goals into account. We assess how they integrate the environment, social issues and good corporate governance  (known as ESG integration).

Engagement
We maintain a dialogue with companies in which we invest in order to impact their approach to sustainability, stimulate the implementation of environmental improvements and mitigate sustainability risks.

Voting rights
DELA has its own voting policy which entails that we exercise our right to vote in as many shareholder meetings of the companies in our investment portfolio as possible. An active voting policy is part of the dialogue with these companies. We also enter into discussions with other major investors where we wish to see improvements in the field of ESG.

Impact investing
Ultimately, DELA aims to have a positive effect on people and environment with our investments and this is ultimately more important that realising a positive return. 

The main results we achieved in the field of more sustainable materials in 2022 were: 

• New company clothing was taken into use in the Netherlands, comprised of 70 percent recycled polyester. 
• The procurement policy was enhanced with specific CSR criteria.
• The Loop Living Cocoon casket, made from mycelium, was included in our product range. This contributes to the development of new types of casket that have a positive impact on people and the environment.
• The paper we used was 100 percent certified environmentally friendly and CO₂-neutral.

Because DELA was borne out of a sense of solidarity and attaches great value to social engagement, it has its own DELA Fund in the Netherlands and in Belgium.

We believe it is important to contribute to society and be there for each other, which is why the two DELA Funds were established. Everyone can submit projects to the funds that are aligned with their themes. In the Netherlands the fund focuses on connecting the generations, while in Belgium it revolves around making the difficult times of saying goodbye more bearable. 

The Dutch Fund received over 300 submissions from associations and foundations in 2022 and contributed to 167 projects; 115 projects were supported with an amount up to €1,500 and 52 projects with an amount of between €1,500 and €10,000. Eighteen donations were made to associations and foundations that provided aid to war victims from Ukraine, 16 of which were initiated by DELA employees. They ranged from purchasing school materials and clothing to paying the fuel costs needed to bring goods to the border. DELA also donated laptops to a school in Eindhoven that teaches students who have fled Ukraine. Other projects involved initiatives such as students meeting with senior citizens, lunches and dancing with the elderly as well as museum visits and baking contests for people of all ages.

The Belgian fund supported the Boven de Wolken (Above the Clouds) project until 2022 which offered parents of infants who died young the opportunity to make a photo report of their child (free of charge). The project started in Flanders but thanks to DELA’s support is now available to parents throughout Belgium.

Both DELA funds supported various social initiatives to the tune of €330,000.

DELA has been the main sponsor of the Roparun relay race where teams of people raise funds for people suffering from cancer. DELA also took part with one team in the 31st edition of the event, which raised over €3.4 million.

Finally, DELA works in social initiatives with football club PSV. As two organisations from the city of Eindhoven we aim to have a joint impact on the region. The main goal in the coming years is to contribute to the sense of connection and solidarity in the region and elsewhere.

In Belgium, DELA supported football club KAA Gent with a remembrance wall where supporters can remember their loved ones.

After deduction of the reinsurance premium, DELA received €669.0 million in premium income in 2022 (2021: €592.5 million), a 13 percent rise compared to the previous year (2021: 15 percent). A primary cause of this growth was the Yarden acquisition. In 2021 the Yarden premium was consolidated from August, in 2022 across the entire year. In Belgium the premium income was €146.1 million (2021: €136.3 million), a rise of 7 percent. In Germany the premium income increased by over 60 percent to €35.3 million (2021: €21.7 million). From November, the increase was due to the acquisition of the German portfolio of Monuta.

The operating result is the result achieved from DELA's core activities, with the exception of exceptional income and expenses, profit sharing and taxes. The operating result for 2022 amounts to €47.6 million. In 2021, the operating result amounted to €54.5 million.

The insurance company’s result was €72.2 million, €5.5 million or 8 percent higher than in 2021. The reason was the increase in costs and income due to the Yarden acquisition. In contrast, costs were higher as a result of the high IT investments needed to replace outdated systems.

The result of the funeral company dropped by €3.8 million to €0.1 million due to the extra costs of the Yarden integration, increased outsourcing due to higher mortality rates, the relatively high absence figures, fewer funerals than expected in Belgium, and extra payments to employees to support their spending power.

The costs attributed to the cooperative for holding and staff increased to €23.0 million, partly due to the extra expenditure on the new strategy and innovation projects.

The net investment return over 2022 was minus 9.5 percent (2021: plus 9.2 percent). Shares had a negative return of approximately 15 percent and fixed-income securities were minus 16 percent. The return on investments in real estate and infrastructure was positive, partly due to the dollar rising against the euro. The net investment result in 2022 amounted to a loss of over €840 million (2021: profit of nearly €650 million).

The volatility of the value of our investments is a direct consequence of our strategic investment choices. These are aimed at achieving the solid long-term returns on which the premium is based as well as to offset any inflation in funeral costs. The nature of the insurance policies – in most cases paid out in the event of death – leads to long-term obligations. Investment results can fluctuate as this extended horizon requires a more offensive strategy. By accepting a calculated risk in our investment strategy, we expect to achieve better overall results over the years. A consequence of this policy is that there are sometimes significant fluctuations in the value of our investment portfolio. This is why the investment result cannot be compared over the years without taking into account issues such as variations in financial markets.

The increasing interest rate determines the value reduction of our investments. In the income statement we see a negative return from investments with a scope of €0.8 billion. At the same time, the technical provisions increased by €300 million to €7.5 billion. The technical provisions on our balance sheet are based on a fixed actuarial interest, which is why the impact of the interest rate rise in 2022 on the technical provisions is not visible on this balance sheet position. This is confirmed by the excess value of the liability adequacy test on the technical provisions, which increased by €1.7 billion from €0.6 billion to €2.3 billion. This largely compensates for the reduction in the investment value. Our solvency remains robust and our continuity is guaranteed, even when interest rates fluctuate.

The coverage represents the market value of the investments in percentages of the market value of the guaranteed liabilities and depends on factors such as interest rates, mortality and costs. The coverage at the start of the year under review was 135 percent and ended at 234 percent. It has been a while since coverage was this high, which means there is room for much more profit distribution.

In 2022 the 20-year interest rate increased from 0.55 percent in early January to 2.87 percent by the end of December. The interest rise resulted in a 129 %-point increase of the coverage. The negative investment results caused a 20 %-point drop. The higher inflation rate results in increased future costs and generated a 17%-point drop, while various portfolio developments resulted in a 7 %-point rise. The average coverage in 2022 was 195 percent (2021: 129 percent).

In 2022 profit sharing was determined at €43.7 million (2021: €5.9 million). This amount was much higher despite the negative results due to the reduced value of the investments. In 2021 profit sharing was relatively low as the average coverage in 2020 was just above the desired minimum at 122 percent. Although a premium measure was not required, this did limit the distribution of profit. Due to the increase in the average coverage to 129 percent over 2021, DELA could in principle realise a profit distribution of 10 percent in 2022. It was then decided to realise a discretionary increase to 50 percent to celebrate two unique milestones: 1) the acquisition and integration of Yarden, and 2) the 85-year anniversary of DELA. The general meeting confirmed this decision.

The DELA UitvaartPlan in the Netherlands is the DELA product with the largest share in the number of policies, some 56 percent in total. 

The premium increase in the Netherlands on 1 January 2023 was 2.96 percent (1 January 2022: 3.46 percent) based on three factors:

• Increase related to rising funeral costs. This component of the premium change is determined annually by the general meeting. The expected inflation rate for the following year determines the proposal for the premium increase as of 1 January. The expected inflation was 1.73 percent. A further 0.27 percent was added due to the ongoing uncertainty about the course of inflation at the time the decision was made in spring 2022, bringing the rise to 2.00 percent. The same percentage was proposed to the general meeting as component for the premium adjustment on 1 January 2023 and accepted;
• Increase related to not fully awarding the profit distribution for the coverage of the back-service. The total premium for the back-service that goes with 2.00 percent inflation of the funeral costs is 1.92 percent, 50 percent of which is allocated as a profit-sharing percentage. The other 50 percent needs to be covered by policyholders. As a result, the increase related to the not fully awarded profit distribution was 0.96 percent;
• Increase related to the premium measure as a result of a structurally low interest rate and low coverage. A premium measure didn’t apply because the 12-month average coverage was above 120 percent in 2022.

DELA determines its solvency in accordance with the Solvency II capital regime, hence the name Solvency-II ratio. This involves European calculation rules in which the risks included in the balance of the insurer are taken into account in determining the solvency. The Solvency-II regulation demands sufficient solvency as a precondition for profit distribution. 

The solvency ratio fell from 236* percent to 226 percent at the end of the year and is therefore still considered robust.

Economic developments such as interest rates, inflation and increased volatility caused the Solvency-II ratio to rise by 6 %-points. Portfolio developments such as new production and the acquisition of the German portfolio cost solvencyresulted in a 27 %-point drop in the Solvency-II ratio. While investment results were negative, sliding share prices and changes to our investment mix partly contributed to a fall in the capital requirement too. On balance, this resulted in a ratio increase of 22 %-points. Other developments resulted in an 11 %-point drop.