REPORT OF THE MANAGEMENT BOARD

In 2025 many parts of the world were marked by political unrest and violent conflict. Despite this, the economy performed relatively well. At DH Reinsurance, we noticed above all an increase in demand driven by improved economic conditions and growth in partnerships. 

DH Reinsurance has a core organisation of  6,0 employees ( 5,0 FTE) (2024: 9,0 ; 6,6 FTE). In addition, about twenty more people provide services for DH Reinsurance through which we jointly give substance to our mission.

We work with specialized medical advisors who take care of the medical assessment and ensure that we can offer customized services. We prefer to work with at least three medical advisors, and we are therefore delighted that Kees Hovingh joined the team this year to replace André Gaasbeek, who stepped down in 2024.

DH Reinsurance's mission is to provide financial security to individuals with pre-existing medical conditions.

Ever since its founding in 1905, DH Reinsurance has emphasized the social responsibility of insurers and championed this vulnerable target group. DH Reinsurance strives to offer term life insurance to virtually everyone.

DH Reinsurance specializes in difficult-to-insure medical mortality risks and offers insurers the possibility of reinsuring them. This allows each insurer to adopt a socially responsible underwriting policy and also allows people with medical conditions to obtain good life insurance.

From our mission, we have defined three core values: expertise, certainty and customization.

Expertise
We specialize in difficult-to-insure medical mortality risks. We strive to offer mortality risk insurance to pretty-well everyone. We make sure we have the right medical expertise to assess the current situation and expected developments in survival rates of people with (complex) medical conditions.

Certainty
We focus on long-term certainty for our cedents and policyholders. We offer products that fit the application and underwriting process of cedents. We take over the financial risk for this target group. We ensure reliable and financially sound operations.

Customization
Providing customization for our policyholders is at the heart of our business. Our processes and corporate culture are fully geared to providing customized and meticulous coverage for people with medical conditions. We handle every policy application or claim with extreme care.

DH Reinsurance focuses on the individual life insurance market in the Netherlands, Belgium, Germany, United Kingdom and Ireland, and on the islands of Curaçao, Aruba and St. Maarten.

Commercially, as expected, there were significantly more new applications and policies than in 2024. The growth strategy launched in 2022 continued to bear fruit in 2025.

In the Netherlands, production grew both through the TAF Maatwerkroute —our partnership with the authorized agency TAF—and through the De Hoop Maatwerkroute. Insurers can refer people with a (complex) medical condition whom they do not offer coverage to De Hoop Maatwerkroute, thereby making a positive contribution to the insurability of this vulnerable target group. Allianz, a.s.r., Centraal Beheer, De Goudse Verzekeringen, FBTO, Interpolis, Nationale Nederlanden, and Scildon are affiliated with this initiative.

The aforementioned developments resulted in a higher number of new policies in 2025 (1.256  compared to 1.011 ), an increase of 24%. Capital production increased by 35% from 204.108 to 275.177.

DH Reinsurance realised in 2025 a profit after tax of 19.434 (2024: 2.856). The increase was primarily due to higher (direct) investment returns resulting from the sale of a large portion of the investments following the transition to a new asset manager. In connection with the change in asset manager, the vast majority of the existing investment portfolio was sold and reinvested in funds managed by the new asset manager. It is proposed to pay a dividend to shareholders of 2.400.

The available equity under Solvency II (EOF) amounts to 68.625 (2024:64.575 ). The increase of 4.050 (net of the proposed dividend) is mainly caused by the increase in the value of the equity portfolio. Based on the standard formula, the required solvency is 29.840 (2024:26.697). The solvency ratio at the end of 2025 is 230% (2024:242%). The solvency ratio has declined slightly compared to the end of 2024, with an increase in equity (+4.050) and an increase in required capital (+3.143). DH Reinsurance has set an internal standard solvency ratio of 200%. See the risk section for the rationale behind this.

Premium income before reinsurance deduction increased by 4% to 6.751 (2024: 6.470).

The insurance portfolio, measured in insured amount, increased more than in 2024 (13% compared to 10%). New business increased by 35% compared to 2024. Lapse increased by 15% compared to 2024.  Over a five-year period, the insurance portfolio grew organically from 856.177 to 1.456.746. That is an increase of 70% in five years.

The investments (excluding deposits, including liquid assets) amounted to 92.920 (2024: 90.148).

The balance sheet value of the liquid assets as of 31-12-2025 was 1.715 (2024: 1.709).

Benefits before deduction of reinsurance amounted to 4.671 up slightly (7,59%) compared to 2024. The major changes in 2025 relate to policy surrenders which increased by  66%, and payouts due to policy expiration (19%). 

The result technical account decreased by 837 compared to 2024. This is mainly due to increase of business costs.

The effective tax rate in 2025 amounts to 25,8% (2024: 25,4%).
The result after tax in 2025 increased by 16.578 compared to 2024.
It is proposed to the General Meeting of Shareholders to distribute a dividend of 2.400 from the profit for the fiscal year and to add the remaining positive result to the Other reserve.

To determine the required solvency, DH Reinsurance uses the standard formula from the Solvency II directive.
DH Reinsurance has set a solvency ratio of 200% as an internal standard. This standard is in line with a high creditworthiness as laid down in Article 199 of the Delegated Regulation EU 2015/35. This sets out which solvency ratio matches the creditworthiness of the company. In credit quality category 1, the rated company has a very strong ability to meet its financial obligations. The probability of default at 0.01% is related to a solvency ratio of 196%. DH Reinsurance wishes to aim for the corresponding solvency ratio (rounded to 200%). This internal standard is met at the end of 2025.

Based on the standard formula, the required solvency is 29.840 (2024:26.697). The solvency ratio at the end of 2025 is 230% (2024:242%).The solvency ratio decreased slightly compared to the end of 2024 with increasing equity (+4.050) and required capital (+3.143).

The solvency ratio is only final after assessment of the Solvency II reports by the supervisory authority De Nederlandsche Bank.

No use was made of a volatility adjustment on the yield curve when calculating the solvency position. Furthermore, the loss-absorbing capacity of the deferred taxes, the so-called LAC DT, is not taken into account.

Geopolitical uncertainty remains high in 2025, among other things due to the war in Ukraine and the situation in various parts of the world. In addition to the human dramas taking place there, this impacts economic conditions. In addition, there is an increase in strategic competition for economic and political influence between China, the U.S. and the EU. Finally, within the EU there are different views in many areas about measures to be taken, which hinders the EU's ability to act. DH Reinsurance only experiences effects of this indirectly, through changing economic conditions in the countries in which we operate.

Higher inflation and interest rates than in the past reinforce economic uncertainty. The stabilization of interest rates and inflation led to higher production volumes in 2025, but (prolonged) economic uncertainty has a negative effect on the demand for our products. In addition, prolonged inflation has an increasing effect on DH Reinsurance's costs, which can hardly be passed on, if at all.

The Covid-19 virus has greatly diminished in significance. It is still too early to estimate the long-term effects on mortality, especially for DH Reinsurance's target group. We have so far observed hardly any additional mortality in our insurance portfolio. It is to be expected that pandemics of a similar magnitude will occur more frequently. We will have to take this into account in our risk scenarios.

Climate risks are likely to play a larger role in society in the longer term. It is important to closely monitor developments and measures taken by governments to mitigate climate risks. For now, we estimate that the impact on DH Reinsurance will be limited.

DH Reinsurance as a provider of medically enhanced mortality benefits, is a monoliner in a market segment that has been under pressure for several years. In addition, the business model is vulnerable due to the market approach from the facultative reinsurance position that makes the company dependent on the strategic choices of the primary insurer. Withdrawing cedents may jeopardize the continuity of the business. The aforementioned strategic projects reduce our vulnerability to this.

Other factors also play a role. Economically deteriorating conditions may result in lower revenues. Furthermore, diseases or pandemics, for example, may put pressure on underwriting results. DH Reinsurance conducts an annual Own Risk and Solvency Assessment, hereinafter ORSA, in which a number of stress scenarios relating to the aforementioned threats are worked through.This includes a climate scenario, in which the possible effects of climate risk are worked through and assessed.

The ORSA of 2025 has shown that in a number of extreme stress scenarios sufficient measures are possible to overcome deterioration of the solvency ratio. The continuity of the company will not be jeopardized in the process.

Sustainable entrepreneurship, impactful entrepreneurship or Corporate Social Responsibility (CSR) are often used as synonyms in the Netherlands. This is understood as entrepreneurship in such a way that the attention for people, planet and profit is balanced and aligned with the expectations of the stakeholders of the company.

We give substance to CSR in a number of areas:

• In our mission
• With the De Hoop Leven Fonds
• In our investment policy

In the context of socially responsible investing, we take into account ESG criteria (environmental aspects, social aspects and good corporate governance) of the entities in which we invest in our investment policy. We endorse the Sustainable Investment Code of the Dutch Association of Insurers.

Sustainable investing is a permanent agenda item of the Investment Committee. The UN Principles for Responsible Investment and the United Nations Global Compact form guidelines for the investment policy.

We engage in impact investing by participating in Polestar Circular Debt Fund. 

DH Reinsurance endorses the core values laid down in the Insurers Code of Conduct and complies with the provisions and rules of conduct of this code. The Supervisory Board and Management Board have taken the oath or affirmation of the financial sector.

DH Reinsurance's remuneration policy has been approved by the Supervisory Board (SB) and is in line with applicable laws and regulations. In addition to the remuneration policy, a remuneration policy has been drawn up for the directors. The General Meeting of Shareholders determines this remuneration policy.

The remuneration system is in accordance with the applicable laws and regulations and the collective labour agreement for the insurance business. The remuneration policy applies to the entire organization, with the exception of the directors.
No variable remuneration is awarded to the directors. According to the remuneration policy, other employees receive a limited variable remuneration, namely a surplus and an annual payment in accordance with the collective labour agreement in the month of May. These variable rewards are not dependent on specific performance. In addition, a profit share of 20% of a monthly salary is awarded, at the discretion of the directors. In exceptional cases it is possible to pay a modest variable reward afterwards for a special individual or group performance. Within DH Reinsurance, there are no employees who have received a total annual remuneration of € 1 million or more. A report has been drawn up for the Supervisory Board on the implementation of the remuneration policy. The key function holders for Compliance and Risk Management report on this separately to the Supervisory Board.

In the context of this report, information that can be traced back to a specific person is not reported.

Within the possibilities of DH Reinsurance as a small organisation, we strive for diversity, with a culture in which differences are recognised, valued and utilised.

By diversity we mean all aspects in which people differ from each other. Both visible aspects, such as age, gender and skin colour, and less visible aspects such as cultural and social backgrounds. We believe that these differences make us stronger.

We strive to give everyone equal opportunities in recruitment, work, training and assessment. We want to create an environment in which everyone feels free to be themselves and no one is excluded.

The management consists of two men. The supervisory board consists of two women and three men. DH Reinsurance strives for a situation in which at least one third of the Management and Supervisory Board consists of women and at least one third of men. Given the small size of DH Reinsurance, DH Reinsurance accepts deviations from this.

Taking risks is an essential part of business operations. It is important to identify, analyse, monitor and control risks as well as possible. If risks are not adequately managed, this poses a threat to achieving DH Reinsurance's strategic objectives. Inadequate risk management can also expose De Hoop to the risk of negative financial effects, operational inefficiency, extra supervision, administrative fines and reputational damage. Effective identification, monitoring and management of risks is therefore an important responsibility of the management and the operational organisation. An adequate risk management system reduces the chance of errors, making wrong decisions and the consequences of unforeseen circumstances. Risk and performance are inextricably linked in this.

Every three years, or in the event of significant interim changes to the objectives, or on the proposal of the risk manager (second line), the management determines the risk appetite. The management then asks the Supervisory Board for approval.

When drawing up the risk appetite, the vision of the supervisor DNB is taken into account, including on the topics: inflation, information security, climate and sustainability risks. These topics, as well as compliance with laws and regulations, form an integral part of the risk management framework.

Our risk appetite is laid down in three strategic Risk Appetite Statements:

• Social relevance and growth
• Capital management
• Business operations
  

Each Risk Appetite Statement qualitatively describes the risk appetite, in such a way that it fits the mission, vision and strategic objectives of the organization. The most important risk categories have been established for each of the three themes.

The degree of risk appetite has been defined for each risk category, with a gradation of reduced, neutral and increased. The starting point is that De Hoop has a neutral risk appetite with an increased risk appetite in some areas. Neutral risk appetite is the level of risk that is common in the life insurance market.

Key Risk Indicators (KRIs) have been established for each risk category, with the limit values of the KRIs derived from the risk appetite. The KRIs are reported quarterly in a KRI dashboard and discussed by the board of directors and the Supervisory Board. Each risk category has an owner who monitors the risk and reports on this annually.

Social relevance and growth

Based on our mission and core values, we have a strong social objective in addition to a commercial objective. For vulnerable groups, such as the chronically ill, this social objective is of great importance, because it gives them the opportunity to take out a term life insurance policy at a suitable price. That is why DH Reinsurance accepts (almost) every medically increased mortality risk: what can be priced is accepted with a positive mortality result for every medical category. DH Reinsurance accepts the risk that (access to or the quality of) healthcare will decrease during the term of the policy.

We focus on new customers who are rejected for medical reasons in the acceptance process at life insurers. We achieve our objectives if we have the trust of all stakeholders, such as our shareholders, cedants, insured parties, supervisors, interest groups and colleagues. Having the right medical expertise, maintaining a good reputation and complying with (partly foreign) laws and regulations are a prerequisite for this.
As a reinsurer, we depend on the efforts of the cedants with whom we do business for the sale of our products. We accept this dependency and do not seek another role in the chain. Based on our social relevance, we perform more activities to make our products known to potential customers and advisors than a regular reinsurer would do.

DH Reinsurance is deliberately active in several countries with a similar population structure, healthcare and mortality risk. In this way, we spread our risk and at the same time we have taken measures to mitigate local risks. For example, risks related to demographic and specific legislation and regulations are analyzed and a partnership is entered into with a local distributor to mitigate these risks.
In the countries in which we are active, we often have only one active cedant. We therefore run the risk that this entails that the cedant produces less or no more. We therefore invest in the relationship with the cedant, chain efficiency and the awareness of our offer in the market.

Capital management

Based on our mission, the promise to our insured parties and cedants is central. In order to fulfill this promise, we strive for a balanced balance sheet with healthy solvency and appropriate growth in the long term.

We take market risks for which we are sufficiently rewarded and apply a long-term socially responsible investment policy. Given our promise to the client, we ensure a prudent calculation of the provision and we cover our matching and interest rate risk to a large extent. The assets for which no insurance obligations are associated may be invested entirely in investment categories with a higher return-yield ratio. The resulting possible fluctuations in assets, returns and solvency ratio are accepted. In order to control the impact, we strive for a high solvency ratio.

We strive to reduce our costs per policy. We accept a limited and sometimes negative value contribution from new production in the short and medium term.

We can accept medically aggravated risks if the medical risk is as statistically and medically scientifically substantiated as possible and the medical advice provides a sufficient basis for determining an appropriate risk premium.

We compensate our shareholders with a return on equity that is reasonably appropriate to the risk and social character in the form of long-term capital growth. We strive to be able to pay out an annual cash dividend.

Business operations

Our mission focuses on customization for policyholders. At the same time, we invest in an efficient operating chain to realize short lead times. In doing so, we emphasize the efficient use of company resources and the focus is on cooperation, accuracy, integrity, transparency and flexibility.

DH Reinsurance is a small core organization with organizational shells around it. In this way, DH Reinsurance can bind expertise to itself that it does not need full-time, and in a number of cases the strategic partners in the organizational shell also take over or reduce the key-person risk. This way of organizing is also cost-efficient. It is important for DH Reinsurance to keep these shells well informed and to bind them to itself for effective business operations, continuity and strategic developments.

Our loyal employees and strategic partners determine the culture and the ability to change of our organization. We therefore invest in colleagues and challenge them to develop themselves.

The 3-lines model is part of the organizational structure of DH Reinsurance and thus guarantees the necessary checks and balances.

In managing operational risks, DH Reinsureance pays attention to, among other things, availability, integrity and confidentiality of data. For the continuity and security of data, DH Reinsurance relies on the measures it takes itself and on the measures taken by suppliers. For example, we rely on the measures of our cloud computing supplier Amazon Web Services (AWS) and on measures taken by our ICT suppliers based on the DNB good practice Information Security and from 2025 also on DORA. The management of other risks related to processes is also risk-based.

Cybersecurity
In the current era, IT risk is increasing, with cyber risk in particular becoming an increasing threat. DH Reinsurance has outsourced IT. DH Reinsurance's infrastructure has been outsourced to renowned cloud services. By working in the cloud, a physical fallback location is no longer necessary, but employees can work elsewhere in the event of calamities. DH Reinsurance, has laid down management measures in its policy with regard to cybercrime, privacy and data security. In 2025 policies and management measures were tightened based on the (implementation of the) DORA regulations.

Fraud and compliance with laws and regulations
During 2025  nothing has come to the attention of the Board of Directors that indicates suspicions of, or actual, fraud and/or violations of laws and regulations.

Sensitivity analyses

Our solvency is sensitive to both volatility on the financial markets and to major changes in the insurance portfolio that can occur as a result of a major deviation from the assumptions. Scenarios have been drawn up for a quantitative risk assessment, which can have both a positive and negative impact on solvency. Various stress scenarios are calculated in the ORSA, which show that the solvency ratio remains well above the required solvency even under extreme circumstances, such as a strongly increased mortality scenario and a very strong decline in the financial markets.