(Updates with new cost savings target and capital buffer)
AMSTERDAM, May 17 (Reuters) - Dutch insurer NN Group on Thursday raised its cost-savings target, as heavy damages from a storm led to a steeper-than-expected 23 percent drop in first-quarter core profit.
NN Group’s 2.5-billion-euros ($2.96 billion) takeover of smaller Dutch rival Delta Lloyd, completed in May last year, will lead to total cost savings of 400 million euros by 2020, the company said, after earlier estimating it at 350 million euros in savings.
At least half of the total savings will be realised before this year ends, Chief Executive Lard Friese said.
Meanwhile, the company’s operating profit dropped to 313 million euros in the January-March period, as damages from a storm that hit Europe on Jan. 18 amounted to 89 million euros.
Operating result from ongoing businesses was seen at 347 million euros in a Reuters poll of analysts, as the company had earlier flagged storm-related damages at 75 million euros.
NN Group’s total capital adequacy measure under Europe’s new Solvency II rules came in higher than expected at 213 percent at end-March, helped by positive developments in the financial markets.
Analysts had predicted the capital buffer to remain roughly stable at the 199 percent level achieved at the end of last year.
($1 = 0.8460 euros)
Reporting by Bart Meijer, Editing by Sherry Jacob-Phillips