Netherlands - This study examines whether and to what degree the ten largest insurance groups active in the Netherlands, as selected by the Fair Insurance Guide, invest in companies that are involved in controversial arms trade. Controversial arms trade relates to the supply of (important parts of) weapons and weapon systems, military transport systems and other military goods, as referred to by the Common Military List of the EU, to:

countries under an UN/EU arms embargo;
unfree countries;
countries involved in a (civil) war;
countries with a high risk of corruption in military procurement;
countries considered a fragile state; and
poor countries spending a disproportional share of their government budget on weapons.

In 2015, the Fair Insurance Guide conducted a similar study, the "Controversial Arms Trade" case study. This study focuses on arms exports to Saudi Arabia only, which is a narrower focus than the 2015 report. The ten selected insurers are:
Achmea
Aegon
Allianz
APG
ASR
Delta Lloyd
Generali
Legal & General
NN Group
Vivat

This study is aimed at controversial arms transfers specifically to Saudi Arabia. The methodology to select countries to which arms supply is controversial was updated for Saudi Arabia. In addition to the red flags which already existed in 2015 (Saudi Arabia is an unfree country with high risks of corruption), Saudi Arabia is now also involved in an armed conflict. Besides, reporting coming from Yemen indicates Saudi Arabia’s operations in Yemen have violated principles of international humanitarian law.
The following five arms producers have been involved in the most relevant transfers and are thus selected for this research:
BAE Systems
Boeing
Lockheed Martin
General Dynamics
Raytheon

Insurance companies are portfolio investors that purchase securities on secondary markets, rather than financiers. Therefore this study has examined bond- and shareholdings of the selected insurers in the selected arms manufacturers. As is standard practice at the Fair Insurance Guide, the investigation focused on the group level of the insurers, not individual subsidiaries. The sole exception is Vivat Verzekeringen, which, since 2015, is a subsidiary of Chinese insurer Anbang (see chapter 3). In the 2015 study, Vivat was taken up in the research as part of the SNS Reaal group, comparisons between the outcome in 2015 and the outcome now are therefore not possible.

This report focuses on investments in the five companies involved in the most relevant arms transfers to Saudi Arabia in 2015 and 2016. The overall conclusion is that 4 insurers active on the Dutch market have major investments in the five companies involved in these arms transfers. These are Legal & General, Allianz, Aegon and APG. Two insurers, Generali and NN Group, hold small investments in one of the selected companies. In total, these insurers invest over 3.6 billion euro in companies involved in arms trade with Saudi Arabia. Four insurers, ASR, Achmea, Delta Lloyd and Vivat Verzekeringen hold no investments in any of these five companies.

Since the report published in 2015 focused on investments in a much wider range of companies, a full comparison is not possible. However, if we look only at the investments found in 2015 for the five arms companies selected now, some conclusions on developments over time can be drawn. The overall picture then, is worrisome. Aegon and APG remain at roughly the same elevated level of exposure to companies active in controversial arms trade, albeit with some ups and downs in individual investments. The biggest investors by far, then as now, are Allianz and Legal & General with a total investment value of €1.2 billion and €1.5 billion respectively. If anything, these two have increased their exposures. The 2015 report showed that Delta Lloyd held holdings worth € 5 million in total (equivalent to US$ 6 million), from which it has now divested. It should be noted however that this research did not verify whether Delta Lloyd divested from the other four companies it invested in in 2015. Achmea and ASR remain unexposed to the selected arms companies.

The 2016 policy update of the Fair Insurance Guide showed that the insurers found in the 2015 report to be investing in companies involved in controversial arms trade, have not improved their policies in this matter. The only exception is NN Group, of which the 2016 policy update for the Fair Insurance Guide concluded that its updated investment policy found it unacceptable to supply weapons if there is an overriding risk these will be used for human rights and humanitarian law violations. Nonetheless, NN Group was found to be investing in Boeing.