Net income impacted by changes to economic assumptions
<pre>
- Solid growth in underlying earnings before tax
- Underlying earnings up 7%, driven by business growth, higher equity markets,
favorable mortality and actuarial assumption updates, and partly offset by unfavorable
currency exchange rates
- Fair value items loss of EUR 493 million, mainly as a result of aligning
economic assumptions related to interest rates, bond fund and equity market returns
with current market conditions
- Net income amounts to EUR 227 million, mainly impacted by fair value losses
- Return on equity amounts to 9.9% as a result of higher underlying earnings and
one-time tax benefits
</pre><pre>
- Sales growth mainly driven by higher variable annuity and pension deposits
- New life sales increase 2% to EUR 412 million, driven by pension sales in the
UK
- Gross deposits up 17% to EUR 11.0 billion, driven by variable annuities and
pensions in US
- Net deposits, excluding run-off businesses, more than double to EUR 3.4
billion
- Accident & health sales decrease 12% to EUR 167 million due to the termination
of certain distribution partnerships earlier this year and unfavorable currency
exchange rates
- Market consistent value of new business increases significantly to EUR 285
million, as a result of higher interest rates, increased sales volumes and management
actions to improve margins
</pre><pre>
- Capital position remains strong; cash flows compressed by one-time items
- Solvency ratio of 208%, reflecting move to swap curve for Dutch solvency
calculation
- Holding excess capital at EUR 1.8 billion
- Operational free cash flows of EUR 88 million, impacted by market movements
and one-time items
</pre> Statement of Alex Wynaendts, CEO
"A further increase in underlying earnings and sales this quarter, and a sharp rise in
the value of new business, were primarily the result of management actions and favorable
market conditions. Net income was impacted, mainly by Aegon's decision to bring economic
assumptions for interest rates and equity markets in line with market conditions. Aegon
also maintained its strong capital position this quarter, a key element of our long-term
strategy.
"We accelerated the expansion of our digital distribution capabilities, reflecting our
strategic focus on innovation at all levels of our company to connect more effectively
with our customers in whatever ways they choose. Notable initiatives included the launch
of direct-to-consumer propositions in Spain and Central & Eastern Europe - we also reached
more than GBP 1 billion in assets on our new innovative retirement platform in the United
Kingdom, which launched just one year ago.
"Our actions this quarter allow us to operate our business and serve our customers
more effectively while maintaining the strength of our company in the long-term. Looking
ahead, we are confident that the continued execution of our strategy and our strong
capital position fully support our ambition to become a leader in each of our chosen
markets."
<pre>
Key performance
indicators
amounts in EUR Q3 Q2 Q3 YTD YTD
millions [b] Notes 2013 2013 % 2012 % 2013 2012 %
Underlying earnings
before tax 1 531 478 11 494 7 1,454 1,390 5
Net income 2 227 243 (7) 377 (40) 674 1,151 (41)
Sales 3 1,697 1,975 (14) 1,550 9 5,410 4,912 10
Market consistent
value of new
business 4 285 202 41 173 65 719 415 73
Return on equity 5 9.9% 6.7% 48 8.0% 24 7.6% 7.3% 4
</pre> STRATEGIC HIGHLIGHTS
<pre>
- Additional steps taken to improve efficiency in the Americas and the
holding
- Aegon Direct propositions launched in Spain, trials commence in several CEE
countries
- Aegon Retirement Choices (ARC) platform in the UK surpasses GBP 1 billion in
assets
</pre> Aegon's ambition
Aegon continues to pursue its strategic aim to be a leader in all of its chosen
markets, supported by four strategic objectives embedded in all Aegon businesses: Optimize
portfolio; Deliver operational excellence; Enhance customer loyalty; and Empower
employees. These provide the strategic framework for the company's ambition to become the
most-recommended life insurance and pension provider by customers and business partners,
as well as the most-preferred employer in the sector.
Optimize portfolio
Aegon is introducing variable annuity products and expertise to the German market.
This builds on Aegon's experience and best practices gained elsewhere in the group,
including the United States, where variable annuities are a significant business.
Aegon continually reviews each of its businesses for strategic fit and return
prospects, and, as part of this review, announced the sale of its Czech pension business
this quarter. Exiting the pension business allows Aegon to focus more on the growing life
insurance market in the Czech Republic which better aligns with Aegon's desired risk
profile and return requirements.
The Aegon Retirement Choices (ARC) platform in the UK continues to draw praise,
recently winning 'Best new platform' and 'Best use of platform technology' at the Aberdeen
UK Platform awards. The platform has achieved unprecedented growth, now exceeding GBP 1
billion of assets under administration.
Deliver operational excellence
Aegon's continued focus on cost efficiency is evident with the implementation of
operational improvements in the Americas and at the holding. The operational improvements
at the holding were initiated in October and are aimed at improving the service to
stakeholders, while reducing expenses. In the Americas, Aegon has begun to execute on a
restructuring program aimed at creating a broad range of synergies. A first important step
was taken toward this objective with the creation of a new division, Enterprise Business
Services (EBS) - a shared services group which has as its primary purpose to bring
together common back office functions and processes. This will enable the core businesses
to focus on delivering a quality customer experience, achieving their strategic
priorities, and developing innovative solutions, in addition to generating considerable
cost reductions. Moreover, EBS has also identified opportunities to source certain
professional functions that support Aegon's businesses to external providers who are able
to deliver those same services at a lower cost.
Enhance customer loyalty
Aegon believes that creating a customer-centric culture will enable it to grow further
by responding to changing markets and customer behaviors. A key element of Aegon's
strategy is to get closer to its customers by increased deployment of technology at all
levels of the organization. The Aegon Direct initiative was launched in Spain this
quarter, and began trials in several Central & Eastern European (CEE) countries. Aegon
Direct allows clients to research, obtain a quote for, and purchase insurance products
online.
Recent survey results from the Hungarian Financial Supervisory Authority show that
Aegon clients are the country's most satisfied bank and insurance clients. This follows a
concerted two-year effort to actively address customer complaints and adjust products
based on customer feedback.
The Transamerica Center for Retirement Studies (TCRS) celebrated its 10-year
anniversary by expanding to create the Transamerica Institute, including the new
Transamerica Center for Health Studies. TCRS helps people, employers and policymakers to
better understand retirement. The expansion aims to bring more clarity to navigating the
financial implications of health coverage decisions in the United States.
Empower employees
Aegon continues to implement initiatives to help employees better understand how they
contribute to Aegon's strategy. In Spain, Aegon has launched the 'Customer Voices' program
that appoints employees to be the customer voice or advocate in the organization. An early
result of this program has been an improved client welcome process which now includes a
personal letter and welcome phone call and a follow-up package with further information
about the company.
In the United States, hundreds of Transamerica's employees from across the country
participated in the Healthy 4.01k walk. Sponsored by Transamerica's Employer Solutions &
Pensions division, this program reminded employees to walk the talk for retirement
readiness. Aegon believes this initiative, and others similar to it, will help its
employees better relate to customers, increasing customer brand loyalty and strengthening
its market position.
<pre>
Financial overview
[c]
YTD YTD
EUR millions Notes Q3 2013 Q2 2013 % Q3 2012 % 2013 2012 %
Underlying
earnings before
tax
Americas 371 360 3 362 2 1,043 1,014 3
The Netherlands 85 74 15 85 - 244 240 2
United Kingdom 26 27 (4) 27 (4) 77 83 (7)
New markets 74 52 42 70 6 188 222 (15)
Holding and other (25) (35) 29 (50) 50 (98) (169) 42
Underlying
earnings before
tax 531 478 11 494 7 1,454 1,390 5
Fair value items (493) (270) (83) (142) - (1,049) 88 -
Realized gains /
(losses) on
investments 202 82 146 128 58 397 258 54
Impairment charges (45) (57) 21 (35) (29) (119) (118) (1)
Other income /
(charges) (42) 27 - 3 - (19) (268) 93
Run-off businesses 1 13 (92) 12 (92) - 17 -
Income before tax 154 273 (44) 460 (67) 664 1,367 (51)
Income tax 73 (30) - (83) - 10 (216) -
Net income 227 243 (7) 377 (40) 674 1,151 (41)
Net income /
(loss)
attributable to:
Equity holders of
Aegon N.V. 227 242 (6) 376 (40) 673 1,150 (41)
Non-controlling
interests - 1 - 1 - 1 1 -
Net underlying
earnings 495 361 37 383 29 1,179 1,067 10
Commissions and
expenses 1,447 1,491 (3) 1,361 6 4,355 4,300 1
of which operating
expenses 11 830 844 (2) 777 7 2,478 2,342 6
New life sales
Life single
premiums 1,282 1,652 (22) 1,125 14 4,425 3,353 32
Life recurring
premiums
annualized 283 355 (20) 293 (3) 988 943 5
Total recurring
plus 1/10 single 412 520 (21) 405 2 1,431 1,278 12
New life sales
Americas 12 116 124 (6) 126 (8) 350 372 (6)
The Netherlands 23 48 (52) 25 (8) 111 80 39
United Kingdom 222 292 (24) 206 8 800 630 27
New markets 12 51 56 (9) 48 6 170 196 (13)
Total recurring
plus 1/10 single 412 520 (21) 405 2 1,431 1,278 12
New premium
production
accident and
health insurance 167 173 (3) 190 (12) 565 572 (1)
New premium
production general
insurance 16 14 14 12 33 44 39 13
Gross deposits (on
and off balance)
Americas 12 7,957 6,417 24 6,391 25 21,362 20,427 5
The Netherlands 278 327 (15) 275 1 1,009 1,202 (16)
United Kingdom 99 71 39 5 - 219 22 -
New markets 12 2,690 5,855 (54) 2,755 (2) 11,108 8,575 30
Total gross
deposits 11,024 12,670 (13) 9,426 17 33,698 30,226 11
Net deposits (on
and off balance)
Americas 12 2,576 1,185 117 904 185 5,374 2,703 99
The Netherlands (64) 85 - (480) 87 (113) (731) 85
United Kingdom 80 53 51 (6) - 173 (8) -
New markets 12 826 2,233 (63) 1,208 (32) 3,204 3,191 -
Total net deposits
excluding run-off
businesses 3,418 3,556 (4) 1,626 110 8,638 5,155 68
Run-off businesses (485) (644) 25 (301) (61) (2,202) (1,940) (14)
Total net deposits 2,933 2,912 1 1,325 121 6,436 3,215 100
Revenue-generating
investments
Sept. Jun. Dec.
30, 30, 31,
2013 2013 % 2012 %
Revenue-generating
investments
(total) 468,973 465,772 1 459,077 2
Investments
general account 137,419 140,388 (2) 145,021 (5)
Investments for
account of
policyholders 161,165 155,893 3 152,968 5
Off balance sheet
investments third
parties 170,389 169,491 1 161,088 6
</pre> OPERATIONAL HIGHLIGHTS
Underlying earnings before tax
Aegon's underlying earnings before tax in the third quarter of 2013 increased 7% to
EUR 531 million compared to the third quarter of 2012. Business growth, the positive
effects of favorable equity markets (EUR 33 million) and favorable mortality in the
Americas (EUR 15 million), more than offset the loss of earnings due to the sale of the
company's interests in partnerships in Spain and Asset Management (EUR 12 million) and the
impact of unfavorable currency exchange rates (EUR 23 million). In addition, actuarial
assumption updates and model refinements amounted to EUR 27 million in the third quarter
of 2013.
Underlying earnings from the Americas increased 2% compared to the third quarter of
2012 to EUR 371 million. This was mainly due to growth in Variable Annuities and Pensions,
favorable mortality experience of EUR 15 million in Life & Protection, and a positive
impact of EUR 5 million of actuarial assumption changes and model refinements. These gains
were partly offset by unfavorable currency exchange rates.
In the Netherlands, underlying earnings were stable at EUR 85 million as an earnings
recovery in Non-life and higher earnings in Pensions were offset by lower Life & Savings
earnings due to the non-recurrence of a provision release of EUR 8 million booked in the
third quarter of 2012.
Underlying earnings from Aegon's operations in the United Kingdom amounted to EUR 26
million in the third quarter of 2013. The positive impact of higher equity markets was
more than offset by investments in technology, adverse persistency of EUR 5 million, and
unfavorable mortality experience and currency exchange rates. The effects of adverse
persistency are expected to continue into the fourth quarter of 2013.
Underlying earnings from New Markets increased 6% to EUR 74 million, mainly due to the
positive impact of actuarial assumption changes and model refinements of EUR 22 million in
Asia in the third quarter of 2013, compared to EUR 7 million in the third quarter of 2012.
Results in Spain were impacted by EUR 9 million as a result of the divestments of the
joint ventures with Banca Civica and Unnim, while earnings from Asset Management were
impacted by EUR 3 million due to the divestment of hedge fund manager Prisma.
Total holding costs decreased 50% to EUR 25 million, mainly as a result of lower net
interest costs following debt redemptions and lower operating expenses.
Net income
Net income decreased 40% to EUR 227 million as higher losses from fair value items
were only partly offset by higher underlying earnings, increased realized gains and tax
benefits.
Fair value items
The results from fair value items amounted to a loss of EUR 493 million. The loss was
mainly driven by long-term economic assumption changes totaling EUR 405 million. Aegon
reduced its annual equity market total return assumption from 9% to 8%, accounting for
approximately EUR 135 million of the total. In addition, the long-term assumption for
10-year US Treasury yields was lowered by 50 basis points to 4.25%, while the grading
period towards the long-term assumption was increased from 5 to 10 years for both the
10-year US Treasury yield assumption and the return assumption for separate account bond
funds. The separate account bond funds return assumption is now set at 4% for 10 years,
and 6% thereafter. These interest rate related adjustments accounted for approximately EUR
270 million of the total.
The loss on fair value hedges without an accounting match under IFRS was EUR 116
million. This was mainly driven by the macro hedge in the Americas, on which the loss was
EUR 95 million, as a result of the strong equity market performance in the third quarter
of 2013. For similar reasons, the loss on the equity collar hedge was EUR 36 million.
Fair value hedging with an accounting match, which include the hedges on Aegon's GMWB
variable annuities block and the guarantees on general account products in the
Netherlands, contributed EUR 31 million to earnings. Fair value investments outperformed
by EUR 13 million, mainly driven by credit derivatives.
Realized gains on investments
In the third quarter, realized gains on investments increased 58% to EUR 202 million
and were the result of adjustments to the asset mix in the investment portfolio in the
Netherlands to bring it in line with the new regulatory yield curve, as well as normal
trading activity.
Impairment charges
Impairments were up compared to last year and amounted to EUR 45 million. These
largely related to impairments on structured assets in the Americas and a single corporate
exposure in the United Kingdom, as well as residential mortgage loans in the Netherlands
and Hungary.
Other income
Other income amounted to a loss of EUR 42 million. The negative impact of the
intangibles write off related to the Polish pension fund business of EUR 182 million and
restructuring charges in the Americas of EUR 27 million, were partly offset by a gain of
EUR 74 million on the sale of the joint venture with CAM and a gain on the recapture of
certain reinsurance contracts in the Americas of EUR 126 million.
Run-off businesses
The results of run-off businesses declined to EUR 1 million, mainly driven by lower
spreads and unfavorable mortality in payout annuities.
Income tax
Income tax amounted to a benefit of EUR 73 million in the third quarter. The effective
tax rate on underlying earnings for the third quarter of 2013 was 7%, mainly driven by a
benefit in the United Kingdom from a reduction in the corporate tax rate from 23% to 20%.
Return on equity
Return on equity increased to 9.9% for the third quarter of 2013, driven by higher net
underlying earnings, which included a one-time tax benefit in the United Kingdom. Return
on equity for Aegon's ongoing businesses, excluding the run-off businesses, amounted to
10.9% over the same period.
Operating expenses
In the third quarter, operating expenses increased 7% to EUR 830 million mainly due to
the non-recurrence of a benefit plan release recorded in the third quarter of 2012,
restructuring expenses in the Americas and higher variable annuities sales and employee
performance related expenses related to the growth of the business in the Americas. On a
comparable basis, operating expenses increased 4%. Approximately half of this increase was
driven by additional investments in technology to support future growth, with the
remainder mainly the result of the growth of the business in the Americas.
Sales
Compared to the third quarter of 2012, Aegon's total sales increased 9% to EUR 1.7
billion. New life sales were up by 2%, driven mainly by higher pension production in the
United Kingdom, partly offset by unfavorable currency movements. In the Americas, new life
sales were down 8%, primarily driven by adverse currency movements, as well as lower
universal life sales due to product withdrawals and product redesign, resulting from the
focus on value creation. Gross deposits increased 17%, with particular success in both the
variable annuity and retirement business in the United States, partly offset by
unfavorable currency movements. Net deposits, excluding run-off businesses, more than
doubled to EUR 3.4 billion and were primarily driven by variable annuity and retirement
deposits in the United States.
Market consistent value of new business
The market consistent value of new business increased strongly to EUR 285 million
mainly as a result of strong sales growth and higher margins in the United States and a
higher contribution from mortgage production in the Netherlands.
Revenue-generating investments
Revenue-generating investments increased 1% during the third quarter of 2013 to EUR
469 billion, driven by continued net inflows and higher equity markets, partly offset by
unfavorable currency exchange rates.
Capital management
Shareholders' equity decreased EUR 0.8 billion compared to the end of the second
quarter of 2013 to EUR 20.3 billion at September 30, 2013. This was driven by unfavorable
currency exchange rates and higher interest rates, resulting in lower revaluation
reserves. The revaluation reserves declined by EUR 0.4 billion to EUR 3.4 billion. Aegon's
shareholders' equity, excluding revaluation reserves and defined benefit plan
remeasurements, amounted to EUR 17.8 billion. The gross leverage ratio improved to 30.1%
in the third quarter, as outstanding commercial paper was reduced by EUR 0.2 billion.
Excess capital in the holding decreased to EUR 1.8 billion, as proceeds of EUR 0.4 billion
received from the divestment of the joint venture with CAM were more than offset by the
payment of the interim dividend of EUR 0.2 billion, a net capital injection into Aegon's
operating units of EUR 0.2 billion and interest payments and operating expenses.
Shareholders' equity per common share, excluding revaluation reserves and defined
benefit plan remeasurements, amounted to EUR 8.42 at September 30, 2013.
At September 30, 2013, Aegon's Insurance Group Directive (IGD) ratio decreased to
208%, driven by the switch to the swap curve for regulatory solvency calculations in the
Netherlands and the payment of the 2013 interim dividend. The capital in excess of the S&P
AA threshold in the United States increased by USD 0.1 billion to USD 0.9 billion, as
earnings for the quarter were largely offset by additional tax charges. The IGD ratio,
excluding Aegon Bank, in the Netherlands was flat at ~245%. The Pillar I ratio in the
United Kingdom, including the with-profit fund, was ~140% at the end of the third quarter
of 2013. This was up from ~130% at the end of the second quarter of 2013, mainly
reflecting EUR 0.2 billion of capital received from the holding. As of this quarter, Aegon
includes the with-profit fund in the reported Pillar I ratio, which is in line with the
regulatory requirements in the United Kingdom.
On October 18, 2013, the Dutch Ministry of Finance shared the results of the impact
study for Solvency 1.5 and started a consultation process on the final calibrations. Aegon
does not expect Solvency 1.5 to have an impact on its capital policy.
On October 15, 2013, Aegon completed the share buyback program announced on September
17, 2013, to neutralize the dilutive effect of the 2013 interim dividend paid in shares.
Between September 17, 2013, and October 14, 2013, 19,047,358 common shares were
repurchased under the share buyback program, at an average price of EUR 5.62 per share.
Cash flows
Operational free cash flows were EUR 88 million in the third quarter of 2013.
Excluding one-time items of EUR (112) million and market impacts of EUR (91) million,
operational free cash flows amounted to EUR 291 million. The one-items were primarily
related to changes to regulatory requirements and tax charges. The impact of market
movements during the third quarter mainly resulted from lower credit spreads in the United
Kingdom and the tax impact of hedge losses in the Americas.
Aegon did not receive material dividends from its operating units during the third
quarter of 2013.
<pre>
Financial
overview, Q3
2013
geographically
[c]
Holding,
other
The United New activities &
EUR millions Americas Netherlands Kingdom Markets eliminations Total
Underlying
earnings before
tax by line of
business
Life 162 59 20 38 - 279
Individual
savings and
retirement
products 138 - - (4) - 134
Pensions 69 27 6 3 - 105
Non-life - (3) - 9 - 6
Distribution - 2 - - - 2
Asset Management - - - 24 - 24
Other - - - - (25) (25)
Share in
underlying
earnings before
tax of
associates 2 - - 4 - 6
Underlying
earnings before
tax 371 85 26 74 (25) 531
Fair value items (502) 14 (8) (12) 15 (493)
Realized gains /
(losses) on
investments 7 190 9 (4) - 202
Impairment
charges (16) (13) (12) (4) - (45)
Other income /
(charges) 90 (2) (1) (124) (5) (42)
Run-off
businesses 1 - - - - 1
Income before
tax (49) 274 14 (70) (15) 154
Income tax 56 (84) 89 6 6 73
Net income 7 190 103 (64) (9) 227
Net underlying
earnings 280 66 119 48 (18) 495
Employee numbers
Sept. 30, Dec. 31,
2013 2012
Employees
excluding
agents, joint
ventures and
associates 20,639 20,902
Agents 2,856 2,748
Total number of
employees
excluding joint
ventures &
associates 23,495 23,650
Aegon's share of
employees
(including
agents) in joint
ventures 724 757
Aegon's share of
employees
(including
agents) in
associates 2,475 2,443
Total 26,694 26,850
</pre> ADDITIONAL INFORMATION
The Hague - November 7, 2013
Conference call
09:00 a.m. CET
Analyst & investor Q&A
09:30 a.m. CET
Media Q&A
10:00 a.m. CET
Audio webcast on aegon.com [http://www.aegon.com ]
Dial-in numbers
United States: +1-480-629-9673
United Kingdom: +44-207-153-2027
The Netherlands: +31-45-631-6902
Two hours after the conference call, a replay will be available on aegon.com
[http://www.aegon.com ].
Presentations
Presentations will be available on aegon.com [http://www.aegon.com ] at 7:35 a.m. CET
Supplements
Aegon's Q3 2013 Financial Supplement and Condensed Consolidated Interim Financial
Statements are available on aegon.com [http://www.aegon.com ].
Full version press release
Use this link for the full version of the press release:
http://www.aegon.com/en/Home/Investors/News-presentations/Press-Releases/2013/Aegon-delivers-higher-underlying-earnings-sales-and-value-of-new-business
About Aegon
As an international insurance, pensions and asset management company based in The
Hague, Aegon has businesses in over twenty markets in the Americas, Europe and Asia. Aegon
companies employ over 23,000 people and have millions of customers across the globe.
Further information: aegon.com [http://www.aegon.com ].
DISCLAIMERS
Cautionary note regarding non-IFRS measures
This document includes the non-IFRS financial measures: underlying earnings before
tax, income tax, income before tax and market consistent value of new business. These
non-IFRS measures are calculated by consolidating on a proportionate basis Aegon's joint
ventures and associated companies. The reconciliation of these measures, except for market
consistent value of new business, to the most comparable IFRS measure is provided in note
3 'Segment information' of Aegon's Condensed Consolidated Interim Financial Statements.
Market consistent value of new business is not based on IFRS, which are used to report
Aegon's primary financial statements and should not be viewed as a substitute for IFRS
financial measures. Aegon may define and calculate market consistent value of new business
differently than other companies. Aegon believes that its non-IFRS measures, together with
the IFRS information, provide meaningful information about the underlying operating
results of Aegon's business including insight into the financial measures that senior
management uses in managing the business.
Local currencies and constant currency exchange rates
This document contains certain information about Aegon's results, financial condition
and revenue generating investments presented in USD for the Americas and GBP for the
United Kingdom, because those businesses operate and are managed primarily in those
currencies. Certain comparative information presented on a constant currency basis
eliminates the effects of changes in currency exchange rates. None of this information is
a substitute for or superior to financial information about Aegon presented in EUR, which
is the currency of Aegon's primary financial statements.
Forward-looking statements
The statements contained in this document that are not historical facts are
forward-looking statements as defined in the US Private Securities Litigation Reform Act
of 1995. The following are words that identify such forward-looking statements: aim,
believe, estimate, target, intend, may, expect, anticipate, predict, project, counting on,
plan, continue, want, forecast, goal, should, would, is confident, will, and similar
expressions as they relate to Aegon. These statements are not guarantees of future
performance and involve risks, uncertainties and assumptions that are difficult to
predict. Aegon undertakes no obligation to publicly update or revise any forward-looking
statements. Readers are cautioned not to place undue reliance on these forward-looking
statements, which merely reflect company expectations at the time of writing. Actual
results may differ materially from expectations conveyed in forward-looking statements due
to changes caused by various risks and uncertainties. Such risks and uncertainties include
but are not limited to the following:
<pre>
- Changes in general economic conditions, particularly in the United States,
the Netherlands and the United Kingdom;
- Changes in the performance of financial markets, including emerging markets,
such as with regard to:
- The frequency and severity of defaults by issuers in Aegon's fixed income
investment portfolios;
- The effects of corporate bankruptcies and/or accounting restatements on
the financial markets and the resulting decline in the value of equity and debt
securities Aegon holds; and
- The effects of declining creditworthiness of certain private sector
securities and the resulting decline in the value of sovereign exposure that Aegon
holds;
- Changes in the performance of Aegon's investment portfolio and decline in
ratings of Aegon's counterparties;
- Consequences of a potential (partial) break-up of the euro;
- The frequency and severity of insured loss events;
- Changes affecting longevity, mortality, morbidity, persistence and other
factors that may impact the profitability of Aegon's insurance products;
- Reinsurers to whom Aegon has ceded significant underwriting risks may fail to
meet their obligations;
- Changes affecting interest rate levels and continuing low or rapidly changing
interest rate levels;
- Changes affecting currency exchange rates, in particular the EUR/USD and
EUR/GBP exchange rates;
- Changes in the availability of, and costs associated with, liquidity sources
such as bank and capital markets funding, as well as conditions in the credit markets
in general such as changes in borrower and counterparty creditworthiness;
- Increasing levels of competition in the United States, the Netherlands, the
United Kingdom and emerging markets;
- Changes in laws and regulations, particularly those affecting Aegon's
operations, ability to hire and retain key personnel, the products Aegon sells, and
the attractiveness of certain products to its consumers;
- Regulatory changes relating to the insurance industry in the jurisdictions in
which Aegon operates;
- Changes in customer behavior and public opinion in general related to, among
other things, the type of products also Aegon sells, including legal, regulatory or
commercial necessity to meet changing customer expectations;
- Acts of God, acts of terrorism, acts of war and pandemics;
- Changes in the policies of central banks and/or governments;
- Lowering of one or more of Aegon's debt ratings issued by recognized rating
organizations and the adverse impact such action may have on Aegon's ability to raise
capital and on its liquidity and financial condition;
- Lowering of one or more of insurer financial strength ratings of Aegon's
insurance subsidiaries and the adverse impact such action may have on the premium
writings, policy retention, profitability and liquidity of its insurance subsidiaries;
- The effect of the European Union's Solvency II requirements and other
regulations in other jurisdictions affecting the capital Aegon is required to
maintain;
- Litigation or regulatory action that could require Aegon to pay significant
damages or change the way Aegon does business;
- As Aegon's operations support complex transactions and are highly dependent on
the proper functioning of information technology, a computer system failure or
security breach may disrupt Aegon's business, damage its reputation and adversely
affect its results of operations, financial condition and cash flows;
- Customer responsiveness to both new products and distribution channels;
- Competitive, legal, regulatory, or tax changes that affect profitability, the
distribution cost of or demand for Aegon's products;
- Changes in accounting regulations and policies or a change by Aegon in
applying such regulations and policies, voluntarily or otherwise, may affect Aegon's
reported results and shareholders' equity;
- The impact of acquisitions and divestitures, restructurings, product
withdrawals and other unusual items, including Aegon's ability to integrate
acquisitions and to obtain the anticipated results and synergies from acquisitions;
- Catastrophic events, either manmade or by nature, could result in material
losses and significantly interrupt Aegon's business; and
- Aegon's failure to achieve anticipated levels of earnings or operational
efficiencies as well as other cost saving initiatives.
</pre> Further details of potential risks and uncertainties affecting Aegon are described in
its filings with the Netherlands Authority for the Financial Markets and the US Securities
and Exchange Commission, including the Annual Report. These forward-looking statements
speak only as of the date of this document. Except as required by any applicable law or
regulation, Aegon expressly disclaims any obligation or undertaking to release publicly
any updates or revisions to any forward-looking statements contained herein to reflect any
change in Aegon's expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based.
<pre>
Media relations
Robin Boon
+31-(0)70-344-8956
[email protected]
Investor relations
Willem van den Berg
+31-(0)70-344-8305
[email protected]
</pre>
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