Aegon Reports Strong Increase in Earnings and
Capital Ratio in 3Q 2017
Net income increases by 31% driven by US
<pre>
- Underlying earnings up by 20% to EUR 556 million reflecting favorable claims
experience, higher fee revenue as a result of favorable equity markets, and lower
expenses in US
- Gain from fair value items of EUR 159 million driven by positive real estate
revaluations and hedging gains in US
- Charge from assumption changes and model updates of EUR 198 million caused by
conversion of the largest block of universal life business to a new model
- Higher underlying earnings, fair value items and realized gains drive increase in net
income to EUR 469 million
- Return on equity for the quarter increases to 8.9%
</pre> Record gross deposits driven by fee-based business; outflows from contract
discontinuances in Mercer block
<pre>
- Gross deposits increase by 65% to EUR 41 billion as a result of exceptionally
strong asset management and UK platform deposits; net outflows of EUR 0.6 billion
driven by lapses on retirement business acquired from Mercer
- New life sales decline by 8% to EUR 202 million due to lower sales in US and exit from
UK annuities
- Accident & health and general insurance sales down by 17% to EUR 180 million from
lower sales in US
- Market consistent value of new business increases by 75% to EUR 121 million benefiting
from management actions
</pre> Strong increase in Solvency II ratio to 195%
<pre>
- Solvency II ratio increases by 10%-points compared with last quarter to 195%.
Capital generation and benefit from divestment of UK annuity book more than offset
interim 2017 dividend
- Capital generation of EUR 809 million including favorable market impacts and one-time
items of EUR 485 million
- Holding excess capital temporarily decreases to EUR 0.9 billion driven by capital
injection into Dutch business
- Gross financial leverage ratio improves by 20 basis points sequentially to 29.2% as a
result of retained earnings
</pre> Statement of Alex Wynaendts, CEO
"I am pleased that our underlying earnings are up for the fifth consecutive quarter,
reflecting growth across our businesses, expense savings and management actions taken to
improve returns. We are also reporting strong net income, despite charges related to
assumption changes and model updates. These were mainly driven by the completion of the
conversion of our largest block of universal life business in the US to a new, more
dynamic model. This effectively concludes the first phase of our model enhancement and
validation program covering all high impact models identified when the program started in
2014.
Our strong capital position is a clear highlight this quarter, with a significant
increase in the group's Solvency II ratio to 195%, which is now at the upper end of the
target range. This enables our businesses to operate from a position of strength and
underpins our target to return EUR 2.1 billion of capital to shareholders over the period
2016 to 2018.
The record gross deposits we generated this quarter were driven by our key growth
areas, such as asset management and our digital platforms. By adapting to the evolving
needs of our customers, we are becoming more relevant throughout their lives. This puts us
in a strong position for continued growth, and gives me confidence that we are taking the
right steps to achieve our ambitions."
<pre>
Key performance indicators
EUR millions [13] Notes 3Q 2017 3Q 2016 % 2Q 2017 % YTD 2017 YTD 2016 %
Underlying earnings
before tax 1 556 461 20 535 4 1,578 1,359 16
Net income / (loss) 469 358 31 529 (11) 1,375 116 n.m.
Sales 2 4,451 2,904 53 3,937 13 12,331 9,229 34
Market consistent value
of new business 3 121 70 75 134 (10) 428 302 42
Return on equity 4 8.9% 7.7% 16 8.4% 7 8.2% 7.2% 13
</pre> Strategic highlights
<pre>
- Aegon launches mutual fund joint venture in Mexico
- Robot processes customer requests to improve administrative efficiency in Dutch
business
- Aegon Asset Management receives top ratings for responsible investment
- Launch of mobile- and user-friendly global careers site
</pre> Aegon's ambition
Aegon's ambition is to be a trusted partner for financial solutions at every stage of life,
and to be recognized by its customers, business partners and society as a company that
puts the interests of its customers first in everything it does. In addition, Aegon wants
to be regarded by its employees as an employer of choice, engaging and enabling them to
succeed. This ambition is supported by four strategic objectives embedded in all Aegon
businesses: Optimized portfolio, Operational excellence, Customer loyalty, and Empowered
employees.
Optimized portfolio
Aegon has joined forces with Administradora Akaan to create the mutual fund company
Akaan Transamerica in Mexico. Akaan Transamerica recently received formal approval from
the Mexican Banking and Securities Commission (CNBV) to initiate operations and go to
market. It will offer a wide variety of Mexican and international mutual funds, as well as
diversified global investment solutions, including alternative investments, actively- and
passively-managed funds, and bespoke investment strategies. Akaan Transamerica will
leverage the extensive investment knowledge and experience from Transamerica Asset
Management's highly skilled team of investment management professionals.
Aegon the Netherlands has entered into a four-year strategic partnership with UK
online lending platform Funding Circle. Direct loans will be provided to small businesses
online, with initial plans to help approximately 2,600 small businesses with funding of
GBP 160 million in its first year of the partnership. Using data analysis, Funding Circle
is able to assess a company's prospects and provide an immediate response about a possible
loan. The partnership offers Aegon strong returns, while enabling small business owners to
grow their businesses with transparent funding.
In the Netherlands, Aegon has entered into a strategic partnership with Dynamic Credit,
an Amsterdam-based alternative fixed income asset manager. Under the agreement, Aegon
will become a 25% shareholder of Dynamic Credit. With over EUR 8 billion of assets under
management, Dynamic Credit aims to serve its customers by matching savings with credit
investments. As part of the partnership, Dynamic Credit's innovative LoanClear platform
will be upgraded and extended into an investment hub for loans from marketplace lenders.
On November 1, 2017, Aegon announced the successful completion of the sale of Unirobe
Meeùs Groep (UMG) to Aon Groep Nederland for EUR 295 million. The transaction is
consistent with Aegon's strategic objective to optimize its portfolio across its
businesses and is expected to result in an increase of the Solvency II ratio of Aegon the
Netherlands by an estimated 6%-points in the fourth quarter of 2017. The divestment will
also lead to a book gain of approximately EUR 180 million, which will be reported in Other
income.
On September 22, 2017, Aegon completed the Legal & General Part VII transfer related
to the divestment of the UK annuity book as announced last year. The completion led to a
2%-points uplift of the group solvency ratio. This transfer completes the divestment of
Aegon's own annuity book in the United Kingdom and is a further milestone in the company's
transformation.
Aegon received approval from the Polish Financial Supervision Authority to take over
the management of Nordea's second-pillar pension fund. The takeover of the management of
Nordea's pension fund in combination with Aegon's existing fund will result in the fourth
largest second-pillar pension fund in Poland, with approximately EUR 3.5 billion of net
assets and 1.9 million pension customers. The larger pension fund will benefit from
economies of scale and improved investment opportunities, and will share best practices
for pension administration.
Operational excellence
In the Netherlands, Aegon is now utilizing a robotic process to handle customer
requests to change addresses or bank account details for products that have recurring
premiums collected. Every day, Aegon receives more than 100 such requests, which
previously meant manually updating information across various systems. By using Robotics
Process Automation (RPA), 95% of all requests can be automatically completed, with no
manual intervention from employees. The RPA can process these change requests quickly,
with a notification automatically sent to customers informing them the change has been
completed. Aegon is examining other opportunities to utilize the RPA technology to
streamline processes across its business.
Customer loyalty
Aegon's Chinese joint venture unveiled Zeus, an industry-leading digital platform for
agents, at the company's Digital Day. The system, which is specifically designed for
individual agents, improves customer experience, and enhances traditional sales,
underwriting and administration processes.
Empowered employees
Management Board member Mark Mullin, responsible for Aegon Americas, was appointed
Chairman of the Board for the American Council of Life Insurers (ACLI), the most prominent
association representing the life insurance industry in the United States. The ACLI
represents 95% of all industry assets in the United States, and advocates on policy
matters in federal, state and international forums. Mark joined the Board of Directors of
the ACLI seven years ago, and has been active in advocating on behalf of the industry for
the retirement enhancement and savings act and the Department of Labor fiduciary rule.
Aegon launched a new global careers site that enables potential employees to identify
career opportunities across Corporate Center, Asset Management, Aegon Global Technology,
the Netherlands and Transamerica in one easy to use site. The site has a number of new
features to help direct top talent, including videos and testimonials from current Aegon
employees, an overview of the work environment, company history and other information
relevant to potential employees.
<pre>
Financial overview
EUR millions Notes 3Q 2017 3Q 2016 % 2Q 2017 % YTD 2017 YTD 2016 %
Underlying
earnings before tax
Americas 376 307 22 341 10 1,029 860 20
Europe 177 151 17 195 (9) 541 481 12
Asia 14 6 125 11 35 37 8 n.m.
Asset Management 30 32 (7) 32 (6) 99 114 (13)
Holding and other (41) (35) (17) (43) 4 (128) (105) (23)
Underlying earnings
before tax 556 461 20 535 4 1,578 1,359 16
Fair value items 159 84 88 (191) n.m. (85) (632) 87
Realized gains /
(losses) on investments 135 21 n.m. 111 22 321 305 5
Net impairments 4 6 (26) 2 111 (5) (53) 91
Other income / (charges) (233) (72) n.m. 291 n.m. 64 (734) n.m.
Run-off businesses (3) 8 n.m. 10 n.m. 38 55 (30)
Income before tax 618 510 21 757 (18) 1,911 300 n.m.
Income tax (149) (152) 2 (228) 35 (536) (183) (192)
Net income / (loss) 469 358 31 529 (11) 1,375 116 n.m.
Net underlying earnings 412 349 18 390 6 1,152 1,012 14
Commissions and
expenses 1,435 1,638 (12) 1,648 (13) 4,749 4,971 (4)
of which
operating expenses 9 909 900 1 1,001 (9) 2,893 2,786 4
Gross deposits
(on and off balance) 10
Americas 8,062 9,375 (14) 9,288 (13) 30,185 32,112 (6)
Europe 9,604 2,769 n.m. 12,007 (20) 31,665 9,298 n.m.
Asia 54 83 (35) 48 12 175 250 (30)
Asset Management 22,971 12,442 85 13,492 70 47,469 36,040 32
Total gross deposits 40,691 24,669 65 34,835 17 109,495 77,700 41
Net deposits
(on and off balance) 10
Americas (11,929) (3,711) n.m. (2,052) n.m. (14,387) 1,058 n.m.
Europe 1,033 (41) n.m. 1,901 (46) 3,709 849 n.m.
Asia 35 69 (49) 31 13 120 208 (42)
Asset Management 10,365 1,380 n.m. 2,491 n.m. 6,596 4,666 41
Total net deposits
excluding run-off
businesses (496) (2,303) 78 2,372 n.m. (3,962) 6,781 n.m.
Run-off businesses (66) (237) 72 (75) 12 (307) (580) 47
Total net deposits /
(outflows) (563) (2,539) 78 2,297 n.m. (4,269) 6,201 n.m.
New life sales
Life single premiums 329 479 (31) 379 (13) 1,204 1,578 (24)
Life recurring premiums
annualized 169 171 (1) 186 (9) 551 571 (4)
Total recurring plus
1/10 single 202 219 (8) 224 (10) 672 729 (8)
New life sales 10
Americas 113 127 (11) 125 (9) 364 409 (11)
Europe 63 64 (1) 65 (2) 195 224 (13)
Asia 26 28 (8) 34 (23) 112 96 16
Total recurring plus
1/10 single 202 219 (8) 224 (10) 672 729 (8)
New premium production
accident and health
insurance 157 198 (21) 200 (22) 630 658 (4)
New premium production
general insurance 23 20 15 30 (24) 80 71 12
</pre><pre>
Revenue-generating investments
Sep. 30, Jun. 30, Dec. 31,
2017 2017 % 2016 %
Revenue-generating investments (total) 816,274 816,915 - 743,200 10
Investments general account 138,583 140,544 (1) 156,813 (12)
Investments for account of policyholders 197,075 198,278 (1) 203,610 (3)
Off balance sheet investments third parties 480,615 478,093 1 382,776 26
</pre> Operational highlights
Underlying earnings before tax
Aegon's underlying earnings before tax increased by 20% compared with the third quarter of
2016 to EUR 556 million. This increase was largely driven by a significant improvement in
underwriting results, higher fee revenue, expense savings and favorable expense items.
Favorable claims experience, favorable expense items in the United States, and positive
one-time items amounted to EUR 33 million.
Underlying earnings from the Americas increased by 22% to EUR 376 million. A
significant improvement in claims experience, higher fee revenue from favorable equity
markets and lower expenses more than offset weakening of the US dollar. Lower expenses
resulted from favorable expense items of approximately EUR 20 million and expense savings
as part of the five-part plan. Favorable claims experience this quarter of EUR 21 million
was mainly driven by seasonality in supplemental health claims. The current quarter also
included a EUR 13 million negative adjustment to intangible assets from lower reinvestment
yields.
Underlying earnings from Aegon's operations in Europe increased by 17% to EUR 177
million. Higher fee revenue due to favorable equity markets, an improvement in
underwriting results in all regions and a EUR 5 million reserve release in the Dutch
non-life business more than offset lower investment income in the Netherlands due to
prepayments and interest rate resets on mortgages.
Aegon's underlying earnings in Asia more than doubled to EUR 14 million. This increase
was primarily driven by the non-recurrence of charges related to reinvestment yields in
the High-Net-Worth (HNW) businesses, and favorable persistency in China.
Underlying earnings from Aegon Asset Management declined by 7% to EUR 30 million, as
expense reductions were more than offset by lower performance and management fees as a
result of lower asset balances due to a contract loss and the divestment of the majority
of the run-off businesses.
The result from the holding declined by EUR 6 million to a loss of EUR 41 million,
caused by higher project-related expenses.
Net income
Net income increased by 31% compared with the third quarter of last year to EUR 469
million, as higher underlying earnings, fair value items and realized gains more than
offset an increase in other charges driven by the conversion of the largest block of
universal life business in the United States to a new model.
Fair value items
The gain from fair value items amounted to EUR 159 million. Positive real estate
revaluations in the Netherlands and United States, hedging gains in the United States, and
a positive result on the guarantee provision in the Netherlands together more than offset
losses in the United Kingdom and the Netherlands on hedges in place to protect Aegon's
capital position.
Realized gains on investments
Realized gains totaled EUR 135 million, and were mainly related to the sale of an
equity investment in the United States, and gains on bonds to optimize the general account
investment portfolio in the United Kingdom following the divestment of the annuity book.
Impairment charges
Net recoveries amounted to EUR 4 million and reflect the continued benign credit
environment.
Other charges
Other charges amounted to EUR 233 million mainly as a result of the net impact of
assumption changes and model updates of EUR 198 million. In the United States, these were
mainly caused by the conversion of the largest block of universal life business to a new
model. The model allows for modeling policyholder behavior and other assumptions on a
policy-by-policy basis. These charges were partly offset by the net positive impact of
assumption changes and model updates in the Netherlands and Asia. The remaining other
charges were driven by the impairment of intangibles related to the announced sale of
Aegon Ireland of EUR 36 million and integration and restructuring expenses of EUR 21
million. These were partly offset by other items, including an expense reserve release
related to the divested annuity business following the completion of the Legal & General
Part VII transfer.
Run-off businesses
The run-off businesses reported a loss of EUR 3 million, which was in line with
expectations following the sale of the majority of the run-off businesses in the second
quarter of this year.
Income tax
Income tax amounted to EUR 149 million, which implies an effective tax rate for the third
quarter of 24%. The effective tax rate on underlying earnings was 26%.
Return on equity
Return on equity increased by 120 basis points compared with the same quarter last
year to 8.9% as a result of higher net underlying earnings.
Operating expenses
Operating expenses increased by 1% compared with the third quarter of 2016 to EUR 909
million as a result of acquisitions in the United Kingdom and an increase in integration
and restructuring expenses. Excluding the impact of these acquisitions, and integration
and restructuring expenses, operating expenses decreased by 3% on a constant currency
basis. This decrease resulted from favorable expense items of approximately EUR 20 million
and expense savings. Aegon is well on track to implement EUR 350 million of expense
savings by year-end 2018 as part of its plans to improve the return on equity. Initiatives
to reduce expenses have led to annual run-rate expense savings of approximately EUR 170
million since the beginning of 2016.
Sales
Aegon's total sales in the third quarter of 2017 were up by 53% to EUR 4.5 billion.
This strong increase was the result of a 65% increase in gross deposits to EUR 40.7
billion, primarily driven by exceptionally strong asset management deposits and strong
institutional platform sales in the United Kingdom, which can fluctuate. Asset management
gross deposits benefited from a large mandate win by Aegon's strategic partner La Banque
Postale Asset Management (LBPAM), and increased sales in China and the Netherlands. The
latter reflects continued strong sales in the Dutch mortgage fund and the inclusion of the
first inflows from general pension fund Stap, for which Aegon carries out the fiduciary
management. Net outflows amounted to EUR 0.6 billion, as high asset management inflows and
increased inflows on the platform in the United Kingdom were more than offset by net
outflows in the Americas as a result of contract discontinuances in the retirement
business acquired from Mercer, in line with earlier guidance.
New life sales declined by 8% to EUR 202 million, which was mainly caused by lower
term life and indexed universal life sales in the United States as a result of Aegon's
focus on profitability, and lower sales following the exit from UK annuities. This was
only partly offset by strong growth in Central & Eastern Europe, particularly in Turkey,
and growth in Spain & Portugal, which was driven by the joint ventures with Santander.
New premium production for accident & health and general insurance decreased by 17% to
EUR 180 million. Product exits and lower supplemental health sales in the United States
more than offset higher travel insurance sales. Travel insurance sales are expected to
reduce significantly as of the first quarter of 2018 as part of the earlier announced
strategic decision to exit the Affinity, Direct TV and Direct Mail distribution channels.
Market consistent value of new business
The market consistent value of new business (MCVNB) increased by 75% to EUR 121
million. The benefit from management actions and higher interest rates more than offset
the exclusion of mortgage sales from the MCVNB calculation, the exit from UK annuities,
and lower life and accident & health sales. No MCVNB is recognized on the majority of
gross deposits, particularly institutional inflows in the United Kingdom and Asset
Management.
Revenue-generating investments
Revenue-generating investments remained stable compared with the end of last quarter
at EUR 816 billion. The takeover of the management of Nordea's second-pillar pension fund
in Poland and the favorable impact from higher equity markets were offset by net outflows
and adverse currency movements.
Capital management
Shareholders' equity declined by EUR 0.3 billion to EUR 20.1 billion on September 30, 2017,
as retained earnings were more than offset by weakening of the US dollar. Shareholders'
equity excluding revaluation reserves and defined benefit plan remeasurements decreased by
EUR 0.2 billion to EUR 16.9 billion - or EUR 8.04 per common share - at the end of the
third quarter. The gross leverage ratio improved by 20 basis points to 29.2% as a result
of retained earnings.
Holding excess capital decreased temporarily to EUR 0.9 billion following an injection
of EUR 1 billion into Aegon the Netherlands to strengthen its capital position. Holding
expenses, the payment of the cash portion of the interim 2017 dividend and other items led
to cash outflows of EUR 224 million. These cash outflows were partly offset by a
EUR 357 million dividend from the United States, and EUR 20 million from Asset Management.
The redemption of EUR 500 million senior unsecured notes on July 18, 2017, was offset by
the issuance of EUR 500 million 1-year senior notes at -16 basis points yield on August 30,
2017.
In October 2017, Aegon's subsidiary in the United Kingdom upstreamed GBP 131 million
to the group based on its strong capital position and funded from the capital release
related to the divestment of its annuity portfolio. Aegon UK expects to pay an additional
dividend later in the fourth quarter, which will bring the total 2017 capital upstream to
the group to GBP 150 million. Aegon expects to receive additional dividends from other
subsidiaries, including from the United States, in the fourth quarter. The capital
upstreamed by the units will more than offset the expected cash outflows from holding
expenses and the share buyback announced on September 28, 2017 to neutralize the dilutive
effect of the 2016 final and 2017 interim stock dividends.
Capital generation
Capital generation of the operating units amounted to EUR 809 million for the quarter.
Market impacts and one-time items of EUR 485 million mainly related to model changes in
both the Netherlands and the United Kingdom as well as model changes related to currency
risk at the group. All major model changes have been approved by Aegon's college of
supervisors. The benefit from separate account derisking as part of the capital plan for
the Netherlands was offset by the negative impact from a model conversion in the United
States. The model changes in the Netherlands and United Kingdom, and the model conversion
in the United States will not have a material recurring impact on capital generation going
forward. Capital generation excluding market impacts and one-time items amounted to
EUR 324 million.
Solvency II ratio
Aegon's Solvency II ratio increased from 185% to 195% during the third quarter, as
capital generation including market impacts and one-time items (+10%) and the completion
of the Legal & General Part VII transfer related to the divestment of the UK annuity book
(+2%) more than offset the accrual for the interim 2017 dividend, which was announced in
August (-3%).
Semi-annual reporting
With effect from 2018, Aegon will report half-year and full-year results, and no
longer publish quarterly results. Reporting dates will be made available on the financial
calendar on http://www.aegon.com [https://www.aegon.com/calendar/?tab=2018 ].
<pre>
Financial overview, 3Q 2017 geographically
Holding,
other
Asset activities &
EUR millions Americas Europe Asia Management eliminations Total
Underlying earnings
before tax by line of business
Life 146 99 18 - - 263
Individual savings
and retirement products 135 - (3) - - 132
Pensions 95 60 - - - 155
Non-life - 15 - - - 15
Asset Management - 0 - 30 - 30
Other - 3 (1) - (41) (39)
Underlying earnings before tax 376 177 14 30 (41) 556
Fair value items 142 7 1 - 8 159
Realized gains / (losses)
on investments 90 41 3 1 - 135
Net impairments 6 (2) 0 - (0) 4
Other income / (charges) (312) 98 (19) (1) 0 (233)
Run-off businesses (3) - - - - (3)
Income before tax 300 322 (0) 30 (34) 618
Income tax (69) (77) (2) (10) 9 (149)
Net income / (loss) 231 245 (2) 20 (25) 469
Net underlying earnings 279 137 7 20 (31) 412
Employee numbers
Sep. 30, Jun. 30, Dec.31,
2017 2017 2016
Employees 29,709 29,657 29,380
of which Aegon's share of employees
in joint ventures and associates 6,312 6,146 5,944
</pre> Full version of the press release
Use this link [https://www.aegon.com/Home/Investors/News-releases/2017/3q-earnings ]
for the full version of the press release.
Additional information
Presentation
The conference call presentation is available on aegon.com
[http://www.aegon.com/results ] as of 7.30 a.m. CET.
Supplements
Aegon's 3Q 2017 Financial Supplement and Condensed Consolidated Interim Financial
Statements
are available on aegon.com [http://www.aegon.com/results ].
Conference call including Q&A
9:00 a.m. CET
Audio webcast on aegon.com [http://www.aegon.com/results ]
Dial-in numbers
United States: +1-719-325-2231
United Kingdom: +44-330-336-9411
The Netherlands: +31-20-703-8261
Passcode: 9062105
Two hours after the conference call, a replay will be available on aegon.com
[http://www.aegon.com/results ].
DISCLAIMERS
Cautionary note regarding non-IFRS measures
This document includes the following non-IFRS-EU financial measures: underlying
earnings before tax, income tax, income before tax, market consistent value of new
business and return on equity. These non-IFRS-EU 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-EU 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-EU, which are used to report Aegon's primary financial
statements and should not be viewed as a substitute for IFRS-EU financial measures. Aegon
may define and calculate market consistent value of new business differently than other
companies. Return on equity is a ratio using a non-IFRS-EU measure and is calculated by
dividing the net underlying earnings after cost of leverage by the average shareholders'
equity, the revaluation reserve and the reserves related to defined benefit plans. Aegon
believes that these non-IFRS-EU measures, together with the IFRS-EU information, provide
meaningful supplemental 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 Asia, and in 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 government 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;
- Consequences of the anticipated exit of the United Kingdom from the European Union;
- 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, taxation of Aegon companies, the products
Aegon sells, and the attractiveness of certain products to its consumers;
- Regulatory changes relating to the pensions, investment, and insurance industries in
the jurisdictions in which Aegon operates;
- Standard setting initiatives of supranational standard setting bodies such as the
Financial Stability Board and the International Association of Insurance Supervisors
or changes to such standards that may have an impact on regional (such as EU),
national or US federal or state level financial regulation or the application thereof
to Aegon, including the designation of Aegon by the Financial Stability Board as a
Global Systemically Important Insurer (G-SII);
- Changes in customer behavior and public opinion in general related to, among other
things, the type of products 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, which may affect Aegon's reported
results and shareholders' equity;
- Aegon's projected results are highly sensitive to complex mathematical models of
financial markets, mortality, longevity, and other dynamic systems subject to shocks
and unpredictable volatility. Should assumptions to these models later prove incorrect,
or should errors in those models escape the controls in place to detect them, future
performance will vary from projected results;
- 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;
- Aegon's failure to achieve anticipated levels of earnings or operational efficiencies
as well as other cost saving and excess capital and leverage ratio management
initiatives; and
- This press release contains information that qualifies, or may qualify, as inside
information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
</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
Dick Schiethart
+31(0)70-344-8821
[email protected]
Investor relations
Willem van den Berg
+31(0)70-344-8305
[email protected]
Conference call including Q&A (9:00 a.m. CET)
Audio webcast on aegon.com
United States: +1-719-325-2231
United Kingdom: +44-330-336-9411
The Netherlands: +31-20-703-8261
Passcode: 9062105
</pre>
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