Aegon Reports Higher Earnings and Sales for Q4 2014
THE HAGUE, The Netherlands, February 19, 2015 /PRNewswire/ --
Proposal to increase final dividend to EUR 0.12 per share
- Continued solid business performance
- Underlying earnings increase to EUR 562 million, driven by growth of the business (EUR 37 million), an employee benefit release in the Netherlands (EUR 45 million) and the stronger US dollar (EUR 25 million)
- Hedging programs and alternative investments main drivers of fair value items loss of EUR 132 million
- Net income up strongly to EUR 399 million, supported by higher realized gains on investments
- Return on equity of 9.7% and 10.5% excluding capital allocated to run-off businesses
- Key markets deliver strong sales growth; asset base continues to expand
- Gross deposits up 29% to EUR 13.7 billion, driven by asset management, variable annuities, mutual funds and Knab; net deposits of EUR 2.4 billion (excluding stable value products)
- Life sales increase 9% to EUR 523 million, mainly as a result of higher universal life sales in US and Asia
- Accident & health and general insurance sales 14% higher to EUR 226 million, driven by US
- Profitability of sales remains strong with MCVNB of EUR 196 million despite lower interest rates
- Gross leverage and fixed charge cover targets achieved after debt redemption
- Gross leverage ratio improves to 28.7% and fixed charge cover increases to 6.5x
- Solvency ratio at 208%; holding excess capital of EUR 1.2 billion after debt redemption
- Operational free cash flows excluding market impacts and one-time items of EUR 338 million
Statement of Alex Wynaendts, CEO
"Aegon's strong fourth quarter results complete a solid year for the company, in what continues to be a challenging environment with persistent low interest rates and market volatility. Higher sales and earnings this quarter evidence the strength of our franchise and the continued trust of our customers.
"Executing on our key strategic objective of optimizing our portfolio of businesses, we announced the sale of our Canadian operations, as well as our stake in La Mondiale Participations in France. At the same time, we continue to invest in growth opportunities. Recently, we announced an asset management partnership with La Banque Postale in France, and we are pleased to conclude a distribution agreement with BANCOOB in Brazil.
"Aegon is well-positioned to serve the diverse and growing financial needs of our current and future customers. Moreover, we remain committed to generating long-term value for all stakeholders. I am therefore pleased that our solid capital position and cash flows enable us to announce an increase in the final dividend to
12 eurocents per share."
Key performance indicators
Q4 Q3 Q4 FY FY
amounts in EUR millions [b] Notes 2014 2014 % 2013 % 2014 2013 %
Underlying earnings before tax 1 562 291 93 473 19 1,865 1,968 (5)
Net income 399 52 - 157 155 1,186 857 38
Sales 2 2,117 2,333 (9) 1,741 22 8,602 7,151 20
Market consistent value of new business 3 196 192 2 268 (27) 832 986 (16)
Return on equity 4 9.7% 5.0% 92 7.7% 25 7.8% 8.6% (10)
STRATEGIC HIGHLIGHTS
- Sale of minority interest in La Mondiale Participations for EUR 350 million
- Aegon and La Banque Postale form asset management partnership in France
- Global employee engagement survey shows Aegon's leading position in the sector
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 committed to continually assessing its businesses to ensure they contribute to its strategic objectives. This resulted in the announcement of the divestment of its Canadian activities in October 2014 and, after a comprehensive strategic review, the announcement of an agreement to sell its 35% share in La Mondiale Participations to La Mondiale for EUR 350 million in November 2014. This is in line with book value and the transaction is expected to close in the first quarter of 2015.
Recognizing opportunities in the market, Aegon and La Banque Postale announce that they have concluded an agreement to form a strategic long-term asset management partnership in France. As part of the agreement, Aegon will acquire a 25% stake in La Banque Postale Asset Management (LBPAM) for a consideration of EUR 112.5 million with the option to increase the stake to 35%. LBPAM is the fifth largest asset manager in France with approximately EUR 150 billion assets under management. The two companies will work closely together to develop a range of investment products that La Banque Postale Asset Management will offer to La Banque Postale's 11 million clients and to its growing institutional client base in France. The transaction is expected to close mid-2015 subject to regulatory approval.
With the aim to further capture growth prospects in Brazil, Mongeral Aegon and BANCOOB (Banco Cooperativo do Brasil) signed an agreement to establish a joint venture to provide life insurance and pension solutions within the SICOOB System. SICOOB is the largest cooperative financial system in the country, with over 2.8 million associates and 2,200 points of service. BANCOOB is a private commercial bank that is owned by the credit cooperative entities affiliated with the SICOOB system. In 2014, the bank had approximately EUR 7 billion in assets and a net equity of approximately EUR 250 million. This agreement represents a key expansion into bank distribution for Mongeral Aegon which already serves over 1 million customers nationwide through over 4,000 broker partners. The final agreement is subject to regulatory approval by SUSEP (Superintendência de Seguros Privados) and CADE (Conselho Administrativo de Defesa Econômica).
Deliver operational excellence
Mongeral Aegon was the winner of the 2014 Innovation in Insurance Award, in the Products and Services category. The National Confederation of Insurance Companies in Brazil recognized Mongeral Aegon's new digital distribution strategy which integrates traditional distribution channels with the company's own online portal and with online stores from business partners.
Aegon has successfully completed the merger and rebranding of a number of legal entities in the United States. Aegon insurance companies in the United States now almost exclusively operate under the Transamerica brand. This simplifies the legal structure, reduces costs, releases capital and leverages the strength of Aegon's Transamerica brand among customers and intermediaries.
Enhance customer loyalty
Aegon has started to upgrade customers in the United Kingdom onto its award-winning platform, Aegon Retirement Choices. This is an important step in the development of the platform. Customers experience better service, lower fees and are able to take advantage of a number of retirement readiness tools offered exclusively on the platform. Upgraded customers are choosing to consolidate assets from other sources.
Knab, Aegon's online bank in the Netherlands, has been recognized as having the best new investment concept for its simple, convenient and accessible investing. It provides sample portfolios to help guide newer investors as well as advanced analysis tools for more experienced investors. Knab's innovations have now attracted more than 50,000 customers, following a strong increase in 2014.
Aegon Spain has expanded its multi-channel distribution approach by rolling out a new innovative advice channel offering customers a personal protection and retirement planning service. Aegon advisers guide customers through their options and use the latest technology to simplify financial and protection planning. Two customer centers have opened in Barcelona and Madrid with others planned over the coming years.
Aegon Hungary was the recipient of three awards for its damage prevention campaign, a European Excellence Award, CSR Hungary Award and PR Society Award. These prestigious accolades acknowledge the best sustainability initiatives in Hungary. Aegon Hungary was also recognized, for the sixth consecutive year, for excellence in customer service by winning the Hungarian Association of Independent Insurance Brokers best insurer award for outstanding customer service in the residential property and personal insurance categories.
Empower Employees
Results from Aegon's fourth annual global employee survey place Aegon at or above the high-performing norm for the financial services sector. Employee empowerment and enablement have each increased 4 points alone this year, and 10 points since the first survey in 2011, to 73 and 74 respectively. 88% of all Aegon employees worldwide participated in the survey. This demonstrates the success of Aegon's ongoing work to become the most preferred employer in the sector, which allows Aegon to attract and develop the talent required to best service the needs of its customers.
Financial overview [c]
Q4 Q3 Q4
EUR millions Notes 2014 2014 % 2013 % FY 2014 FY 2013 %
Underlying earnings before tax
Americas 367 134 174 299 23 1,134 1,314 (14)
The Netherlands 172 127 35 124 39 558 454 23
United Kingdom 29 28 3 20 45 115 87 32
New Markets 33 40 (16) 46 (27) 196 227 (13)
Holding and other (39) (37) (4) (15) (156) (138) (113) (22)
Underlying earnings before tax 562 291 93 473 19 1,865 1,968 (5)
Fair value items (132) (296) 55 (272) 51 (807) (1,294) 38
Realized gains / (losses)
on investments 304 85 - 104 191 697 500 39
Net impairments (28) 5 - (1) - (34) (122) 72
Other income / (charges) (191) (29) - (33) - (240) (52) -
Run-off businesses (3) (31) 90 15 - (21) 21 -
Income before tax 511 23 - 286 79 1,458 1,021 43
Income tax (112) 29 - (129) 13 (272) (164) (66)
Net income 399 52 - 157 155 1,186 857 38
Net income / (loss) attributable to:
Equity holders of Aegon N.V. 399 52 - 155 158 1,186 854 39
Non-controlling interests - - - 2 (78) 1 3 (79)
Net underlying earnings 429 235 82 350 22 1,416 1,531 (8)
Commissions and expenses 1,596 1,398 14 1,469 9 5,892 5,873 -
of which operating expenses 9 897 826 9 836 7 3,312 3,273 1
New life sales
Life single premiums 1,481 1,806 (18) 2,085 (29) 5,596 6,510 (14)
Life recurring premiums annualized 374 372 1 271 38 1,485 1,260 18
Total recurring plus 1/10 single 523 552 (5) 480 9 2,045 1,911 7
New life sales
Americas 10 169 141 20 113 49 552 464 19
The Netherlands 82 99 (17) 95 (14) 251 206 22
United Kingdom 194 250 (22) 213 (9) 972 1,014 (4)
New markets 10 76 61 25 58 32 271 228 19
Total recurring plus 1/10 single 523 552 (5) 480 9 2,045 1,911 7
New premium production
accident and health insurance 204 241 (15) 181 13 941 746 26
New premium production
general insurance 22 16 38 18 25 73 61 18
Gross deposits
(on and off balance)
Americas 10 7,764 7,053 10 7,062 10 31,849 28,424 12
The Netherlands 989 716 38 329 200 2,781 1,338 108
United Kingdom 67 90 (25) 62 9 281 281 -
New markets 10 4,864 7,382 (34) 3,179 53 20,519 14,287 44
Total gross deposits 13,684 15,242 (10) 10,632 29 55,431 44,330 25
Net deposits (on and off balance)
Americas 10 (314) 457 - 1,203 - 5,358 6,578 (19)
The Netherlands 484 338 43 (87) - 1,131 (199) -
United Kingdom 34 57 (41) 38 (10) 156 211 (26)
New markets 10 591 2,945 (80) 885 (33) 3,296 4,089 (19)
Total net deposits
excluding run-off businesses 794 3,797 (79) 2,039 (61) 9,941 10,678 (7)
Run-off businesses (170) (265) 36 (164) (4) (1,217) (2,366) 49
Total net deposits / (outflows) 625 3,532 (82) 1,876 (67) 8,724 8,312 5
Revenue-generating investments
Dec. 31, Sep. 30, Dec. 31,
2014 2014 % 2013 %
Revenue-generating investments (total) 558,328 538,217 4 475,285 17
Investments general account 153,653 151,469 1 135,409 13
Investments for account of policyholders 191,467 184,317 4 165,032 16
Off balance sheet investments third parties 213,208 202,432 5 174,843 22
OPERATIONAL HIGHLIGHTS
Underlying earnings before tax
Aegon's underlying earnings before tax in the fourth quarter of 2014 increased 19% to EUR 562 million compared with the fourth quarter of 2013. The main drivers of the increase were higher earnings resulting from growth in variable annuity, pension and asset management balances (EUR 37 million), an employee benefit reserve release resulting from legislation changes in the Netherlands
(EUR 45 million) and the stronger US dollar (EUR 25 million). These more than offset the reduction in earnings of approximately EUR 25 million, which resulted from the assumption changes and model updates implemented in the third quarter.
Underlying earnings from the Americas were up 23% to EUR 367 million. Growth in variable annuity and pension balances, the positive impact of one-time items of EUR 15 million and favorable currency movements, were partly offset by the earnings reduction from the assumption changes and model updates implemented in the third quarter.
In the Netherlands, underlying earnings increased 39% to EUR 172 million. This was driven by a positive contribution of EUR 45 million from an employee benefit reserve release.
Underlying earnings from Aegon's operations in the United Kingdom were up 45% to EUR 29 million in the fourth quarter of 2014, mainly due to improved persistency.
Underlying earnings from New Markets declined to EUR 33 million. Higher surrenders in Poland following product changes (EUR 10 million), the derecognition of the earnings contribution from France and lower earnings from Asia more than offset growth at Aegon Asset Management, which resulted from an increase in third-party business.
Total holding costs increased to EUR 39 million. This was primarily the result of net interest costs following a debt issuance to refinance a perpetual bond in the second quarter of 2014, of which the cost was previously accounted for directly through shareholders' equity. In addition, higher Solvency II related expenses and the non-recurrence of a gain from interest on taxes of EUR 18 million in the fourth quarter of 2013 also had a negative impact.
Net income
Net income more than doubled to EUR 399 million due to higher underlying earnings, an improvement in fair value items and higher realized gains on investments, more than offsetting an increase in other charges.
Fair value items
The results from fair value items improved to a loss of EUR 132 million. The loss was mainly driven by hedging programs and underperformance on alternative investments related to the energy sector in the United States, and credit spread tightening in the Netherlands. These were partly offset by a change in discounting resulting from a change in collateral agreements for derivative portfolios, together with a positive result on the hedges covering guarantees in the Netherlands.
Realized gains on investments
Realized gains on investments increased to EUR 304 million, and were primarily related to a repositioning of the investment portfolio in anticipation of Solvency II in the Netherlands and the United Kingdom, and the divestment of a private equity investment in the Netherlands.
Impairment charges
Impairments increased to EUR 28 million. This was mainly the result of lower recoveries on previously impaired structured securities, which supported impairments in the previous quarters of 2014. Aegon expects this trend to continue into 2015.
Other charges
Other charges totaled EUR 191 million and were primarily caused by a charge for the Optas agreement in the Netherlands (EUR 95 million), a provision for the implementation of the fee cap on pensions in the United Kingdom (EUR 35 million), a provision for the modification of unit-linked policies in Poland (EUR 23 million) and a change in the valuation of fixed assets in Aegon's Canadian business in anticipation of its divestment (EUR 15 million).
Run-off businesses
The loss from run-off businesses amounted to EUR 3 million.
Income tax
Income tax amounted to EUR 112 million in the fourth quarter. The effective tax rate on underlying earnings was 24%.
Return on equity
Return on equity increased to 9.7% for the fourth quarter of 2014, driven by higher underlying earnings. Return on equity for Aegon's ongoing businesses, excluding the run-off businesses, amounted to 10.5% over the same period.
Operating expenses
In the fourth quarter, operating expenses increased 7% to EUR 897 million, due to a stronger US dollar and a provision for the implementation of the fee cap on pensions in the United Kingdom, which more than offset an employee benefit reserve release in the Netherlands. At constant currencies, the increase was 3%.
Sales
In the fourth quarter of 2014, Aegon's total sales were up 22% to EUR 2.1 billion. This was the result of growth in variable annuities, indexed universal life and universal life with secondary guarantees, as well as favorable currency effects. New life sales were up 9% to EUR 523 million, driven by higher sales of universal life products in the United States and Asia. In response to the further decline of interest rates and in-line with Aegon's pricing discipline, Aegon stopped offering its universal life product with secondary guarantees in early February 2015. Gross deposits increased 29%, as higher deposits in Aegon Asset Management and variable annuities in the United States more than offset lower deposits in the retirement business. Net deposits, excluding run-off and stable value businesses amounted to EUR 2.6 billion as a result of inflows in variable annuities, the retirement business and Aegon Asset Management. New premium production for accident and health insurance increased 13% to EUR 204 million, mainly due to higher supplemental health sales in the United States as a result of the Affordable Care Act.
Market consistent value of new business
The market consistent value of new business amounted to EUR 196 million. The positive effect of sales growth in the United States was more than offset by lower interest rates and lower production of Dutch mortgages for Aegon's general account. The universal life product with secondary guarantees, which Aegon has decided to stop selling in February 2015, had a negative market consistent value of new business in the fourth quarter.
Revenue-generating investments
Revenue-generating investments increased 4% during the fourth quarter of 2014 to EUR 558 billion, driven by favorable market impacts, currency movements and net inflows.
Capital management
Shareholders' equity increased EUR 2.4 billion compared with the end of the third quarter of 2014 to EUR 24.3 billion at December 31, 2014. This increase was mainly driven by lower interest rates, which resulted in higher revaluation reserves, and favorable currency movements. The revaluation reserves were up by EUR 1.8 billion to EUR 8.3 billion. Aegon's shareholders' equity, excluding revaluation reserves and defined benefit plan remeasurements, increased to EUR 17.6 billion - or EUR 8.34 per common share - at the end of the fourth quarter, driven by net income generated during the quarter and favorable currency movements.
The gross leverage ratio further improved to 28.7% in the fourth quarter, well within the target range of 26-30%. This was driven by the redemption of the EUR 500 million 4.125% senior bond as of December 8, 2014, and higher shareholders' equity. The fixed charge cover ratio increased to 6.5x in 2014, up from 5.2x in 2013 and within the target range of 6-8x. Excess capital in the holding company amounted to EUR 1.2 billion, as the impact of debt redemption, interest payments and operating expenses were only partly offset by net dividends received from country units.
Aegon's Insurance Group Directive (IGD) ratio increased to 208% in the fourth quarter of 2014, mainly driven by earnings generated in the quarter. The capital in excess of the S&P AA threshold in the United States remained stable at USD 1.1 billion, as dividends paid to the holding were offset by earnings. The RBC ratio in the United States was ~540% at year-end 2014. In the Netherlands, the IGD ratio, excluding Aegon Bank, was ~215%. Earnings generated in the fourth quarter were more than offset by the negative impact of declining interest rates on required capital. The Pillar I ratio in the United Kingdom, including the with-profit fund, was ~140%, as the negative impact of de-risking and business transformation costs more than offset earnings generated during the quarter. These local Solvency I ratios will become less relevant over the course of 2015, as Aegon's capital management for its European entities transitions towards Solvency II, ahead of its introduction as of January 1, 2016.
On November 24, 2014, Aegon announced that it had reached an agreement to sell its 35% share in La Mondiale Participations to La Mondiale for EUR 350 million, in line with IFRS book value. The proceeds will increase the group's IGD solvency ratio by approximately 5 percentage points. Aegon expects this transaction to close in the first quarter of 2015.
Cash flows
Operational free cash flows were EUR 325 million in the fourth quarter of 2014. Excluding one-time items and positive market impacts operational free cash flows amounted to EUR 338 million. Positive market impacts in the Americas were largely offset by negative market impacts in the Netherlands and the United Kingdom.
Final dividend
At the Annual General Meeting of Shareholders on May 20, 2015, the Supervisory Board will, absent unforeseen circumstances, propose a final dividend for 2014 of EUR 0.12 per common share. If approved, and in combination with the interim dividend of EUR 0.11 per share paid over the first half of 2014, Aegon's total dividend over 2014 will amount to EUR 0.23 per common share. The final dividend will be paid in cash or stock at the election of the shareholder. The value of the stock dividend will be approximately equal to the cash dividend. Aegon intends to neutralize the dilutive effect of the stock dividend on earnings per share.
Aegon's Euronext-listed shares will be quoted ex-dividend on May 22, 2015, while its NYSE-listed shares will be quoted ex-dividend on May 21, 2015. The record date is May 25, 2015, for Aegon's Euronext-listed shares and May 26, 2015, for its NYSE-listed shares. The election period for shareholders will run from May 28 up to and including June 12, 2015. The stock fraction will be based on the average share price on Euronext Amsterdam from June 8 through June 12, 2015. The stock dividend ratio will be announced on June 17, 2015 and the dividend will be payable as of June 19, 2015.
Financial overview, Q4 2014 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 114 102 25 (4) - 237
Individual savings
and retirement products 169 - - - - 169
Pensions 81 58 2 3 - 145
Non-life - 9 - 9 - 18
Distribution - 2 - - - 2
Asset Management - - - 26 - 26
Other - - - - (39) (39)
Share in underlying earnings
before tax of associates 3 - 1 (1) - 3
Underlying earnings before tax 367 172 29 33 (39) 562
Fair value items (172) 61 1 (14) (9) (132)
Realized gains /
(losses) on investments 11 248 42 4 - 304
Net impairments (19) (5) - (4) - (28)
Other income / (charges) (17) (99) (38) (37) (1) (191)
Run-off businesses (3) - - - - (3)
Income before tax 167 377 34 (18) (48) 511
Income tax (17) (105) 1 (6) 13 (112)
Net income 150 272 35 (23) (35) 399
Net underlying earnings 264 123 45 21 (24) 429
Employee numbers
Dec. 31, Dec. 31,
2014 2013
Employees 28,602 26,891
of which agents 5,713 4,753
of which Aegon's share of employees
in joint ventures and associates 1,614 1,462
Full version press release
Use this link for the full version of the press release.
ADDITIONAL INFORMATION
The Hague - February 19, 2015
Presentation
The conference call presentation is available on aegon.com as of 7.30 a.m. CET.
Supplements
Aegon's Q4 2014 Financial Supplement and Condensed Consolidated Interim Financial Statements are available on aegon.com.
Conference call including Q&A
9:00 a.m. CET
Audio webcast on aegon.com
Dial-in numbers
United States: +1-212-444-0412
United Kingdom: +44-203-427-1902
The Netherlands: +31-20-716-8296
Two hours after the conference call, a replay will be available on aegon.com.
Aegon’s roots go back 170 years – to the first half of the nineteenth century. Since then, Aegon has grown into an international company, with businesses in more than 25 countries in the Americas, Europe and Asia. Today, Aegon is one of the world’s leading financial services organizations, providing life insurance, pensions and asset management. Aegon’s purpose is to help people take responsibility for their financial future. More information: aegon.com.
DISCLAIMERS
Cautionary note regarding non-IFRS measures
This document includes the following 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 these 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. In addition, return on equity is a ratio using a non-GAAP measure and is calculated by dividing the net underlying earnings after cost of leverage by the average shareholders' equity excluding the preferred shares, the revaluation reserve and the reserves related to defined benefit plans.
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:
- 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 and excess capital and leverage ratio management initiatives.
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.
Media relations
Marcel van Beusekom
+31(0)70-344-8572
gcc@aegon.com
Investor relations
Willem van den Berg
+31(0)70-344-8305
ir@aegon.com
PRN NLD
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