THE HAGUE, the Netherlands, November 9, 2017 /PRNewswire/ --
Net income increases by 31% driven by US
- 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%
Record gross deposits driven by fee-based business; outflows from contract discontinuances in Mercer block
- 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
Strong increase in Solvency II ratio to 195%
- 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
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."
Key performance indicators EUR millions  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
- 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
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.
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.
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.
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.
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.
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.
64 (734) n.m. Run-off businesses (3) 8 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
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
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 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.
Net recoveries amounted to EUR 4 million and reflect the continued benign credit environment.
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.
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 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 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.
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 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.
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 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%).
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.
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
Full version of the press release
Use this link for the full version of the press release.
The conference call presentation is available on aegon.com as of 7.30 a.m. CET.
Aegon's 3Q 2017 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
United States: +1-719-325-2231
United Kingdom: +44-330-336-9411
The Netherlands: +31-20-703-8261
Two hours after the conference call, a replay will be available on aegon.com.
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.
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 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.
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.
Willem van den Berg
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