Aegon Ltd. · EURONEXT:AGN

Aegon — Citi European Insurance Conference 2015

43 slides from Aegon's conference presentation, January 2015

1. Slide 1: Strong foundations for growth

   Strong foundations for growth January 2015 Citi European Insurance Conference Investor presentation aegon.com

2. Slide 2: Aegon at a glance

   Aegon at a glance Over 150 Life insurance, pensions years of & asset management history Underlying earnings before tax of Present in more EUR 1.3 billion YTD through Q3 2014 than 25 markets 5% Life 12% 6% throughout 6% Americas 28% Individual Savings and Retirement The Netherlands the Americas, 55%

3. Slide 3: Well positioned to benefit from global trends

   Well positioned to benefit from global trends  Reduced social benefits  Changing demographics Helping people take Economic responsibility for their environment  Volatile financial markets financial future  High growth of financial assets  Disintermediation, shift to do-it-yourself (UK, NL) Cust

4. Slide 4: Attractive propositions across the customer life cycle

   Attractive propositions across the customer life cycle Assets Protection Workplace for Need: protect family, Product: life, non-life insurance and savings property, wealth and health Accumulation Reduced social Need: financial confidence, Product: pensions, benefits long-term ROI savings, investment

5. Slide 5: Focusing on pension participants to drive growth in established markets

   Focusing on pension participants to drive growth in established markets Enabling Customers in need of Comparable Growth employees to save retirement solutions customer needs opportunities Pension plan Pension plan balances* participants* Guaranteed US retirement income USD Increase retention rate 13

6. Slide 6: New Markets' strategy driving continued growth

   New Markets’ strategy driving continued growth  Focus on protection Asia ► Leadership in risk/rider products in key CEE markets ► Strong growth in high-net-worth segments in Hong Kong and Singapore Central & Eastern  Expanded distribution Europe ► Successful Spanish joint-ventures with Santander e

7. Slide 7: Stepping up investments to accelerate execution of strategy

   Stepping up investments to accelerate execution of strategy  Similar customer-centric investments across US our markets ~950k participants created retirement ► Creating awareness of retirement needs outlooks through retirement apps ► Diversifying distribution through self-serve NL propositions ~400

8. Slide 8: Digitizing from front to back office

   Digitizing from front to back office  Digitizing platforms, processes and systems Customer Advisor Employer ► Platforms to service all key counterparties ► Digital processes allow for self-service ► Enhanced data quality as a result of system Access Channels improvements ► Improving data analytics

9. Slide 9: Reducing expenses while growing and investing in our businesses

   Reducing expenses while growing and investing in our businesses  Expense reduction primarily realized in established markets ► Expenses increase in New Markets driven by business growth  Expense savings create room to accelerate execution of strategy ► Efficiency improved due to cost control and g

10. Slide 10: Continuous profitable sales growth with lower capital intensity

    Continuous profitable sales growth with lower capital intensity  Strong sales growth with low new business strain as a result of strategic shift in business mix ► Focus on fee-based products with lower investments in new business ► Hedging of guarantees at point of sale leads to improved risk/retur

11. Slide 11: Strong free cash flow growth

    Strong free cash flow growth  Free cash flow up strongly as a result of higher operational free cash flow (OFCF) from business growth and lower holding expenses ► OFCF growth from fee-based businesses more than offsets lower spread-related cash flows ► Holding expenses halved as result of cost savi

12. Slide 12: Increasing share of capital allocated to core businesses

    Increasing share of capital allocated to core businesses  Objective to further increase share of capital allocated to core businesses ► Organic capital release from run-off businesses to continue  Divestments between 2010-2013 of EUR 2.4 billion – on average at book value  Divestment of Aegon’s l

13. Slide 13: Continued portfolio optimization in 2014

    Continued portfolio optimization in 2014  Agreement on sale of Canadian activities for CAD 600 million Divestments  Agreement on sale of stake in La Mondiale Participation for EUR 350 million  Divestment of the stake in the joint venture with Caja de Badajoz  Exclusive negotiations with La Banqu

14. Slide 14: Core businesses deliver attractive returns and drive cash flow growth

    Core businesses deliver attractive returns and drive cash flow growth  Core businesses delivering return on equity within group target range  Increase in cash flows will be driven by growth in core businesses  Cash flows from run-off businesses expected to remain around current levels ► Cash flow

15. Slide 15: 2015 financial targets

    2015 financial targets 30-35% € 1.3-1.6 7-10% 10-12% Fee-based earnings as % Annual operational free Grow underlying earnings Return on equity by 2015 of underlying earnings by cash flow by 2015* on average per annum 2015 in billions between 2012 and 2015 See slide 45 for main economic assumptions 1

16. Slide 16: Q3 2014 Results

    Q3 2014 Results For questions please contact Investor Relations +31 70 344 8305 ir@aegon.com P.O. Box 85 2501 CB The Hague The Netherlands

17. Slide 17: Q3 performance impacted by exceptional charges

    Q3 performance impacted by exceptional charges  Underlying earnings and return on equity lower due to assumption changes and model updates ► Announced sale of Canadian business to improve RoE by ~40bps  Profitable sales growth continues across the group  Operational free cash flows include new bu

18. Slide 18: Assumption review and model enhancements key to operational excellence

    Assumption review and model enhancements key to operational excellence  Annual Q3 review of assumptions Q3 earnings impacts (EUR million) ► Updated old-age mortality assumptions based on industry studies and own experience Assumption changes Model updates Total US Life & Protection (265) (29) (294)

19. Slide 19: Capital position impacted by mortgage valuation change

    Capital position impacted by mortgage valuation change  Group IGD solvency ratio of 202%; Holding excess capital of EUR 1.5 billion  Continued strong capital position in the US  NL IGD ratio impacted by ~25pp due to valuation methodology change for Dutch mortgages ► Use of additional market obser

20. Slide 20: All markets contribute to growth in new life and accident & health sales

    All markets contribute to growth in new life and accident & health sales  New life sales up 34% driven by growth across all markets ► Record buy-out deal underscores leadership in insured solutions for Dutch pension funds ► Growing demand in US for universal life products ► New Markets sales increa

21. Slide 21: Record gross deposits as strong momentum continues

    Record gross deposits as strong momentum continues  Asset Management inflows more than triple to EUR 7.1 billion on mandate wins in all markets  Americas gross deposits of USD 9.3 billion on continued growth of fee business ► US variable annuity deposits up 25% to USD 2.9 billion; record net depos

22. Slide 22: Key messages

    Key messages  Results impacted by assumption changes and model updates Q3 results  Continued sales momentum throughout group reflects strong commercial progress  Operational free cash flows* includes strain from record Dutch pension buy-out Capital and risk  Controlled environment and strict gov

23. Slide 23: Index

    Index Press subject to go directly to the slides or continue with presentation 3Q14 3Q14 3Q14 3Q14 Strategy Financials Country Reconciliation support specific tables, assumptions & sensitivities Slide 29-30 Slide 31-38 Slide 39-42 Slide 43-46 23

24. Slide 24: Sustainability ingrained in our strategy

    Sustainability ingrained in our strategy Products and services A responsible approach Supporting local communities customers can trust to investments  Clear and easy to understand  Decisions guided by Aegon’s  Long history of working with products Responsible Investment Policy and investing in lo

25. Slide 25: Investing in Aegon

    Investing in Aegon Aegon’s ordinary shares  Aegon ordinary shares Ticker symbol AGN NA ► Traded on Euronext Amsterdam since 1969 Underlying ISIN NL0000303709 and quoted in euros SEDOL 5927375NL Trading Platform Euronext Amsterdam Country Netherlands  Aegon New York Registry Shares (NYRS) Aegon’s N

26. Slide 26: Underlying earnings of EUR 291 million

    Underlying earnings of EUR 291 million  Lower earnings in the Americas as growth in Underlying earnings before tax VA, pension and mutual fund balances were Americas The Netherlands more than offset by the impact of (USD million) (EUR million) assumption changes and model updates  Higher earnings

27. Slide 27: Net income of EUR 52 million

    Net income of EUR 52 million  Fair value items mainly reflect hedging programs without accounting match in the US and NL, and model updates in the US  Gains on investments mainly driven by fixed income portfolio rebalancing in NL  Impairments on mortgages in CEE more than offset by net recoveries

28. Slide 28: Fair value items impacted by hedge programs and model updates

    Fair value items impacted by hedge programs and model updates Total fair value items of EUR (296) million FV hedging with FV hedging without accounting match* accounting match FV investments FV other EUR (109) million EUR (114) million EUR (40) million EUR (33) million Derivatives ∆: EUR 904m Deriva

29. Slide 29: Gross deposits of EUR 15.2 billion

    Gross deposits of EUR 15.2 billion  Strong variable annuity and mutual fund Gross deposits deposits in the Americas more than offset Americas The Netherlands by lower deposits from pensions (USD billion) (EUR million)  Surging gross deposits in the Netherlands driven by inflows at on-line bank Kna

30. Slide 30: New life sales of EUR 552 million

    New life sales of EUR 552 million  New life sales in the Americas up 22% New life sales driven by higher universal life sales Americas The Netherlands  Higher new life sales in the Netherlands (USD million) (EUR million) driven mostly by largest ever pension buy-out deal  New life sales in the Un

31. Slide 31: MCVNB of EUR 192 million

    MCVNB of EUR 192 million  Lower MCVNB in the Americas as the Market consistent value of new business impact of lower interest rates more than Americas The Netherlands offset higher sales (USD million) (EUR million)  MCVNB in the Netherlands declined driven by lower contribution from mortgages resu

32. Slide 32: Operational free cash flows and holding excess capital

    Operational free cash flows and holding excess capital  Operational free cash flows* of EUR 275 million reflect new business strain related to large pension contract win in the Netherlands ► Market impacts of EUR (99) million due mostly to the impact of lower interest rates ► One-time items of EUR

33. Slide 33: Capital allocated to run-off businesses

    Capital allocated to run-off businesses  Current capital allocated to run-off businesses of USD 2.0 billion ► Return on capital of run-off businesses of 0.2% year to date  Capital intensive run-off businesses negatively impact return on equity ► Capital allocated to run-off businesses included in

34. Slide 34: Americas

    Americas  Lower earnings as growth in VA, pension Underlying earnings Operating expenses before tax (USD million) (USD million) and mutual fund balances more than offset by assumption changes and model updates  Decline in operating expenses mainly driven by lower restructuring costs 487 454 489 47

35. Slide 35: The Netherlands

    The Netherlands  Earnings increase due mostly to higher Underlying earnings Operating expenses before tax (EUR million) (EUR million) investment income and improved margins on savings  Higher operating expenses driven by a reclassification of expenses and increased 114 131 127 182 194 195 investme

36. Slide 36: United Kingdom

    United Kingdom  Higher underlying earnings driven mostly by Underlying earnings Operating expenses before tax (GBP million) (GBP million) improved persistency  Operating expenses increased due mostly GBP 9 million provision for restructuring European direct marketing activities 26 83 22 78 77 19 t

37. Slide 37: New Markets

    New Markets  Lower earnings as strong earnings growth in Underlying earnings Operating expenses before tax (EUR million) (EUR million) Asset Management more than offset by EUR 48 million change in assumption changes and model updates  Higher operating expenses due mostly to 72 162 163 166 62 highe

38. Slide 38: Reconciliation of effective tax rate Q3 2014

    Reconciliation of effective tax rate Q3 2014 Reconciliation of effective tax rate Q3 2014 New Markets/ EUR million Americas The Netherlands United Kingdom Total Holdings Income before tax (48) 70 27 (26) 23 Nominal tax rate 35.0% 18 25.0% (18) 21.5% (6) N/A 17 12 Actual income tax 52 (26) (2) 5 29 N

39. Slide 39: General account investments roll-forward

    General account investments roll-forward General account investment roll-forward EUR billion Americas The Netherlands United Kingdom New Markets & Other Opening balance June 30, 2014 77.9 48.4 11.8 4.1 Net in- and outflow 0.2 0.9 0.1 0.2 Unrealized / realized results (0.3) 0.9 0.4 (0.0) Foreign exch

40. Slide 40: Main economic assumptions

    Main economic assumptions Main US economic assumptions  10-year US Treasury assumed to grade to 4.25% by 2024  3-month US Treasury assumed to grade to 2.5% by 2024  Credit spreads are assumed to grade to 110 bps by 2016  Bond funds are assumed to return 4% until 2024 and 6% thereafter  Annual g

41. Slide 41: Earnings sensitivities to equity markets and reinvestment yields

    Earnings sensitivities to equity markets and reinvestment yields  Protection of capital position main purpose of macro Macro hedge equity sensitivity estimates hedging program Total equity return in Fair value items impact quarter  IFRS accounting mismatch between hedges and liabilities -8% ~USD (

42. Slide 42: Upcoming events

    Upcoming events February March Q4 results AIFA conference, Florida February 19, 2015 March 2, 2015 Publication of 2014 Annual Report March 20, 2015 HSBC Conference, London March 23, 2015 Morgan Stanley Conference, London March 26, 2015 42

43. Slide 43: Disclaimers

    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 proportion

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