Slide 1: Q3 2014 Results
Q3 2014 Results The Hague – November 13, 2014 Alex Wynaendts Darryl Button CEO CFO
Slide 2: 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
Slide 3: 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)
Slide 4: 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
Slide 5: 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
Slide 6: 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
Slide 7: 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
Slide 8: Appendix continued
Appendix continued 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 Download IR & Media App in the Appstore
Slide 9: 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 10-12 Slide 13-20 Slide 21-24 Slide 25-28 9
Slide 10: 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%
Slide 11: 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
Slide 12: 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 Aegon New York Registry Shares (NYRS) Country Netherlands ► Traded
Slide 13: 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
Slide 14: 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
Slide 15: 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
Slide 16: 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
Slide 17: 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
Slide 18: 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
Slide 19: 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
Slide 20: 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
Slide 21: 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
Slide 22: 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
Slide 23: 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
Slide 24: 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
Slide 25: 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
Slide 26: 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
Slide 27: 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
Slide 28: 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 (
Slide 29: Upcoming events
Upcoming events November December Citi Global Financials Societe Generale Premium Conference Review Conference Singapore Paris November 19, 2014 December 3, 2014 HSBC Investors Goldman Sachs US Financial Conference Services Conference Zurich New York November 27, 2014 December 9, 2014 February Q4 re
Slide 30: 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