Aegon Ltd. · EURONEXT:AGN
Aegon — Goldman Sachs US Capital Management event, Paris (June 2019)
24 slides from Aegon's conference presentation, Jun 6, 2019
Slide 1: US capital management in the context of group targets
US capital manage- ment in the context of group targets Matt Rider CFO Paris, 6 June 2019 Helping people achieve a lifetime of financial security
Slide 2: Focus on growth in 2019 – 2021
AEGON Group Focus on growth in 2019 – 2021 Engaging our large customer base and growing in core markets Customers Goals Focus • Broader and longer • Offer bundled products and advisory customer relationship • Provide customers with relevant guidance • Improved customer • Evolve operating model engag
Slide 3: Targets 2019 – 2021
AEGON Group Targets 2019 – 2021 Growth strategy will deliver sustainable and attractive returns to all stakeholders Normalized capital generation Strong focus on customer centricity EUR 4.1 billion Cumulative for 2019 – 20211 Dividend pay-out ratio Building on strong market positions 45 – 55 % Of no
Slide 4: Targeting EUR 4.1 bn normalized capital generation
AEGON Group Targeting EUR 4.1 bn normalized capital generation Sustainably growing capital generation mainly driven by Drive for Growth category1 Normalized capital generation1 (in EUR billion, cumulative for 3 years) 2019 – 2021 cumulatively: 4.1 Over EUR 8 billion normalized capital Scale-up for t
Slide 5: US strongly contributes to group's financial performance
US strongly contributes to group’s financial performance KPIs Transamerica RoC target achieved RBC ratio per Total remittances Position in core two quarters early year-end 2018 to Holding products in US >9% 465% USD 13bn Top-10 +2.5%-pts +65%-pts above since 2010 > 13 million since 2015 range mid-po
Slide 6: Maintaining a strong RBC ratio as key to successful growth
Maintaining a strong RBC ratio as key to successful growth Market benchmarking RBC ratio US RBC ratio RBC ratio target pre-tax reform New Target Change 480% 472% 462% 465% Aegon US 350 – 450% 350 – 450% = 460% Peer 1 425 – 450% 400 – 425% Peer 2 425% 400% 440% 440% Peer 3 400% 400% = Peer 4 >400% >3
Slide 7: US RBC ratio is supported by three main, well-capitalized life insurance legal entities
US RBC ratio is supported by three main, well-capitalized life insurance legal entities Composition of US RBC ratio 2018, in USD million and % TLIC TPLIC TFLIC Transamerica Life Transamerica Premier Life Transamerica Financial Life Insurance Company, IA Insurance Company, IA Insurance Company, NY •
Slide 8: Legal entities provide sustainable remittances while maintaining their capital strengths
Legal entities provide sustainable remittances while maintaining their capital strengths Capital strength and remittances in USD million and % TLIC TPLIC TFLIC 924 700% 790 600% 717 125 220 500% - 160 160 400% 300% 200% 100% (200) 0% 2016 2017 2018 2016 2017 2018 2016 2017 2018 • Remittances consist
Slide 9: Strong capital positions of legal entities allow for remittances to US Holding and Group
Strong capital positions of legal entities allow for remittances to US Holding and Group US remittances 2018, in USD million Aegon Group 1,050 Aegon US TLIC 924 225 pension fund Includes one-time Aegon US Holding Funding of pension benefits from merger with obligations through Firebird Re and from l
Slide 10: Remittances underpinned by strong ongoing normalized capital generation
Remittances underpinned by strong ongoing normalized capital generation US capital generation and remittance to Holding in USD million 3000 • Since 2010, total core remittances paid of USD 10 billion and total remittances paid from transactions 2500 of USD 3 billion • Strong contributions to remitta
Slide 11: Leveraging leading positions to optimize competitive advantages
Leveraging leading positions to optimize competitive advantages Workplace Solutions One Transamerica facilitates integrated Workplace strategy Voluntary Synthetic GICs DB Pension DC Pension Multi-life LTC Benefits sold at Notional Plan Participants Plan Participants sales the Workplace Outstanding #
Slide 12: Well positioned in key products that meet customer needs
Well positioned in key products that meet customer needs Individual Solutions Variable Annuity Indexed Universal Life insurance with Sub-advised mutual sales Life sales benefit riders sales fund assets #9 #4 #4 #9 Sources: Morningstar, LIMRA and internal analysis. Rank/share for VA is as of 4Q18, IU
Slide 13: Broad initiatives to accelerate growth
Broad initiatives to accelerate growth Goals Levers Position at 2H2018 Improve • Accelerate VA sales via product enhancements & new launches #10 VA5 new business market rank competitive • Launch new IUL rider in WFG & brokerage to propel sales #4 IUL6,7 new business market rank position • Reprice te
Slide 14: Accelerating growth based on strong capital position
Accelerating growth based on strong capital position Aegon USA / Transamerica 9% RoC achieved Modernization and Top-10 positions in Broad initiatives to two quarters early simplification core products accelerate growth Strongly positioned to sustainably grow capital generation Simplification and gro
Slide 15: Appendix
| EGON Appendix
Slide 16: Transamerica concentrates its US life insurance carriers
Transamerica concentrates its US life insurance carriers Simplification of legal entity structure 2014 2015 2016 2017 2018 2019 2020 Largest life insurance carrier of Transamerica writing all Transamerica Life Insurance Company, IA (TLIC) lines of business Stonebridge Life Insurance Company, VT Tran
Slide 17: Well-managed capital sensitivities
Well-managed capital sensitivities US capital sensitivities Ratio in %, at year-end 2018 Scenario Solvency II RBC US RBC Ratio remains in the Capital Equity markets +25% +34% +43% Target Zone for all sensitivity scenarios. Equity markets -25% -23% -25% • Capital sensitivities include impacts Interes
Slide 18: Updated Solvency II sensitivities
1H 2018 Results Updated Solvency II sensitivities Solvency II sensitivities In percentage points Scenario Group US NL UK Equity markets +25% +15% +34% +2% -7% Equity markets -25% -11% -23% -5% -2% Interest rates +50 bps +3% -0% +3% +2% Interest rates -50 bps -6% -14% -1% -4% Credit spreads* +50 bps
Slide 19: Manageable sensitivity to US credit risk
Manageable sensitivity to US credit risk • General Account has significantly decreased due to increased focus on fee-based businesses resulting in divestments and product re-designing • US RBC ratio is well positioned to absorb credit losses − The US RBC ratio remains well within the target range of
Slide 20: RBC to Solvency II ratio capital reconciliation
RBC to Solvency II ratio capital reconciliation • Conversion methodology for US operations has been agreed with DNB, to be reviewed annually • Calibration of US insurance entities followed by subsequent adjustment for US debt and Holding items - Calibration of US insurance entities is consistent wit
Slide 21: Credit losses on historically low levels
Credit losses on historically low levels Impairments on US general account fixed income assets in bps 120 91 82 64 48 52 37 average of 24 bps 27 since 1992 33 25 17 17 9 17 1 2 4 8 8 2 1 3 1 -2 -6 -2 -9 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20
Slide 22: Remittances supported by strong capital generation
Remittances supported by strong capital generation Capital generation and remittances 2018, in EUR million Normalized Gross Region capital remittance generation1 • Capital generation supported by low new Americas 1,050 908 business strain Netherlands 413 200 • US continues to account for the majorit
Slide 23: Returned EUR 2.1 billion capital over 2016 – 2018
Returned EUR 2.1 billion capital over 2016 – 2018 Free cash flows significantly increased • Full year dividend for 2018 increased 2 cents to EUR 0.29 per common share • Achieved EUR 2.1 billion capital return to shareholders over 2016 - 2018 • Dividend well covered by strong free cash flows • Lower
Slide 24: Disclaimer
Disclaimer Cautionary note regarding non-IFRS-EU 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 con
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