Aegon Ltd. · EURONEXT:AGN
Aegon — UBS Insurance Conference 2009
24 slides from Aegon's conference presentation, Jun 25, 2009
Slide 1: Execution of strategy and growth prospects in emerging markets
Local knowledge. Global power. Execution of strategy and growth prospects in emerging markets Michiel van Katwijk EVP, Group Treasurer UBS Insurance conference, London, June 25th, 2009
Slide 2: Cautionary note regarding forward-looking statements
Cautionary note regarding forward-looking statements Cautionary note regarding forward-looking statements The statements contained in this presentation that are not historical facts are forward-looking statements as defined in the US Private Securities Litigation Reform Act of 1995. The following ar
Slide 3: Key messages
Key messages o Continued execution of strategic priorities o Ambition to realize scale in emerging markets o Well-positioned to benefit from attractive growth prospects in CEE o Regulatory changes provide opportunities for well-positioned companies Local knowledge. Global power. 3
Slide 4: Three strategic long-term priorities to improve performance
Three strategic long-term priorities to improve performance Geographic mix Reallocate capital towards Capital allocation 1 businesses with higher growth 5-10% Global businesses and return prospects 15 - 25% New markets* 10% 25 - 30% 35% Western Europe Improve growth and returns 2 from existing busin
Slide 5: Maintaining strong capital buffer
Industry impact of current economic environment Financial markets o Volatility Increased cost of capital & o Illiquidity less availability of capital Maintaining strong capital Regulators buffer o Focus on capital o Take a more remains key Fungibility of capital restricted conservative stance Custom
Slide 6: Lower margin environment
Lower margin environment 2004 - 2008 2008 … o The cost of capital has increased during the crisis and is expected to remain higher o Expected returns will be impacted by higher required capital o Reducing our financial market risk will result in more stable earnings o More rational pricing is evolvi
Slide 7: Execution of short-term priorities: capital, costs, contingency
Execution of short-term priorities Capital o EUR 2.6 billion of capital freed-up since 1H08 o EUR 0.6 billion to be freed-up in the remainder of the year o Strong capital position with EUR 2.7 billion in excess capital above AA o Able to withstand further market shocks Costs o EUR 150 million of cos
Slide 8: Execution of long-term strategic priorities
Execution of long-term strategic priorities 1 Reallocate capital towards businesses with higher growth and return prospects o Run-off institutional spread based business o Sale of Taiwanese life business o Refocus of Canadian business o Withdrawal from Group Risk market in the UK o Entrance in Turke
Slide 9: Implementation European variable annuity strategy
Implementation European variable annuity strategy Market opportunity Driving success o Product design Long-term simplify and reduce guarantees to reflect market conditions estimate Market size o Standardisation (EUR billion AuM) single consistent product suite on single platform o Capital efficiency
Slide 10: Emerging markets – realize scale
Emerging markets – realize scale CEE – grow leadership positions in the region o Develop strong tied network and strengthen broker relationships o Capture more synergies at regional level o Focus on existing markets Asia – focused strategy o Sold life insurance business in Taiwan o Further develop A
Slide 11: AEGON India
AEGON India o Indian business now established and plans in place to grow distribution to drive volume. The business is written through a joint venture with an Indian partner Current JV structure Progress delivered Sales (APE, INR mln) 4601 Religare / 26% 41% Alliances 44% Direct Agency 30% 8% INR 46
Slide 12: Central & Eastern Europe offers attractive growth prospects
Central & Eastern Europe offers attractive growth prospects Life insurance penetration - Size of bubble shows 2007 insurance density (life insurance premiums per capita) Country where AEGON is present Life premiums as % GDP Other country 16% 14% UK 12% 10% Ireland France Russia 8% Turkey Belgium Rom
Slide 13: Life market – Historical growth and profitability by country
Life market– Historical growth and profitability by country o Growing Polish profitability mainly due to increasing risk component of life o Positive Turkish growth following political environment developments Return on equity versus technical reserves growth Return on equity (%) 35 30 25 Turkey 20
Slide 14: Pension market – Historical growth of assets under management
Pension market – Historical growth of assets under management Pension fund market assets under management (EUR billion) 60 50 +144% 40 Turkey voluntary pension fund Slovakia mandatory pension fund 30 Hungary mandatory pension fund Poland mandatory pension fund 20 10 0 2004 2005 2006 2007 2008 Local
Slide 15: Execution of strategy
Execution of strategy Ambition Progress o Achieve market leadership (top 5) o Step by step improving position in in all our markets every country o Increase market share in life and o Acquisitions in pensions pension o Growing sales life / pension o Expand into mortgages throughout o Postponing mort
Slide 16: Central & Eastern Europe has seen good growth and profitability
Central & Eastern Europe has seen good growth and profitability Value of new business Sales (APE) (in EUR million) (in EUR million) 72 74 126 98 46 82 27 32 2005 2006 2007 2008 2005 2006 2007 2008 Underlying earning before tax Revenue generating investments (in EUR million) (in EUR billion) 108 5.9
Slide 17: Building from leading pension positions
Building from leading pension positions o Target is 10% market share in CEE mandatory pension fund market Members in Market share in Rank in mandatory and Country mandatory mandatory voluntary pension pension pension Hungary 820,000 (mandatory and voluntary) 21% 2 Slovakia 200,000 (mandatory and vol
Slide 18: Building from leading life positions
Building from leading life positions Gross Written Market share life Rank life Country Premiums1 insurance insurance (EUR million) (by GWP) (by GWP) Poland 260 13% 2 32 Hungary 184 10% 3 Slovakia 16 1% 12 Czech Republic 10 1% 14 Turkey 1 1% 19 Romania Greenfield 1. Data from local regulatory bodies
Slide 19: Limited impact from regulatory change
Limited impact from regulatory change o Poland: minimal expected impact on profitability – Measures have been anticipated but brought forward o Hungary: significant changes, but step by step approach – Opening system for older generation (over 52 years) – Decreasing asset fees (with guaranteed yield
Slide 20: Focus on sales and short term priorities
Focus on sales and short term priorities o Distribution expansion – Building tied networks: focus on quality – Strong broker relationships – Alternative channels: growing importance for growth o Sharing best practices – Product design – Czech product range copied in Romania – Sales solutions – Commo
Slide 21: Positive results from sales focus
Positive results from sales focus New pension fund members New pension fund members in 2008 600,000 450,000 450,000 2007 2008 PF production Acquisitions 300,000 300,000 150,000 150,000 - - Hungary Poland Czech Slovakia Romania Turkey Hungary Poland Czech Slovakia Romania Turkey Republic Republic Reg
Slide 22: Key messages
Key messages o Continued execution of strategic priorities o Ambition to realize scale in emerging markets o Well-positioned to benefit from attractive growth prospects in CEE o Regulatory changes provide opportunities for well-positioned companies Local knowledge. Global power. 22
Slide 23: Q&A
Q&A For questions please contact Investor Relations +31 70 344 8305 ir@aegon.com Local knowledge. Global power. 23
Slide 24: Local knowledge. Global power.
Local knowledge. Global power. 24