Aegon Ltd. · EURONEXT:AGN
Aegon — Q4 2008 Earnings Presentation
17 slides from Aegon's earnings presentation, Mar 12, 2009
Slide 1: Fourth quarter 2008 results
Local knowledge. Global power. Fourth quarter 2008 results Alex Wynaendts, CEO Media conference call March 12, 2009
Slide 2: Key messages
Key messages o Strong capital position - Excess capital of EUR 2.9 billion above S&P AA capital adequacy requirements - IGD ratio of 183%; solvency capital surplus of EUR 5.6 billion - NAIC RBC ratio of 350% for the US life operations - Committed to maintain capital level equivalent to AA capital ad
Slide 3: The three C's: capital, costs, contingency
The three C’s: capital, costs, contingency o Optimize Capital structure o Capital release of EUR 1.7 billion in 2008 Capital o Target capital release of EUR 1.5 billion in 2009 o Portfolio review: downsizing IMD* o EUR 150 million cost measures in 2009 Costs o Further cost measures will be explored
Slide 4: Strong capital position
Strong capital position December 31, 2007 December 31, 2008 Insurance Group Directive EUR 6.7 billion EUR 5.6 billion (IGD) surplus capital* (190%) (183%) S&P risk-based insurance capital model excess capital in EUR 1.6 billion EUR 2.9 billion operating units above AA level and holding NAIC RBC rati
Slide 5: Excess capital supported by pro-active capital management
Excess capital supported by pro-active capital management Excess capital development Q4 2008 (EUR million) 3,000 (514) 808 2,875 (287) (1,456) 1,012 312 Impact from capital markets Q3 08 Excess Convertible Credit Rating Interest rates Capital Other Q4 Q4 08 Total Capital in core capital impairments
Slide 6: Underlying earnings impacted by equity markets decline
Underlying earnings impacted by equity markets decline o Underlying loss before tax of EUR 181 million o Americas experienced a negative impact of USD 839 million, related to: – VA reserve strengthening, DPAC unlocking, and lower fees – Reserve strengthening in life reinsurance o One-off charges in
Slide 7: Net loss due to severe financial markets disruption
Net loss due to severe financial markets disruption Net income mainly impacted by financial markets: o Underlying earnings affected by lower equity markets o Impairments on bonds (EUR 360 million) and equities (EUR 141 million) o Extraordinary tax charge of EUR 300 million Underlying earnings to net
Slide 8: Resilient new life sales despite market turmoil
Resilient new life sales despite market turmoil o Total Q4 new life sales of EUR 598 million – Americas sales driven by lower production in retail life and BOLI/COLI – Continued strong annuities sales in the UK – Lower group pension sales in the Netherlands, retail sales held up well – New life sale
Slide 9: Strong deposits drive net inflows
Strong deposits drive net inflows o Total Q4 net deposits of EUR 1.7 billion – Growth driven by fixed annuities and fee-based institutional deposits in the US o Total Q4 gross deposits of EUR 11.9 billion (+24%) – Growth driven by fixed annuities and fee-based institutional deposits in the US – Othe
Slide 10: Value of new business up across major markets
Value of new business up across major markets o Value of new business up by 3% to EUR 233 million – Higher VNB in Americas mainly from fixed annuities – VNB in Netherlands driven by Life & protection – Higher VNB in the UK driven by higher annuity sales and higher margins – Lower VNB in Other countr
Slide 11: General account mainly in Americas
General account mainly in Americas Total investments General account EUR 332 billion EUR 130 billion Other Holding United countries 0% Off balance Kingdom 5% sheet 4% 29% The Netherlands 25% General account 39% Americas Policyholder 67% account 32% As of December 31, 2008 Local knowledge. Global pow
Slide 12: US Bonds are mostly investment grade
US Bonds are mostly investment grade AEGON USA bond portfolio quality profile EUR 70 billion* - December 31, 2008 B Below B BB 2.4% 0.7% 4.1% BBB 30.5% A & above 62.3% * Based on amortized cost of bonds – IFRS Basis; includes AFS and FVTPL assets. Ratings based on a hierarchy of S&P, Moody’s, Fitch,
Slide 13: Unrealized losses – impairments
Unrealized losses – impairments o Lower bond values lead to EUR 1.7 billion decrease in revaluation reserve o Unrealized losses are not a good indication for future losses o Impairments Q4: EUR 501 million before tax – as announced on February 17 o Strong asset & liability and liquidity management –
Slide 14: Business developments 2008
Business developments 2008 o Enhanced position in pension markets Hungary and Poland o First step in fast-developing Turkish life insurance and pension market o Expanded footprint in Latin America with life insurance joint venture Brazil o Presence in Spanish bank distribution channel extended o Con
Slide 15: Weathering the storm
Conclusions o Earnings clearly impacted by financial markets o Core business remains resilient o Capital position remains strong o Cost reductions underway o Adequate contingencies in place Weathering the storm Local knowledge. Global power. 15
Slide 16: For questions please contact Group Corporate Communications
For questions please contact Group Corporate Communications: Greg Tucker Dick Schiethart +31 70 344 8956 gcc-ir@aegon.com Local knowledge. Global power. 16
Slide 17: 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