Aegon Ltd. · EURONEXT:AGN
Aegon — H2 2023 Earnings Presentation
39 slides from Aegon's earnings presentation, Mar 1, 2024
Slide 1: 2H 2023 Results
2H 2023 Results Lard Friese Matt Rider Chief Executive Officer Chief Financial Officer March 1, 2024
Slide 2: Delivering on Aegon's strategy
Delivering on Aegon’s strategy ▪ In 2H 2023, operating capital generation1 up 16% to EUR 660 million and to EUR 1,280 million for the full-year, exceeding the initial guidance of EUR 1.0 billion ▪ Operating result of EUR 681 million, down 32% due to the impact of previously executed management actio
Slide 3: Building distribution capacity at WFG
Building distribution capacity at WFG US – World Financial Group (WFG) Transamerica’s market Licensed agents Multi-ticket agents share in WFG1 (number in thousand) (number in thousand) (in %) 74 62% 64% ▪ Continued recruiting and training efforts 63 increased number of licensed agents ▪ Improved pro
Slide 4: Driving significant growth in US Individual Life
Driving significant growth in US Individual Life US – Individual Life (in USD million) New life sales New business strain Earnings on in-force1 664 ▪ 13% growth year-on-year of new life sales and a similar increase of new 486 509 business strain, mainly from indexed 431 universal life with an IRR ab
Slide 5: Leading in attractive Retirement segments
Leading in attractive Retirement segments US – Retirement Plans (in USD) Written sales Net deposits GA Stable IRA Earnings on ▪ Successful year for mid-sized plans mid-sized plans Value AuA1 AuA1 in-force2 written sales in mid-sized (billion) (billion) (billion) (billion) (million) plans 11.1 101 ▪
Slide 6: Growing the UK Workplace business, but a challenging environment for Retail
Growing the UK Workplace business, but a challenging environment for Retail UK (in GBP million) Workplace Retail Revenues gained / net deposits net deposits (lost) on net deposits (annualized) ▪ In Workplace, continued good momentum in winning new schemes, with lower net deposits reflecting departur
Slide 7: Steady progress in growth markets
Steady progress in growth markets Growth markets (in EUR million, International segment) New life sales1 P&C and A&H new Operating capital premium production generation2 293 ▪ New life sales increased in Brazil by 37% and in China by 19%, partly offset 248 by lower sales in Spain ▪ Increased health
Slide 8: Challenging environment for Asset Management
Challenging environment for Asset Management Aegon Asset Management (in EUR million) 3rd-party net deposits Net deposits Operating capital ▪ In 2023, net outflows in 3rd-party Global Platforms Strategic Partnerships generation business on the Global Platforms mainly from outflows of two large client
Slide 9: 2H 2023 Financial Results
2H 2023 Financial Results Matt Rider Chief Financial Officer
Slide 10: 2H 2023 financial results
2H 2023 financial results (in EUR and %, in million except per share data and solvency ratio) Operating Shareholders’ Operating Free cash Cash Capital Gross Group result equity per capital flow at Holding financial solvency share generation1 leverage ratio 681 4.27 660 429 2,387 5,064 193% -32% +0.0
Slide 11: Operating result decreased from management actions and non-recurring benefits in prior year period
Operating result decreased from management actions and non-recurring benefits in prior year period Operating result Change vs. (2H 2023, in EUR million) 2H 2022 in Americas local currency ▪ Net investment result reduced from lower asset levels following a reinsurance transaction with Wilton Re, high
Slide 12: 2H 2023 US operating result impacted by unfavorable claims and policyholder experience
2H 2023 US operating result impacted by unfavorable claims and policyholder experience Americas operating result build-up 2H 2023 (in USD million) CSM and RA release 492 Expenses experience variance (39) ▪ USD 39 million experience variance on expenses driven by about USD 25 million of Claims (104)
Slide 13: Net result of zero driven by realized losses following management actions
Net result of zero driven by realized losses following management actions Net result (2H 2023, in EUR million) Non-operating items ▪ Gains from hedges in the US and the holding more than offset market-related losses from onerous contracts and alternative Operating result 681 investments, as well as
Slide 14: EUR 445 million comprehensive income despite zero net result
EUR 445 million comprehensive income despite zero net result Shareholders’ equity Shareholders’ ▪ Realized losses on investments within the net equity per share result offset by corresponding gains from (in EUR million) asset disposals in Other Comprehensive Income (OCI) Shareholders’ equity at June
Slide 15: CSM relatively stable as growth in US Strategic Assets is offset by management actions
CSM relatively stable as growth in US Strategic Assets is offset by management actions and assumption updates elsewhere CSM roll forward (in EUR million) ▪ CSM in US Strategic Assets increased due to business growth, CSM end of 1H 2023 8,302 favorable experience adjustments, and benefits from the ex
Slide 16: CSM development reflecting strategy to grow Strategic Assets and shrink Financial Assets
CSM development reflecting strategy to grow Strategic Assets and shrink Financial Assets (in USD million) US Strategic Assets CSM roll-forward US Financial Assets CSM roll-forward CSM end of 1H 2023 2,178 4,990 New business 207 25 CSM release (121) (283) Accretion of interest 37 78 Experience varian
Slide 17: Higher operating capital generation reflects business growth
Higher operating capital generation reflects business growth Operating capital generation (before holding funding and operating expense, 2H 2023, in EUR million) 728 303 660 ▪ Higher earnings on in-force driven by business growth in the US Strategic Assets and previous management 428 Americas action
Slide 18: Different trends resulting from accounting frameworks
Different trends resulting from accounting frameworks IFRS Operating result 1,005 (in EUR million) (324) 681 -32% ▪ Recurring structural differences between IFRS and EoIF can be expected to come through in every reporting period; these 2H 2022 2H 2023 lowered the operating result and increased EoIF
Slide 19: Capital positions of main units remain above operating levels
Capital positions of main units remain above operating levels US UK RBC ratio1 Solvency II ratio2 427% 432% 166% 187% 1H 2023 2H 2023 1H 2023 2H 2023 ▪ Favorable operating capital generation, only ▪ 28%-pt benefit from a regulatory change partly offset by remittances to the Holding impacting risk ma
Slide 20: Creating value from US Financial Assets
Creating value from US Financial Assets 3.9 Capital employed in Financial Assets (at 400% RBC ratio, 2H 2023, Operating capital generation in USD billion) ▪ In line with expectations, the negative contribution from Universal Life was more than offset by other Financial Asset books 115 Universal Life
Slide 21: Cash Capital at Holding boosted by proceeds from the completion of the transaction with a.s.r.
Cash Capital at Holding boosted by proceeds from the completion of the transaction with a.s.r. Cash Capital at Holding (in EUR million) 2,201 ▪ Free cash flow includes EUR 75 million special remittance from AIFMC and interim dividend from a.s.r. 2,387 ▪ Proceeds from completion of the transaction 42
Slide 22: Delivering on Aegon's commitments
Delivering on Aegon’s commitments (in EUR million) Operating capital generation1 Gross financial leverage 1,280 5,621 ~1,200 ~1,100 ▪ Delivering on OCG guidance ▪ Redemption of matured ~1,000 reflects a solid 2023 run-rate 5,064 ~ 5,000 EUR 500 million senior bond and favorable one-time items brings
Slide 23: Concluding remarks
Concluding remarks Lard Friese Chief Executive Officer
Slide 24: Delivering on Aegon's strategy
Delivering on Aegon’s strategy ▪ In 2H 2023, operating capital generation1 up 16% to EUR 660 million and to EUR 1,280 million for the full-year, exceeding the initial guidance of EUR 1.0 billion ▪ Operating result of EUR 681 million, down 32% due to the impact of previously executed management actio
Slide 25: Announcement
Announcement Analysts and investors are invited to a Aegon UK Strategy Teach-In Webinar on June 25, 2024 Logistical details will be announced in due course. For questions, please contact IR +31 70 344 8305 or ir@aegon.com 25
Slide 26: Appendix
Appendix
Slide 27: Group solvency ratio amounts to 193% and includes the contribution from Aegon's stake in a.s.r.
Group solvency ratio amounts to 193% and includes the contribution from Aegon’s stake in a.s.r. Group solvency position (in EUR million) Contribution of Other units, US RBC US Solvency II UK SE Aegon’s stake diversification, (in USD million) equivalent Solvency II in a.s.r.3 and elimination Group so
Slide 28: Key capital sensitivities and assumptions
Key capital sensitivities and assumptions Capital sensitivities1 UK SE US Solvency II Scenario US RBC (in percentage points, Solvency II equivalent 4Q 2023) Equity markets +25% -6% +3% +6% Equity markets -25% +7% -14% -24% Interest rates +50 bps +1% +1% 0% Interest rates -50 bps -1% +1% +1% Governme
Slide 29: Key IFRS 17 sensitivities
Key IFRS 17 sensitivities IFRS sensitivities (Balances per December 31, 2023) CSM (pre-tax) Shareholders’ equity Americas UK Americas UK Scenario (in USD million) (in GBP million) (in USD million) (in GBP million) Balance at end of period 7,125 1,380 3,690 1,256 Equity markets +25% 382 372 234 (22)
Slide 30: Financial leverage reduced by redeeming a EUR 500 million senior bond in December 2023
Financial leverage reduced by redeeming a EUR 500 million senior bond in December 2023 Gross financial leverage Gross financial leverage ratio1 (in EUR billion) (in %) 7.4 32.2% 7.0 30.7% 6.7 6.7 29.2% 28.6% 27.9% Senior 2.4 6.0 5.9 25.7% 26.5% 2.3 1.8 1.7 5.6 24.7% 1.2 1.3 5.1 1.3 0.8 Hybrid 5.0 4.
Slide 31: Well-diversified US investment portfolio
Well-diversified US investment portfolio Aegon US asset allocation1 compared to industry2 (US general account, 100% = USD 76.4 billion, on December 31, 2023) 49.2% 48.7% US Industry Aegon US 12.8% 13.3% 14.7% 14.3% 10.0% 10.5% 6.4% 6.2% 2.7% 2.8% 4.1% 3.2% 0.9% 0.4% Cash and Government Corporate bon
Slide 32: Diversified US corporate bond portfolio
Diversified US corporate bond portfolio Aegon US fixed income securities1 US corporate bond portfolio1 BBB-rated US corporate bond portfolio1, 2 (In USD billion, on December 31, 2023) (in USD billion, on December 31, 2023) (in USD billion, on December 31, 2023) 1% 5% 9% 8% 1% 6% 7% 4% 23% 4% 4% 1% 8
Slide 33: Well-managed CML portfolio with conservative loan-to-value (LTV)
Well-managed CML portfolio with conservative loan-to-value (LTV) US Commercial Mortgage Loan (CML) portfolio LTV split US CML portfolio (based on amortized cost, in USD billion, on December 31, 2023) (based on amortized cost, on December 31, 2023) 63.7% 14% 52.9% 48.9% 49.8% Overall 51.8% Multi-Fami
Slide 34: Defensive positioning of other real estate related investments in the US general account
Defensive positioning of other real estate related investments in the US general account US commercial MBS investments US real estate investments1 in USD billion, on December 31, 2023) (in USD billion, on December 31, 2023) AAA 2% 8% 4% AA 3% 26% A Energy 1.8 BBB Multi-Family 23% 2.4 63% BIG Commerc
Slide 35: Investing in Aegon
Investing in Aegon Aegon’s ordinary shares Aegon’s New York Registry Shares (NYRS) ▪ Traded on Euronext ▪ Traded on NYSE since 1991 and Amsterdam since quoted in US dollars 1969 and quoted in ▪ One Aegon NYRS equals one Aegon euros Amsterdam-listed common share ▪ Cost effective way to hold internati
Slide 36: Aegon Investor Relations
Aegon Investor Relations Contact Investor Relations Yves Cormier, Head of Investor Relations +44 782 337 1511 Karl-Otto Grosse-Holz, Investor Relations Officer +31 70 344 7857 Hielke Hielkema, Investor Relations Officer +31 70 344 7697 Jan-Willem Stokhuijzen, Investor Relations Officer +31 70 344 83
Slide 37: Disclaimer (1/2)
Disclaimer (1/2) Local currencies and constant currency exchange rates Actual results may differ materially and adversely from expectations conveyed in forward-looking statements due to changes caused This document contains certain information about Aegon’s results, financial condition and revenue g
Slide 38: Disclaimer (2/2)
Disclaimer (2/2) Reinsurers to whom Aegon has ceded significant underwriting risks may fail to meet their obligations; Changes in ESG standards and requirements, including assumptions, methodology and materiality, or a change by Aegon in Changes in customer behavior and public opinion in gener
Slide 39: W@® aegon
W@® aegon