Aegon Ltd. · EURONEXT:AGN
Aegon — H1 2023 Earnings Presentation
33 slides from Aegon's earnings presentation, Aug 17, 2023
Slide 1: 1H 2023 Results
Change foto to sth that highlights a “young, diverse customer base” 1H 2023 Results Lard Friese Matt Rider Chief Executive Officer Chief Financial Officer August 17, 2023
Slide 2: Starting the next chapter of Aegon's transformation with solid 1H 2023 performance
Starting the next chapter of Aegon’s transformation with solid 1H 2023 performance ▪ Opening the next strategy chapter ▪ In 1H 2023, operating result up 3% to ▪ On track to moving Aegon’s legal seat with Capital Markets Day 2023 and EUR 818 million and operating capital to Bermuda closure of transac
Slide 3: Chapter 2: Clear priorities to create value
Chapter 2: Clear priorities to create value Capital Markets Day 2023 Change Accelerate Drive improvement and Manage group profile Transamerica’s growth value in rest of portfolio capital actively ▪ Accelerate strategy to ▪ Significantly reduce ▪ Continue to strengthen ▪ Use significant financial cre
Slide 4: Expanding the distribution reach at WFG
Expanding the distribution reach 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 %) ▪ Continuing growth of number of licensed 70 34 64% 31 60% agents in line with plan 58 ▪ Improving product
Slide 5: 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 ▪ Growing new life sales by 17%, mainly from Indexed Universal Life sold 233 164 324 147 through WFG 200 240 ▪ Increasing sales in term life from adjusted p
Slide 6: Building leadership positions in attractive Retirement segments
Building leadership positions in attractive Retirement segments US – Retirement Plans (in USD) Net deposits GA Stable Value IRA Earnings on mid-sized plans AuA1 AuA1 in-force2 (million) (billion) (billion) (million) ▪ Benefitting from strong sales in prior periods and lower withdrawals in mid- 995 1
Slide 7: Continuing momentum in UK Workplace platform contrasts with challenging environment for Retail
Continuing momentum in UK Workplace platform contrasts with challenging environment for Retail UK (in GBP million) Workplace Retail Revenues gained / net deposits net deposits (lost) on net deposits ▪ Onboarding of new schemes and higher (annualized) net deposits from existing schemes in the Workpla
Slide 8: Challenging environment for Asset Management
Challenging environment for Asset Management Asset Management (in EUR million) 3rd-party net deposits Net deposits Operating Capital Global Platforms Strategic Partnerships Generation ▪ Overall net outflows in 3rd-party business on the Global platform partly offset by continued inflows in Dutch 3,45
Slide 9: 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 ▪ Growing business in Brazil, supported by higher credit life sales, and in China 168 67 44 benefitting from relaxation of COVID-1
Slide 10: Continuing to sharpen the strategic focus
Continuing to sharpen the strategic focus Closing a.s.r. transaction Building partnerships Extending a joint venture Increasing strategic focus Aegon NL Aegon UK Aegon Asset Management Aegon International ▪ Closed the transaction with a.s.r. ▪ Extending the existing strategic ▪ Extended joint ventur
Slide 11: Redomiciliation to Bermuda; change in Group supervision
Redomiciliation to Bermuda; change in Group supervision Redomiciliation to Bermuda Bermuda Monetary Authority to become group supervisor ▪ Transfer of legal domicile to ▪ Bermuda Monetary Authority to Bermuda2 become group supervisor1 ▪ Aegon to maintain head office in ▪ Established, well-regarded N
Slide 12: Aegon will continue to apply well-recognized international governance standards
▪ Aegon will preserve its current governance principles to the extent possible, practical and Aegon will continue to appropriate in the context of Aegon's international footprint apply well-recognized ▪ Following stakeholder engagement, changes have international been made to the proposed bye-laws o
Slide 13: 1H 2023 Financial Results
1H 2023 Financial Results Matt Rider Chief Financial Officer
Slide 14: 1H 2023 financial results
1H 2023 financial results (in EUR million) Operating Operating Free cash Cash Capital Gross Group result capital flow2 at Holding2 financial Solvency II generation1 leverage ratio 818 620 287 1,315 5,586 202% +3% vs. 1H 2022 +13% vs. 1H 2022 (107) vs. 1H 2022 (299) vs. FY 2022 (35) vs. FY 2022 -6%-p
Slide 15: Benefitting from business growth and improved claims experience, offset by impact from market movements
Benefitting from business growth and improved claims experience, offset by impact from market movements Operating result Overall negative impact from market movements Change vs. (1H 2023, in EUR million) 1H 2022 in ▪ Lower net investment result in the US, partly from higher short- local currency ter
Slide 16: Net loss driven by previously announced charges in the US
Net loss driven by previously announced charges in the US Net result (1H 2023, in EUR million) Non-operating items ▪ Hedges maintained high effectiveness on an economic basis Operating result 818 ▪ Realized losses on investment from sale of bonds in the context of reinsuring an SGUL1 portfolio Fair
Slide 17: Lower CSM from assumption changes and run-off of Financial Assets
Lower CSM from assumption changes and run-off of Financial Assets CSM roll forward New business (in EUR million) ▪ EUR 214 million new CSM from profitable growth in US Individual Life driven by Indexed Universal Life products ▪ EUR (29) million offset from reinsurance of UK protection book CSM end o
Slide 18: Higher capital generation reflects business growth and improvement in claims experience
Higher capital generation reflects business growth and improvement in claims experience Operating Capital Generation (before holding funding and operating expense, excluding Aegon NL, 1H 2023, in EUR million) 760 288 620 ▪ Higher earnings on in-force driven by Americas from improved claims 439 Ameri
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 425% 427% 169% 166% FY 2022 1H 2023 FY 2022 1H 2023 ▪ Favorable operating capital generation, only ▪ Decrease reflects dividends to the intermediate partly offset by remittances to the Holding UK holdin
Slide 20: Creating value from US Financial Assets
Creating value from US Financial Assets Capital employed Universal Life in Financial Assets (at 400% RBC ratio, 1H 2023, in USD billion) 4.1 ▪ Agreed to reinsure USD 1.4 billion SGUL statutory reserves to Wilton Re reducing exposure to mortality risk ▪ Generated around USD 225 million capital Operat
Slide 21: Cash Capital at Holding in upper half of the operating range
Cash Capital at Holding in upper half of the operating range Cash Capital at Holding1 (in EUR million) 287 1.614 (61) ▪ Free cash flow driven by remittances from all units 1,500 1.315 ▪ Acquisitions in Asset Management more than (524) offset proceeds from completion of the sale of Operating Aegon’s
Slide 22: Financial targets for 2025
Reduce gross financial leverage Around EUR 5.0 billion Increase operating capital generation1 Around EUR 1.2 billion Financial targets for 20252 Grow free cash flows Around EUR 800 million Increase dividend to shareholders Around EUR 0.40 per share 1. Before holding and funding expenses 2. Barring u
Slide 23: Concluding remarks
Concluding remarks Lard Friese Chief Executive Officer
Slide 24: Starting the next chapter of Aegon's transformation with solid 1H 2023 results
Starting the next chapter of Aegon’s transformation with solid 1H 2023 results ▪ Opening the next strategy chapter ▪ In 1H 2023, operating result up 3% to ▪ On track to moving Aegon’s legal seat with Capital Markets Day 2023 and EUR 818 million and operating capital to Bermuda closure of transaction
Slide 25: Leader in investment, protection, and retirement solutions
Grow US Strategic Assets capital generation sustainably Leader in investment, Release capital of and reduce exposure to US Financial Assets protection, and retirement solutions Significant financial flexibility at Holding Increase dividend per share throughout transformation 25
Slide 26: Appendix
Appendix
Slide 27: Key capital sensitivities and assumptions
Key capital sensitivities and assumptions Capital sensitivities1 Scenario UK Solvency II US RBC (in percentage points, Equity markets +25% -6% +12% 2Q 2023) Equity markets -25% +10% -28% Interest rates +50 bps -1% 0% Interest rates -50 bps 0% +1% Government spreads +50 bps -2% n/a Government spreads
Slide 28: Conversion of RBC to Solvency II
Conversion of RBC to Solvency II ▪ Conversion methodology for US operations has been agreed with DNB, subject to regular review ▪ Calibration of US insurance entities followed by subsequent adjustment for US debt and holding items • Calibration of US insurance entities is consistent with EIOPA’s gui
Slide 29: Leverage ratio impacted by reduction of equity due to book loss from transaction with a.s.r.
Leverage ratio impacted by reduction of equity due to book loss from transaction with a.s.r. and transition to IFRS 9 / 17 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% 27,4% Senior 2.4 6.0 5.9 25,7% 2.3 1.8 1.7 5.6 5.6
Slide 30: Investing in Aegon
Investing in Aegon Aegon’s New York Aegon NYRS Aegon’s ordinary shares Registry Shares (NYRS) contact details ▪ Traded on Euronext Amsterdam since ▪ Traded on NYSE since 1991 and quoted in 1969 and quoted in euros US dollars ▪ One Aegon NYRS equals one Aegon Amsterdam-listed common share ▪ Cost effe
Slide 31: Aegon Investor Relations
Aegon Investor Relations Contact Investor Relations 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 8328 Anton Zhan, Investor Relations Officer +31 70 344 7416
Slide 32: 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 33: Disclaimer (2/2)
Disclaimer (2/2) ▪ Changes in customer behavior and public opinion in general related to, among other things, the type of products Aegon ▪ Reliance on third-party information in certain of Aegon’s disclosures, which may change over time as methodologies and data sells, including legal, regulatory or