Aegon Ltd. · EURONEXT:AGN
Aegon — Q3 2017 Earnings Presentation
25 slides from Aegon's earnings presentation, Nov 9, 2017
Slide 1: 3Q 2017 Results
3Q 2017 Results Alex Wynaendts Matt Rider The Hague – November 9, 2017 CEO CFO Helping people achieve a lifetime of financial security
Slide 2: Highlights of strong 3Q 2017 results
Overview 2 Highlights of strong 3Q 2017 results • Underlying earnings increase driven by improved claims experience, higher fee revenue as a result of favorable markets, and lower expenses in the US • Return on equity improves to 8.9% reflecting strong net underlying earnings • Group solvency ratio
Slide 3: Underlying earnings increase by 20%
Earnings 3 Underlying earnings increase by 20% • Improved claims experience in Life and Health in the US and Dutch non-life business • Lower US expenses due to management actions as part of the cost savings program and favorable expense items • Favorable markets drive higher account balances resulti
Slide 4: Expense savings of EUR 350 million on track for 2018
Earnings 4 Expense savings of EUR 350 million on track for 2018 Declining core operating expenses (EUR million – rolling 4 quarters ) • Continued execution of expense savings program 3,800 drives reduction in core operating expenses 3,650 • Reduction in core operating expenses included favorable exp
Slide 5: Strong net income
Earnings 5 Strong net income Underlying earnings to net income development in 3Q 2017 (EUR million) UEBT 3Q 2017 556 Gain from fair value items Fair value items 159 Mainly from positive real estate revaluations Realized gains 135 and hedging gains from the US Net recoveries 4 Other charges (233) Rea
Slide 6: Impact of assumption changes and model updates
Earnings 6 Impact of assumption changes and model updates Overview of Other income / (charges) (EUR million) • Charge in the US mainly driven by conversion Assumption Other Total & Models of largest block of UL business to new, Americas (304) (8) (312) dynamic model of which UL model conversion (252
Slide 7: Record gross deposits of EUR 41 billion
Sales 7 Record gross deposits of EUR 41 billion • Gross deposits increased 65% to EUR 41 billion, primarily driven by exceptionally strong asset management deposits and strong institutional platform sales in the UK - Asset management gross deposits benefited from a large mandate win by Aegon’s partn
Slide 8: Life sales impacted by exit from UK annuities
Sales 8 Life sales impacted by exit from UK annuities • New life sales declined by 8% to EUR 202 million, driven by lower term and indexed universal life sales in the US as a result of Aegon’s focus on profitability and lower sales in the UK following the exit from annuities • New premium production
Slide 9: Excess capital temporarily decreases due to capital injection
Capital 9 Excess capital temporarily decreases due to capital injection • Holding excess capital decreased temporarily to EUR 0.9 billion in 3Q 2017 following an injection of EUR 1 billion into Aegon the Netherlands • Regular dividends received during the quarter from the US of EUR 357 million and A
Slide 10: Group solvency ratio increases to 195%
Capital 10 Group solvency ratio increases to 195% • Capital generation of EUR 324 million excluding market impacts and one-time items of EUR 485 million • One-time items mainly related to model changes in US, NL, UK and the group - Model changes in units have a limited impact on capital generation i
Slide 11: Delivering on our commitments
Strategy 11 Delivering on our commitments • USD 150m run-rate expense savings by year-end 2017 Americas • Improved profitability in Life & Health businesses • GBP 150m dividend from UK following completion of annuity book sale Europe • Positioned Dutch business to resume dividend payments to the gro
Slide 12: Appendix
12 Appendix For questions please contact Investor Relations +31 70 344 8305 ir@aegon.com P.O. Box 85 2501 CB The Hague The Netherlands
Slide 13: Netherlands strategy update
13 Register? Aegon office December 1st Please contact IR in the Hague +31 70 344 8305 ir@aegon.com Netherlands strategy update
Slide 14: Aegon at a glance
Strategy support 14 Aegon at a glance Focus Sales Asia Life insurance, pensions & Total sales of asset management for over € 12.3bn 2% 26 million customers (2017 YTD) Europe Americas 32% 60% History Employees Our roots date back to the Over 29,000 employees 6% first half of the 19th century (Septemb
Slide 15: Americas: Strong earnings improvement
Financials 15 Americas: Strong earnings improvement • Underlying earnings up to USD 438 million, mostly driven by improved claims experience, favorable equity markets and lower expenses • Operating expenses decreased by 3% as expense savings and favorable expense items more than offset higher projec
Slide 16: Europe: UK drives higher earnings
Financials 16 Europe: UK drives higher earnings • Underlying earnings increased to EUR 177 million mainly driven by higher fee revenue in the UK resulting from favorable markets and improved underwriting results • Operating expenses increased by 13% due primarily to the acquisitions in the UK and re
Slide 17: Asia: Continued earnings growth
Financials 17 Asia: Continued earnings growth • Underlying earnings more than doubled to USD 17 million, mainly due the HNW business and China • New life sales were supported by strong sales in China • Net deposits decreased mainly due to lower sales and higher lapses in Japanese Yen-denominated VAs
Slide 18: Asset management: Strong net deposits
Financials 18 Asset management: Strong net deposits • Underlying earnings down by 7% as lower expenses were more than offset by lower performance and management fees • Lower operating expenses driven by the Americas and the UK as a result of continued strong expense discipline and favorable currency
Slide 19: Group solvency ratio increases to 195%
Capital 19 Group solvency ratio increases to 195% OF and SCR development (EUR billion) SII 185% 3% 1% 11% -2% -3% 195% • Own funds movement as a result of market variance is mainly due to currency translation impact (with offset in SCR) OF • Completion of L&G part VII 16.2 0.4 (0.3) (0.2) (0.2) (0.3
Slide 20: Progress on financial targets
Financials 20 Progress on financial targets Year-end Commitment 3Q 2017 results 2018 target Strong sales growth CAGR of 10% >10% Reduce operating expenses EUR 350 million EUR ~170million Increase RoE 10% 8.9% Excess capital at Holding EUR 1.0 – 1.5 billion EUR 0.9 billion Return capital to sharehold
Slide 21: General account investments
Financials 21 General account investments September 30, 2017 amounts in EUR millions, except for the impairment data Americas Europe Asia Holding & other Total Cash/Treasuries/Agencies 17,630 16,803 480 166 35,079 Investment grade corporates 31,890 3,952 3,427 - 39,270 High yield (and other ) corpor
Slide 22: Updated US macro hedge earnings sensitivity
Capital and assumptions 22 Updated US macro hedge earnings sensitivity Macro hedge sensitivity estimates (Fair value result, in USD million) • Protection of capital position main purpose of macro hedging program Total equity return in quarter Fair value items impact • Run-rate hedging expenses have
Slide 23: Main economic assumptions
Capital and assumptions 23 Main economic assumptions Overall assumptions US NL UK Exchange rate against euro 1.10 n.a. 0.85 Annual gross equity market return (price appreciation + dividends) 8% 7% 7% Main assumptions for financial targets US NL UK 10-year government bond yields Develop in line with
Slide 24: Investing in Aegon
24 Investing in Aegon Aegon’s ordinary shares Ticker symbol AGN NA • Aegon ordinary shares ISIN NL0000303709 - Traded on Euronext Amsterdam since 1969 SEDOL 5927375NL and quoted in euros Trading Platform Euronext Amsterdam Country Netherlands • Aegon New York Registry Shares (NYRS) - Traded on NYSE
Slide 25: Disclaimer
25 Disclaimer Cautionary note regarding non-IFRS 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