Aegon Ltd. · EURONEXT:AGN
Aegon — Analyst & Investor Conference, New York City, December 2010
29 slides from Aegon's conference presentation, Dec 7, 2010
Slide 1: Employer Solutions & Pensions
Employer Solutions & Pensions Kent Callahan CEO Betsy Summers CFO Analyst & Investor Conference New York City, December 2010
Slide 2: Key messages – delivering more than the sum of the parts
Key messages – delivering more than the sum of the parts � ES&P coordination unlocks meaningful opportunity � AEGON US pensions is outpacing the industry � Innovation and quality driving strong results � Solid risk management program in place 2
Slide 3: ES&P – reaching all aspects of the employee benefits market
ES&P – reaching all aspects of the employee benefits market Market Segment HQs Client Base Participant Base Product Offerings Operates in the micro to small plan defined contribution markets (start-up Los Angeles, CA 16,807 734,433 to USD 20M) and multiple employer plan markets. Operates in the smal
Slide 4: Portfolio management – winding down BOLI / COLI
Portfolio management – winding down BOLI / COLI � Not considered part of our core businesses � Closing business to new sales, but will continue to provide high quality service to existing customers � Q4 charge of approximately USD 210 million related to write-off of goodwill and other intangible ass
Slide 5: Delivering more than the sum of the parts
Delivering more than the sum of the parts Ambition Results � Leverage strong existing client � Sales and deposits up year-over and advisor relationships year � Expand distribution � Access new and evolving markets � Further increase customer and � Pension Operations Project (POP) advisor satisfacti
Slide 6: Continued focus on execution of strategy
Continued focus on execution of strategy Reallocate capital � Increase fee business and reduce spread business � De-emphasize capital intensive SPGA* � Wind down BOLI / COLI Increase returns � Cross-unit initiatives � Drive top line growth (organic, new markets, linked sales) � Re-priced synthetic G
Slide 7: US demographics support pension growth
US demographics support pension growth US retirement market YE 2009 Defined Benefit Defined Contribution (USD billion) Total (USD billion) Union USD 334 USD 9,284 billion Union USD 111 Corporate USD 1,843 Corporate USD 3,256 Public USD 2,554 Public USD 340 USD 4,731 457/403(b) USD 846 USD 4,553 Proj
Slide 8: Significant sales opportunities in the 401(k) market
Significant sales opportunities in the 401(k) market � Key industry stats – 52.1 million active participants – Median participant age 45 years old – Median account balance is USD 53,700 – Plan assets = USD 3.3 trillion Projected 2010 Sales opportunities in defined contribution Book of business Sales
Slide 9: Pension growth engine
Pension growth engine Factors Execution � Extensive distribution network � Diverse asset streams from multiple channels � Industry projected growth ~ 9-10% � Third Party Administrator (TPA) channel � US Pension sales up 22% for first 9 months � Total Retirement Outsourcing (TRO) � US Pension deposit
Slide 10: AEGON has an extensive pension distribution network
AEGON has an extensive pension distribution network Micro to small market Medium to large market (Sales by channel – 9M2010) (Sales by channel – 9M2010) 3% 4% 11% 14% 32% 22% 18% 64% 10% 1% 21% ■ Broker Dealer ■ Retirement Advisor ■ Wirehouse ■ Broker Dealer-Wirehouse ■ Bank ■ Bank ■ Consultant ■ Co
Slide 11: AEGON pension growth has outpaced the market
AEGON pension growth has outpaced the market Assets* � 12% compound annual growth rate from 2003 300% 227% to 2009 versus retirement market rate of 3% 200% � AEGON assets of USD 71.6 billion in 2010 are 128% 227% of 2003 assets of USD 31.5 billion 100% � Retirement market assets of USD 11.0 trillion
Slide 12: Withdrawal rates are at historical lows
Withdrawal rates are at historical lows AEGON pension withdrawal rates 16.0% 15.1% 14.9% 14.7% 14.2% 14.0% 13.5% 13.2% 13.1% 11.7% 12.0% 10.7% 10.1% 9.5% 9.5% 9.6% 10.0% 8.9% 9.1% 8.5% 8.0% 5.6% 6.0% 5.3% 5.0% 5.3% 4.2% 4.0% 3.1% 3.5% 2.6% 2.0% 2003 2004 2005 2006 2007 2008 2009 YTD Q3 2010 Total Wi
Slide 13: Client service – helps win and retain clients
Client service – helps win and retain clients Industry validation yields credibility 13
Slide 14: Pension innovation driving results
Pension innovation driving results Differentiation is a must Total Retirement Outsourcing Total Plan Management Fiduciary Plan Education Management Management Management DC Due Diligence Annual • Education Planner Investment Review Retirement Plan • Education Planner Report Review • Transamerica Ins
Slide 15: US demographics support growth of supplemental health and life products
US demographics support growth of supplemental health and life products Voluntary Benefits � 81.7 million employees have the option to buy one or more voluntary worksite products.(1) � 363,000 US businesses are considering introducing voluntary benefits in the next two years.(1) � 50% of all large c
Slide 16: Group synergies add to bottom line performance
Group synergies add to bottom line performance Operational Initiatives � Pension Operations Project (POP) – Identify savings between TRS and DIA* through identifying and implementing synergies, leveraging resources and expertise, and eliminating redundancies • Technology • Production / distribution
Slide 17: Execution of strategy demonstrated by strong results (1)
Execution of strategy demonstrated by strong results (1) Underlying earnings before tax Pension sales (USD million) (USD billion) 101 95 3.1 3.1 86 2.8 2.5 2.7 69 58 48 47 1.4 1.3 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Revenue-generating investments Opera
Slide 18: Execution of strategy demonstrated by strong results (2)
Execution of strategy demonstrated by strong results (2) Pension gross deposits Pension net deposits & withdrawal rate (USD billion) 4.9 (USD billion) 2.9 14.9% 14.0% 3.7 12.9% 12.1% 11.7% 2.0 11.9% 3.3 3.3 3.0 2.7 1.3 1.7 1.3 2.4 1.1 10.5% 0.7 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q1 09 Q2 09 Q
Slide 19: Earnings drivers
Earnings drivers Underlying earnings before tax* (USD million) 56 61 48 38 37 47 37 55 73 82 83 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Actual Model � Source of earnings is a combination of: – Separate account and off balance sheet � fees � approximately 50% – Purchased ann
Slide 20: Impact low interest rates manageable
Impact low interest rates manageable � Not pursuing growth in products where profitability is sensitive to low rates � Active management to protect in-force block from decline in interest rates – Prudent asset/liability management of the general account portfolio – Proactively manage credited rates
Slide 21: Conclusion – Delivering more than the sum of the parts
Conclusion – Delivering more than the sum of the parts � ES&P coordination unlocks meaningful opportunity � AEGON US pension growth is outpacing the industry � Innovation and quality driving strong results � Solid risk management program in place 21
Slide 22: Appendix
Appendix
Slide 23: Competitive environment – Pensions, Voluntary benefits
Competitive environment � Pensions – On 1/1/10 new 403(b) regulations took affect which significantly encouraged movement toward a single vendor model as well as an increased focus on fund selection and a greater awareness of plan sponsors’ fiduciary responsibilities. – Small plan competitors • Hart
Slide 24: Competitive environment – Stable value investments
Competitive environment � Stable value investments – Demand for “wraps” in excess of supply; certain issuers looking to exit the industry; limited new capacity – AEGON Stable Value Solutions doubled the price of its wraps 2009 versus 2008. SVS believes it was a market leader in establishing a more a
Slide 25: Most used DC providers
Most used DC providers Top DC record keepers ranked by assets Top DC record keepers ranked by number of participants Top DC record keepers ranked by number of sponsors US DC plan assets record kept (USD M) as of 12/31/2009 US DC plan participants record kept, as of 12/31/2009 US DC plan sponsors rec
Slide 26: Competitive Edge – customer satisfaction at Diversified
Competitive Edge – customer satisfaction at Diversified The Profit Sharing/401(k) Council The Eddy Awards – 2010 Pensions & Investments DC Education Awards of America 2009 Signature Awards Recipient of First Place Education Received Gold Honors in Plan Awards for Special Projects, Transitions and Co
Slide 27: Competitive Edge – customer satisfaction at TRS
Competitive Edge – customer satisfaction at TRS PLANSPONSOR® Chatham Partners – 2009 2009 Defined Contribution Survey Client Satisfaction Analysis Recipient of “43 Best in Received 38 “Best in Class” ratings and exceeded Class Cups” covering each the proprietary benchmark in 90 of the 97 participant
Slide 28: For questions please contact Investor Relations
For questions please contact Investor Relations T: +31 70 344 8305 E: ir@aegon.com www.aegon.com P.O. Box 85 2501 CB The Hague The Netherlands
Slide 29: Disclaimer
Disclaimer Cautionary note regarding non-GAAP measures This presentation includes certain non-GAAP financial measures: underlying earnings before tax and value of new business. The reconciliation of underlying earnings before tax to the most comparable IFRS measure is provided in Note 3 "Segment inf
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