Aegon Ltd. · EURONEXT:AGN
Aegon — JP Morgan Insurance Forum 2019
19 slides from Aegon's conference presentation, May 9, 2019
Slide 1: Fixed income investor presentation
Fixed income investor presentation JP Morgan Insurance forum New York City May 9, 2019 Helping people achieve a lifetime of financial security
Slide 2: Aegon at a glance
1H 2018 Results Aegon at a glance What we do Life insurance, pensions & Asia asset management for approximately 2% 28.5 million customers (2018) Deposits Europe Net deposits €(4.7) billion Americas 37% (2018) History 54% Our roots date back to the first half of the 19th century 7% Employees AAM Over
Slide 3: Successful execution on strategy
Simplification and growth Successful execution on strategy • Developing from a product manufacturer to financial services provider Clear • Expand in asset management, administration, and advice strategy • Significant investments in technology to offer a fully digitized service to our customers • Piv
Slide 4: Capital update
Capital update 4
Slide 5: Robust financial profile
Simplification and growth Robust financial profile Continued strong Group Solvency II ratio Increased diversification of remittances Gross financial leverage ratio within target range Fixed charges well covered by growing capital generation Limited near term maturities and ample liquidity Ratings re
Slide 6: Continued strong Group Solvency II ratio of 211%
Simplification and growth Continued strong Group Solvency II ratio of 211% • Tier 1 comfortably covers SCR at 181% per YE 2018 YE18 Capital framework Drivers of ratio • Operating in top-end of target range provides a buffer 211% to absorb potential impacts as capital frameworks Opportunity 200% cont
Slide 7: Main units solvency ratios remain within or above target zones
Main units solvency ratios remain within or above target zones Local solvency ratio by unit Market impacts & one-time items in YE 2018 (%) • Absorbed adverse impact on capital ratio from lower tax rate through recapture 2H18 465% of VA captive; early adoption new VA framework 1H18 490% • Merger of T
Slide 8: Updated Solvency II sensitivities
1H 2018 Results Updated Solvency II sensitivities Solvency II sensitivities (in percentage points) Scenario Group US NL UK Equity markets +25% +15% +34% +2% -7% Equity markets -25% -11% -23% -5% -2% Interest rates +50 bps +3% -0% +3% +2% Interest rates -50 bps -6% -14% -1% -4% Credit spreads* +50 bp
Slide 9: Leverage ratio within target range of 26 – 30%
Leverage ratio within target range of 26 – 30% Focus on further deleveraging the group as target range is maintained on more conservative definition Gross financial leverage (in %, restated using more conservative definition) • 2018 gross financial leverage ratio within target zone • More conservati
Slide 10: Holding excess cash
Holding excess cash Remains within target range • Holding excess cash remained within target range of EUR 1.0 - 1.5 billion − EUR 700 million of debt redemptions in 2H18 • The Holding received EUR 1.4 billion in gross remittances from subsidiaries in 2018, including EUR 418 million from Europe drive
Slide 11: Debt issuance focused on refinancing grandfathered securities
Debt issuance focused on refinancing grandfathered securities • Vast majority of grandfathered Tier 1 securities are callable on a quarterly basis - Approx. 34% of securities have fixed coupon of ~6% on average; remainder has a reset coupon of ~2.5% on average • AGM authorization allows for issuance
Slide 12: Flexibility in replacing grandfathered securities
Flexibility in replacing grandfathered securities • Grandfathered securities to be replaced before the end of the grandfathering period in 2025* - Securities would be treated as liabilities in 2026 if not replaced • Significant flexibility in replacing securities due to limited short-term maturities
Slide 13: Objective to maintain strong financial strength ratings
Objective to maintain strong financial strength ratings Insurance Aegon NV Ratings last Financial issuer rating, affirmed Strength outlook rating, outlook AA-, A-, Feb 26, 2019 negative negative A+, A-, stable Mar 26, 2019 stable A1, A3, stable stable Dec 20, 2017 13
Slide 14: Remittances supported by strong capital generation
Remittances supported by strong capital generation Capital generation and remittances (EUR million, 2018) Normalized Gross Region capital remittance generation1 • Capital generation supported by low new Americas 1,050 908 business strain Netherlands 413 200 • US continues to account for the majority
Slide 15: Appendix
Appendix For questions please contact Investor Relations +31 70 344 8305 ir@aegon.com P.O. Box 85 2501 CB The Hague The Netherlands Helping people achieve a lifetime of financial security
Slide 16: General account investments
General account investments December 31, 2018 amounts in EUR millions, except for the impairment data Americas Europe Asia Holdings & other Total Cash/Treasuries/Agencies 14,875 16,555 538 148 32,116 Investment grade corporates 31,148 3,861 3,819 - 38,828 High yield (and other ) corporates 2,061 16
Slide 17: Manageable sensitivity to US credit risk
Manageable sensitivity to US credit risk • General Account has significantly decreased due to increased focus on fee-based businesses resulting in divestments and product re-designing • US RBC ratio is well positioned to absorb credit losses − The US RBC ratio remains well within the target range of
Slide 18: Credit losses trending down
Credit losses trending down Simplification and growth Impairments on US general account fixed income assets (in bps) 120 91 82 64 48 52 37 average of 24 bps 27 since 1992 33 25 17 17 9 17 1 2 4 8 8 2 1 3 1 -2 -6 -2 -9 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 20
Slide 19: Disclaimer
Disclaimer Cautionary note regarding non-IFRS-EU 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