THE HAGUE, The Netherlands,
February 17, 2017 /PRNewswire/ --
Strong improvement in underlying
earnings driven by the Americas
- Underlying earnings up to EUR 554
million driven by strong expense management,
improved claims experience and higher interest rates
- Expense savings reached an annual run rate of EUR 110 million, significantly exceeding the 2016
target
- Fair value items result of EUR (13)
million as gains in the
Netherlands from widening credit spreads and higher interest
rates were offset by losses in the United
States as a result of market volatility
- Net income of EUR 470 million
driven by strong underlying earnings and one-time tax benefits
- Return on equity increases to 10.5%, and 9.1% excluding
one-time tax benefits
Continued solid gross deposits; net outflows mostly from
lower margin businesses
- Gross deposits of EUR 23 billion;
net outflows of EUR 3.5 billion
driven by outflows from Chinese money market funds and anticipated
lapses on Mercer block
- New life sales amount to EUR 240
million partly driven by shift to fee-based solutions in
NL
- Accident & health and general insurance sales down 5% to
EUR 225 million following product
exits in US
- Market consistent value of new business of EUR 118 million benefiting from higher interest
rates
Solvency II ratio benefits from market
movements
- Solvency II ratio increases to an estimated 159% driven by
favorable spread movements and higher interest rates
- Capital generation of EUR 0.3
billion, excluding market impacts and one-time items of
EUR 0.3 billion
- Review of current 75% level of loss absorbing capacity of
deferred taxes to be completed before the end of the second quarter
of 2017
- Holding excess capital increases to EUR
1.5 billion and gross leverage ratio to 29.9% as a result of
senior debt issuance
- Final 2016 dividend per share of EUR
0.13
Statement of Alex Wynaendts, CEO
"During 2016, we made good progress in the execution
of our strategy by growing our business, realizing major expense
savings and increasing our returns. At the same time, we continued
to invest in our digital transformation and enhance the customer
experience."
"I am especially pleased that we concluded the year
with strong fourth quarter earnings, which increased as a result of
successful expense reductions, improved claims experience and
growth in fee-based revenues."
"Our group capital position remained stable throughout
the year despite significant volatility in financial markets,
political uncertainty and regulatory changes. In line with our
target to return capital to shareholders, we are today announcing a
final dividend of 13 cents per share.
Looking ahead, I am confident that the actions we are taking as a
management team will enable us to deliver on our promises to all
stakeholders."
Key performance indicators
EUR millions 11b, 11c Notes Q4 2016 Q3 2016 % Q4 2015 %
Underlying earnings before tax * 1 554 461 20 435 27
Net income / (loss) 470 358 31 (580) -
Sales 2 2,727 2,904 (6) 2,886 (6)
Market consistent value
of new business 3 118 70 70 149 (21)
Return on equity 4 10.5% 7.7% 35 7.7% 35
(table continued)
EUR millions 11b, 11c FY 2016 FY 2015 %
Underlying earnings before tax * 1,913 1,867 2
Net income / (loss) 586 (523) -
Sales 11,956 10,410 15
Market consistent value
of new business 420 597 (30)
Return on equity 8.0% 7.3% 9
All comparisons in this release are
against the fourth quarter of 2015, unless stated otherwise.
Strategic highlights
- Strategy update and financial targets reaffirmed at December
investor conference
- Bancassurance partnership with Santander in Spain & Portugal extended
- Cofunds acquisition closed; making Aegon the leading UK
platform
- Transamerica Ventures invests in German pension start-up
fairr.de
Aegon's ambition
Aegon's ambition is to be a trusted partner for financial solutions
at every stage of life, and to be recognized by its customers,
business partners and society as a company that puts the interests
of its customers first in everything it does. In addition, Aegon
wants to be regarded by its employees as an employer of choice,
engaging and enabling them to succeed. This ambition is supported
by four strategic objectives embedded in all Aegon businesses:
Optimized portfolio, Operational excellence, Customer loyalty, and
Empowered employees.
Strategy update
In December 2016, Aegon provided
the market with a strategy and progress update on the 2018
financial targets at its Analyst & Investor Conference in
New York City. This included a
number of significant measures tied to the previously announced
5-part plan to improve operational performance in the Americas,
such as:
- Doubling the expense savings to be achieved from USD 150 million to USD 300 million by 2018
- Further net reduction of >500 roles
- First phase of location strategy implemented, resulting in the
closure of 3 locations
- Strategic decision to close Affinity, Direct TV and Direct Mail
channels resulting in USD 100 million
of capital release over the next three years
- Development of integrated Worksite offering to combine wealth,
health & advice
With the planned operational performance improvements in the
Americas, Aegon reaffirmed the company's target of a group return
on equity of 10% by 2018. The target will further be supported by a
Group-wide expense savings program of EUR
350 million by 2018 and by returning EUR 2.1 billion of capital to shareholders in the
period 2016 to 2018.
Optimized portfolio
On December 28, 2016, Aegon and
Banco Santander agreed to extend the scope of their bancassurance
partnership in Spain by including
health insurance. The joint venture partners have also agreed to
accelerate the commercial development of certain insurance products
in the coming months. Furthermore, Aegon and Banco Santander Totta
agreed to strengthen their commitment through a more ambitious
business plan in Portugal by
expanding the distribution reach of their partnership. These
agreements build on the successful development of the bancassurance
partnership in Spain and
Portugal in recent years.
On January 1, 2017, Aegon
successfully closed the acquisition of Cofunds from Legal &
General following regulatory approval. Cofunds and Aegon's platform
businesses are highly complementary. With the transaction Aegon
will have an additional 750,000 platform customers representing
approximately GBP 75 billion assets
under administration, bringing total customers to over 1 million on
Aegon's platforms with more than GBP 100
billion assets under administration. The acquisition is
expected to yield significant synergies from distribution, cost and
capital perspectives.
Operational excellence
Effective January 1, 2017,
Management Board member Marco Keim
was given expanded responsibilities which now include oversight of
the Netherlands, Central &
Eastern Europe, and Spain & Portugal. In this expanded role he will focus
his efforts on realizing significant revenue synergies through
cross-border collaborations such as Aegon's Digital Center of
Excellence. This will help Aegon adapt to fast moving changes in
the industry by sharing knowledge and expertise on a variety of
topics, including technology, control functions, human resources,
multinational product offerings and digital solutions.
Transamerica Ventures, Aegon's venture capital fund made an
investment in German pension start-up fairr.de, which is a digital
pension provider with a direct sales model. Fairr.de has
demonstrated rapid growth in Germany and presents an opportunity for
Aegon's Dutch pension business to enter the market. Fairr.de offers
third pillar private pension plans for employers, independent
professions and the self-employed, while also offering corporate
pension products to employers. Aegon's Dutch pension business is
expected to contribute significant value to the partnership through
its broad experience in the fields of corporate pension products,
primarily company pension plans.
Customer loyalty
In the United States, Aegon's
subsidiary Transamerica launched a new customer care cross-training
program called the Learning Journey. Consistent with the company's
strategic shift to One Transamerica, the program is reshaping the
customer experience by cross-training call center representatives
to handle and process questions on multiple product lines. This is
a significant step in improving the customer experience as it will
reduce the need to transfer customers from one representative to
another depending on product type. Instead the training will allow
for a single representative to serve the customers' needs, while
developing a deeper and more meaningful relationship.
In November, Aegon the Netherlands surpassed more than 900,000
My Aegon accounts, which is an increase of more than 150,000
accounts in 2016. My Aegon is a website and mobile app that allows
Aegon customers to have insights into their financial positions day
and night. My Aegon provides customers with access to the necessary
documentation digitally and at a moment's notice when and where
they want it, reducing the need for physical mailings. Over 37% of
all Aegon the Netherland's customers currently have a My Aegon
account and have completed more than 130,000 transactions in 2016
contributing to the improved Net Promoter Scores seen throughout
the year.
Empowered employees
For the second year in a row, Transamerica has achieved 90 out
of 100 possible points in the Human Rights Campaign Foundation
Corporate Equality Index. Businesses are scored on a range of
policies that support LGBTQ employees, these include
anti-discrimination protections, domestic partner benefits,
diversity training and transgender-inclusive benefits.
Transamerica's continued high score reflects the company's
commitment to creating an inclusive work environment for all
employees. Workplace equality continues to grow in importance to
customers when choosing how their financial needs will be met and
this ranking solidifies Transamerica is at the forefront of this
evolution.
Aegon the Netherlands improved 10 spots to number 15 in the 2016
Best Employer Survey for companies with more than 1,000 employees.
There were more than 200,000 employees across more than 300
organizations surveyed to derive the best employers to work for in
the Netherlands. Aegon scored high
on organizational pride, receiving praise for work, satisfaction
with alignment of the organization and satisfaction with the type
of work performed. Aegon's ambition is to further improve as an
employer of choice and to enter the top 10 of the Best Employer
Survey in the Netherlands.
Financial overview
EUR millions Notes Q4 2016 Q3 2016 % Q4 2015 %
Underlying earnings before tax
Americas 388 307 27 291 33
Europe 174 151 15 142 23
Asia 13 6 108 3 -
Asset Management 35 32 7 38 (8)
Holding and other (57) (35) (61) (39) (45)
Underlying earnings before tax 554 461 20 435 27
Fair value items (13) 84 - (159) 92
Realized gains / (losses) on investments 36 21 66 58 (39)
Net impairments (1) 6 - 64 -
Other income / (charges) (38) (72) 47 (1,181) 97
Run-off businesses (1) 8 - 21 -
Income before tax 536 510 5 (762) -
Income tax (66) (152) 56 182 -
Net income / (loss) 470 358 31 (580) -
Net income / (loss) attributable to:
Equity holders of Aegon N.V. 470 358 31 (581) -
Non-controlling interests - - 159 - (63)
Net underlying earnings 471 349 35 381 24
Commissions and expenses 1,726 1,638 5 1,844 (6)
of which operating expenses 9 978 900 9 997 (2)
New life sales
Life single premiums 476 479 (1) 561 (15)
Life recurring premiums annualized 192 171 12 216 (11)
Total recurring plus 1/10 single 240 219 9 273 (12)
New life sales 10
Americas 133 127 5 152 (12)
Europe 75 64 17 94 (20)
Asia 32 28 12 27 18
Total recurring plus 1/10 single 240 219 9 273 (12)
New premium production accident
and health insurance 201 198 2 213 (5)
New premium production general insurance 23 20 15 25 (6)
Gross deposits (on and off balance) 10
Americas 8,769 9,375 (6) 8,511 3
Europe 3,474 2,769 25 3,107 12
Asia 54 83 (34) 63 (14)
Asset Management 10,326 12,442 (17)12,079 (15)
Total gross deposits 22,625 24,669 (8)23,761 (5)
Net deposits (on and off balance) 10
Americas (2,073) (3,711) 44 726 -
Europe 411 (41) - 342 20
Asia 51 69 (26) 50 2
Asset Management (1,702) 1,380 - 1,662 -
Total net deposits excluding run-off
businesses (3,313) (2,303) (44) 2,780 -
Run-off businesses (179) (237) 24 (215) 17
Total net deposits / (outflows) (3,492) (2,539) (38) 2,564 -
(table continued)
EUR millions FY 2016 FY 2015 %
Underlying earnings before tax
Americas 1,249 1,278 (2)
Europe 655 559 17
Asia 21 20 3
Asset Management 149 170 (12)
Holding and other (162) (161) -
Underlying earnings before tax 1,913 1,867 2
Fair value items (645) (771) 16
Realized gains / (losses) on investments 340 346 (2)
Net impairments (54) 49 -
Other income / (charges) (771) (2,180) 65
Run-off businesses 54 88 (39)
Income before tax 836 (601) -
Income tax (250) 78 -
Net income / (loss) 586 (523) -
Net income / (loss) attributable to:
Equity holders of Aegon N.V. 586 (524) -
Non-controlling interests - 1 (52)
Net underlying earnings 1,483 1,481 -
Commissions and expenses 6,696 6,916 (3)
of which operating expenses 3,764 3,734 1
New life sales
Life single premiums 2,054 2,823 (27)
Life recurring premiums annualized 764 822 (7)
Total recurring plus 1/10 single 969 1,104 (12)
New life sales
Americas 542 599 (9)
Europe 299 332 (10)
Asia 128 173 (26)
Total recurring plus 1/10 single 969 1,104 (12)
New premium production accident
and health insurance 860 960 (10)
New premium production general insurance 94 84 12
Gross deposits (on and off balance)
Americas 40,881 36,999 10
Europe 12,773 11,489 11
Asia 304 408 (25)
Asset Management 46,366 33,722 37
Total gross deposits 100,325 82,618 21
Net deposits (on and off balance)
Americas (1,015) 7,754 -
Europe 1,260 869 45
Asia 259 353 (27)
Asset Management 2,964 8,235 (64)
Total net deposits excluding run-off
businesses 3,468 17,211 (80)
Run-off businesses (759) (833) 9
Total net deposits / (outflows) 2,709 16,378 (83)
Revenue-generating investments
Dec. 31, Sep. 30, Dec. 31,
2016 2016 % 2015 %
Revenue-generating investments (total) 743,200 723,485 3 710,458 5
Investments general account 156,813 159,053 (1) 160,792 (2)
Investments for account of policyholders 203,610 197,493 3 200,226 2
Off balance sheet investments third parties 382,776 366,939 4 349,440 10
Operational highlights
Underlying earnings before tax
Aegon's underlying earnings before tax in the fourth quarter of
2016 increased by 27% compared with the fourth quarter of 2015 to
EUR 554 million. This increase was in
part driven by expense reductions, an improvement in claims
experience in the United States
and positive adjustments to intangible assets related to higher
interest rates. Favorable claims experience and one-time items
totaled EUR 38 million in the fourth
quarter of 2016.
Underlying earnings from the Americas increased to EUR 388 million as a result of EUR 31 million favorable morbidity experience and
a positive adjustment to intangible assets from higher interest
rates of EUR 18 million. These more than offset EUR 13 million adverse persistency in the life
business and EUR 5 million one-time
charges. Expense savings as a result of management actions offset
an increase in variable expenses and the acquisition of Mercer's
defined contribution business.
In Europe, underlying earnings
increased to EUR 174 million. This
was mainly driven by lower amortization of deferred policy
acquisition costs (DPAC) in the United
Kingdom following the write down of DPAC related to
upgrading customers to the retirement platform in the fourth
quarter of 2015. Earnings in the United
Kingdom also benefited from increased fee income as well as
EUR 8 million favorable claims
experience and reserve releases, which more than offset margin
pressure. Earnings from the other businesses in Europe were stable compared with the same
quarter last year.
The result of Aegon's operations in Asia increased to EUR
13 million as a result of a positive impact of EUR 7 million from higher interest rates.
Underlying earnings from Aegon Asset Management declined
slightly to EUR 35 million, mainly as
a result of lower performance fees.
The result from the holding declined to a loss of EUR 57 million driven by EUR 8 million one-time charges from reserve
adjustments and higher project-related expenses. The latter
included expenses related to the implementation of a new global HR
system.
Net income
Net income amounted to EUR 470
million as a result of strong underlying earnings and a
favorable effective tax rate.
Fair value items
The loss from fair value items amounted to EUR 13 million. Gains in the Netherlands from positive real estate
revaluations, widening credit spreads, and an interest rate
mismatch on an IFRS basis were more than offset by losses in
the United States. The latter was
mostly driven by fair value items without an accounting match as a
result of higher equity markets and interest rates following the US
elections.
Realized gains on investments
Realized gains on investments of EUR 36
million were mostly the result of private equity divestments
and normal trading activity in the
Netherlands.
Impairment charges
Net impairments amounted to EUR 1
million, as recoveries on energy-related bonds in
the United States were offset by
an impairment in asset management.
Other charges
Other charges of EUR 38 million were
mainly driven by the United
States, which primarily related to restructuring charges. In
Europe, other charges were driven
by an adjustment of deferred policyholder acquisition costs related
to Aegon's European variable annuities business and additions to a
legal claims provision in Central & Eastern Europe
(CEE), which were partly offset by model updates in the Netherlands.
Run-off businesses
The result from run-off businesses decreased to a loss of
EUR 1 million due to a EUR (18) million adjustment to the intangible
balances for the BOLI/COLI business.
Income tax
Income tax amounted to EUR 66 million
in the fourth quarter as a result of one-time tax benefits in
the United States and the
United Kingdom. The effective tax
rate for the quarter was 12% as a result.
Return on equity
Return on equity increased to 10.5% in the fourth quarter of
2016 driven by higher underlying earnings and the aforementioned
tax benefits. Excluding these tax benefits Aegon's return on equity
would have amounted to 9.1%.
Operating expenses
Operating expenses decreased by 2% compared with the fourth
quarter of 2015 to EUR 978 million.
Expense reductions as a result of management actions, lower
restructuring charges, favorable currency movements, and
non-recurrence of last year's defined benefit charges more than
offset an increase in year-end variable personnel expenses and the
acquisition of Mercer's defined contribution business.
Sales
Aegon's total sales declined by 6% to EUR
2.7 billion in the fourth quarter of 2016. This was mainly
the result of lower gross deposits which were down 5% as a result
of a decrease in asset management deposits from last year's
exceptionally high level. Lower deposits from asset management more
than offset increased deposits from Aegon's online bank Knab and
higher retirement plan deposits in the
United States. Net outflows amounted to EUR 3.5 billion and were mainly driven by
outflows from low-margin money market funds in China and net outflows on the business
acquired from Mercer. The latter is in line with the anticipated
lapse behavior when acquiring a block of retirement business.
New life sales declined by 12% to EUR 240
million, partly driven by lower pension sales in
the Netherlands as a result of a
continued shift in demand from defined benefit to defined
contribution solutions. In addition, universal life sales in
the United States continue to be
impacted by a decline in the recruitment of new agents.
Furthermore, new premium production for accident & health and
general insurance was down by 5% to EUR 225
million due to product exits in the United States.
Market consistent value of new business
The market consistent value of new business declined to
EUR 118 million compared with the
fourth quarter of 2015 due to a lower contribution from variable
annuities in the United States as
well as the divestment of the annuity portfolio and a change in
product mix in the United Kingdom.
As a result of higher interest rates, market consistent value of
new business increased considerably compared with previous quarters
in 2016.
Revenue-generating investments
Revenue-generating investments were up 3% during the fourth
quarter of 2016 to EUR 743 billion as
the appreciation of the US dollar and higher equity markets more
than offset net outflows and the impact of higher interest rates on
the value of fixed income investments.
Capital management
Shareholders' equity was stable compared with the end of the
previous quarter at EUR 21 billion on
December 31, 2016. Retained earnings,
positive remeasurements of defined benefit plans and strengthening
of the US dollar largely offset a lower revaluation reserve as a
result of increased interest rates. Shareholders' equity, excluding
revaluation reserves and defined benefit plan remeasurements,
increased 7% to EUR 17.5 billion - or
EUR 8.52 per common share - at the
end of the fourth quarter. The main drivers of this increase were
net income and favorable currency movements.
The gross leverage ratio increased 40 basis points to 29.9% in
the fourth quarter, as the issuance of senior debt more than
offsets the positive impact of this quarter's net income. On
December 6, 2016, Aegon issued
EUR 500 million senior unsecured
notes with a coupon of 1%. The proceeds of these notes have been
earmarked for the redemption of EUR 500
million 3% senior unsecured notes due in July 2017. Pro forma for this redemption, Aegon's
gross financial leverage ratio reduced to 28.4%.
Holding excess capital increased to EUR
1.5 billion driven by the aforementioned issuance of senior
notes. Excluding this item, holding excess capital decreased by
EUR 0.1 billion to EUR 1.0 billion, as EUR
0.2 billon remittances from the units were offset by
neutralization of the 2016 interim stock dividend, coupon payments
and operating expenses.
Capital generation of the operating units excluding market
impacts and one-time items amounted to EUR
0.3 billion in the fourth quarter of 2016. Market impacts in
the quarter amounted to EUR 0.4
billion, mainly due to the positive impact of favorable
credit spread movements on the Dutch mortgage portfolio and
favorable market movements on the own employee pension plans in
Aegon's main markets. One-time items totaled EUR (0.1) billion, and included higher capital
requirements mainly as a result of a repositioning of Aegon the
Netherlands' investment portfolio. Capital generation including
market impacts and one-time items amounted to EUR 0.6 billion for the quarter.
Aegon's Solvency II ratio increased to an estimated 159% during
the fourth quarter as favorable market impacts more than offset
one-time items in the operating units and the net effect from other
items. Before the end of the second quarter of 2017, the
assumptions underlying Aegon's factor for the loss absorbing
capacity of deferred taxes (LAC-DT) of 75% will be reviewed
following new guidance by the Dutch Central Bank issued early
February 2017. The Dutch operating
entities have remitted EUR 100
million to the local holding in the first quarter
of 2017. Upstreaming of dividend from Aegon the Netherlands to
the group is pending the aforementioned review.
The estimated local solvency ratios of Aegon's main units as of
December 31, 2016 were:
- 440% RBC ratio in the United
States
- 141% Solvency II ratio in the
Netherlands
- 156% Solvency II ratio in the United
Kingdom
On February 10, 2017, Standard
& Poor's affirmed its 'AA-' ratings on Aegon's core operating
entities, while revising their outlook on Aegon and its rated
subsidiaries domiciled in the United
States and the Netherlands
from 'stable' to 'negative'.
Final dividend
At the Annual General Meeting of Shareholders on May 19, 2017, the Supervisory Board will, absent
unforeseen circumstances, propose a final dividend for 2016 of
EUR 0.13 per common share. If
approved, and in combination with the interim dividend of
EUR 0.13 per share paid over the
first half of 2016, Aegon's total dividend over 2016 will amount to
EUR 0.26 per common share. The final
dividend will be paid in cash or stock at the election of the
shareholder. The value of the stock dividend will be approximately
equal to the cash dividend.
Aegon's Euronext-listed shares will be quoted ex-dividend on
May 23, 2017, while its NYSE-listed
shares will be quoted ex-dividend on May 22,
2017. The record date for both shares is May 24, 2017. The election period for
shareholders will run from May 30 up
to and including June 16, 2017. The
stock fraction will be based on the average share price on Euronext
Amsterdam from June 12 until
June 16, 2017. The stock dividend
ratio will be announced on June 20,
2017, and the dividend will be payable as of June 23, 2017.
Financial overview, Q4 2016 geographically
EUR millions Americas Europe Asia
Underlying earnings before
tax by line of business
Life 155 91 20
Individual savings and
retirement products 140 - (4)
Pensions 93 60 -
Non-life - 21 -
Distribution - 3 (2)
Asset Management - - -
Other - - -
Underlying earnings before tax 388 174 13
Fair value items (226) 171 (11)
Realized gains / (losses)
on investments (18) 52 2
Net impairments 5 (1) -
Other income / (charges) (27) (9) -
Run-off businesses (1) - -
Income before tax 121 387 5
Income tax 35 (81) (14)
Net income / (loss) 157 306 (9)
Net underlying earnings 327 161 1
(table continued)
Holding,
other
Asset activities &
EUR millions Management eliminations Total
Underlying earnings before
tax by line of business
Life - - 266
Individual savings and
retirement products - - 136
Pensions - - 153
Non-life - - 21
Distribution - - 1
Asset Management 35 - 35
Other - (57) (57)
Underlying earnings before tax 35 (57) 554
Fair value items - 53 (13)
Realized gains / (losses)
on investments - - 36
Net impairments (5) - (1)
Other income / (charges) (1) (1) (38)
Run-off businesses - - (1)
Income before tax 28 (5) 536
Income tax (10) 4 (66)
Net income / (loss) 18 (1) 470
Net underlying earnings 22 (41) 471
Employee numbers
Dec. 31, Sep. 30, Dec. 31,
2016 2016 2015
Employees 29,380 29,732 31,530
of which Aegon's share of employees
in joint ventures and associates 5,944 6,121 7,499
Use this link for the full version of the press
release.
DISCLAIMERS
Cautionary note regarding non-IFRS measures
This document includes the following non-IFRS financial
measures: underlying earnings before tax, income tax, income before
tax, market consistent value of new business and return on equity.
These non-IFRS measures are calculated by consolidating on a
proportionate basis Aegon's joint ventures and associated
companies. The reconciliation of these measures, except for market
consistent value of new business, to the most comparable IFRS
measure is provided in note 3 'Segment information' of Aegon's
Condensed Consolidated Interim Financial Statements. Market
consistent value of new business is not based on IFRS, which are
used to report Aegon's primary financial statements and should not
be viewed as a substitute for IFRS financial measures. Aegon may
define and calculate market consistent value of new business
differently than other companies. Return on equity is a ratio using
a non-IFRS measure and is calculated by dividing the net underlying
earnings after cost of leverage by the average shareholders' equity
excluding the preferred shares, the revaluation reserve and the
reserves related to defined benefit plans. Aegon believes that
these non-IFRS measures, together with the IFRS information,
provide meaningful information about the underlying operating
results of Aegon's business including insight into the financial
measures that senior management uses in managing the business.
Local currencies and constant currency exchange
rates
This document contains certain information about Aegon's
results, financial condition and revenue generating investments
presented in USD for the Americas and Asia, and in GBP for the United Kingdom, because those businesses
operate and are managed primarily in those currencies. Certain
comparative information presented on a constant currency basis
eliminates the effects of changes in currency exchange rates. None
of this information is a substitute for or superior to financial
information about Aegon presented in EUR, which is the currency of
Aegon's primary financial statements.
Forward-looking statements
The statements contained in this document that are not
historical facts are forward-looking statements as defined in the
US Private Securities Litigation Reform Act of 1995. The following
are words that identify such forward-looking statements: aim,
believe, estimate, target, intend, may, expect, anticipate,
predict, project, counting on, plan, continue, want, forecast,
goal, should, would, is confident, will, and similar expressions as
they relate to Aegon. These statements are not guarantees of future
performance and involve risks, uncertainties and assumptions that
are difficult to predict. Aegon undertakes no obligation to
publicly update or revise any forward-looking statements. Readers
are cautioned not to place undue reliance on these forward-looking
statements, which merely reflect company expectations at the time
of writing. Actual results may differ materially from expectations
conveyed in forward-looking statements due to changes caused by
various risks and uncertainties. Such risks and uncertainties
include but are not limited to the following:
- Changes in general economic conditions, particularly in
the United States, the Netherlands and the United Kingdom;
- Changes in the performance of financial markets, including
emerging markets, such as with regard to:
- The frequency and severity of defaults by issuers in
Aegon's fixed income investment portfolios;
- The effects of corporate bankruptcies and/or accounting
restatements on the financial markets and the resulting decline in
the value of equity and debt securities Aegon holds; and
- The effects of declining creditworthiness of certain
private sector securities and the resulting decline in the value of
sovereign exposure that Aegon holds;
- Changes in the performance of Aegon's investment portfolio and
decline in ratings of Aegon's counterparties;
- Consequences of a potential (partial) break-up of the
euro;
- Consequences of the anticipated exit of the United Kingdom from the European Union;
- The frequency and severity of insured loss events;
- Changes affecting longevity, mortality, morbidity, persistence
and other factors that may impact the profitability of Aegon's
insurance products;
- Reinsurers to whom Aegon has ceded significant underwriting
risks may fail to meet their obligations;
- Changes affecting interest rate levels and continuing low or
rapidly changing interest rate levels;
- Changes affecting currency exchange rates, in particular the
EUR/USD and EUR/GBP exchange rates;
- Changes in the availability of, and costs associated with,
liquidity sources such as bank and capital markets funding, as well
as conditions in the credit markets in general such as changes in
borrower and counterparty creditworthiness;
- Increasing levels of competition in the United States, the Netherlands, the United Kingdom and emerging markets;
- Changes in laws and regulations, particularly those affecting
Aegon's operations' ability to hire and retain key personnel,
taxation of Aegon companies, the products Aegon sells, and the
attractiveness of certain products to its consumers;
- Regulatory changes relating to the pensions, investment, and
insurance industries in the jurisdictions in which Aegon
operates;
- Standard setting initiatives of supranational standard setting
bodies such as the Financial Stability Board and the International
Association of Insurance Supervisors or changes to such standards
that may have an impact on regional (such as EU), national or US
federal or state level financial regulation or the application
thereof to Aegon, including the designation of Aegon by the
Financial Stability Board as a Global Systemically Important
Insurer (G-SII);
- Changes in customer behavior and public opinion in general
related to, among other things, the type of products Aegon sells,
including legal, regulatory or commercial necessity to meet
changing customer expectations;
- Acts of God, acts of terrorism, acts of war and pandemics;
- Changes in the policies of central banks and/or
governments;
- Lowering of one or more of Aegon's debt ratings issued by
recognized rating organizations and the adverse impact such action
may have on Aegon's ability to raise capital and on its liquidity
and financial condition;
- Lowering of one or more of insurer financial strength ratings
of Aegon's insurance subsidiaries and the adverse impact such
action may have on the premium writings, policy retention,
profitability and liquidity of its insurance subsidiaries;
- The effect of the European Union's Solvency II requirements and
other regulations in other jurisdictions affecting the capital
Aegon is required to maintain;
- Litigation or regulatory action that could require Aegon to pay
significant damages or change the way Aegon does business;
- As Aegon's operations support complex transactions and are
highly dependent on the proper functioning of information
technology, a computer system failure or security breach may
disrupt Aegon's business, damage its reputation and adversely
affect its results of operations, financial condition and cash
flows;
- Customer responsiveness to both new products and distribution
channels;
- Competitive, legal, regulatory, or tax changes that affect
profitability, the distribution cost of or demand for Aegon's
products;
- Changes in accounting regulations and policies or a change by
Aegon in applying such regulations and policies, voluntarily or
otherwise, which may affect Aegon's reported results and
shareholders' equity;
- Aegon's projected results are highly sensitive to complex
mathematical models of financial markets, mortality, longevity, and
other dynamic systems subject to shocks and unpredictable
volatility. Should assumptions to these models later prove
incorrect, or should errors in those models escape the controls in
place to detect them, future performance will vary from projected
results;
- The impact of acquisitions and divestitures, restructurings,
product withdrawals and other unusual items, including Aegon's
ability to integrate acquisitions and to obtain the anticipated
results and synergies from acquisitions;
- Catastrophic events, either manmade or by nature, could result
in material losses and significantly interrupt Aegon's
business;
- Aegon's failure to achieve anticipated levels of earnings or
operational efficiencies as well as other cost saving and excess
capital and leverage ratio management initiatives; and
- This press release contains information that qualifies, or may
qualify, as inside information within the meaning of Article 7(1)
of the EU Market Abuse Regulation.
Further details of potential risks and uncertainties affecting
Aegon are described in its filings with the Netherlands Authority
for the Financial Markets and the US Securities and Exchange
Commission, including the Annual Report. These forward-looking
statements speak only as of the date of this document. Except as
required by any applicable law or regulation, Aegon expressly
disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained
herein to reflect any change in Aegon's expectations with regard
thereto or any change in events, conditions or circumstances on
which any such statement is based.
Additional information
Presentation
The conference call presentation is available on aegon.com as of
7.30 a.m. CET.
Supplements
Aegon's Q4 2016 Financial Supplement and Condensed Consolidated
Interim Financial Statements
are available on aegon.com.
Conference call including Q&A
9:00 a.m. CET
Audio webcast on aegon.com
Dial-in numbers
United States:
+1-719-457-2086
United Kingdom:
+44-330-336-9411
The Netherlands:
+31-20-721-9251
Passcode: 9768082
Two hours after the conference call, a replay will be available
on aegon.com.
Media relations
Debora de Laaf
+31 (0) 70 344 8730
gcc@aegon.com
Investor relations
Willem van den Berg
+31 (0) 70 344 8305
ir@aegon.com