THE HAGUE, The Netherlands,
August 11, 2016 /PRNewswire/ --
Underlying earnings impacted by adverse
claims experience; net loss driven by UK annuity
book divestment
- Underlying earnings amount to EUR 435
million; higher earnings from Europe more than offset by the Americas mainly
due to adverse claims experience, low interest rates and lower
variable annuity earnings
- Fair value items loss of EUR 378
million, mostly driven by the impact of low interest rates
on hedging programs
- Net loss of EUR 385 million due
to book loss on divestment of UK annuity book and fair value
items
- Return on equity of 6.8%
Continued strong sales from deposit
businesses; decline in life sales
reflects continued focus on
profitability
- Gross deposits at high level of EUR 23
billion driven by US retirement plans, asset management and
savings deposits in the
Netherlands; net deposits, excluding run-off businesses, of
EUR 1.2 billion
- New life sales decline 11% to EUR 244
million as a result of focus on profitability
- Accident & health and general insurance sales down 9% to
EUR 226 million, mainly from lower
production in US
- Market consistent value of new business decreases to
EUR 100 million due to lower life
sales and interest rates
Capital position remains solid as a
result of management actions; interim dividend
increased by 8%
- Solvency II ratio increased to an estimated 158%, as capital
generation and management actions, including UK annuity book
divestment, offset adverse market impacts
- Capital generation of EUR 0.9
billion; EUR 0.3 billion
excluding market impacts and one-time items
- Holding excess capital up to EUR 1.1
billion as net dividends received from the units more than
offset capital return to shareholders and holding expenses
- Gross leverage ratio increases to 29.6% driven by capital
return to shareholders and net loss
- Interim dividend increases 8% to EUR
0.13 per share; intention to neutralize dilutive effect of
stock dividend
Statement of Alex Wynaendts, CEO
"While I am pleased with the development of our
capital position, our second quarter results did not meet our
expectations. Earnings were affected by exceptionally low interest
rates, adverse claims experience in our life and health
businesses in the US, and the book loss
from the divestment of our UK annuity portfolio. We are
implementing further measures to improve earnings going
forward - including accelerating our ambitious
expense savings program currently under way across our
company.
"Management actions during the second quarter resulted
in an improvement to Aegon's capital position. These led to a
substantial benefit in the
Netherlands and included divesting our annuity portfolio in
the UK, which was clearly in the best strategic and financial
interests of our company.
"We are pleased by the strong gross
deposits, an indication that we are successfully repositioning
our businesses and providing attractive solutions to an expanding
customer base. Moreover, the acquisition of BlackRock's Defined
Contribution platform and today's announcement of the acquisition
of Cofunds positions our UK business as the leader in the fast
growing digital platform market.
"Reflecting the continued strength of our balance
sheet and our commitment to provide attractive returns to our
shareholders, we are announcing an increase in our interim dividend
to 13 cents per
share."
Key performance indicators
EUR millions YTD YTD
[11b],[ 11c] Notes Q2 2016 Q1 2016 % Q2 2015 % 2016 2015 %
Underlying earnings
before tax 1 435 462 (6) 505 (14) 897 937 (4)
Net income / (loss) (385) 143 - 319 - (242) 608 -
Sales 2 2,765 3,560 (22) 2,335 18 6,324 4,960 27
Market consistent
value of new business 3 100 133 (25) 183 (46) 232 323 (28)
Return on equity 4 6.8% 7.3% (7) 7.6% (10) 7.1% 6.9% 2
Strategic highlights
- Aegon divests remaining part of own UK annuity portfolio to
Legal & General
- Aegon finalizes sale of certain assets of Transamerica
Financial Advisors
- Aegon first to receive license to launch General Pension
Fund in the
Netherlands
- Kames achieves highest rating in UN Principles
for Responsible Investment Survey
- Transamerica earns award for being a top business technology
innovator
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.
Five part plan announced to improve returns in the
Americas
Recent financial performance and deterioration in the macro
environment, with interest rates falling to new lows have
intensified headwinds. Therefore, despite the significant changes
already underway, more must be done to cut costs and improve
results. Aegon is committed to increasing return on equity and
announces a five part plan for improved returns in the
Americas.
1. Remediation of deterioration of profitability in life
& health businesses
Aegon has taken decisive action to address the poor financial
performance of the Life & Health businesses, and management
will continue to identify further measures to improve returns:
- Implementing increases on monthly deduction rates on three
sizable blocks of Universal Life (UL) insurance.
- Diligently working with regulators to secure rate increases on
its Long Term Care business.
These actions are expected to improve results starting 2016. In
addition to steps already underway to improve the results of our UL
and LTC blocks, Aegon is accelerating the assessment of additional
blocks in order to identify further opportunities to improve
returns.
2. Focused and disciplined expense management
implementation
Aegon is committed to reducing operating expenses in the
Americas by USD 150 million by 2018,
and has a number of initiatives already underway and planned for
2017 and beyond. Overall, total headcount for Transamerica has
declined by 650 since the end of the first quarter. Other examples
include the One Recordkeeping system for retirement plans and the
integration of the acquired Mercer business, and a move to
digitized transactions and rationalization of printing. However,
some projects may take longer to implement. To offset any delay in
realized savings, further measures are being identified.
3. Rationalized location strategy in light of
One Transamerica restructure
To better capture the intended benefits of the One Transamerica
strategy, further promote operational excellence and fulfill the
commitment to cost savings and simplification, the company's
geographic footprint in the US is under evaluation. It is also the
goal to utilize innovative technology solutions to ensure
collaboration in a cost-effective manner.
4. Strategic overhaul of business lines and product
offerings
The product management group is conducting a rigorous review of
the product portfolio in the United
States to test for financial performance and risk
characteristics, as well as fit within the customer centric
strategic vision. The objective is to pivot from making many
products available across multiple channels to a more focused and
simpler to administer approach that will support cost efficiency
and operational excellence while still meeting the needs of the
customer with a competitive platform. This will span a multi-year
period, but will result in a product set that transforms
Transamerica into a higher-returning company that is more
innovative, competitive, and responsive to market and customer
needs.
5. Disposition of non-core assets
Aegon has taken numerous actions in order to optimize the
business portfolio in the US. This is demonstrated by the
divestitures of Transamerica Canada, Clark Consulting, Inc. and
certain assets of Transamerica Financial Advisors, Inc. in the last
18 months. Multiple other closed blocks are being assessed to
determine if a transaction would transfer risk and release capital.
Aegon is also exploring the sale of non-core legal entities that
would bring greater simplification and enhance returns.
Aegon has implemented an aggressive plan in the US to enhance
earnings, increase returns, and manage costs. This diligent plan
will further "right-size" the organization given the market
realities of its core businesses. The One Transamerica restructure
was the first - and critical - step to transform the company into a
more nimble competitor. By aligning meaningful expense management
and surgical product and business portfolio management with a
streamlined operating model, the tactical plan to deliver on the
strategic vision is well under way. An in-depth update of the five
part plan will be provided at Aegon's Analysts & Investor
Conference on December 8, 2016 in
New York.
Optimized portfolio
On May 23, Aegon announced the
divestment of the remainder of its own UK annuity portfolio to
Legal & General. Aegon initially reinsured GBP 3 billion of liabilities to Legal &
General, which will be followed by a Part VII transfer. This
transaction follows the previously announced divestment of
GBP 6 billion of its UK annuity
portfolio to Rothesay Life. Aegon now has approximately
GBP 1 billion annuity liabilities
remaining through an inward reinsurance transaction. By selling its
own UK annuity portfolio, Aegon will be able to fully focus on its
fast-growing platform and protection business.
In the United States,
Transamerica completed the sale of certain assets of Transamerica
Financial Advisors, Inc. to John Hancock Financial Network, Inc, on
May 13. Transamerica Financial
Advisors is a full-service, independent broker-dealer and
registered investment advisor with around 1,100 advisors and 90
employees.
Aegon was the first company to receive approval from the Dutch
Central Bank to launch 'Stap', a General Pension Fund (APF) in
the Netherlands. Stap is a pension
pooling vehicle that enables separate financial administration for
multiple pension plans from multiple employers. This vehicle
enables smaller pension schemes to benefit from economies of scale
and to comply with complex pension regulations, meaning that a
greater percentage of the employees' pension premium is invested
and that employers and participants can count on excellent service.
The fund is administered by TKP, an Aegon subsidiary responsible
for administering the pensions of over 3 million customers in
the Netherlands. Stap also allows
individual schemes to benefit from the investment expertise
normally only available to larger pension funds. The fiduciary
investments for Stap will be carried out by TKP Investments, a
subsidiary of Aegon Asset Management, which has around 23 billion euro of existing assets under
management and advice. Stap starts with the acquisition of
corporate clients and existing company pension funds in
liquidation. Later this year, Stap will also be available for the
SME market.
As part of Aegon's strategy to enhance its risk-return profile
and to improve capital efficiency, Aegon completed a fourth
longevity transaction in the
Netherlands in June. The transaction builds on previous
longevity deals and underlines Aegon's leadership in the Dutch
pension market. The hedge, covering close to EUR 3 billion of underlying reserves, provides
protection for a period of 50 years against longevity
improvements.
Aegon Life, Aegon's Indian joint venture, is accelerating the
execution of its strategy. As a result, it will restructure its
activities and focus on the digital direct-to-consumer market, in
which it has a leading position. As such, it will close its
traditional commission-based agency channel and reduce its agency
headcount by over 3,000.
Operational excellence
Kames Capital, Aegon's asset management business in the UK,
received the highest possible rating in the United Nation's most
recent Principles for Responsible Investment Survey. The survey
covers categories such as the quality and disclosure of policies,
setting objectives and strategies, governance and resources,
collaborative activities, and commitment to promoting responsible
investment among its clients and peers. Kames Capital has been a
signatory of the Responsible Investment Survey since 2008 and this
is the second consecutive year in which it has received the A+
rating, which is awarded to only 15% of signatories.
Transamerica, Aegon's US subsidiary, was named as a 2016 Elite
100 Company by InformationWeek. Transamerica was ranked number 33
in InformationWeek's 28th annual list of top business technology
innovators for its Enterprise Marketing and Analytics Platform. The
platform brings together data from numerous product lines and
points of customer contact to provide a 360 degree view of
customers, from first outreach to customer retention, covering the
end-to-end customer journey. The project allows Transamerica to
better predict customers' future needs, which in turn can lead to
further innovations.
Customer loyalty
Knab, Aegon the Netherlands' online bank, surpassed over 100,000
customers for the very first time during the quarter, only four
years since its launch. Knab provides customers with an innovative
and comprehensive overview of their investments, debts and income,
not just with Knab but also held at other banks. The growing
customer base is driven by the excellent quality of products and
services that Knab offers. This was confirmed once again in recent
customer surveys, which indicate that over 90% of business
customers and private customers are very satisfied with the service
they receive. Indeed, more than a third of individual customers and
over 40% of business customers would recommend Knab to family,
friends and colleagues, the highest score for any bank in
the Netherlands.
Empowered employees
Transamerica and Aegon Asset Management jointly launched
'Bravo!', a digital employee recognition program. This provides a
quick and easy means to recognize and reward employees who work
together, bring clarity and exceed expectations. Bravo! awards
points to employees who live Aegon's core values, and these points
can be redeemed for gift cards, merchandise items or charitable
contributions to the charity of the employee's choosing. Aegon is
committed to recognizing and rewarding those employees who make a
real difference in the business and the lives of its customers.
EUR millions Q2 Q1 YTD YTD
Notes 2016 2016 % Q2 2015 % 2016 2015 %
Underlying earnings
before tax
Americas 270 283 (5) 358 (24) 554 648 (15)
Europe 160 169 (5) 139 15 330 281 17
Asia 1 0 111 2 (49) 1 (1) -
Asset Management 37 45 (18) 47 (22) 82 92 (11)
Holding and other (33) (36) 9 (41) 20 (69) (83) 17
Underlying earnings
before tax 435 462 (6) 505 (14) 897 937 (4)
Fair value items (378) (358) (6) (293) (29) (736) (451) (63)
Realized gains / (losses)
on investments 229 54 - 134 72 283 252 12
Net impairments (23) (36) 36 7 - (59) (4) -
Other income / (charges) (636) (6) - (11) - (642) (11) -
Run-off businesses 18 28 (36) 17 7 47 33 42
Income before tax (355) 145 - 359 - (210) 755 -
Income tax (30) (1) - (40) 24 (32) (147) 78
Net income / (loss) (385) 143 - 319 - (242) 608 -
Net income / (loss)
attributable to:
Equity holders
of Aegon N.V. (385) 143 - 319 - (242) 608 -
Net underlying earnings 312 352 (11) 398 (22) 663 713 (7)
Commissions and expenses 1,589 1,744 (9) 1,791 (11) 3,333 3,532 (6)
of which
operating expenses 9 926 960 (4) 923 - 1,886 1,825 3
New life sales
Life single premiums 489 610 (20) 616 (21) 1,099 1,576 (30)
Life recurring
premiums annualized 195 205 (5) 212 (8) 400 415 (4)
Total recurring
plus 1/10 single 244 266 (8) 274 (11) 510 573 (11)
New life sales 10
Americas 138 144 (4) 158 (12) 282 298 (6)
Europe 75 85 (12) 76 (2) 160 170 (6)
Asia 31 37 (17) 40 (22) 68 105 (35)
Total recurring
plus 1/10 single 244 266 (8) 274 (11) 510 573 (11)
New premium production
accident and
health insurance 199 262 (24) 228 (13) 460 535 (14)
New premium production
general insurance 27 24 11 20 36 51 42 22
Gross deposits (on
and off balance) 10
Americas 9,265 13,472 (31) 9,069 2 22,737 20,619 10
Europe 3,088 3,441 (10) 2,723 13 6,529 5,786 13
Asia 94 73 30 91 4 167 293 (43)
Asset Management 10,506 13,092 (20) 6,256 68 23,598 11,403 107
Total gross deposits 22,953 30,078 (24) 18,139 27 53,031 38,101 39
Net deposits
(on and off balance) 10
Americas (56) 4,825 - 1,913 - 4,769 6,317 (25)
Europe 159 731 (78) (85) - 890 718 24
Asia 80 59 36 73 11 139 263 (47)
Asset Management 1,046 2,240 (53) 988 6 3,286 3,069 7
Total net deposits
excluding run-off
businesses 1,229 7,855 (84) 2,888 (57) 9,084 10,367 (12)
Run-off businesses (103) (240) 57 (111) 7 (343) (324) (6)
Total net deposits
/ (outflows) 1,125 7,615 (85) 2,777 (59) 8,740 10,043 (13)
Revenue-generating investments
Jun. 30, Mar. 31, Dec. 31,
2016 2016 % 2015 %
Revenue-generating investments (total) 716,746 704,554 2 710,458 1
Investments general account 159,933 162,784 (2) 160,792 (1)
Investments for account of policyholders 194,512 191,286 2 200,226 (3)
Off balance sheet
investments third parties 362,301 350,483 3 349,440 4
Operational highlights
Underlying earnings before tax
Aegon's underlying earnings before tax in the second quarter of
2016 declined by 14% compared with the second quarter of 2015 to
EUR 435 million. This was the result
of lower variable annuity margins, lower asset management
performance fees, adverse claims and the recurring earnings impact
of the actuarial assumption changes and model updates implemented
in the third quarter of 2015. In total, adverse claims experience
and one-time items amounted to EUR 45
million in the second quarter of 2016.
Aegon started reaping the benefits of its EUR 200 million expense savings program in the
second quarter of 2016, with expenses declining by 4% compared with
the previous quarter. As such, Aegon is ahead on reaching the
planned savings for 2016.
Underlying earnings from the Americas declined to EUR 270 million. This was caused by adverse
claims experience, lower earnings from Variable Annuities and the
recurring USD 25 million impact of
the actuarial assumption changes and model updates implemented in
the third quarter of 2015. Earnings from Variable Annuities
declined as a result of the reduction of closed block variable
annuity balances and declining margins due to lower interest
rates.
In Europe, underlying earnings
increased by 15% to EUR 160 million.
This increase was driven by lower amortization of deferred policy
acquisition costs (DPAC) in the United
Kingdom following the write down of deferred policy
acquisition costs related to upgrading customers to the retirement
platform in the fourth quarter of 2015, and the normalization of
surrenders in Poland.
The result from Aegon's operations in Asia was down slightly to EUR 1 million, as Aegon increased the stake in
its strategic partnership in India
from 26% to 49% in the fourth quarter of 2015. On a comparable
basis, the result was up by EUR 1
million.
Underlying earnings from Aegon Asset Management declined to
EUR 37 million, mainly as a result of
lower performance fees and unfavorable currency movements.
The loss from the holding improved to EUR
33 million, primarily due to lower funding costs after the
redemption of a senior bond in December
2015 and a reinsurance benefit of EUR
3 million.
Net income
The net loss amounted to EUR 385
million. This was primarily caused by the book loss on the
annuity divestment in the United
Kingdom and a higher loss from fair value items.
Fair value items
The loss from fair value items was EUR
378 million. This was mainly driven by underperformance of
alternative investments, equity and interest rate volatility in
the United States, and interest
rate hedges in the
Netherlands.
Realized gains on investments
Realized gains on investments increased to EUR 229 million and were primarily the result of
a rebalancing of the remaining investment portfolio in the
United Kingdom and gains resulting
from asset-liability management adjustments in the Netherlands.
Impairment charges
Impairments were EUR 23 million for
the quarter, mainly related to energy investments in the United States.
Other charges
Other charges amounted to EUR 636
million, the main driver for which was the book loss on the
annuity divestment in the United
Kingdom of EUR 628 million.
This was only partly offset by the book gain of EUR 52 million on the divestment of certain
assets of Transamerica Financial Advisors.
Run-off businesses
Earnings from run-off businesses improved to EUR 18 million.
Income tax
Income tax amounted to EUR 30 million
in the second quarter, mainly the result of the loss on the
divestment of the annuity book in the United Kingdom being taxed at a lower rate
than the profit contribution from the other business units. The
effective tax rate on underlying earnings was 28%.
Return on equity
Return on equity declined to 6.8% in the second quarter of 2016,
as lower net underlying earnings more than offset lower
shareholders' equity.
Operating expenses
In the second quarter, operating expenses were stable at
EUR 926 million compared with the
second quarter of 2015, but down 4% compared with the previous
quarter. The former was the result of expense savings programs in
the United States and a lower US
dollar, which offset higher expenses in the Netherlands and the impact of the
inclusion of the acquisitions of Mercer's defined contribution
business and a stake in La Banque Postale Asset Management.
Excluding the impact of these acquisitions, operating expenses
declined by 2%, mainly caused by the expense savings in
the United States.
Sales
Aegon's total sales increased by 18% to EUR 2.8 billion in the second quarter of 2016.
This increase was the result of higher gross deposits, which were
up 27% to EUR 23.0 billion.
Retirement Plans deposits increased mainly due to the Mercer
acquisition, while Asset Management benefited from higher
recognized gross deposits in Aegon's Chinese asset management joint
venture AIFMC and the inclusion of deposits from the minority stake
in La Banque Postale Asset Management. Net deposits, excluding
run-off businesses, were down to EUR 1.2
billion, due to higher contract discontinuances from the
Mercer block and lower inflows in variable annuities.
New life sales declined by 11% to EUR 244
million, mainly driven by Aegon's adherence to its strict
pricing policy in the current low interest rate environment. New
premium production for accident & health and general insurance
was down to EUR 226 million, as a
lower contribution from portfolio acquisitions and the impact of
product exits in the United States
more than offset higher general insurance sales in Spain and Hungary.
Market consistent value of new business
The market consistent value of new business declined to
EUR 100 million. This was mainly due
to the negative impact of lower interest rates on both sales and
margins in Asia and the United States, and the exclusion of the
value of new business generated by Aegon Bank in the Netherlands as of 2016.
Revenue-generating investments
Revenue-generating investments were up 2% during the second
quarter of 2016 to EUR 717 billion
due to favorable market movements.
Capital management
Shareholders' equity declined by EUR 0.9
billion compared with the end of the previous quarter to
EUR 22.0 billion on June 30, 2016. Revaluation reserves increased
slightly by EUR 0.1 billion to EUR 7.9
billion, as the impact of lower interest rates was nearly
offset by the annuity divestment in the United Kingdom. Aegon's shareholders' equity,
excluding revaluation reserves and defined benefit plan
remeasurements, declined to EUR 16.4
billion - or EUR 7.91 per
common share - at the end of the second quarter. This was caused by
the loss incurred in the quarter, the payment of the final dividend
of 2015 and the second tranche of the share buyback.
The gross leverage ratio increased to 29.6% in the second
quarter, primarily due to the book loss on the annuity divestment,
the EUR 0.2 billion cost of the
second tranche of the share buyback completed in the second quarter
and the payment of the final 2015 dividend.
Holding excess capital increased by EUR
0.1 billion to EUR 1.1 billion
as dividends received from the Americas, Asset Management,
Spain and Central &
Eastern Europe more than offset
the impact of the second tranche of the share buyback, the final
2015 cash dividend, interest payments and holding operating
expenses.
Aegon's Solvency II ratio increased to an estimated 158% in the
second quarter. This was mainly the effect of management actions in
the Netherlands and the annuity
reinsurance transaction with Legal & General in the
United Kingdom, which more than
offset the negative impact of lower interest rates. The RBC ratio
in the United States declined to
~450%, driven by dividends paid to the holding and the negative
impact of lower interest rates, which more than offset earnings
generated in the quarter. In the
Netherlands, the Solvency II ratio increased to 154%, as the
positive impact of a more thorough application of the volatility
adjuster and tightening of sovereign spreads far exceeded the
adverse impact of lower interest rates. In the United Kingdom, the Solvency II ratio
increased to 145%, as the benefits of the reinsurance transaction
with Legal & General and additional interest rate hedging more
than offset lower interest rates.
Going forward, Aegon will report business unit Solvency II
ratios on a semi-annual basis. The consolidated estimated group
Solvency II ratio will continue to be reported on a quarterly
basis.
Capital generation
Capital generation of the operating units, amounted to
EUR 0.9 billion in the second quarter
of 2016. Market impacts in the quarter amounted to EUR (0.2) billion, mainly due to lower interest
rates in the United States and
the Netherlands. One-time items
amounted to EUR 0.8 billion, which
were the result of management actions in the Netherlands and the United Kingdom. In the Netherlands, these primarily consisted of
a more thorough application of the volatility adjuster, while the
United Kingdom benefited from
additional interest rate hedges. Excluding market impacts and
one-time items, capital generation amounted to EUR 0.3 billion for the quarter. Capital
generation in the second quarter of 2016 did not include the
benefit of the annuity reinsurance transaction in the United Kingdom, which was accounted for
directly in the Solvency II ratio.
Interim dividend
Aegon aims to pay out a sustainable, growing dividend, in line
with the growth of its cash flows. This policy is reflected in the
8% increase of the 2016 interim dividend to EUR 0.13 per common share. The interim 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 intends to neutralize the dilutive effect of
the stock dividend on earnings per share.
Aegon's Euronext-listed shares will be quoted ex-dividend on
August 19, 2016, and its NYSE-listed
shares will be quoted ex-dividend on August
18, 2016. The record date is August
22, 2016. The election period for shareholders will run from
August 24 up to and including
September 9, 2016. The stock fraction
will be based on the average share price on Euronext Amsterdam from
September 5 through September 9,
2016. The stock dividend ratio will be announced on
September 14, 2016 and the dividend
will be payable as of September 16,
2016.
Financial overview, Q2 2016 geographically
Holding,
other
Asset activities &
EUR millions Americas Europe Asia Management eliminations Total
Underlying earnings before
tax by line of business
Life 53 85 6 - - 143
Individual savings
and retirement products 135 - (4) - - 131
Pensions 82 62 - - - 145
Non-life - 5 - - - 5
Asset Management - - - 37 - 37
Other - 9 (1) - (33) (25)
Underlying earnings before tax 270 160 1 37 (33) 435
Fair value items (107) (210) (7) - (54) (378)
Realized gains /
(losses) on investments 4 223 1 1 - 229
Net impairments (15) (4) (0) - (3) (23)
Other income / (charges) 41 (681) (0) 0 4 (636)
Run-off businesses 18 - - - - 18
Income before tax 211 (512) (5) 38 (86) (355)
Income tax (40) 6 (5) (14) 22 (30)
Net income / (loss) 171 (506) (10) 24 (64) (385)
Net underlying earnings 197 117 (4) 24 (23) 312
Employee numbers
Mar.
Jun. 30, 31, Dec. 31,
2016 2016 2015
Employees 29,425 29,922 31,530
of which agents 6,691 6,514 8,433
of which Aegon's share of employees
in joint ventures and associates 1,931 1,962 1,983
Additional information
The Hague -
August 11, 2016
Full version press release
Use this link for the full version of the press release.
Presentation
The conference call presentation is available on aegon.com as of
7.30 a.m. CET.
Supplements
Aegon's Q2 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: +1 212 444
0896
United Kingdom: +44(0)20 3427
0503
The Netherlands: +31(0)20 716
8257
Passcode: 537240
Two hours after the conference call, a replay will be available
on aegon.com.
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 and market consistent value of new business. 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.
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. In addition, 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.
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 also 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;
and
- Aegon's failure to achieve anticipated levels of earnings or
operational efficiencies as well as other expense saving and excess
capital and leverage ratio management initiatives.
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.
All comparisons in this release are against the second
quarter of 2015, unless stated otherwise.
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
PRN NLD
SOURCE Aegon N.V.