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The Hague, May 20, 2015
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Welcome to the Annual General Meeting
- f Shareholders
Annual General Meeting of Shareholders Aegon N.V. Jaarlijkse - - PowerPoint PPT Presentation
Annual General Meeting of Shareholders Aegon N.V. Jaarlijkse - - PowerPoint PPT Presentation
The Hague, May 20, 2015 Annual General Meeting of Shareholders Aegon N.V. Jaarlijkse Algemene Vergadering van Aandeelhouders Aegon N.V. Welcome to the Welkom op de jaarlijkse Annual General Meeting Algemene Vergadering of Shareholders van
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Rob Routs
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Chairman Supervisory Board Voorzitter Raad van Commissarissen
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Opening
Agenda item 1 / Agendapunt 1
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Presentation on the course of business in 2014 Presentatie over de gang van zaken in 2014
Agenda item 2 / Agendapunt 2
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Strong foundations for growth
Alex Wynaendts
CEO & Chairman of the Executive Board
The Hague – May 20, 2015
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Aegon’s purpose is to help people take responsibility for their financial future
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Our products and services have never been more needed Our expertise
Protection Accumulation At & after retirement
Changing demographics New digital technologies Low interest rates Increased regulation Changing capital requirements
Trends We support people throughout their working lives and into retirement
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Global aging and changing demographics
Global Retirement Readiness Score
5.8 Aegon Retirement Readiness Index (ARRI) 7
Japan 4.6 Netherlands 5.7 United Kingdom 6.0 United States 6.2 India 7.0
Hungary: 4.9 Spain: 5.0 Poland: 5.1 Turkey: 5.4 Sweden: 5.4 France: 5.4 Canada: 6.0 Germany: 6.1 China: 6.2 Brazil: 6.8
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Growing importance of technology
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7% 6% 3% 2% 4% 5% 1%
Persistently low interest rates
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
10-year government bond yields
US NL
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Regulatory changes with a significant impact on our industry
Regulators seeking to strengthen consumer protection New laws on tax and data privacy Unprecedented reforms in some of our markets End of commissions to brokers in the UK and the Netherlands
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Regulators will set the bar high
New capital requirements to enhance risk management and governance
Implementation of Solvency II in 2016 Aimed at enhancing consumer protection Capital requirements linked to risks insurers take on
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A clear framework to address global trends and developing customers’ needs
Purpose Strategic Objectives
Leader in all of our chosen markets
Help people take responsibility for their financial future Working together Bringing Clarity Exceeding Expectations Company values Ambition
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Making the right choices
Optimize our portfolio
Divestments Expanding distribution with strong local partners
- Canada
- Partnership with La Mondiale
(France)
- Joint venture with Caja Badajoz
(Spain)
- Santander Totta (Portugal)
- La Banque Postale (France)
- BANCOOB (Brazil)
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Towards a more efficient and responsive company
Pursue operational excellence
- Adjusted product offerings to
continued low interest rates
- Launched new products to meet
customers’ needs
- Established global IT framework
- Cost savings create room to invest
in Aegon’s businesses
Improved efficiency
OpEx / (OpEx + UEBT)
63% 63% 59% 59% 58% 2010 2011 2012 2013 2014*
* Adjusted for model and assumption updates. Without these adjustments, our cost: earnings ratio for 2014 would have totaled 61%.
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Becoming a more customer-centric company
Customer loyalty
- Online offerings in nearly all Aegon’s
markets
- Further enhancement of online
platforms & tools
- Launched Venture Fund to respond
quicker to changing markets
- Enhancing services of customer
service centers
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Through launch of specialized software
- Customer loyalty measured with
Net Promoter Score
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Aiming for top quartile in all our chosen markets
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Empowered employees to help people take responsibility for their financial future
Empower our employees
- Broadening talent mix
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Attracting talented people from a range of different industries
- Talent Review Process
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Succession planning and talent identification well established
- Promoting workforce diversity
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Joined Workplace Pride Staff performance metrics
High performing norm 2015 Financial services norm 2015
63 67 69 73
2011 2013 2014 2015 73 66
Engagement
64 67 70 74
2011 2013 2014 2015 71 67
Enablement
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Organizational changes to take advantage of opportunities
Better connecting with our customers Enhancing distribution Introducing new investment solutions
3,300 I&R employees with a national footprint
Actively serving
25,000+ plan sponsors 5.4 million customers New deposits of USD 42 billion in 2014 and revenue generating investments of USD 296 billion
Servicing US customers through a single investment & retirement division
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Integrated solution to and through retirement in the UK
At-retirement
Capabilities for adviser market
Workplace savings
‘Gated’ solutions for employees
Non-advised
Self service Single investment & trading platform – offering a compelling solution to advisers, employers and their employees
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Leadership positions in the Netherlands offer strong foundations for growth
1.9 2.3 2.5 2.8 4.4
Pension fund Insurer Pension fund Aegon Pension fund
In millions of customers
Aegon PPI Cappital * Gross written premiums pensions in 2013 (Source: DNB) ** Per January 1, 2015. Premium Pension Institution (PPI) is a specific type of defined contribution contract
Pension administrator
#2
PPI provider with 0.6 billion euro in Assets under Management**
#1
Aegon Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Others
Pensions insurer*
#1
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New Markets’ strategy driving continued growth
- Focus on protection
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Leadership in risk/rider products in key CEE markets
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Strong growth in high-net-worth segments in Hong Kong and Singapore
- Expanded distribution
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Newly developed professional advisory channel in Spain
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Continued growth of tied agent networks in CEE
- Direct propositions
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New online propositions in Asia, CEE, Spain and Brazil
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Leader in Indian online term life insurance market
- Strong growth of assets under management
- Expanding our third-party business
Asset Management Asia Central & Eastern Europe Latin America Spain
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Our strategy is delivering results
Customer focused Strong performance
Solid underlying earnings before tax in 2014
EUR 1.9 billion
Expanding digital capabilities Enhancing distribution Getting closer to
- ur customers
Very strong ratings
AA-
Continued strong sales in 2014
EUR 8.6 billion
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0.20* 0.21 0.22 0.23 2011 2012 2013 2014
- Proposed final 2014 dividend of EUR 0.12 per share; total 2014 dividend of EUR 0.23 per share
- Continue to neutralize stock dividends to avoid dilution
- Future dividend growth dependent on strong capital position and cash flows
Sustainable dividend growth
* Final 2011 dividend of EUR 0.10 per share annualized for comparative purposes
Increasing dividends
(EUR per share)
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Creating value for all our stakeholders
€
Profits Benefits Society Protection
Capital Trust Customers Talent Investors Employees
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Presentation on the course of business in 2014 Presentatie over de gang van zaken in 2014
Agenda item 2 / Agendapunt 2
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Annual Report 2014 Jaarverslag 2014
Agenda item 3.1 / Agendapunt 3.1
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Darryl Button
CFO & Member of the Executive Board
The Hague – May 20, 2015
Creating and sharing value in 2014
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Aegon performed strongly in 2014 Key figures
Sales
+ 20%
EUR 8.6 billion
Underlying earnings
- 5%
EUR 1.9 billion
Net income
+38%
EUR 1.2 billion
Operational expenses
+1%
EUR 3.3 billion
Revenue-generating investments
+17%
EUR 558 billion
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Strong underlying trends masked by assumption changes and model updates
1,775 1,982 1,968 1,865 2011 2012 2013 2014 936 1,672 857 1,186 2011 2012 2013 2014
Underlying earnings before tax
(EUR million)
Net income
(EUR million)
- Underlying earnings impacted by assumption changes and model updates
Note: 2011 as reported
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- Strong gross deposits mainly driven by US pensions and variable annuities
- Stronger universal life production in US and Asia; higher pension production in the Netherlands
- Accident & health and general insurance sales exceed EUR 1 billion for the first time
Total sales growth of 20% driven by continued strong deposits
44 55 FY 2013 FY 2014 0.8 1.0 FY 2013 FY 2014
Note: Total sales consists of new life sales plus 1/10th of gross deposits plus new premiums for accident & health and general insurance
+25% +7% +26%
Gross & net deposits
(EUR billion)
A&H and general insurance
(EUR billion)
New life sales
(EUR billion)
1.9 2.0 FY 2013 FY 2014
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Continued strong capital position and cash flows
1.2 1.6 1.3 1.2 2011 2012 2013 2014 8.6% 6.7% 8.6% 7.8% 2011 2012 2013 2014 1.2 2.0 2.2 1.2 2011 2012 2013 2014 195% 228% 212% 208% 2011 2012 2013 2014
Operational free cash flows
(Excl. market impacts and one-time items, EUR bln)
Return on equity
(%)
Excess capital at the holding
(EUR billion)
Solvency ratio
(Insurance Group Directive, %)
Note: 2011 and 2012 return on equity as reported
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- Operational free cash flows of EUR 1.2 billion excluding market impacts and one-time items
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Positive market impacts and one-time items largely offset by negative impacts from model updates and assumption changes
- Increase in free cash flows driven by reduction in holding expenses
Operational free cash flows and holding excess capital
2013 2014 Operational free cash flow 1,547 902 Market impacts & one-time items 212 (334) Normalized OFCF 1,335 1,237 Holding funding & operating expenses (460) (326) Free cash flow 875 911
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- Holding excess capital declined following EUR 1.0 billion of senior debt redemptions
Excess capital development
2013 2014 Starting position 2.0 2.2 Net dividend from units 1.0 0.9 Acquisitions & divestments 0.6 (0.0) Common dividends (0.4) (0.4) Funding & operating expenses (0.4) (0.4) Debt issuances/redemptions (0.4) (1.0) Other (0.1) (0.1) Ending position 2.2 1.2
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Funding costs
(EUR million, fixed charge coverage)
- Gross financial leverage target range of 26-30%
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Leverage cut by ~25% since 2011
Leverage and fixed charge coverage targets achieved in 2014
9.2 8.7 7.7 7.1
34.0% 32.0% 33.3% 28.7%
2011 2012 2013 2014
520 444 403 303 3.8x 4.8x 5.2x 6.5x 2011 2012 2013 2014
Note: Gross leverage and fixed charge coverage ratios as reported
- Fixed charge coverage target range of 6-8x
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Fixed charges reduced by more than 40%
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Positioning capital structure for Solvency II
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Taking advantage of low interest rates through proactive refinancing
Gross leverage
(EUR billion, %)
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- Underlying earnings impacted by adverse claims experience and low interest rates
in the US
- Sales growth across the group; new business remains profitable despite
low interest rates
- Strong operational free cash flows and solid excess capital position
Q1 2015 earnings impacted by adverse claims experience
Note: Earnings = underlying earnings before tax; Cash flows = operational free cash flows excluding market impact and one-time items
+32%
compared with Q1 2014
€ 2.8bn
Sales
+11%
compared with Q1 2014
€ 339m
Cash flows
- 6%
compared with Q1 2014
€ 469m
Earnings
7.2%
excluding run-off businesses
6.6%
Return on Equity
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- Expected group Solvency II ratio remains in the range of 150% to 200%
- Uncertainties still to be resolved throughout 2015
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Internal model approval process and calibration
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US equivalence and deduction & aggregation methodology (including US RBC conversion ratio)
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Assessment of Transferability and Fungibility
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Specifications for use of Matching Adjustment
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Loss absorbing capacity of taxes
Solvency II range confirmed; uncertainties remain
- US life RBC ratio
conversion
- Non-regulated and
- ther entities
Non-EEA
- Netherlands (IM)
- United Kingdom (IM)
- Spain (SF)
- CEE (SF)
- Diversification benefit
EEA
- Senior leverage net
- f excess capital
- Required capital
Holding
- Cash flows driven by
local ratios
- Updated capital
policy January 2016
Group
+ – =
Note: EEA = European Economic Area; IM = Internal Model, SF = Standard Formula; CAL = Company Action Level
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- Persistently low interest rates
- Increased regulation of financial services
- Changing capital requirements
- Continued execution of our strategy
- Well-positioned to capture growth opportunities
Looking ahead
2015
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Annual Report 2014 Jaarverslag 2014
Agenda item 3.1 / Agendapunt 3.1
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Remuneration Report 2014 Remuneratierapport 2014
Agenda item 3.2 / Agendapunt 3.2
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2014
- No changes to Executive Board Remuneration Policy since 2011
- Executive Board policy aligned with Global Remuneration Framework
- Vesting according to sustained performance (ex-ante / ex-post)
2015
- New type of contract for Alex Wynaendts, in connection with re-appointment
- Clauses in contract reflect revised governance requirements
Main points from Aegon’s Executive Board Remuneration Policy
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- Remuneration in 2014
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Fixed compensation CEO increased with 10% compared to 2013 (After increase, Executive Board total compensation still below 25th percentile of peer groups)
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Deferred variable compensation from 2011 and 2012 paid out / vested
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Upfront variable compensation regarding performance year 2013 paid out / vested
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3 year holding periods apply to all vested shares
- Conditional variable compensation allocated over 2014
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Alex Wynaendts: 79,13% of fixed compensation (2013: 98,33%)
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Darryl Button: 79,76% of fixed compensation (2013: 98,50%)
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40% of variable compensation to be paid in 2015 60% deferred
2014 Executive Board remuneration
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Financial and non-financial Group targets (75% maximum)
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Underlying earnings after tax (15%)
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Return on equity (15%)
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Market consistent value of new business (18.75%)
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Return on economic required capital (11.25%)
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Strategy/sustainability (15%):
Personal targets (25% maximum)
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Strategy execution – business model, portfolio management, customer-centricity
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HR and sustainability topics – employee engagement, succession planning
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Large projects/issues – cash flow development, Solvency II
Executive Board remuneration – variable compensation indicators and results
23.75% Alex Wynaendts 24.38% Darryl Button
Outcome 2014
55.38%
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- New contract Alex Wynaendts is a services agreement
- Clauses from previous employment contract that are no longer fitting or otherwise
need updating will be amended
- New clauses will be included
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Severance payment in case of early termination limited to a maximum of one year annual salary in cash
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Retirement age will be brought forward from 62 to 60
2015 Executive Board remuneration – new contract for Alex Wynaendts
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- Aegon’s policy takes into account both national and international circumstances
and conditions
- Legislation and regulations impact remuneration policies
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Dutch government introduced maximum variable compensation in financial sector
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Limits on sign-on- , retention- and severance payments
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Fiscal treatment of pension accrual in the Netherlands further limited
- Worldwide, Aegon’s compensation policies (and competitive landscape) are
impacted
Aegon’s Remuneration Policy in general – going forward
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- Prior to 2015, some selected senior staff were eligible for variable compensation
exceeding the new maximums
- Starting performance year 2015, variable compensation levels for these roles have
been adjusted downwards to match applicable new maximums
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Aegon the Netherlands: 20% maximum on average for senior management
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Holding of the Group in NL (N.V.) and Aegon companies in Europe: maximum variable compensation has become 100%
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Outside Europe: maximum variable compensation has become 200%
Variable compensation at Aegon Group and the new maximums
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Annual Report 2014 Jaarverslag 2014
Agenda item 3.1 / Agendapunt 3.1
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Annual Accounts 2014: Proposal to adopt the Annual Accounts 2014 Jaarrekening 2014: Voorstel tot vaststelling van de Jaarrekening 2014
Agenda item 3.3 / Agendapunt 3.3
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Vóór de stemming
- Plaats kaart met chip naar voren
- Naam verschijnt in venster
Tijdens de stemming
- Stemkeuzes verschijnen in venster
- Maak uw keuze:
1 = Vóór 2 = Tegen 3 = Onthouding
- Keuze verschijnt in venster
- Tijdens stemming kunt u uw
keuze wijzigen
- Laatste keuze geldt
Prior to the voting
- Insert card with chip facing you
- Name appears on display
During the voting
- Voting options appear in display
- Press button:
1 = For 2 = Against 3 = Abstain
- Choice appears in display
- During voting you can change
your choice
- Last choice counts
Voting procedure / Stemprocedure
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Annual Accounts 2014: Proposal to adopt the Annual Accounts 2014 Jaarrekening 2014: Voorstel tot vaststelling van de Jaarrekening 2014
Voting on agenda item 3.3 / Stemming over agendapunt 3.3
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Proposal to approve the final dividend 2014 Voorstel tot goedkeuring van het slotdividend
- ver het boekjaar
2014
Agenda item 4 / Agendapunt 4
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- Cash flows upstreamed to the holding are available to execute our
strategy, to fund operating expenses and to pay dividends to shareholders
- Aegon aims to pay a sustainable dividend to shareholders, which can
grow over time if performance of the company allows so
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Balance prudence versus offering an attractive dividend
- In normal circumstances, Aegon expects to declare an interim dividend
and propose a final dividend for approval at the AGM Aegon’s dividend policy
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- Proposed final dividend for 2014:
EUR 0.12 per common share
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Results in total dividend for 2014 of EUR 0.23 per common share
- To be paid in cash or stock
- Value of stock dividend approximately
equal to cash dividend Aegon’s dividend proposal
0.11 0.12
2013 2014
Dividend
(EUR) 0.22 0.23
Final dividend Interim dividend
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Proposal to approve the final dividend 2014 Voorstel tot goedkeuring van het slotdividend
- ver het boekjaar
2014
Agenda item 4 / Agendapunt 4
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Proposal to approve the final dividend 2014 Voorstel tot goedkeuring van het slotdividend
- ver het boekjaar
2014
Voting on agenda item 4 / Stemming over agendapunt 4
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Proposal to release the members of the Executive Board from liability for their duties Voorstel tot het verlenen van kw ijting aan de leden van de Raad van Bestuur
Agenda item 5 / Agendapunt 5
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Proposal to release the members of the Executive Board from liability for their duties Voorstel tot het verlenen van kw ijting aan de leden van de Raad van Bestuur
Voting on agenda item 5 / Stemming over agendapunt 5
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Proposal to release the members of the Supervisory Board from liability for their duties Voorstel tot het verlenen van kw ijting aan de leden van de Raad van Commissarissen
Agenda item 6 / Agendapunt 6
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Proposal to release the members of the Supervisory Board from liability for their duties Voorstel tot het verlenen van kw ijting aan de leden van de Raad van Commissarissen
Voting on agenda item 6 / Stemming over agendapunt 6
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Proposal to reappoint
- Mr. Alex R. Wynaendts
to the Executive Board Voorstel tot herbenoeming van de heer Alex R. Wynaendts als lid van de Raad van Bestuur
Agenda item 7 / Agendapunt 7
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Alex Wynaendts
Age 54 Nationality Dutch Profession/ Functie Chairman Executive Board and CEO
- f Aegon N.V.
Memberships other boards/ Andere bestuursfuncties* None Shares in Aegon N.V./ Aantal aandelen in Aegon N.V. 295,734 common shares
* Qualifying under Act Management and Supervision/Conform Wet bestuur en toezicht
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Proposal to reappoint
- Mr. Alex R. Wynaendts
to the Executive Board Voorstel tot herbenoeming van de heer Alex R. Wynaendts als lid van de Raad van Bestuur
Agenda item 7 / Agendapunt 7
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Proposal to reappoint
- Mr. Alex R. Wynaendts
to the Executive Board Voorstel tot herbenoeming van de heer Alex R. Wynaendts als lid van de Raad van Bestuur
Voting on agenda item 7 / Stemming over agendapunt 7
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Proposal to appoint
- Mr. Ben J. Noteboom
to the Supervisory Board Voorstel tot benoeming van de heer Ben J. Noteboom als lid van de Raad van Commissarissen
Agenda item 8 / Agendapunt 8
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Age 56 Nationality Dutch Profession/ Functie Non-Executive Director Former occupation/ Vroegere functie: CEO Randstad Holding N.V. Memberships other boards/ Andere bestuursfuncties* Supervisory Board member Ahold N.V. and Wolters Kluwer Shares in Aegon N.V./ Aantal aandelen in Aegon N.V. 23,500 common shares
Ben Noteboom
* Qualifying under Act Management and Supervision/Conform Wet bestuur en toezicht
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“Aegon plays a hugely important role not only in terms of providing financial security to millions of people, but also in the wider economy. The company has made exciting improvements to become more customer-centric. I hope to make a positive contribution by drawing on my own experience in this area.”
- Ben. J. Noteboom
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Proposal to appoint
- Mr. Ben J. Noteboom
to the Supervisory Board Voorstel tot benoeming van de heer Ben J. Noteboom als lid van de Raad van Commissarissen
Agenda item 8 / Agendapunt 8
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Proposal to appoint
- Mr. Ben J. Noteboom
to the Supervisory Board Voorstel tot benoeming van de heer Ben J. Noteboom als lid van de Raad van Commissarissen
Voting on agenda item 8 / Stemming over agendapunt 8
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Proposal to authorize the Executive Board to issue common shares Voorstel tot machtiging van de Raad van Bestuur tot uitgifte van gewone aandelen
Agenda item 9 / Agendapunt 9
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Proposal to authorize the Executive Board to issue common shares Voorstel tot machtiging van de Raad van Bestuur tot uitgifte van gewone aandelen
Voting on agenda item 9 / Stemming over agendapunt 9
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Proposal to authorize the Executive Board to restrict or exclude pre-emptive rights upon issuing common shares Voorstel tot machtiging van de Raad van Bestuur tot beperking
- f uitsluiting van
voorkeursrechten bij de uitgifte van gewone aandelen
Agenda item 10 / Agendapunt 10
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Proposal to authorize the Executive Board to restrict or exclude pre-emptive rights upon issuing common shares Voorstel tot machtiging van de Raad van Bestuur tot beperking
- f uitsluiting van
voorkeursrechten bij de uitgifte van gewone aandelen
Voting on agenda item 10 / Stemming over agendapunt 10
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Proposal to authorize the Executive Board to issue common shares under incentive plans Voorstel tot machtiging van de Raad van Bestuur tot uitgifte van gewone aandelen in het kader van incentiveplannen
Agenda item 11 / Agendapunt 11
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Proposal to authorize the Executive Board to issue common shares under incentive plans Voorstel tot machtiging van de Raad van Bestuur tot uitgifte van gewone aandelen in het kader van incentiveplannen
Voting on agenda item 11 / Stemming over agendapunt 11
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Proposal to authorize the Executive Board to acquire shares in the Company Voorstel tot machtiging van de Raad van Bestuur tot verkrijging van eigen aandelen
Agenda item 12 / Agendapunt 12
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Proposal to authorize the Executive Board to acquire shares in the Company Voorstel tot machtiging van de Raad van Bestuur tot verkrijging van eigen aandelen
Voting on agenda item 12 / Stemming over agendapunt 12
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Any other business Wat verder ter tafel komt
Agenda item 13 / Agendapunt 13
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Close of the meeting Sluiting van de vergadering
Agenda item 14 / Agendapunt 14
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Thank you – Dank u wel
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