Donald J. Shepard Chairman Executive Board AEGON N.V. Voorzitter - - PowerPoint PPT Presentation

Donald J. Shepard

Chairman Executive Board AEGON N.V. Voorzitter Raad van Bestuur AEGON N.V.

Annual General Meeting of Shareholders – April 25, 2006 1

Good Progress in 2005

Strong financial performance Improved position in AEGON’s three major markets Expansion strategy on track

Annual General Meeting of Shareholders – April 25, 2006 2

Strong Financial Performance

Operating earnings before tax increased 21% to EUR 2,147 million Net income increased 21% to EUR 2,732 million New life sales increased 9% for the year to EUR 2,539 million Strong capital base and cash flow generation

Annual General Meeting of Shareholders – April 25, 2006 3

Strong financial performance Improved position in AEGON’s three major markets Expansion strategy on track

Annual General Meeting of Shareholders – April 25, 2006 4

Americas – New Life Sales

Standardized new life sales (in USD mln)

1,400

+7%

1,200

BOLI/COLI

1,000

Reinsurance

800

Retail

600 400 200 2004 2005

‹ US new life sales increased 7%, driven in particular by strong reinsurance

sales, which were up 46%

‹ Continue to focus on improving returns in a challenging environment

Annual General Meeting of Shareholders – April 25, 2006 5

Growth within AEGON USA’s Pension Group

(in USD mln)

5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 1996 1997 1998 1999 2000 2001 2002

Pension Group assets

2003 2004 2005

43,798*

Transamerica Retirement Services Diversified Investment Advisors

*Excludes purchased annuities at TRS

Total Retirement Assets under Management Pension Group AEGON Institutional Markets Other qualified annuities USD 43.8 billion USD 3.4 billion USD 14.4 billion Total USD 61.6 billion 24,570

2002 – 2005 : CAGR of 21%

Annual General Meeting of Shareholders – April 25, 2006 6

Developments in AEGON The Netherlands Unique group pension capability in all three key areas: administration, insured pension solutions and asset management New Levensloop (Lifecycle) product successfully introduced Administrative performance improved considerably Successfully developed new disability products (WIA) AEGON Asset Management wins 4 first prize S&P Awards and 3 first prize Lipper Awards for consistent performance

Annual General Meeting of Shareholders – April 25, 2006 7

Strengthening AEGON UK’s IFA channel

1400

Advisor Headcount (RI)

1200 1000 800 600 400 200 2000 2001 2002 2003 2004 2005

Positive Solutions is a national IFA that provides management services to Registered Individuals (RI) through an e-platform Accelerated acquisition of remaining 40% of Positive Solutions Number of Registered Individuals more than doubled since initial investment in late 2002 Average productivity has increased markedly

Annual General Meeting of Shareholders – April 25, 2006 8

AEGON UK – Product Mix

2002 2005

51% 29% 9% 3% 8% 45% 23% 11% 9% 12% Group Individual Bonds Annuities Risk Pensions Pensions

AEGON UK has continued to see a favourable change in product mix with higher margin business up from 20% in 2002 to 32% in 2005

Annual General Meeting of Shareholders – April 25, 2006 9

Strong financial performance Improved position in AEGON’s three major markets Expansion strategy on track

Annual General Meeting of Shareholders – April 25, 2006 10

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Poland Czech Republic Hungary Slovakia

603 1,179 1,720 2,828 12 20 11 13 AEGON present in larger Eastern European markets

Russia Slovenia Croatia Romania Bulgaria Ukraine

Life and pensions premiums USD million Market growth 1999-2004 Percent

Source: Swiss Re

260 251 64 29 531 3,544 17 55 24 43 16% 21

Poland Czech Republic Hungary Slovakia

603 1,179 1,720 2,828 12 20 11 13

Annual General Meeting of Shareholders – April 25, 2006 11

Developments in Other Countries – Central & Eastern Europe Strong growth potential for life and pension products with over 65 million people in AEGON CEE countries Improvements in AEGON Hungary’s sales organization already generating results in 4Q05 new life sales AEGON Poland record sales in 4Q05, now ranked #4 in the Polish life market, new lines of business developed Pension fund of AEGON Slovakia currently has over 70,000 members Life sales for AEGON Czech Republic started after launch of operation in April 2005

Annual General Meeting of Shareholders – April 25, 2006 12

AEGON Spain – Expansion Through the Bank Channel P&C business divested to concentrate on partnerships with savings banks AEGON Spain generated total life premiums of EUR 126 mln and new life sales of EUR 25 mln Partnership with CAM generated total life premiums of EUR 560 mln (+12%) and new life sales of EUR 219 mln (+24%) New joint ventures with Caja de Badajoz and Caja Navarra* AEGON life products will soon be sold in

• ver 1,500 branches across Spain

AEGON Spain strives to further expand the network given the dominant role of banks in the Spanish life and pensions market

* Transactions expected to close in 2Q 2006

Annual General Meeting of Shareholders – April 25, 2006 13

AEGON Pension Network First international network dedicated to providing cross border group pensions solutions for multi-national corporate clients and their employees Developed with the expertise of AEGON’s partner in France, La Mondiale, as well as with the cooperation of AEGON subsidiaries in the UK, the Netherlands and the USA Integrated solutions:

– reporting – asset pooling – customized local pension and employee benefits programs – expatriate solutions

HDI Pensionsmanagement recently joined AEGON Pension Network, providing presence in Germany

Annual General Meeting of Shareholders – April 25, 2006 14

Developments in Other countries - Asia

Nanjing Shandong

Roll out across China from Shanghai to Beijing, Nanjing and Shandong – reaching a population

• f over 150 mln people

AEGON-CNOOC’s multi-channel distribution strengthened with the addition of brokers Growth on track – top 10 foreign life insurer In Taiwan new business sales grew 58% reflecting strong sales in 1H 2005 Fourth quarter sales exceeded third quarter sales by 54% Increased efforts to sell unit-linked products showed encouraging results in the fourth quarter

Annual General Meeting of Shareholders – April 25, 2006 15

Overall a Good Year

Improved position in AEGON’s three major markets Expansion strategy delivering results AEGON is well-positioned to deliver the products and services that will lead to the continued growth of our business

Annual General Meeting of Shareholders – April 25, 2006 16

Jos Streppel

Member Executive Board AEGON N.V. Lid Raad van Bestuur AEGON N.V.

Annual General Meeting of Shareholders – April 25, 2006 17

Financial Performance

Annual General Meeting of Shareholders – April 25, 2006 18

(20%) (20%)

25 20 Share in profit/(loss) of associates

• (22)

277 Other non operating income/(charges)

15% 15%

1,020 1,171 Net gains/losses on investments and impairment charges (before tax)

18% 18%

1.38 1.63

• per share

29% 29%

2,795 3,615 Income before tax

21% 21%

1,772 2,147 Operating earnings before tax

21% 21%

2,256 2,732 Net income

∆ constant exchange rates

FY 2005

∆

FY 2004

(in EUR mln, except per share data)

AEGON Group – Sales Overview

Annual General Meeting of Shareholders – April 25, 2006 19

‹ Increase in new life sales of 9% driven by all country units ‹ Strong growth in Variable Annuity sales and traditional GIC’s ‹ Production off balance sheet driven by the Netherlands, the UK and Other

countries

3%

4,891 5,021

3%

18,329 18,882 Total gross premiums

32%

2,735 3,604

8%

14,312 15,414 Annuity and institutional guaranteed products deposits

1%

4,416 4,451

9%

16,027 17,425 Off balance sheet production

9% ∆

643 4Q 2005 639 4Q 2004

1%

2,320 2,539 APE Life Insurance FY 2005

∆

FY 2004

(in EUR mln)

Americas – Sales Overview

Annual General Meeting of Shareholders – April 25, 2006 20

‹ New life sales increased by 7%; life reinsurance sales up 46% ‹ Sequential growth in Fixed Annuity sales continued in 4Q 2005 through

improved distribution platform

‹ Strong Variable Annuity sales notable in both retail and pension segments ‹ Off balance sheet production remains stable

13%

1,354 1,529

19%

5,278 6,260 Variable Annuities

3%

605 626

(26%)

3,017 2,221 Fixed Annuities

29%

1,649 2,121

13%

9,487 10,712 Institutional Guaranteed Products

(7%)

5,275 4,912

(0%)

18,435 18,353 Off b/s production

7% ∆

287 4Q 2005 303 4Q 2004

(5%)

1,087 1,166 APE Life Insurance FY 2005

∆

FY 2004

(in USD mln)

Americas – Operating Earnings

18%

506 599

21%

1,670 2,014 Net income 2,717 2,365 FY 2005

29% 17% ∆

510 427 4Q 2004

43% 56% ∆

2,112 2,026 FY 2004 727 Income before tax 667 Operating earnings before tax 4Q 2005

(in USD mln)

Annual General Meeting of Shareholders – April 25, 2006 21

The Netherlands – Sales Overview

‹ Strong group pension production by capturing several large contracts ‹ Individual life market remains challenging ‹ Off balance sheet sales higher on asset-only contracts and increased

sales of TKP Pensions

65%

568 939

21%

2,881 3,478 Savings deposits

(16%)

178 149

10%

789 864 Off b/s production

2% ∆

62 4Q 2005 72 4Q 2004

(14%)

226 231 APE Life Insurance FY 2005

∆

FY 2004

(in EUR mln)

Annual General Meeting of Shareholders – April 25, 2006 22

The Netherlands – Operating Earnings

(53%)

444 207

10%

920 1,014 Net income 1,286 322 FY 2005

17% 64% ∆

472 69 4Q 2004

(51%) 48% ∆

1,097 196 FY 2004 229 Income before tax 102 Operating earnings before tax 4Q 2005

(in EUR mln)

Annual General Meeting of Shareholders – April 25, 2006 23

UK – Sales Overview

‹ New life sales increased 4% in 2005 and 16% in the fourth quarter, making it

the highest sales quarter ever in the UK

‹ Broader range of non-pension products resulted in over 30% of new

business coming from annuities, bonds and protection products

‹ Increasing off balance sheet production mainly attributable to the continued

strong performance of AEGON UK’s fixed income team

42%

60 85

• 143

1,032 Off b/s production

4% ∆

196 4Q 2005 169 4Q 2004

16%

662 687 APE Life Insurance FY 2005

∆

FY 2004

(in GBP mln)

Annual General Meeting of Shareholders – April 25, 2006 24

UK – Operating Earnings

42%

24 34

20%

82 98 Net income 186 111 FY 2005

24% 2%

∆ 49 33 4Q 2004

2% (9%)

∆ 150 109 FY 2004 50 Income before tax 30 Operating earnings before tax 4Q 2005 (in GBP mln) Excluding the effect of the accelerated acquisition of Positive Solutions operating earnings before tax increased 32%

Annual General Meeting of Shareholders – April 25, 2006 25

Other countries – Sales Overview

56% 50% ∆

80 54 4Q 2005 68 92 4Q 2004

18%

204 318 Off b/s production

(41%)

245 368 APE Life Insurance FY 2005

∆

FY 2004

(in EUR mln)

‹ New life sales increased 50% driven by strong sales in Taiwan in the first

half of 2005

‹ Strong off balance sheet production driven by increased pension fund

deposits in Hungary and Slovakia

Annual General Meeting of Shareholders – April 25, 2006 26

Other countries – Operating Earnings

(66%)

29 10

109%

101 211 Net income 248 44 FY 2005

84% (61%) ∆

39 30 4Q 2004

(72%) (83%) ∆

135 113 FY 2004 11 Income before tax 5 Operating earnings before tax 4Q 2005

(in EUR mln)

Decrease in operating earnings primarily reflects lower contributions from Spain, due to the sale of the general insurance activities

Annual General Meeting of Shareholders – April 25, 2006 27

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Shareholders’ Equity Development

(in EUR mln)

330 19,276 1,515 76 152 (132) 2,732 (272) 14,875

Shareholders’ equity increased 30% to EUR 19,276 million in 2005

Shareholders' Net income Dividend paid Currency Sold ow n Change fair Coupon on Other Shareholders' equity shares value reserve perpetuals equity January 1 December 31

Annual General Meeting of Shareholders – April 25, 2006 28

Donald J. Shepard

Chairman Executive Board AEGON N.V. Voorzitter Raad van Bestuur AEGON N.V.

Annual General Meeting of Shareholders – April 25, 2006 29

Share price development in USD as of AGM April 2005

Nationwide Metlife Inc Lincoln Financial Manulife Principal US insurance sector AEGON (USD) AIG Hartford Prudential US

Share price development vs. US peers (1 year, USD)

0% 10% 20% 30% 40% 50%

Annual General Meeting of Shareholders – April 25, 2006 30

Share price development in local currency as of AGM April 2005

Prudential UK European insurance sector ING

AXA

Allianz Aviva AEGON (EUR) Fortis Generali Zurich Financial

Share price development vs. European peers (1 year, local currency)

0% 10% 20% 30% 40% 50%

Annual General Meeting of Shareholders – April 25, 2006 31

Valuation: ten year historical P/E development

70 60 20 30 40 50 AEGON ING Fortis ABN AMRO 10

29/12/1995 29/12/1996 29/12/1997 29/12/1998 29/12/1999 29/12/2000 29/12/2001 29/12/2002 29/12/2003 29/12/2004 29/12/2005

Trailing P/E multiples

Annual General Meeting of Shareholders – April 25, 2006 32