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zyxwvutsrqponmlkihgfedcbaYXWVUTSRQPONMLKJIHGFEDCBA Welcome to the - - PowerPoint PPT Presentation
zyxwvutsrqponmlkihgfedcbaYXWVUTSRQPONMLKJIHGFEDCBA Welcome to the - - PowerPoint PPT Presentation
zyxwvutsrqponmlkihgfedcbaYXWVUTSRQPONMLKJIHGFEDCBA Welcome to the Annual General Meeting of Shareholders AEGON N.V. Welkom op de jaarlijkse Algemene Vergadering van A Aandeelhouders AEGON N.V. d lh d AEGON N V In order to hear a
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Current market environment
GDP growth expectations1 (%) GDP growth expectations1 (%)
2 4 6
- 6
- 4
- 2
US UK
Equity markets2 Equity markets2
160 180
Indexed level (December 31, 2002=100)
40 60 80 100 120 140 Jan-03 Feb-04 Feb-05 Feb-06 Feb-07 Feb-08
AEX (Amsterdam) S&P 500
Feb-09
Credit spread gapping2 Total US credit market debt/GDP3 (%)
Eurozone
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2008 2009 2010 2011
FTSE 100 10 Y Treasury
Average corporate bond yields Average corporate bond yields (%) (%)
10 Y T AA
350 300 8.0
BBB
250 6.0 200 150 4.0 100 2.0 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2009 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09
1. Source: Consensus Economics Inc. 2. Bloomberg 3. Total US credit market debt measured by the US Federal Reserve includes debt owed by domestic financial services firms, mortgages, corporate debt, federal government debt, small business debt, consumer debt, state and local government debt, and foreign debt
Local knowledge. Global power. 3
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Continued challenges for the insurance industry in 2009
Market environment
- Significant improvement
financial markets as of financial markets as of second quarter’09
- Decline in sales
volumes in entire industry
Market conditions to remain uncertain throughout 2010
Insurance companies
- Greater emphasis on
importance of capital
Significant effect on risk and
importance of capital
- Solvency II capital
adequacy requirements
capital management
Customers
- Demand for greater
financial guarantees
- Demand for simpler
and more transparent
Product redesigns
p products
Maintaining strong capital buffer buffer remains key
Local knowledge. Global power. 4
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Execution of strategy
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AEGON’s ambition “To be a global leader in helping customers secure their financial futures”
- Rebalance capital allocation
- Rebalance capital allocation
- Improve growth and returns
- Reduce financial markets risks
- Manage AEGON as an international company
…resulting in sustainable profitable growth
Local knowledge. Global power. 6
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zyxwvutsrqponmlkihgfedcbaYXWVUTSRQPONMLKJIHGFEDCBA
Continued focus on execution of strategy
Full repayment to the Dutch State Full repayment to the Dutch State
- Repaid one-third of the EUR 3 billion
Reallocate capital towards businesses with higher growth and return prospects
- Freed-up EUR 3.3 billion in 2009 – 60% capital efficiency and 40% de-risking
- Running off institutional spread-based business in the US
- Sale of Taiwanese life insurance activities and Dutch funeral insurance business
Improve growth and return from existing business Improve growth and return from existing business
- Cost savings of EUR 250 million in 2009, exceeding EUR 150 million target in 2009
- Headcount reduced by 7% in 2009
- Restructuring in the US, UK and the Netherlands
Reduce financial markets risks
- Reduced risk to equity markets, interest rates and credit markets during 2009
Manage AEGON as an international company Manage AEGON as an international company
- Global asset management operational
- Launched variable annuities in the Netherlands and Japan
- European data center in Edinburgh
Emerging stronger from the crisis
Local knowledge. Global power. 7
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- Q4 08
Q1 09 Q2 09 Q3 09 Q4 09
Execution of strategy demonstrated by increased results
Underlying earnings before tax Value alue of new business
- f new business
Underlying earnings before tax
(EUR million) (EUR million)
404 351 427 181
- 22
- 181
233 201 181 169 216 169
Q4 08 Q1 09 Q2 09 Q3 09 Q4 09
Revenue Revenue-generating investments generating investments New life sales New life sales
(EUR billion) (EUR million)
598 549 354 361 543 469 484 549 332 334 342
Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Local knowledge. Global power. 8
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t t
Focus on operational excellence
- Achieved significant improvement in customer service levels
– Invest in improving operational capabilities
- Continue to be cost efficient operator
– Enhance web capabilities – R d Reduce numb ber of f ad dmi ini istrati ion pl tf latforms – Reduce processing time – Increase policy per headcount
- Building on strong brand names AEGON and Transamerica
…while reducing overall cost levels…
Local knowledge. Global power. 9
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p Continued strong capital position
Excess capital above AA capital adequacy requirements EUR 3.7 billion Capital preservation initiatives in 2009 EUR 3.3 billion
60% is capital efficiency with generally no material earnings impact 40% is de-risking
Insurance Group Directive: Capital surplus EUR 6.7 billion
g
Solvency ratio 204% Risk Based Capital (RBC) ratio for AEGON USA 362%
Continue to maintain substantial capital buffer
Local knowledge. Global power. 10
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Repayment of EUR 1 billion with proceeds from equity issue
- First step to full withdrawal from government support
– Supported by strong capital position – Repayment of remaining EUR 2 billion top priority
- Economic benefits of repayment
– Repurchase at EUR 1.15 billion in 2009 versus EUR 1.5 billion thereafter – Avoid potential future coupon p pay yments of at least 8.5% on rep purchased securities
- Benefits of replacing convertible core capital securities with equity
– Maintain capital buffer and enhance quality of capital – Dilution from the equity issue limited to 12.5% – Stronger position to repurchase the remaining EUR 2 billion of CCCS
- Successful equity offering of EUR 1 billion
Successful equity offering of EUR 1 billion
– Accelerated book building method – Issue price of EUR 5.25 per share – 157,822,000 new shares and 32,654,191 treasury shares
Local knowledge. Global power. 11
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Conclusions
- Continued focus on execution of strategy
- Demonstrated by return to profit
Demonstrated by return to profit
- Focus on operational excellence, while reducing overall cost levels
- Strong capital position
AEGON well-positioned for the future for the future
Local knowledge. Global power. 12
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