Aegon reports strong first half 2018 results

Transcription

1 1 Aegn reprts strng first half 2018 results Net incme amunts t EUR 491 millin supprted by increase in underlying earnings Underlying earnings increase by 2% t EUR 1,064 millin, r 10% n cnstant currencies driven by expense savings, a higher investment margin in the Netherlands, perfrmance fees, and grwth in Asia Realized lsses n investments f EUR 67 millin are driven by the sale f US treasuries as part f nging asset-liability management Other charges f EUR 294 millin, mstly due t a lss n the sale f Aegn Ireland and charges related t restructuring prgrams, which are expected t generate substantial expense savings Return n equity increases significantly t 9.2% as a result f higher underlying earnings and a lwer crprate tax rate in the United States Net depsits increase driven by asset management flws; accident & health sales impacted by prduct exits Net depsits imprve t EUR 3.9 billin, mainly driven by higher asset management inflws and better retentin in the UK business, which mre than ffset utflws in the US retirement plan business New life sales decline by 2% t EUR 422 millin n a cnstant currency basis, partly driven by lwer indexed universal life and term life sales in the US; Adverse currency mvements impact sales by an additinal 8% Accident & health and general insurance sales dwn 48% t EUR 274 millin mstly as a result f previusly annunced strategic decisin t exit travel and stp lss insurance in the United States Strng capital psitin and grwing capital generatin allw fr increase in interim dividend Slvency II rati increases by 14%-pints cmpared with year-end 2017 t 215%, driven by wn funds grwth; Slvency ratis main units remain well within r abve target znes Capital generatin f EUR 1,386 millin, including favrable market impacts and ne-time items f EUR 628 millin Interim 2018 dividend increases t EUR 0.14 per share Hlding excess cash increases t EUR 1.9 billin mstly driven by remittances frm the units; EUR 700 millin has been earmarked t reduce leverage in the secnd half f 2018 Grss financial leverage rati f 28.9% expected t reduce by ~200 basis pints fllwing planned deleveraging Statement f Alex Wynaendts, CEO "In the first half f 2018, Aegn delivered a strng perfrmance, demnstrating peratinal excellence, cmmitment t grwth and cntinued capital allcatin discipline. Building n ur track recrd f expense savings, we further imprved efficiency by transferring mre than 2,000 emplyees as part f ur utsurcing agreement in the United States, and migrated mre than 400,000 retail custmers frm Cfunds t ur platfrm. These actins will enable us t significantly reduce expenses, drive prfitability and enhance custmer experience. I m excited that new prpsitins acrss ur cmpany are resnating well with custmers, and the ptential this ffers t drive future grwth. In the United States, we launched ur new Wealth + Health brand identity t raise awareness abut the cnnectin between physical and financial well-being. By raising awareness and by ffering the right slutins, we have the ptential t help millins f peple better prepare fr the future. Our balance sheet remains strng with a Slvency II rati f 215%, a significant increase cmpared with the end f last year. Furthermre, I am pleased that ur businesses in the Netherlands and United Kingdm remitted capital t the grup, and that ur financial strength has enabled us t increase ur interim dividend t 14 cents per share. This prgress, tgether with expense savings, gives me cnfidence that we will be able t meet ur 2018 targets. Nte: All cmparisns in this release are against 1H 2017, unless stated therwise Media relatins Investr relatins Cnference call including Q&A (9:00 a.m. CET) Dick Schiethart Jan Willem Weidema Audi webcast n aegn.cm +31 (0) gcc@aegn.cm +31 (0) ir@aegn.cm United States: United Kingdm: The Netherlands: Passcde:

2 2 Financial verview EUR millins 13 Ntes 2018 Secnd half Underlying earnings befre tax 1 Americas (8) 728 (17) Eurpe Asia Asset Management Hlding and ther (87) (87) (1) (84) (4) Underlying earnings befre tax 1,064 1, ,099 (3) Fair value items (3) (273) n.m. Realized gains / (lsses) n investments (67) 187 n.m. 226 n.m. Net impairments - 1 n.m. (16) 98 Other incme / (charges) (294) 297 n.m. (365) 19 Run-ff businesses (7) 41 n.m. (11) 38 Incme befre tax 692 1,294 (46) 1,144 (39) Incme tax (201) (387) n.m. Net incme / (lss) (46) 1,454 (66) Net underlying earnings Return n equity 4 9.2% 8.0% % 5 Cmmissins and expenses 3,269 3,314 (1) 2,995 9 f which perating expenses 9 1,863 1,984 (6) 1,893 (2) Grss depsits (n and ff balance) 10 Americas 19,892 22,123 (10) 16, Eurpe 11,813 12,694 (7) 12,985 (9) Asia (37) 100 (24) Asset Management 32,167 24, ,834 (13) Ttal grss depsits 63,949 59, ,339 (4) Net depsits (n and ff balance) 10 Americas (7,139) (2,458) (190) (27,255) 74 Eurpe 2,879 2, ,246 (11) Asia 5 85 (94) 44 (88) Asset Management 8,254 (3,769) n.m. 10,681 (23) Ttal net depsits excluding run-ff businesses 4,000 (3,466) n.m. (13,285) n.m. Run-ff businesses (109) (240) 55 (98) (11) Ttal net depsits / (utflws) 3,891 (3,706) n.m. (13,382) n.m. New life sales 2, 10 Life single premiums (21) 889 (22) Life recurring premiums annualized (8) Ttal recurring plus 1/10 single (10) 427 (1) New life sales 2,10 Americas (16) 221 (4) Eurpe (1) Asia (18) 65 9 Ttal recurring plus 1/10 single (10) 427 (1) New premium prductin accident and health insurance (55) 303 (30) New premium prductin prperty & casualty insurance Market cnsistent value f new business Revenue-generating investments & Emplyee numbers June 30, Dec. 31, June 30, 2018 Revenue-generating investments (ttal) 824, , ,915 1 Investments general accunt 138, , ,544 (2) Investments fr accunt f plicyhlders 193, ,838 (3) 198,278 (3) Off balance sheet investments third parties 493, , ,093 3 Emplyees 25,867 28,318 (9) 29,657 (13) f which agents 6,511 6,689 (3) 6,768 (4) f which Aegn's share f emplyees in jint ventures and assciates 6,451 6,497 (1) 6,146 5

3 3 Strategic highlights Aegn Americas transfers ver 2,000 emplyees t TCS, leading t significant expense savings Aegn the Netherlands acquires leading Dutch incme prtectin service prvider Rbidus Mre than 400,000 retail Cfunds custmers migrated t Aegn UK s leading platfrm Aegn Spain expects t significantly imprve prfitability fllwing management actins and M&A New prducts and business mdels drive significant inflws at Aegn Asset Management Aegn s strategy Aegn s purpse t help peple achieve a lifetime f financial security frms the basis f the cmpany s strategy. The central fcus f the strategy is t further transfrm Aegn frm a prduct-based t a custmer needs-driven cmpany. This means serving diverse and evlving needs acrss the custmer life cycle; being a trusted partner fr financial slutins that are relevant, simple, rewarding, and cnvenient; and develping lng-term custmer relatinships by prviding guidance and advice, and identifying additinal financial security needs at every stage f custmers lives. Aegn is fcused n reducing cmplexity, eliminating duplicatin, imprving accuracy and increasing autmatin in rder t realize cst efficiencies, thereby enabling it t invest and becme a mre digitally enabled and custmercentric cmpany. Furthermre, the cmpany is fcused n driving scale and establishing strng psitins in its current markets, adhering t strict standards t ensure the efficient use f capital by all f its businesses. Fur key strategic bjectives that enable the cmpany t execute its strategy are embedded in all f Aegn s businesses: Optimized prtfli, Operatinal excellence, Custmer lyalty and Empwered emplyees. Americas Aegn annunced n January 11, 2018, that Transamerica had entered int an agreement with Tata Cnsultancy Services (TCS) t transfrm the administratin f its US insurance and annuity business lines. The partnership is a significant step frward in the executin f its strategy as it enables Transamerica t accelerate bth the enhancement f its digital capabilities and the mdernizatin f its platfrms t service its custmers acrss all insurance and annuities lines f its business. As part f the agreement, which is expected t lead t run-rate expense savings f USD 100 millin ver time, ver 2,000 Transamerica emplyees transitined t TCS n April 16, Related t these expense savings, Aegn recrded USD 119 millin f transitin and cnversin expenses in Other charges in the first half f Transamerica successfully launched its Wealth + Health brand identity in the first half f This new identity is fcused n helping custmers imprve their verall well-being by encuraging them t manage bth their wealth and health. The launch included a high-prfile advertising campaign targeted at financial prfessinals t demnstrate Transamerica s cmmitment t Wealth + Health. Transamerica als launched a series f new prduct enhancements ver the curse f the first half f the year t further imprve its cmpetitive psitining. Prduct enhancements fr variable annuities have resulted in a favrable change in sales mmentum. On tp f the variable annuity enhancements, additinal imprvements were made in July t strengthen the cmpetitive psitin f tw f the prducts riders n ffer. Regarding life prducts, new enhancements t indexed universal life (IUL) were launched in late April and have been very well received. In supprt f the stated strategic bjective t reduce the amunt f capital allcated t its run-ff businesses, Aegn annunced n August 7, 2018 its agreement t divest the last substantial blck f its life reinsurance business t SCOR Glbal Life. This transactin cvers business that Transamerica retained after it divested the vast majrity f its reinsurance business t SCOR Glbal Life in 2011 and The transactin is expected t result in a pre-tax IFRS lss f apprximately USD 105 millin and a ne-time benefit f apprximately USD 50 millin n Transamerica's capital psitin in the secnd half f The IFRS equity allcated t run-ff businesses has declined by USD 1.3 billin since the end f 2015 driven by a series f divestments.

4 4 Eurpe T expand its psitin in the incme prtectin value chain, Aegn the Netherlands reached an agreement t acquire Rbidus, a leading incme prtectin service prvider in the Netherlands, frm Avedn Capital Partners. This transactin fits Aegn s strategic bjective t grw its fee-based businesses. Aegn will acquire apprximately 95% f the cmpany with the remainder t be retained by Rbidus management team. Rbidus will cntinue t perate n a standalne basis under its wn brand name. Aegn will pay EUR 105 millin fr this acquisitin frm hlding excess cash. In the United Kingdm, Aegn s brad platfrm ffering and mni-channel distributin strategy have established Aegn as the leading platfrm prvider in the market. S far in 2018, Aegn has cmpleted several majr migratins ttaling GBP 85 billin assets as part f the Cfunds integratin. The migratin f GBP 57 billin institutinal assets was cmpleted in March, fllwed by the migratin f mre than 400,000 retail custmers and GBP 28 billin f assets t the Aegn platfrm in May. After the migratin prcess, sme advisrs and custmers have experienced peratinal and custmer services issues. Aegn UK has taken several measures t slve these and recver service levels, which led t GBP 3 millin additinal expenses in June. Aegn expects t incur additinal integratin expenses in Other charges until the Cfunds integratin has been cmpleted. Migratin f the assets related t the Natinwide business is the final milestne in respect f the Cfunds integratin and is expected t be cmpleted in the first half f The full integratin f Cfunds will enable Aegn t realize the GBP 60 millin targeted annualized expense savings cmpared with GBP 20 millin achieved thrugh the first half f Anther imprtant milestne in the transfrmatin f Aegn UK was the successful transfer f GBP 16 billin f assets frm BlackRck s defined cntributin business, which brught new and enhanced capabilities t Aegn as part f its wrkplace prpsitin. The Part VII transfer fr this business was cmpleted n July 1, 2018 and is expected t lead t an apprximate 10%-pints reductin f Aegn UK s Slvency II rati in the secnd half f 2018 driven by an increase in required capital due t the additinal assets under administratin. The UK platfrm business reached a recrd high f GBP 120 billin assets. This increase was driven by a net inflw f GBP 2.6 billin and the upgrade f GBP 1.5 billin in custmer assets t the platfrm. Since the start f the prgram, GBP 12.5 billin f custmer assets have been upgraded t the platfrm ut f a cumulative target f apprximately GBP 20 billin by year-end On April 3, 2018, Aegn successfully cmpleted the sale f Aegn Ireland plc t Athra Hlding Ltd. This transactin is cnsistent with Aegn's strategic bjective t ptimize its prtfli f businesses. The divestment led t an imprvement in Aegn's grup slvency rati f ver 4%-pints and a bk lss f EUR 93 millin in the first half f Aegn fcuses n prfitable grwth in Spain & Prtugal, where it aims t grw mstly in prtectin prducts. A clear example f this strategy is the agreement Aegn signed t expand its successful partnership with Banc Santander in Spain. The expansin, which cvers term life and selected lines f nn-life insurance fllwing Banc Santander's acquisitin f the Banc Ppular franchise in 2017, will give Aegn access t an additinal client base f fur millin custmers and is expected t lead t substantial grwth ging frward. Aegn will pay an upfrnt cnsideratin f EUR 215 millin, plus an additinal amunt f up t EUR 75 millin t be paid after 5 years, depending n the perfrmance f the partnership. The final terms (including clsing and date f payment) f the transactin are subject t due diligence, regulatry apprval, several ther cnditins and t the prcess f terminating the existing alliances f Banc Ppular. In additin, t imprve the results f Aegn s wn business in Spain, which is currently lss-making, the cmpany initiated a significant restructuring prgram in the first half f Thrugh ratinalizatin f distributin, expense savings and mre effective claims handling, Aegn expects t generate imprved financial results in this business. The restructuring, in cmbinatin with the cntinued grwth and expansin f the partnership with Banc Santander, is expected t enable Aegn s business in Spain & Prtugal t imprve its prfitability significantly.

5 5 Asia Aegn fcuses n three fast-grwing custmer segments in Asia: High-Net-Wrth (HNW) individuals, aging affluent custmers, and ascending affluent custmers. Universal life insurance, variable annuities, and prtectin prducts are cre prducts in the regin. These prducts are supplemented with direct-t-custmer digital distributin platfrms in markets in which Aegn des nt have an insurance license. Transamerica Life Bermuda (TLB), Aegn s HNW business, cntinues t expand gegraphically and is serving and writing business fr high-net-wrth individuals in a grwing number f markets. While universal life prducts are the key prduct fr TLB, the cmpany has launched a retirement prduct t cmplement the prduct suite while als develping ther prduct ideas t better serve a cmpetitive HNW segment in Asia. In China, Aegn s cmmitment t a prtectin led strategy and strength f their critical illness prducts have enabled the jint venture t grw sales during the first half f 2018 in a challenging life insurance market. One f the key drivers f Aegn s strng sales grwth is its award-winning digital distributin platfrm Zeus. Zeus is being upgraded in the secnd half f 2018 t deliver even mre custmer services and prduct fferings by further leveraging artificial intelligence technlgies and big data capabilities. In India, Aegn s jint venture cntinues t drive the direct-t-cnsumer strategy and the regins digital transfrmatin with simple and transparent prtectin led prducts. Frm a sum assured perspective, the cmpany ranks 8 th in India in the first half f 2018, further demnstrating Aegn s fcus n a prtectin led strategy. Asset Management Grwing external third-party assets is an imprtant element f the grwth strategy f Aegn Asset Management. The cntinued strng cmmercial mmentum in the Netherlands was underlined by strng inflws int the Dutch Mrtgage Funds, which grew t EUR 15 billin f assets under management in the first half f Furthermre, Stap, the Dutch APF initiated by Aegn, fr which TKPI (a subsidiary f Aegn Asset Management) undertakes the fiduciary management, wn a significant mandate f EUR 1.7 billin. At the end f the first half f 2018, ttal assets under management in Stap std at EUR 4.6 billin, making it the single largest APF in the Netherlands. During the first half f 2018, Aegn Asset Management made significant prgress in mving tward a glbally integrated perating mdel t strengthen its rganizatinal set-up and supprt its grwth ambitins. In rder t create an integrated, multi-lcatin cmmercial business that makes ding business with Aegn simpler and mre efficient, Asset Management cmbined its Eurpean based sales teams under ne leadership. The glbally integrated mdel with ne Eurpe and ne US regin will enable the creatin f a glbal suite f relevant investment strategies that can be distributed via its varius brands in all f its markets, accelerate grwth f third party business, and enhance Aegn s ability t attract and serve clients.

6 6 Operatinal highlights Underlying earnings befre tax Aegn s underlying earnings befre tax increased by 2% cmpared with the first half f 2017 t EUR 1,064 millin. Earnings increased by 10% n a cnstant currency basis driven by expense savings, higher investment margin in the Netherlands, business grwth in Asia and higher perfrmance fees. In the first half f 2018, adverse mrtality in the United States mre than ffset favrable underwriting results in Asia and the Netherlands. Underlying earnings frm the Americas decreased by 8% t EUR 602 millin driven by the weakening f the US dllar. On a cnstant currency basis earnings were up by 3%, as expense savings mre than ffset adverse mrtality. The current half year included EUR 55 millin unfavrable mrtality cmpared with EUR 34 millin in the same perid last year acrss the Life and Fixed Annuity businesses. Underlying earnings befre tax frm Aegn s peratins in Eurpe increased strngly by 14% t EUR 435 millin. This was the result f grwth in all regins, mst ntably in the Netherlands. Earnings grwth was mstly driven by a higher investment margin frm the shift t higher-yielding assets, lwer funding csts and grwth f the bank s balance sheet, and lwer expenses. Furthermre, earnings frm nn-life benefited frm EUR 22 millin in prvisin releases related t the disability business. Aegn s underlying earnings in Asia increased by 38% t EUR 31 millin as a result f higher earnings acrss all business lines. The increase in earnings frm the HNW businesses was the result f higher investment yields and favrable claims experience. The ther business lines benefited frm expense savings and business grwth, particularly in China. Underlying earnings frm Aegn Asset Management increased by 19% t EUR 83 millin as a result f a EUR 18 millin increase in perfrmance fees, mstly driven by Aegn s Chinese asset management jint venture. The result frm the hlding remained stable at a lss f EUR 87 millin, as expense savings ffset temprary higher interest expenses due t refinancing activities. Net incme Net incme amunted t EUR 491 millin in the first half f 2018, and reflects strng underlying earnings as well as realized lsses n investments, restructuring and integratin expenses, and a bk lss n the sale f Aegn Ireland. Fair value items The lss frm fair value items amunted t EUR 3 millin. Psitive real estate revaluatins in the Netherlands were ffset by lsses in the Netherlands and the United States n hedges in place t prtect Aegn s capital psitin. Realized lsses n investments Realized lsses n investments ttaled EUR 67 millin, as lsses frm the sale f US treasuries mre than ffset gains as a result f prtfli ptimizatin in Eurpe, including EUR 20 millin in the United Kingdm. Net impairments Net impairments amunted t nil and reflect the cntinued benign credit envirnment.

7 7 Other charges Other charges f EUR 294 millin were mainly driven by a bk lss n the sale f Aegn Ireland and restructuring expenses in the United Kingdm, Spain and United States. In Eurpe, Other charges f EUR 179 millin were partly driven by the EUR 93 millin bk lss n the sale f Aegn Ireland, which clsed n April 3, Restructuring and integratin expenses in the United Kingdm and Spain ttaled EUR 59 millin. In the United Kingdm, a reserve strengthening f EUR 49 millin fr the residual annuity bk was driven by the afrementined prtfli ptimizatin, which led t EUR 20 millin realized gains. These items were partly ffset by a benefit f EUR 27 millin frm assumptin changes and mdel updates. In the United States, Other charges f EUR 88 millin were largely the result f EUR 98 millin transitin and cnversin charges related t the agreement with TCS t administer Aegn s US insurance and annuity business lines. During the first half f 2018, Transamerica cnducted its annual assumptin review, which resulted in a charge f EUR 32 millin. The IFRS assumptin review fr Lng-Term Care resulted in n material charges. These items were partly cmpensated by a EUR 45 millin gain related t last year s divestment f the majrity f the run-ff businesses t Wiltn Re. Other charges at the hlding amunted t EUR 21 millin and were driven by IFRS 9 / 17 implementatin expenses. Run-ff businesses The result frm run-ff businesses declined t a lss f EUR 7 millin due t the divestment f the majrity f the remainder f these businesses in Incme tax Incme tax amunted t EUR 201 millin, which implies an effective tax rate fr the first half f 2018 f 29%, making it higher than the expected effective tax rate ging frward. This was mainly the result f a ne-time tax expense related t last year s divestment f the majrity f the run-ff businesses, which is ffset by the afrementined ne-time gain. The effective tax rate n underlying earnings was 19% cmpared with 28% in the first half f This decrease reflects the lwering f the nminal crprate tax rate in the United States frm 35% t 21%. Return n equity Return n equity increased by 120 basis pints cmpared with the same perid last year t 9.2%. The increase was driven by higher underlying earnings and a lwer crprate tax rate in the United States. Operating expenses Operating expenses decreased by 6% t EUR 1,863 millin driven by the weakening f the US dllar. On a cnstant currency basis, expenses were stable, as expense savings, and the divestment f UMG and Aegn Ireland mre than ffset higher restructuring expenses. Aegn is n track t achieve EUR 350 millin in annual run-rate expense savings by year-end 2018 as part f its plans t imprve return n equity. Initiatives t reduce expenses have led t annual run-rate expense savings f apprximately EUR 325 millin since the beginning f 2016, including the agreement with TCS. Annual run-rate expense savings increased by EUR 45 millin in the first half f Depsits and sales Grss depsits increased by 8% t EUR 64 billin, as strng depsits in Asset Management mre than ffset adverse currency mvements and lwer depsits n the platfrm in the United Kingdm. Asset Management depsits benefited frm cntinued strng inflws in the Dutch Mrtgage Funds, fiduciary management inflws in the Netherlands related t general pensin fund Stap, and strng inflws in China. Net depsits amunted t EUR 3.9 billin, as cntinued strng asset management inflws and increased net inflws in the United Kingdm as a result f imprved retentin mre than ffset net utflws in the Americas driven by retirement plan utflws. These utflws were caused by a limited number f large cntract lsses in the 403(b) retirement business, which mstly related t medical care prvider merger and acquisitin activity. Excluding these utflws, net depsits in the US retirement business were neutral in the first half f 2018.

8 8 New life sales amunted t EUR 422 millin, a decline f 10% as a result f the weakening f the US dllar. On a cnstant currency basis, new life sales declined by 2%. Lwer term life and indexed universal life sales in the United States and lwer sales in the Asian HNW businesses mre than ffset the cntinued success f the critical illness prduct in China, and higher sales in Spain & Prtugal and the Netherlands. New premium prductin fr accident & health and general insurance decreased by 48% t EUR 274 millin. This was predminantly driven by lwer supplemental health, travel and stp lss insurance sales in the United States. The reductin in travel and stp lss insurance sales resulted frm the previusly annunced strategic decisin t exit the Affinity, Direct TV and Direct Mail distributin channels. Market cnsistent value f new business Market cnsistent value f new business (MCVNB) increased by 28% t EUR 304 millin driven by the Americas and Eurpe. The increase in MCVNB in the Americas resulted frm tax refrm, a favrable prduct mix and updated expense assumptins, which mre than ffset lwer life and accident & health sales. The MCVNB in Eurpe dubled as a result f an enhanced sales mix in Spain & Prtugal and imprved margins n the platfrm business in the United Kingdm. Revenue-generating investments Revenue-generating investments increased by 1% cmpared with the end f 2017 t EUR 825 billin. Net inflws and the strengthening f the US dllar mre than ffset the divestment f Aegn Ireland. Sharehlders equity Sharehlders equity decreased by EUR 0.1 billin t EUR 20.5 billin n June 30, 2018, as retained earnings and strengthening f the US dllar were mre than ffset by a lwer revaluatin reserve as a result f increased interest rates in the United States. Sharehlders equity excluding revaluatin reserves and defined benefit plan remeasurements increased by EUR 0.6 billin t EUR 18.0 billin r EUR 8.68 per cmmn share at the end f the first half This increase reflects retained earnings and strengthening f the US dllar. Grss financial leverage rati The grss financial leverage rati increased by 30 basis pints t 28.9% as the increase in sharehlders equity was mre than ffset by a temprary increase in leverage as a result f refinancing activities. On April 11, 2018, Aegn issued USD 800 millin Tier 2 subrdinated debt securities, first callable n April 11, 2028, and maturing n April 11, The cupn is fixed at 5.5% until the first call date and flating thereafter with a margin including a 100 basis pints step-up. The net prceeds frm this issuance are being used t redeem grandfathered subrdinated debt and fr general crprate purpses. Effective May 15, 2018, Aegn redeemed USD 525 millin 8% grandfathered Tier 2 subrdinated ntes. On May 24, 2018, Aegn exercised its right t redeem the EUR 200 millin 6% perpetual capital securities. The redemptin f these grandfathered Tier 1 securities was effective n July 23, 2018, when the aggregate principal amunt was repaid tgether with any accrued and unpaid interest. The redemptin f the afrementined grandfathered Tier 1 securities, tgether with the maturity f EUR 500 millin senir debt in August 2018, is expected t lead t an imprvement in the grss financial leverage rati by apprximately 200 basis pints in the secnd half f Hlding excess cash Hlding excess cash increased frm EUR 1,354 millin t EUR 1,923 millin during the first half f the year. Aegn has earmarked EUR 700 millin t reduce leverage in the secnd half f The grup received EUR 593 millin in remittances frm subsidiaries, f which EUR 390 millin frm the United States and EUR 203 millin frm Eurpe, including frm the Netherlands and United Kingdm. The divestment f Aegn Ireland added a further EUR 196 millin t hlding excess cash. In additin, refinancing activities led t a temprary increase in hlding excess cash by EUR 200 millin.

9 9 These cash inflws were partly ffset by EUR 167 millin fr the cash prtin f the final 2017 dividend, EUR 163 millin cash utflws mainly related t hlding funding and perating expenses and EUR 87 millin capital injectins t supprt grwth f the business, and t strengthen the capital psitins f Aegn s wn business in Spain and its jint venture in Japan. Capital generatin Capital generatin f the perating units amunted t EUR 1,386 millin fr the first half f Market impacts and ne-time items ttaled EUR 628 millin. Market impacts were mainly driven by the favrable impact frm equity market and interest rate mvements in the United States, and psitive impact frm credit spread and equity market mvements in the United Kingdm. One-time items included the benefit frm the divestment f Aegn Ireland, capital release frm exiting the Affinity, Direct TV and Direct Mail distributin channels in the United States, and management actins in the United Kingdm. These mre than ffset the negative impact f lwering the Ultimate Frward Rate (UFR), the capital strain frm investments in illiquid assets, and mdel updates in the Netherlands. Slvency II rati Aegn s Slvency II rati increased frm 201% t 215% during the first half 2018 mainly due t nrmalized capital generatin, market impacts and management actins, which were nly partly ffset by the final 2017 dividend. The estimated RBC rati in the United States increased t 490% n June 30, 2018, frm 472% at the end f This increase was mainly driven by nrmalized capital generatin, the psitive impact frm equity market and interest rate mvements, and management actins, which were nly partly ffset by ther items including remittances t the grup. The benefit frm management actins was mstly driven by the release f capital as a result f the previusly annunced strategic decisin t exit the Affinity, Direct TV and Direct Mail distributin channels. The estimated Slvency II rati in the Netherlands decreased t 190% n June 30, 2018, frm 199% at the end f Nrmalized capital generatin was mre than ffset by remittances t the grup and ne-time items, including the lwering f the UFR by 15 basis pints t 4.05%, capital strain frm investments in illiquid assets, and mdel updates. Market impacts had a minr negative impact n the rati, as the increase in Own Funds was ffset by an increase in SCR, mstly as a result f credit spread mvements. The estimated Slvency II rati in the United Kingdm increased t 197% n June 30, 2018, frm 176% at the end f The increase was mainly driven by nrmalized capital generatin, the psitive impact frm credit spread and equity market mvements, and management actins, which were nly partly ffset by ther items including remittances t the grup. Management actins included derisking f the investment prtfli, funds restructuring and a temprary benefit frm changes in the equity hedging prgram, which is expected t reverse in the secnd half f the year. Interim 2018 dividend Aegn aims t pay ut a sustainable dividend t allw equity investrs t share in Aegn s perfrmance, which can grw ver time if Aegn s perfrmance s allws. The 2018 interim dividend amunts t EUR 0.14 per cmmn share. The interim dividend will be paid in cash r stck at the electin f the sharehlder. The value f the stck dividend will be apprximately equal t the cash dividend. Aegn intends t neutralize the dilutive effect f the interim 2018 stck dividend n earnings per share in the furth quarter f this year, barring unfreseen circumstances. Aegn s shares will be quted ex-dividend n August 24, The recrd date is August 27, The electin perid fr sharehlders will run frm August 29 up t and including September 14, The stck fractin will be based n the average share price n Eurnext Amsterdam, using the high and lw f each f the five trading days frm September 10 thrugh September 14, The stck dividend rati will be annunced n September 19, 2018, and the dividend will be payable as f September 21, 2018.

10 10 Aegn N.V. Hlding excess cash EUR millins Secnd half Full Year Beginning f perid 1,512 1,725 1,512 1,354 Dividends received 599 1,247 1, Capital injectins (59) (1,033) (1,092) (87) Divestments / (acquisitins) Net capital flws t the hlding Funding and perating expenses (187) (164) (352) (163) Dividends and share buybacks (142) (417) (559) (167) Leverage issuances / (redemptins) Other 3 (8) (5) (2) Hlding expenses and capital return (327) (588) (916) (132) End f perid 1,725 1,354 1,354 1,923 Aegn N.V. Slvency II rati June 30, Dec. 31, June 30, EUR millins Ntes Eligible Own Funds 17,092 15,628 16,185 Cnslidated Grup SCR 7,940 7,774 8,732 Slvency II rati 11b, % 201% 185% United States - RBC rati 490% 472% 464% The Netherlands - Slvency II rati 190% 199% 144% United Kingdm - Slvency II rati 197% 176% 169%

11 11 Americas Underlying earnings befre tax increase by 3% t USD 729 millin driven by expense savings Net incme decreases t USD 289 millin due t realized lsses and transitin and cnversin charges Grss depsits amunt t USD 24.1 billin; net utflws f USD 8.8 billin mainly as a result f 403(b) retirement plan cntract lsses Return n capital increases by 130 basis pints t 8.3% Underlying earnings befre tax Underlying earnings befre tax frm the Americas in the first half f 2018 increased by 3% t USD 729 millin, as expense savings mre than ffset adverse mrtality in the life business. Life earnings increased by 17% t USD 96 millin, as lwer perating expenses and higher investment incme were partially ffset by adverse mrtality experience and adverse persistency. Adverse mrtality experience in the first half f 2018 was USD 66 millin cmpared with USD 49 millin in the same perid last year, mainly due t higher claims frequency, reflecting higher than expected seasnality. Adverse persistency was largely driven by the implementatin f mnthly deductin rates increases at the end f Earnings frm Accident & Health remained stable at USD 123 millin, as lwer perating expenses were ffset by lwer investment incme. Slightly favrable claims experience in Lng-Term Care was ffset by the impact f prduct exits. Earnings frm Retirement Plans decreased by 9% t USD 137 millin. This was the result f higher perating expenses as a result f changes in expense allcatins between prduct lines and lwer spread incme caused by adverse mrtality experience n the clsed purchased annuities blck. Mutual Fund earnings increased by 17% t USD 26 millin, mstly driven by higher fee revenue resulting frm favrable equity market perfrmance and business grwth. Earnings frm Variable Annuities increased by 34% t USD 253 millin primarily driven by lwer perating expenses as a result f changes in expense allcatins between prduct lines, and a ne-time charge in the first half f 2017 f USD 14 millin. Earnings frm Fixed Annuities declined by 44% t USD 52 millin in the first half f This was caused by lwer spread incme due t lwer balances and the nn-recurrence f favrable mrtality experience f USD 9 millin in the first half f Stable Value Slutins earnings were stable at USD 47 millin. Earnings frm Latin America decreased by USD 6 millin t a lss f USD 4 millin due t increased expenses. Net incme Net incme frm Aegn s businesses in the Americas decreased by USD 404 millin t USD 289 millin in the first half f This decrease was primarily driven by realized lsses, tgether with transitin and cnversin charges that were partially ffset by lwer taxes due t a lwer crprate tax rate. The results frm fair value items amunted t a lss f USD 91 millin. The lss n fair value hedges withut an accunting match under IFRS was USD 120 millin. This lss was in line with expectatins driven by the impact f equity market mvements n the macr hedge. The result n fair value hedges with an accunting match amunted t a gain f USD 77 millin mainly driven by vlatility gains. The results n fair value investments amunted t a lss f USD 48 millin, mainly frm the impact f widening credit spreads n derivatives. Realized lsses n investments f USD 150 millin resulted frm the sale f US treasuries as part f nging asset-liability management activity and nrmal trading activity. Net recveries amunted t USD 5 millin. The run-ff businesses declined t a lss f USD 8 millin as a result f the divestment f the majrity f the remainder f these businesses in 2017.

12 12 Other charges f USD 106 millin were mainly caused by transitin and cnversin charges f USD 119 millin related t the TCS agreement. During the first half f 2018, Transamerica cnducted its annual assumptin review, which resulted in USD 39 millin charges. The IFRS assumptin review fr Lng-Term Care resulted in n material charges. These charges were partially ffset by a pre-tax gain f USD 54 millin related t last year s divestment f the majrity f the run-ff businesses t Wiltn Re, which was largely ffset by a related ne-time tax expense. Incme tax expense in the first half f 2018 amunted t USD 90 millin and includes a ne-time tax expense f USD 47 millin in relatin t the divestment f the majrity f the run-ff businesses t Wiltn Re in As a result, the incme tax rate fr the first half f 2018 f 24% was higher than the statutry tax rate f 21%. Return n capital The return n average capital invested in Aegn s businesses in the Americas in the first half f 2018, excluding revaluatin reserves and defined benefit plan remeasurements, increased by 130 basis pints t 8.3%. This increase was driven by higher pre-tax earnings, tgether with higher net underlying earnings resulting frm lwer taxes due t tax refrm, effective as f January 1, Return n capital f Aegn s businesses excludes the benefit f leverage at the hlding. Operating expenses Operating expenses increased by 5% t USD 960 millin, as restructuring expenses were higher due t transitin and cnversin charges assciated with the TCS partnership, which amunted t USD 119 millin in the first half f Aegn expects t incur apprximately USD 30 millin f additinal transitin and cnversin charges in the secnd half f Operating expenses excluding restructuring expenses declined by 7% t USD 835 millin mainly driven by the expense savings prgram. Run-rate annual expense savings increased by USD 14 millin t USD 277 millin in the first half f Sales Grss depsits increased by 1% t USD 24.1 billin. Retirement Plans depsits decreased by 3% t USD 18.7 billin, as lwer takever depsits in the medium t large plan market mre than ffset higher recurring depsits. While grss depsits in Variable Annuities were dwn by 4% t USD 1.7 billin year-ver-year, they were up by 13% in the first half f 2018 cmpared with the secnd half f 2017, driven by prduct enhancements and imprved market cnditins. Aegn expects t cntinue regaining market share fllwing the prduct enhancements that are being rlled ut in 2018 t imprve cmpetitiveness f its variable annuity prducts. Depsits in Mutual Funds cntinued t be strng at USD 3.4 billin cmpared with USD 2.8 billin in the same half last year. Ttal net utflws amunted t USD 8.8 billin in the first half f Net utflws in Retirement Plans ttaled USD 6.5 billin fr the first half, driven by a limited number f large cntract lsses in the 403(b) retirement business, which mainly related t medical care prvider merger and acquisitin activity. Since these utflws are mstly the result f merger and acquisitin activity, they are nt expected t lead t a trend. Excluding these cntract lsses, Retirement Plans net depsits were neutral in the first half f Net utflws in Variable Annuities amunted t USD 1.5 billin, mainly caused by increased surrenders as the business matures and impacts frm re-pricing in the market. Net inflws in Mutual Funds f USD 0.1 billin resulted frm increased grss depsits. Fixed Annuities experienced net utflws f USD 0.6 billin as the bk matures. New life sales were dwn by 6% t USD 257 millin, mainly caused by lwer term life and indexed universal life sales. Mre recently, indexed universal life sales have stabilized as a result f prduct enhancements. Term life prduct enhancements are expected t be implemented late in the secnd half f 2018 t imprve cmpetitiveness f the ffering.

13 13 New premium prductin fr accident & health insurance declined by 52% t USD 228 millin as a result f lwer supplemental health, travel and stp lss insurance sales in the United States. This mvement is in line with previusly prvided guidance that indicated that new premium prductin fr accident & health insurance wuld decrease by apprximately USD 300 millin in 2018 as a result f the previusly annunced strategic decisin t exit the Affinity, Direct TV and Direct Mail distributin channels. Market cnsistent value f new business Market cnsistent value f new business increased by 31% t USD 244 millin, as updated expense assumptins, tax refrm and a favrable prduct mix mre than ffset lwer life and accident & health sales. Revenue-generating investments Revenue-generating investments decreased by 3% cmpared with year-end 2017 t USD 455 billin. The decline was driven by net utflws cmbined with a decline in the revaluatin reserve f USD 3.0 billin due t rising interest rates and widening credit spreads.

14 14 Americas USD millins Ntes 2018 Secnd half Underlying earnings befre tax by line f business Life (43) Accident & Health (23) Retirement Plans (9) 166 (17) Mutual Funds (17) Variable Annuities Fixed Annuities (44) 53 (3) Stable Value Slutins (1) 52 (9) Latin America (4) 2 n.m. (1) n.m. Underlying earnings befre tax (14) Fair value items (91) (57) (59) 249 n.m. Realized gains / (lsses) n investments (150) 32 n.m. 146 n.m. Net impairments 5 1 n.m. (20) n.m. Other incme / (charges) (106) 244 n.m. (653) 84 Run-ff businesses (8) 44 n.m. (11) 22 Incme befre tax (61) 564 (33) Incme tax (90) (278) n.m. Net incme / (lss) (58) 1,069 (73) Net underlying earnings (5) Cmmissins and expenses 2,397 2, , f which perating expenses Grss depsits (n and ff balance) by line f business 10 Life Retirement Plans 18,714 19,206 (3) 15, Mutual Funds 3,418 2, , Variable Annuities 1,662 1,723 (4) 1, Fixed Annuities Latin America n.m Ttal grss depsits 24,095 23, , Net depsits (n and ff balance) by line f business 10 Life (18) (16) (14) (17) (8) Retirement Plans (6,670) (969) n.m. (29,511) 77 Mutual Funds 146 (88) n.m. 464 (69) Variable Annuities (1,542) (968) (59) (1,316) (17) Fixed Annuities (641) (629) (2) (552) (16) Latin America n.m Ttal net depsits excluding run-ff businesses (8,648) (2,660) n.m. (30,889) 72 Run-ff businesses (131) (260) 49 (121) (8) Ttal net depsits / (utflws) (8,779) (2,920) n.m. (31,011) 72 New life sales 10 Life single premiums (2) Life recurring premiums annualized (6) 257 (2) Ttal recurring plus 1/10 single (6) 262 (2) Life (12) Latin America (23) Ttal recurring plus 1/10 single (6) 262 (2) New premium prductin accident and health insurance (52) 339 (33) Revenue-generating investments June 30, Dec. 31, June 30, 2018 Revenue-generating investments (ttal) 455, ,316 (3) 474,172 (4) Investments general accunt 84,051 88,222 (5) 89,120 (6) Investments fr accunt f plicyhlders 120, ,640 (3) 118,864 1 Off balance sheet investments third parties 250, ,454 (2) 266,188 (6)

15 15 Eurpe Underlying earnings befre tax increase strngly by 14% t EUR 435 millin, driven by the Netherlands Net incme grws by 9% t EUR 288 millin Net depsits increase by 8%, reflecting higher retentin in the UK New life sales increase by 6% t EUR 140 millin, driven by Spain & Prtugal and the Netherlands Underlying earnings befre tax Underlying earnings befre tax frm Aegn s peratins in Eurpe increased strngly by 14% cmpared with the first half f 2017 t EUR 435 millin. This was the result f grwth in all regins, mst ntably in the Netherlands and CEE. Earnings in the Netherlands were up by 17% t EUR 318 millin. Life earnings increased t EUR 238 millin as a result f an imprved investment margin, reflecting the shift t higher-yielding assets, and lwer expenses. Earnings frm Nn-life rse t EUR 24 millin as disability underwriting results benefitted frm EUR 22 millin prvisin releases. Banking imprved t EUR 49 millin, driven by a higher net interest margin, reflecting balance sheet grwth and lwer funding csts, partly ffset by higher expenses in line with the bank s grwth. Service Business earnings declined t EUR 8 millin due t the lss f earnings as a result f the sale f UMG, and investments in new digital prpsitins. In the United Kingdm, earnings rse by 1% t EUR 69 millin. Digital Slutins earnings increased t EUR 10 millin, driven by higher fee incme as a result f new business inflws, upgrades t the platfrm and higher average equity markets. Earnings f the Existing Business declined by EUR 14 millin t EUR 59 millin due t upgrades t the digital platfrm and lwer investment incme fllwing bnd sales, while last year included a EUR 4 millin refund f reinsurance premiums. CEE s earnings increased by 14% t EUR 41 millin, as a result f business grwth, mst ntably in Turkey and Hungary. Earnings in Spain & Prtugal increased by 25% t EUR 7 millin, driven by prtfli grwth and better underwriting results in the jint ventures with Santander in Prtugal. Net incme Net incme frm Aegn s businesses in Eurpe amunted t EUR 288 millin. The gain frm fair value items was EUR 76 millin, driven by EUR 128 millin real estate revaluatins in the Netherlands. This was partly ffset by EUR 68 millin negative fair value changes n hedges in the Netherlands, which are in place t prtect Aegn s capital psitin. Realized gains ttaled EUR 61 millin and were primarily the result f prtfli ptimizatin in the Netherlands and the United Kingdm. Other charges f EUR 179 millin were caused by a EUR 93 millin lss n the sale f Aegn Ireland, a EUR 49 millin reserve strengthening related t the UK s residual annuity bk, and EUR 40 millin integratin expenses fr Cfunds and BlackRck s defined cntributin business in the United Kingdm. The reserve strengthening related t afrementined prtfli ptimizatin, which led t realized gains. The psitive impact frm assumptin changes and mdel updates f EUR 27 millin was partly ffset by a EUR 19 millin restructuring charge in Aegn s wn business in Spain. Return n capital The return n average capital invested in Aegn s businesses in Eurpe was stable at 7.5% excluding revaluatin reserves and defined benefit plan remeasurements. The psitive impact frm imprved net underlying results was ffset by the negative impact frm the EUR 1 billin capital injectin t strengthen the Slvency II capital psitin in the Netherlands in the third quarter f Fr the Netherlands, return n capital fr the first half f 2018 std at 7.8%. The return ver the same perid in the United Kingdm was 6.2%, in CEE 18.7%, and in Spain & Prtugal 1.1%. Return n capital f Aegn s businesses excludes the benefit f leverage at the hlding.

16 16 Operating expenses Operating expenses decreased by 11% t EUR 717 millin as a result f lwer expenses in the Netherlands and the United Kingdm. The main drivers in the Netherlands were the sale f UMG in the furth quarter f last year and expense savings in the insurance businesses. In the United Kingdm, higher Cfunds and BlackRck integratin expenses were mre than ffset by expense savings and the divestment f Aegn Ireland. The higher expenses in Spain & Prtugal were caused by a prvisin fr a restructuring prgram t imprve the financial perfrmance f Aegn Spain s wn business. Sales Grss depsits declined by 7% t EUR 11.8 billin as grss depsits in the United Kingdm were dwn by 16% t EUR 7.3 billin due t lwer platfrm sales whilst maintaining market share. This was partly ffset by an 11% increase t EUR 4.3 billin in the Netherlands, driven by cntinued mmentum at Aegn s nline bank Knab and Aegn s PPIs. Grss depsits in CEE increased by 24% t EUR 185 millin, largely as a result f higher pensin depsits in Rmania, Pland and Hungary. Net depsits fr Eurpe increased by 8% t EUR 2.9 billin as a result f 19% higher net inflws in the United Kingdm, reflecting imprved retentin. In the Netherlands, increased PPI net inflws were mre than ffset by lwer net depsits at Knab. Prductin f mrtgages in the Netherlands was up by 13% t EUR 4.6 billin in the first half f 2018, f which EUR 2.5 billin was related t third-party investr demand, mainly thrugh the Dutch Mrtgage Funds. New life sales increased by 6% t EUR 140 millin in the first half f 2018, which was the result f increases in all regins, mst ntably in Spain & Prtugal and the Netherlands. In Spain & Prtugal, the 10% sales increase was mainly the result f grwth in the jint ventures with Santander, while in the Netherlands sales grew 6%, driven by defined benefit pensins, immediate annuities and pensin indexatin premiums. New premium prductin fr Accident & Health was dwn by 11% t EUR 20 millin as last year s number included ne-time higher sales in the Netherlands fllwing legislative changes. New premium prductin fr general insurance increased by 7% t EUR 61 millin, driven by Hungary and the Santander jint ventures. Market cnsistent value f new business The market cnsistent value f new business in Eurpe mre than dubled t EUR 74 millin. In Spain & Prtugal, MCVNB increased strngly as a better sales mix led t imprved margins, while in the United Kingdm the strng increase was driven by imprved margins n pensin prducts n the platfrm. Revenue-generating investments Revenue-generating investments decreased by 1% in the first half f 2018 t EUR 274 billin, reflecting the sale f Aegn Ireland.

17 17 Eurpe EUR millins Ntes 2018 Secnd half Underlying earnings befre tax NL Life NL Nn-life NL Banking NL Service business 8 22 (67) 22 (66) The Netherlands UK Existing Business (19) UK Digital Slutins 10 (5) n.m. (3) n.m. United Kingdm Central & Eastern Eurpe Spain & Prtugal (2) n.m. Underlying earnings befre tax Fair value items 76 (250) n.m. (5) n.m. Realized gains / (lsses) n investments (61) 92 (34) Net impairments 1 2 (61) 2 (61) Other incme / (charges) 5 (179) 72 n.m. 264 n.m. Incme befre tax (45) Incme tax (106) (98) (9) (135) 21 Net incme / (lss) (50) Net underlying earnings Cmmissins and expenses 975 1,084 (10) 1,057 (8) f which perating expenses (11) 802 (11) Grss depsits (n and ff balance) 10 The Netherlands 4,328 3, ,162 4 United Kingdm 7,283 8,632 (16) 8,627 (16) Central & Eastern Eurpe Spain & Prtugal (26) Ttal grss depsits 11,813 12,694 (7) 12,985 (9) Net depsits (n and ff balance) 10 The Netherlands (15) United Kingdm 2,154 1, ,860 (25) Central & Eastern Eurpe (31) 78 (12) Spain & Prtugal 7 8 (17) 5 28 Ttal net depsits / (utflws) 2,879 2, ,246 (11) New life sales 6, 10 Life single premiums (1) 499 (15) Life recurring premiums annualized Ttal recurring plus 1/10 single (1) The Netherlands United Kingdm (7) Central & Eastern Eurpe (11) Spain & Prtugal Ttal recurring plus 1/10 single (1) New premium prductin accident and health insurance (11) New premium prductin prperty & casualty insurance Revenue-generating investments June 30, Dec. 31, June 30, 2018 Revenue-generating investments (ttal) 274, ,050 (1) 264,636 4 Investments general accunt 60,298 58, ,079 6 Investments fr accunt f plicyhlders 90,085 95,880 (6) 94,071 (4) Off balance sheet investments third parties 124, , ,485 9