An introduction to Aegon Helping people achieve a lifetime of financial security
Content An introduction to Aegon 2 3 Aegon at a glance 17 International presence 27 Asia Key facts & figures Businesses in more than 20 countries A key long-term growth market 5 Our strategy 20 Americas 29 Aegon Asset Management Helping people achieve a lifetime of financial security Serving the pre- and post-retirement markets A global investment manager 8 Our value chain 22 Europe Creating a positive impact One of the leading brands in the financial services industry
Overview 3 Aegon at a glance Asia 2% Europe Focus Life insurance, pensions & asset management for over 26 million customers Sales Total sales of 16.2 billion 1) (Full year 2017) Americas 31% 61% 6% History Our roots date back to the first half of the 19 th century Employees Over 28,000 employees (December 31, 2017) AAM Earnings Underlying earnings before tax of 2.1 billion (Full year2017) Investments Revenue-generating investments 817 billion (December 31, 2017) Paid out in claims and benefits 48.1 billion (2017) 1) Sales represents new life sales + accident & health premiums + general insurance premiums + 1/10 of gross deposits
Customers at the heart of everything we do For more than 170 years Aegon at a glance 4 <1900 Aegon s roots date back to the first half of the 19 th century >1983 International expansion to over 20 markets in the Americas, Europe and Asia 1983: Joining forces Merger of Dutch insurers Ago and Ennia; Aegon established Recent history Executing our ambitious customercentric Transform Tomorrow strategy
Our operating environment Key trends are shaping our industry Our strategy 5 Shift away from guaranteed life products Low interest rates combined with changing demographics New prudential regulation and increased capital requirements Rising demand for transparent products Focus on individual responsibility Reduced social benefits and fiscal incentives Increased awareness to save for retirement Workplace channel increasingly important Increased importance digital channels Changing customer behavior in researching and purchasing products New technology creates increased transparency More effective and efficient ways to advise and serve mass affluent customers
A clear and steady strategy To continue for the next 170 years and beyond Our strategy 6 Purpose To help people achieve a lifetime of financial security Ambition To be a trusted partner for financial solutions at every stage of life Our four strategic objectives support our ambition to be a trusted partner for financial solutions at every stage of life Loyal customers Operational excellence Commitment To act responsibly and to create positive impact for all our stakeholders Empowered employees Optimize portfolio Values Working together Exceeding expectations Bringing clarity
Living up to our purpose To help people achieve a lifetime of financial security Our strategy 7 From working life through guidance and advice to trusted provider of retail solutions Protection We protect what s important to our customers, their families, their health and their homes Accumulation We help our customers save and invest for the future At & after retirement We provide our customers with a stable income in retirement, helping to meet costs of care and securing their families future
Our value chain Our value chain How we create a positive impact at every stage of our business 8 Stakeholders Input Output Customers Employees Investors Business partners Society Premiums & deposits Talent and time Capital Distribution Asset mgt Advice & guidance To help people achieve a lifetime of financial security Product administration Protection & guarantees Benefits 48.1 billion in 2017 Salaries* 2.3 billion in salaries and additional benefits Returns* 1.17 billion total return to investors Revenues* 4.3 billion in commissions and payments for goods & services Community investment* 759 million in local taxes and community investment * Full year 2016 numbers: source Aegon 2016 Review
Aegon s business model Putting the customer at the heart of everything we do Our value chain 9 Customers Sales & distribution Pay-in phase Pay-out phase We develop products and services, and seek to build a lifelong relationship with our customers. We price our products and services by assessing risks such as movements in financial markets, and changes in mortality and morbidity. We offer our products directly to our customers or through brokers, banks and other intermediaries who receive a fee or commission from us or our customers. As an insurer, we underwrite our products and services to ensure we can assess and manage risk, and meet our obligations. Customers make deposits or pay premiums on our products, which we then invest to pay benefits when the time comes. As the money we receive is often spread over a number of years, whereas most marketing and sales costs are immediate, these costs are included on our balance sheet and gradually reduced (amortized) over time. Products such as pensions and annuities mature and enter a pay-out phase. With life insurance, this happens when a claim is made. Beneficiaries receive either a lump sum or a series of regular payments over a specified period of time.
How we create and share value for our customers Our value chain 10 By ensuring that customer-centricity is part of our DNA By being accessible online By providing optimal products and services Through innovative new platforms Serving over 26 million customers globally 96% of Aegon businesses offer products & services online 48.1billion paid out in policyholder claims and benefits in 2017
Our value chain Aegon Retirement Readiness Index (ARRI) Research shows that preparedness for retirement is still low 11 Aegon Retirement Readiness Index (Global score by year) 86,000 people surveyed since 2012 - In 15 countries 5.8 5.9 5.8 5.9 5.2 4.9 2012 2013 2014 2015 2016 2017 ARRI assesses how well workers view their level of retirement preparedness ARRI increased slightly from 5.8 in 2016 to 5.9 in 2017 - Still at a level that indicates that people are not doing enough to prepare for retirement Source: The Aegon Retirement Readiness Survey Note: The ARRI ranks retirement readiness on a scale from 0 to 10. A high index score is considered to be between 8 and 10, a medium score between 6 and 7.9, and, a low score being less than 6. For more information about the ARRI please click here.
How we create and share value for our employees Our value chain 12 By providing worthwhile employment By embracing diversity By enabling professional development By helping colleagues with their own financial futures 97% of our workforce take part in standardized performance appraisals 1) Over 600 per employee spent on training in 2016 23,353hours granted to employees for volunteer activities in 2016 Source: Aegon 2016 Review 1) Senior management 97%; middle management 97%; other grades 100%
How we create and share value for our investors Our value chain 13 Through shareholder engagement By returning capital to our shareholders By addressing underperformance By developing long-term value 24.4 billion Total capitalization at the end of fourth quarter 2017 AA- financial strength rating by Standard & Poor s International shareholder base; traded in Amsterdam & New York
How we create and share value for our business partners Our value chain 14 Through our joint ventures and strategic partners Through customer insight With our distribution partners Through our investments in start-ups Strong & complementary joint venture partners Omni-channel approach towards our customers Investments in 18 unique start-ups by our dedicated investment fund Transamerica Ventures at June 30, 2017
How we create and share value in our local communities Our value chain 15 By supporting local communities - Providing support through community investments to vulnerable people By encouraging our employees to add value via volunteer work By our sport sponsorships - We are promoting a healthy lifestyle 95% of our businesses offer inclusive insurance products 8.8 million donations made to charities and other good causes in 2016 1.03 million is value of voluntary work undertaken by our employees in 2016
How we create and share value In brief Our value chain 16 7.2 billion impact investments EUR millions, 2016 Supporting our local communities EUR millions Our shareholder base February 2018 14.4 213 43.3 106 57.4 6% 119 309 Affordable housing 15% International dev. banks Green bonds Americas 1,600 Renewable energy Sustainable timber Care homes elderly 6.3 6.1 8.6 8.8 10% 49% NL UK Rest of Europe 4,800 Micro-finance Rest of the world Social Green RMBS 2013 2014 2015 2016 20% In 2016, the value of voluntary work undertaken by employees was EUR 1.03 million
International presence 17 Aegon s international presence
A strong international presence In more than 20 countries International presence Aegon businesses or Aegon Insights Joint ventures 18
Our global reporting structure International presence 19 Americas United States Life Accident & health Retirement plans Mutual funds Variable annuities Fixed annuities Stable Value Solutions Latin America Strategic partnerships (Brazil, Mexico) Asia In Hong Kong and Singapore: high net worth businesses Aegon Insights Strategic partnerships (China, India & Japan) Aegon Asset Management Americas Netherlands United Kingdom Rest of the world Strategic partnerships (China, France) The Netherlands Life & Savings Pensions Non-life Distribution United Kingdom & Ireland Life Pensions Europe Central & Eastern Europe Czech Republic Hungary Poland Romania Slovakia Turkey Spain & Portugal Strategic partnerships with Banco Santander and Liberbank (Spain)
The Americas at a glance A few key indicators Americas 20 Underlying earnings before tax By line of business Sales 1) Revenue-generating investments 145 99 1 251 Life Accident & health Retirement plans 410 284 Mutual funds Variable annuities Fixed annuities 5.8 6 5.7 Stable Value Solutions 54 315 Latin America 2015 2016 2017 $ 1.6 billion Full year 2017 $ 5.7 billion Full year 2017 $ 467 billion December 31, 2017 1) Sales represents new life sales + accident & health premiums + general insurance premiums + 1/10 of gross deposits
The Americas at a glance Transamerica is Aegon s main brand in the US Americas 21 Operations in the United States, Brazil & Mexico Almost 11,000 employees December 31, 2017 In the US, among the top 10 largest providers of variable annuities, universal life and term life Diverse & targeted distribution to better align with its 13 million customers in the US 1) Primary sponsor of US professional golfer Zach Johnson 1) Source 2016 Review
Europe at a glance A few key indicators Europe 22 Underlying earnings before tax By line of business Sales 1) Revenue-generating investments 64 17 Life Pensions 236 391 Non-life Other 4.9 1.6 1.7 2015 2016 2017 707 million Full year 2017 4.9 billion Full year 2017 277 billion December 31, 2017 1) Sales represents new life sales + accident & health premiums + general insurance premiums + 1/10 of gross deposits
Europe at a glance One of the leading brands in the Dutch financial sector Europe 23 Headquartered in The Hague; offices in Leeuwarden and Groningen Over 3,000 employees December 31, 2017 In the Netherlands, Aegon is the #2 provider of group pensions and the #5 in individual life Using a variety of distribution channels to help customers access products and services as best suits their needs Primary sponsor of Dutch Rowing Association
Europe at a glance Europe Aegon UK enables customers to create the tomorrow they want 24 Aegon UK s main offices are in Edinburgh and London Approximately 3,400 employees December 31, 2017 In the UK, Aegon focuses on retirement, workplace savings and protection Leading position for award-winning retirement platform with GBP 117 billion 1) in assets under administration Various partnerships with organizations that make a social impact, such as the Breakfast Club & Princes Trust 1) December 31, 2017
Europe at a glance Growth potential in Central & Eastern Europe Europe 25 Present in Czech Republic, Hungary, Poland, Romania, Slovakia & Turkey Over 2,300 employees December 31, 2017 #1 In household insurance in Hungary Successful Aegon Direct portal for nonlife in Hungary Aegon Czech Republic is sponsor of ice speed skater Martina Sáblíková
Europe at a glance Europe Spain & Portugal key markets with strong partnerships 26 Distribution through strong partnerships with banks: Banco Santander & Liberbank Over 600 employees December 31, 2017 In Spain, Aegon has established a reputation as a preferred provider of protection products Online distribution is increasingly important in order to connect with customers in Spain & Portugal
Asia at a glance A few key indicators Asia 27 Underlying earnings before tax By line of business Sales 1) Revenue-generating investments -21 High net worth businesses 10 67 Aegon Insights Strategic partnerships 269 194 209 2015 2016 2017 $ 55 million Full year 2017 $ 209 million Full year 2017 $ 9.7 billion December 31, 2017 1) Sales represents new life sales + accident & health premiums + general insurance premiums + 1/10 of gross deposits
Asia at a glance A key long-term growth market for Aegon Active with TLB, Aegon Insights, and joint ventures in China, India, Japan, serving more than 650,000 customers in 2016 1) Leading position in India with online insurance Asia Approximately 1,500 employees December 31, 2017 (Excluding agents) Aegon s digital business GoBear, Asia's only impartial metasearch engine for financial products, is one of Asia's fastest-growing fintech startups 28 Aegon s regional office in Hong Kong oversees and supports operations throughout the region 1) Source 2016 Review
Aegon Asset Management at a glance A few key indicators Aegon Asset Management 29 Underlying earnings before tax By line of business Sales 1) Assets under management 53 59 Americas Netherlands -7 16 15 UK Rest of the world Strategic partnerships 3.4 4.6 6.1 2015 2016 2017 136 million Full year 2017 6.1 billion Full year 2016 318 billion December 31, 2017
Aegon Asset Management at a glance Aegon Asset Management A global investment manager for institutional, wholesale and retail clients 30 Businesses and partnerships in US, the Netherlands, UK, France, Central & Eastern Europe and Asia A robust investment performance track record underlined by numerous industry awards, including various Morningstar awards Approximately 250 dedicated investment professionals worldwide December 31, 2017 Global platform of solutions & strategies, including fixed income, equities, real estate and multi asset solutions Operating under five brands catering for distinctive customer value propositions
Aegon s Management Board Appendix Management Board 31 Alex Wynaendts CEO Matt Rider CFO Allegra van Hövell-Patrizi CRO Mark Mullin CEO Americas Marco Keim CEO Continental Europe Adrian Grace Sarah Russell Mark Bloom Carla Mahieu Onno van Klinken CEO UK CEO Asset Management CTO Global Head HR General Counsel Note: Executive Board consists of CEO and CFO.
Committed to financial education Appendix strategy support 32 Conduct research, educate the public and lead a global dialogue on retirement security International presence Established centers for longevity and retirement in the Netherlands, the US and Brazil Partnering up Building relationships with respected partners in the field of longevity, retirement and health Research publication Publication of original research regarding: retirement, longevity, population aging, healthcare coverage and health & wellness Leveraging expertise The Centers for longevity and retirement are a collaboration of experts from Aegon s businesses in Europe, the Americas and Asia Helping people achieve a lifetime of financial security