Aegon Ltd. · EURONEXT:AGN
Aegon — Q4 2021 Earnings Presentation
30 slides from Aegon's earnings presentation, Feb 9, 2022
Slide 1: 4Q 2021 Results
4Q 2021 Results Lard Friese Chief Executive Officer Matt Rider Chief Financial Officer February 9, 2022 Helping people live their best lives
Slide 2: Progressing on strategic priorities
Progressing on strategic priorities 1 Good progress in achieving financial and strategic commitments 2 Continuous progress on operational improvement plan 3 Solid growth in Strategic Assets and Asset Management 4 Successfully implementing Financial Asset actions in NL and US 5 Proposed final DPS of
Slide 3: Our progress since Capital Markets Day
Our progress since Capital Markets Day 2021 guidance 2021 realized Addressable expense savings From expense initiatives vs. 2019 EUR 200 million EUR 244 million ✓ Operating capital generation Before holding expenses EUR 1.1 billion EUR 1.4 billion ✓ Free cash flow EUR 350 – 400 million EUR 729 milli
Slide 4: Executing on Aegon's granular operating plan
Executing on Aegon’s granular operating plan Initiative delivery • Continued rapid pace in execution of (in no. of initiatives, year-end 2021) the operational improvement plan 109 844 1,140 78 • Continuous process of developing 195 new initiatives to capture the full Growth potential of our organiza
Slide 5: Increasing new business growth in US Strategic Assets
Increasing new business growth in US Strategic Assets US – Individual Solutions US – Workplace Solutions New life sales New business strain Value of new life RP1 Middle-Market RP1 Middle-Market RP1 Middle-Market (in USD million) (in USD million) business written sales net deposits2 assets under admi
Slide 6: Increasing momentum in UK; continued growth in NL Strategic Assets
Increasing momentum in UK; continued growth in NL Strategic Assets NL UK Mortgage Workplace net Net growth Knab Workplace net Retail net Platform Revenues origination deposits customers deposits deposits expenses/AuA gained/(lost) on (in EUR billion) (in EUR million) (in 1,000 customers) (in GBP mil
Slide 7: Growing in Asset Management and Growth Markets
Growing in Asset Management and Growth Markets Asset Management Growth Markets (Spain & Portugal, China1, Brazil) Third-party Operating margin Operating result New life sales Value of new life New premium net deposits Global Platforms Strategic (in EUR million) business production Global Platforms (
Slide 8: 4Q 2021 Financial Results
4Q 2021 Financial Results Matt Rider Chief Financial Officer 8
Slide 9: Financial results for the full-year 2021
Financial results for the full-year 2021 FY 2020 FY 2021 Addressable expense savings From expense initiatives vs. 2019 EUR 75 million EUR 244 million Operating result EUR 1.7 billion EUR 1.9 billion Free cash flow EUR 530 million EUR 729 million1 Cash Capital at Holding EUR 1.1 billion EUR 1.3 billi
Slide 10: On track to deliver expense savings target
On track to deliver expense savings target Addressable expenses • Expense initiatives drove the reduction (in EUR million, in constant currency) of expenses by EUR 244 million, 61% of the EUR 400 million expense -7% savings target for 2023 3,120 • Expense savings delivered in 4Q21 offset by exceptio
Slide 11: Operating result of EUR 470 million with business growth partly offsetting adverse mortality
Operating result of EUR 470 million with business growth partly offsetting adverse mortality Operating result (in EUR million) US claims experience Operating result 4Q 2020 479 • EUR 83 million adverse mortality claims experience in Life driven by COVID-19 and higher claim frequency Americas (76) •
Slide 12: Net result of EUR 526 million driven by operating result
Net result of EUR 526 million driven by operating result Net result (4Q 2021, in EUR million) Operating result 470 Non-operating items Fair value items 90 • Fair value gains from alternative investments and unhedged risks in US, and real estate in the Netherlands Gains on investments 121 • Net recov
Slide 13: Capital position of main units above the operating level
Capital position of main units above the operating level US RBC ratio NL Life Solvency II ratio UK Solvency II ratio (regulated entities) (Aegon Levensverzekering N.V.) (Scottish Equitable Plc) +14%-pts -20%-pts 186% -4%-pts 446% 172% 171% 167% 426% 400% 150% 150% 350% 135% 135% 3Q 2021 4Q 2021 3Q 2
Slide 14: Cash Capital at Holding in the upper half of operating range
Cash Capital at Holding in the upper half of operating range Cash Capital at Holding (in EUR million) • Over EUR 1 billion gross 1,010 remittances in FY21 of which 67 EUR 520 million in 4Q21 (281) (125) • Gross remittances include 1,500 distribution of excess capital from (288) 1,279 several units o
Slide 15: Successful implementation of management actions on the Variable Annuities Financial Asset
Successful implementation of management actions on the Variable Annuities Financial Asset US Variable Annuities Performance Capital generation Dynamic hedge effectiveness 228 (in USD million) (in %) 98% / 93% 567 98% 99% 99% 98% GMWB 302 228 79 86% 93% GMIB/DB (50) 4Q20 1Q21 2Q21 3Q21 4Q21 4Q20 1Q21
Slide 16: Continued progress in managing the LTC Financial Asset
Continued progress in managing the LTC Financial Asset US Long-Term Care (LTC) Performance Actual to expected Progress on rate Capital claims ratio (in %) 77% increase program (value of approved rate increases) generation (in USD million) 41 83% 77% 138 70% 118 43% 52% 76% of upgraded expectation 36
Slide 17: Strengthened NL Life Financial Asset balance sheet with another longevity reinsurance transaction
Strengthened NL Life Financial Asset balance sheet with another longevity reinsurance transaction NL Life book Performance Solvency II Remittances Operating capital ratio (in %) 186% to Aegon NL (in EUR million) 25 generation (in EUR million) 56 186% 67 172% 172% 55 56 159%149% Operating level (150%
Slide 18: Outlook for the year
Outlook for the year 2022 outlook1 2023 target2 Addressable expense savings Continued progress EUR 400 million From expense initiatives vs. 2019 towards 2023 target Operating capital generation Around EUR 1.2 billion Around EUR 1.3 billion reflects management actions and as provided at CMD and based
Slide 19: Concluding remarks
Concluding remarks Lard Friese Chief Executive Officer 19
Slide 20: Key messages
1 Good progress in achieving financial and strategic commitments 2 Continuous progress on operational improvement plan Key 3 Solid growth in Strategic Assets and Asset Management messages 4 Successfully implementing Financial Asset actions in NL and US 5 Proposed final DPS of EUR 0.09; full-year DPS
Slide 21: Appendix
Appendix For questions please contact Investor Relations +31 70 344 8305 [email protected] P.O. Box 85 2501 CB The Hague The Netherlands Helping people live their best lives
Slide 22: Group Solvency II ratio amounts to 211%
Group Solvency II ratio amounts to 211% Own funds (OF) and Solvency Capital Requirement (SCR) development (in EUR million) • Capital return includes the final SII 209% +4% -3% +2% +4% -5% 211% 2021 dividend and the announced share buyback related to variable compensation (346) • Higher equity market
Slide 23: Well-managed capital sensitivities
Well-managed capital sensitivities Solvency II and RBC sensitivities (in percentage points, 4Q 2021) Scenario Group NL Life3 UK4 US5 US RBC6 Equity markets +25% +2% -1% -3% +14% +18% Equity markets -25% -8% -2% +2% -24% -35% Interest rates +50 bps -1% -8% +1% +0% -1% Interest rates -50 bps -0% +7% -
Slide 24: Net recoveries in the US general account in 2021
Net recoveries in the US general account in 2021 Impairments on US general account fixed income assets (in bps) 120 91 82 64 48 52 37 33 27 25 17 17 17 19 Average 9 8 8 22 1 2 4 2 1 3 1 (6) (2) (2) (9) (3) (4) 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Slide 25: Conversion of RBC to Solvency II
Conversion of RBC to Solvency II • Conversion methodology for US operations has been agreed with DNB, subject to regular review • Calibration of US insurance entities followed by subsequent adjustment for US debt and holding items - Calibration of US insurance entities is consistent with EIOPA’s gui
Slide 26: Leverage ratio benefits from debt reduction and increased shareholders' equity
Leverage ratio benefits from debt reduction and increased shareholders’ equity Gross financial leverage Gross financial leverage ratio (in EUR billion) (in %) 7.4 32.2% 7.0 30.7% 6.7 6.7 29.2% 28.6% 27.9% Senior 2.4 6.0 5.9 2.3 1.8 1.7 24.6% 1.2 1.3 Hybrid 5.0 4.7 4.9 4.9 4.7 4.6 2016 2017 2018 2019
Slide 27: Main economic assumptions for the 2021-2023 targets
Main economic assumptions for the 2021-2023 targets Overall assumptions US NL UK Exchange rate against euro 1.2 n.a. 0.9 2021: 2% 2021: 4% 2021: 4% Annual gross equity market return (price appreciation + dividends) 2022 onwards 8% 2022 onwards 6.5% 2022 onwards 6.5% Main assumptions for financial ta
Slide 28: Aegon Investor Relations
Aegon Investor Relations Stay in touch Upcoming events 2022 Contact Investor Relations Jan Willem Weidema AIFA Conference March 7 – 8, 2022 Head of Investor Relations +31 70 344 8028 Sean Dargan +1 443 475 3736 Investor Relations Officer Morgan Stanley Conference March 17, 2022 Karl-Otto Grosse-Holz
Slide 29: Investing in Aegon
Investing in Aegon Aegon ordinary shares Aegon New York Registry Shares (NYRS) • Traded on Euronext Amsterdam • Traded on NYSE since 1991 and since 1969 and quoted in euros quoted in US dollars • One Aegon NYRS equals one Aegon Amsterdam-listed common share • Cost effective way to hold international
Slide 30: Disclaimer
Disclaimer Cautionary note regarding non-IFRS-EU measures This document includes the following non-IFRS-EU financial measures: operating result, income tax, result before tax, market consistent value of new business, return on equity and addressable expenses. These non-IFRS-EU measures, except for a