Aegon Ltd. · EURONEXT:AGN
Aegon — BoA-ML Banking & Insurance CEO Conference 2017
28 slides from Aegon's conference presentation, Sep 27, 2017
Slide 1: Accelerate, connect, deliver: Executing on our strategy
Accelerate, Executingconnect, deliver on our strategy Alex Wynaendts BoA-ML Banking & Insurance CEO Conference London – September 27, 2017 CEO Helping people achieve a lifetime of financial security
Slide 2: Overview
Overview 2 Overview • Transformed the profile of the company by focusing on fee and protection business Strong • Significant progress in optimizing portfolio execution • Maintained solid capital position • Management actions drive strong free cash flow growth • Broaden relationship with customers th
Slide 3: Key trends are shaping our industry
Key trends 3 Key trends are shaping our industry Shift away from • Low interest rates combined with changing demographics guaranteed • New prudential regulation and increased capital requirements life products • Rising demand for transparent products Focus on • Reduced social benefits and fiscal inc
Slide 4: Serving customers throughout their lives
Focus on individual responsibility 4 Serving customers throughout their lives …to trusted provider of …through guidance retail solutions and advice… From worksite relationship… At & after retirement Situation Retirees looking for income and wealth transfer Wealth accumulation Situation Increasingly
Slide 5: Introducing new platforms
Increased importance of digital channels 5 Introducing DIGITAL new platforms EXPERIENCE PLATFORM CUSTOMER EMPLOYER ADVISOR The Wealth + Health App: A simple Allow the Employer to manage their Allow the Advisor to manage their book and engaging platform for the employee benefits package and the of bu
Slide 6: Focused investments in FinTech
Increased importance of digital channels 6 Focused investments in FinTech Technology to enhance Investing in FinTech Benefits to Aegon customer experience • Improved user experience • Building life-long relationships with customers • Online advice & guidance • Developing new solutions & • Simplified
Slide 7: New business profile changed considerably
Shift away from guaranteed products 7 New business profile changed considerably • Shifted away from traditional life insurance to capital-light products - Traditional products less attractive due to low interest rates, changing demographics and higher capital requirements • Shift reflected in five-f
Slide 8: Significant shift to fee businesses
Shift away from guaranteed products 8 Significant shift to fee businesses Development of fee-based balances and earnings (Balances in EUR billion; underlying earnings in %) 900 817 60% • Strong growth in fee-based earnings; percentage tripled to 45% since 2010 750 45% • Organic growth supplemented w
Slide 9: Management actions drive quality of capital composition
Shift away from guaranteed products 9 Management actions drive quality of capital composition • Improved capital composition driven by growing core businesses, divestments and run-off portfolios • Growth of capital generation driven by growth of fee-based businesses Composition of required capital (
Slide 10: Solid capital position
Capital 10 Solid capital position 185% • Improved Solvency II ratio at high-end of 150-200% capital target zone Solvency II ratio 149% Tier 1 • Quality of capital increased significantly as % of SCR AA- • Maintained strong credit ratings throughout past decade S&P rating Solvency II ratio and Tier 1
Slide 11: Significant growth in free cash flows
Capital 11 Significant growth in free cash flows Management actions drive free cash flow growth (EUR million) Region Old1 20182 • US capital generation stable at USD 1 billion Americas3 ~900 ~850 after divestment of run-off businesses Netherlands4 ~225 ~300 United Kingdom ~25 ~100 Asset Management ~
Slide 12: Clear focus for each unit
Balanced portfolio 12 Clear focus for each unit Complete transformation Optimize Transamerica UK EU Capture synergies US EM Achieve scale or divest LA Continue to grow AAM Accelerate growth Creating a balanced portfolio of businesses with predictable cash flows
Slide 13: Expense reductions of EUR 350 million on track for 2018
Expense reductions 13 Expense reductions of EUR 350 million on track for 2018 Declining core operating expenses (EUR million – rolling 4 quarters ) 3.900 • Successful expense savings program drives 3.750 reduction in core operating expenses • Acquisitions in US and UK in key business lines add to sc
Slide 14: Experienced management team committed to deliver
Management 14 Experienced management team committed to deliver Functional heads Alex Wynaendts Matt Rider Allegra van Hövell-Patrizi Mark Bloom Carla Mahieu Onno van Klinken CEO CFO CRO CTO Global Head HR General Counsel Business unit heads Mark Mullin Marco Keim Adrian Grace Sarah Russell Americas
Slide 15: Strategy delivers long-term value to shareholders
Capital return 15 Strategy delivers long-term value to shareholders • Interim dividend for 2017 of EUR 0.13 per common share • Paid a sustainable growing dividend for five consecutive years • Remittances support growing dividends and investments in strategic priorities Increasing dividends (EUR per
Slide 16: Conclusion
Conclusion 16 Conclusion Transformed the company by focusing on fee and protection businesses Clear strategy to broaden relationship with customers Solid capital position Management actions driving free cash flow growth On track to return EUR 2.1 billion to shareholders over 2016–2018
Slide 17: Appendix
Appendix 17 Appendix For questions please contact Investor Relations +31 70 344 8305 [email protected] P.O. Box 85 2501 CB The Hague The Netherlands
Slide 18: Americas: Strong earnings improvement in 2Q17
Appendix 18 Americas: Strong earnings improvement in 2Q17 • Underlying earnings up to USD 374 million, mostly driven by improved claims experience and favorable equity markets • Operating expenses increased by 4% due to higher restructuring charges and one-time favorable variable employee expenses i
Slide 19: Europe: Favorable markets drive solid earnings in 2Q17
Appendix 19 Europe: Favorable markets drive solid earnings in 2Q17 • Underlying earnings increased to EUR 195 million mainly driven by higher account balances and favorable markets in the UK and improved claims experience in Dutch non-life business • Operating expenses increased by 12% due primarily
Slide 20: Asia: Continued earnings growth in HNW and China in 2Q17
Appendix 20 Asia: Continued earnings growth in HNW and China in 2Q17 • Underlying earnings increased to USD 12 million, mainly due to higher earnings from HNW business and China • New life sales increased by 7% as a result of strong demand for new critical illness product in China • Net deposits dec
Slide 21: Asset management: Improved net deposits in 2Q17
Appendix 21 Asset management: Improved net deposits in 2Q17 • Underlying earnings declined by 14% as lower expenses were more than offset by lower management fees • Lower operating expenses driven by lower expenses in the Americas • Net inflows of EUR 2.5 billion mainly from the Americas, the Nether
Slide 22: Group solvency ratio increases significantly to 185% in 2Q17
Appendix 22 Group solvency ratio increases significantly to 185% in 2Q17 • Divestment of majority of US run-off businesses and completion of the Rothesay Part VII transaction combined were the main drivers of the increased ratio on a comparable basis • Capital generation of EUR 0.6 billion including
Slide 23: General account investments
Appendix 23 General account investments June 30, 2017 amounts in EUR millions, except for the impairment data Americas Europe Asia Holding & other Total Cash/Treasuries/Agencies 18,079 16,904 371 163 35,517 Investment grade corporates 32,890 3,934 3,483 - 40,307 High yield (and other ) corporates 2,
Slide 24: Capital generation and excess capital
Appendix 24 Capital generation and excess capital • Capital generation excluding market impacts and one-time items of EUR 0.3 billion • Holding excess capital increased to EUR 1.7 billion at the end of the second quarter due to the dividends received from the US and CEE, and special dividend from As
Slide 25: Updated Solvency II sensitivities
Appendix 25 Updated Solvency II sensitivities Solvency II sensitivities (in percentage points) Scenario Group US NL UK Capital markets • Group Solvency II ratio well within target zone of capital management policy Equity markets +20% +3% +2% +3% -7% Equity markets -20% -5% -10% -6% +8% • Sensitiviti
Slide 26: Main economic assumptions
Appendix 26 Main economic assumptions Overall assumptions US NL UK Exchange rate against euro 1.10 n.a. 0.85 Annual gross equity market return (price appreciation + dividends) 8% 7% 7% Main assumptions for financial targets US NL UK 10-year government bond yields Develop in line with forward curves
Slide 27: Investing in Aegon
27 Investing in Aegon Aegon’s ordinary shares Ticker symbol AGN NA • Aegon ordinary shares ISIN NL0000303709 - Traded on Euronext Amsterdam since 1969 SEDOL 5927375NL and quoted in euros Trading Platform Euronext Amsterdam Country Netherlands • Aegon New York Registry Shares (NYRS) - Traded on NYSE
Slide 28: Disclaimer
28 Disclaimer Cautionary note regarding non-IFRS measures This document includes the following non-IFRS-EU financial measures: underlying earnings before tax, income tax, income before tax, market consistent value of new business and return on equity. These non-IFRS-EU measures are calculated by con
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