Aegon Ltd. · EURONEXT:AGN
Aegon — Q3 2015 Earnings Presentation
26 slides from Aegon's earnings presentation, Nov 12, 2015
Slide 1: Q3 2015 Results
Q3 2015 Results The Hague – November 12, 2015 Alex Wynaendts Darryl Button CEO CFO
Slide 2: Earnings impacted, strong sales and solid capital position
Earnings impacted, strong sales and solid capital position Underlying earnings affected by actuarial assumption changes Closing of sale of low-return business in Canada as part of portfolio optimization Continued sales growth for fee-based deposit businesses Strong operational free cash flow
Slide 3: Four main elements affecting Q3 2015 earnings
Four main elements affecting Q3 2015 earnings Actuarial Economic Book loss on assumption changes assumption changes Model updates Canada sale EUR (96) million EUR 101 million EUR (209) million EUR (751) million impact on impact on impact on impact on Underlying earnings Fair value items Other charge
Slide 4: Extensive review to improve assumptions and models
Extensive review to improve assumptions and models Updated actuarial assumptions in L&P related to Assumption changes Q3 earnings impact and model updates (EUR million) adjustments in lapse expectations for long-term care Actuarial assumption changes Assumption changes in I&R related to adjustme
Slide 5: Group solvency ratio and holding excess capital increased
Group solvency ratio and holding excess capital increased Group IGD up to 225%, driven by divestments, earnings generated and one-time adjustments Holding excess capital up to EUR 1.8 billion ► Leverage ratio increased to 28.8% due to book loss on Canada divestment ► Proceeds of Canada divestmen
Slide 6: Sales growth driven by 27% increase in gross deposits
Sales growth driven by 27% increase in gross deposits Gross deposits increased 27% driven by asset management, US retirement, NL bank deposits New life sales down as higher IUL sales in the US and favorable currency movements were more than offset by withdrawal of UL secondary guarantee product,
Slide 7: Transamerica a top-10 US retirement provider after Mercer acquisition
Transamerica a top-10 US retirement provider after Mercer acquisition Mercer business strategic fit for Transamerica Participants and assets in US retirement Acquisition strengthens Transamerica’s (million and USD billion) + USD 71 billion AuA Top-10 leading position in US retirement sector To
Slide 8: Key messages
Key messages Earnings affected by actuarial assumption changes and model updates Q3 results Continued sales growth for fee-based deposit businesses Increased group solvency ratio and Holding excess capital Capital & Designation as global systemically important insurer Regulatory Progress m
Slide 9: Upcoming events
Upcoming events November HSBC conference Zurich November 26, 2015 December Citi conference Hong Kong & Tokyo December 3 & 4, 2015 January Analyst & Investor Conference London January 13, 2016 9
Slide 10: Appendix continued: Q3 2015 results
Appendix continued Q3 2015 results For questions please contact Investor Relations +31 70 344 8305 [email protected] P.O. Box 85 2501 CB The Hague The Netherlands
Slide 11: Index
Index Press subject to go directly to the section 3Q15 3Q15 3Q15 Strategy Financials Reconciliation support tables, assumptions & sensitivities Slide 12-13 Slide 14-20 Slide 21-26 11
Slide 12: Aegon at a glance
Aegon at a glance Focus History Employees Life insurance, pensions & Our roots date back to first half of Around 28,000 employees asset management 19th century September 30, 2015 Underlying earnings before tax Revenue-generating investments Paid out in claims and benefits 2015 YTD September 30, 2015
Slide 13: Sustainability embedded in our strategy
Sustainability embedded in our strategy Products and services A responsible approach Supporting local communities customers can trust to investments Clear and easy to understand Decisions guided by Aegon’s Long history of working with and products Responsible Investment Policy investing in loc
Slide 14: Underlying earnings up to EUR 436 million
Underlying earnings up to EUR 436 million Earnings in Americas impacted by actuarial Underlying earnings before tax assumption changes Earnings in Netherlands increased due to Americas The Netherlands (USD million) (EUR million) higher investment income and lower funding costs UK earnings decl
Slide 15: Fair value items impacted by hedge programs and guarantees
Fair value items impacted by hedge programs and guarantees Total of EUR (103) million FV hedging with FV hedging without accounting match accounting match FV investments FV other EUR (9) million EUR (103) million EUR (1) million EUR 10 million Derivatives ∆: EUR 588m Derivatives ∆: EUR (103)m Liabil
Slide 16: Net result of EUR (524) million
Net result of EUR (524) million Fair value items loss mainly driven by hedging programs in the US, primarily the result of adjustments to the macro equity hedge program, which more than offset positive impact from assumption changes Gains on investments amounted to EUR 36 million and were mainly
Slide 17: Gross deposits increased to EUR 19.4 billion
Gross deposits increased to EUR 19.4 billion Lower gross deposits in the Americas as Gross deposits growth in pensions was more than offset by lower deposits in VA Americas The Netherlands (USD billion) (EUR billion) Gross deposits in the Netherlands up due to continued strong performance from K
Slide 18: New life sales amounted to EUR 435 million
New life sales amounted to EUR 435 million New life sales in the Americas decreased, New life sales as higher indexed UL sales were more than offset by the divestment of Canada, Americas The Netherlands withdrawal of UL secondary guarantee (USD million) (EUR million) product, and lower term life s
Slide 19: MCVNB of EUR 125 million impacted by low interest rates
MCVNB of EUR 125 million impacted by low interest rates Lower MCVNB in the Americas mainly Market consistent value of new business driven by the divestment of Canada, a lower contribution from VA, and lower interest Americas The Netherlands rates (USD million) (EUR million) MCVNB in the Netherla
Slide 20: Operating expenses amounted to EUR 912 million
Operating expenses amounted to EUR 912 million Operating expenses in the Americas Operational expenses increased mainly as a result of higher employee benefit expenses and Americas The Netherlands investments in technology (USD million) (EUR million) Decline in NL operating expenses as higher em
Slide 21: Operational free cash flows and holding excess capital
Operational free cash flows and holding excess capital Operational free cash flows* of EUR 350 million ► One-time items of EUR (243) million were primarily related to the assumption changes and model updates ► Positive market impacts of EUR 131 million were mainly driven by higher valuation of mor
Slide 22: Capital allocated to run-off businesses further reduced
Capital allocated to run-off businesses further reduced Sale of Clark Consulting released USD 0.2 billion of capital Current capital allocated to run-off businesses of USD 1.7 billion ► Return on capital of run-off businesses of 3.7% year to date Capital intensive run-off businesses negatively
Slide 23: Main economic assumptions unchanged
Main economic assumptions unchanged 10-year US Treasury assumed to grade to 4.25% by 2025 3-month US Treasury assumed to grade to 2.5% by 2025 Credit spreads are assumed to grade to 110 bps by 2017 Bond funds are assumed to return 4% until 2025 and 6% thereafter US annual gross equity mark
Slide 24: Earnings sensitivities to equity markets and reinvestment yields
Earnings sensitivities to equity markets and reinvestment yields Protection of capital position main purpose of macro Macro hedge equity sensitivity estimates hedging program Total equity return in Fair value items impact quarter IFRS accounting mismatch between hedges and liabilities -8% ~USD (
Slide 25: Investing in Aegon
Investing in Aegon Aegon ordinary shares Aegon’s ordinary shares ► Traded on Euronext Amsterdam since 1969 Ticker symbol AGN NA and quoted in euros Underlying ISIN NL0000303709 SEDOL 5927375NL Aegon New York Registry Shares (NYRS) Trading Platform Euronext Amsterdam Country Netherlands ► Traded
Slide 26: Disclaimers
Disclaimers Cautionary note regarding non-IFRS measures This document includes the following non-IFRS financial measures: underlying earnings before tax, income tax, income before tax and market consistent value of new business. These non-IFRS measures are calculated by consolidating on a proportion