Aegon Ltd. · EURONEXT:AGN
Aegon — Merrill Lynch Conference, London, October 2008
23 slides from Aegon's conference presentation, Oct 9, 2008
Slide 1: Weathering the global financial crisis
Weathering the global financial crisis Alex Wynaendts – CEO Merrill Lynch Conference, London, October 2008 Unlocking the global potential 1
Slide 2: AEGON well positioned
AEGON well positioned o AEGON well positioned to withstand global financial crisis o Capital position enhanced by actively reducing risk o Focus on maximizing return on capital o Executing the right strategy Unlocking the global potential 2
Slide 3: Proactive steps have been taken to improve capital efficiency
Proactive steps have been taken to improve capital efficiency o Significant risk reductions implemented - Limited direct equity exposure - Interest rate risks lowered - Guarantees on products lowered - Hedging of guarantees - Asset and liability matching o Disciplined liquidity management o Strong g
Slide 4: Strong capital position
Strong capital position Capital position as of June 30, 2008 Insurance Insurance Group Group Directive Directive (IGD) (IGD) 205% solvency solvency ratio ratio S&P S&P risk-based risk-based insurance insurance capital capital model model excess excess capital capital in in country country units unit
Slide 5: Limited direct equity exposure
Limited direct equity exposure Total investments General account Shares EUR 344 billion EUR 127 billion EUR 3.5 billion Off balance sheet Loans Canadian 27% 18% Universal Life Other 19% 7% Other Real estate 40% 2% General Shares account 3% 37% Private Equities Policyholder Bonds equity& account 70%
Slide 6: Equity market impact on earnings and capital
Equity market impact on earnings and capital Based on equity markets as of June 30, 2008 Impact on earnings Impact on capital (12 month period, EUR million) (EUR million) Assumed Assumed equity market equity market decline of 10% 20% decline of 10% 20% -200 -200 -450 -500 o Lower fees o Direct expos
Slide 7: Active management of US investment portfolio
Active management of US investment portfolio Shifts in US investment portfolio EUR 78.7 billion as per June 30, 2008 o Increased Cash position o IG Corporate bond actions: Cash/Treasuries/Agency – Reduced total exposure High Yield Corporate – Increased diversification Emerging Markets Debt – Increas
Slide 8: Significant shift into higher rated assets
Significant shift into higher rated assets Subprime in US investment portfolio EUR 2.5 billion as per June 30, 2008 o Increased quality o Limited impairments o Subprime CDOs of EUR 13 million 65% 71% 81% 87% 95% 99% 99% 83% 2001 2002 2003 2004 2005 2006 2007 1H08 AAA & AA A BBB BIG CMBS in US invest
Slide 9: Reduced exposure to financials
Reduced exposure to financials Financials as % of general account assets in US investment portfolio EUR 9.9 billion as per June 30, 2008 o Actively reduced financial sector exposure, esp. in 2007 and 2008 o 20% reduction of stakes in financials in 1H08 o USD 3.6 billion of gross sales, with a net re
Slide 10: Impact of potential credit impairments manageable
Impact of potential credit impairments manageable Impact on IFRS net income Impact on available capital Impact on Impact on IFRS net IFRS net available available Losses DAC offset Taxes income income Losses DAC offset Taxes capital capital No DAC offset -445 -550 -624 -780 336 -1.200 420 -1.200 240
Slide 11: Fundamentally attractive industry
Fundamentally attractive industry Attractive prospects for life insurance and pension companies: o Fundamental demographic and economic changes ... generating new customers and new needs… … driving demand for financial solutions o Opportunities arising from current market conditions Unlocking the gl
Slide 12: AEGON a pure life and pensions company
AEGON a pure life and pensions company o AEGON has a sound business model o Our business is to attract long term liabilities and invest in long term assets - Assets and liabilities matched - Long dated illiquid liabilities Unlocking the global potential 12
Slide 13: Strong liquidity position
Strong liquidity position Liquidity management Stress scenario Assumptions: o Extreme possibility of ‘frozen’ markets for (EUR billion) years anticipated 80 o Impaired capital markets liquidity test 60 assumes an extended period and normal liquidity only resuming in 2 years 40 20 Results: 0 o Our li
Slide 14: Strategic priorities to improve performance
3 strategic priorities to improve performance Reallocate capital towards businesses with higher growth and 1 return prospects 2 Improve growth and returns from existing businesses 3 Manage AEGON as an international group Unlocking the global potential 14
Slide 15: Optimize capital allocation
Optimize capital allocation 1 Reallocate capital towards businesses with higher growth and return prospects Geographic mix Capital allocation 5-10% Global businesses 15-25% New markets* 10% 30% 25-35% Western Europe 60% 40-50% US 2007 Target allocation 2012 * New markets = Central & Eastern Europe,
Slide 16: Improve growth and returns from existing businesses
3 strategic priorities to improve performance 2 Improve growth and returns from existing businesses o Reshape business model in Canada o Implementation of plan to improve return on capital in US by 100 bps o Release of EUR 315 million through innovative securitization in the UK Unlocking the global
Slide 17: Further release of capital
Further release of capital o Enhance the Group’s financial flexibility: - Securitizations of in-force life insurance and pension books - De-risking o Further opportunities are explored to: - Improve capital efficiency - Optimize capital allocation - Improve returns Unlocking the global potential 17
Slide 18: Manage AEGON as an international group
3 strategic priorities to improve performance 3 Manage AEGON as an international group o Asset management o Variable annuities o Life reinsurance Unlocking the global potential 18
Slide 19: AEGON: an attractive investment case
AEGON: an attractive investment case o Strong financial position o Action to further release capital o Focus on maximizing return on capital o Clear direction, priorities and targets Well positioned for the future Unlocking the global potential 19
Slide 20: Q&A
Unlocking the global potential Q&A Unlocking the global potential 20
Slide 21: For questions please contact Investor Relations
Unlocking the global potential For questions please contact Investor Relations +31 70 344 8305 [email protected] P.O. Box 85 2501 CB The Hague The Netherlands Unlocking the global potential 21
Slide 22: Upcoming events
Upcoming events 6 November 2008 AEGON Q3 2008 Results 13 November 2008 Cheuvreux Conference, New York Jos Streppel 24 November 2008 AEGON Analyst and Investor Day, London 4 December 2008 Société Générale Conference, Paris Alex Wynaendts Unlocking the global potential 22
Slide 23: Cautionary note regarding forward-looking statements
Cautionary note regarding forward-looking statements Cautionary note regarding forward-looking statements The statements contained in this presentation that are not historical facts are forward-looking statements as defined in the US Private Securities Litigation Reform Act of 1995. The following ar
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