Aegon Ltd. · EURONEXT:AGN
Aegon — Analyst & Investor Conference - London 2016
25 slides from Aegon's conference presentation, Jan 13, 2016
Slide 1: United Kingdom & Ireland
United Kingdom & Ireland Adrian Grace Clare Bousfield CEO CFO Analyst & Investor Conference - London - January 13, 2016
Slide 2: Today’s storyline
Today’s storyline • Delivered an award winning unique multi-channel platform Achievements • Successful implementation of significant regulatory changes since 2010 • Reduced operating costs by ~35% • Simplify our business Priorities going • Maintain competitive cost base forward • Continue to grow, u
Slide 3: Achievements on previous targets
Achievements on previous targets 3
Slide 4: Delivering significantly improved results
Delivering significantly improved results Underlying earnings Operating expenses Operational free cash flow* GBP million # million GBP million GBP million 175 120 300 3 125 100 250 80 200 2 75 60 150 25 40 100 1 -25 20 50 -75 0 0 0 2013 2014 2015 2013 2014 2015 -125 annualized annualized Pension fle
Slide 5: Good progress in 2015 against a challenging regulatory landscape
Good progress in 2015 against a challenging regulatory landscape 2015 Target Delivery Key drivers • Operating cost reductions achieved by end 2011, with cost Reduce operating base reduced a further 5% to ~35% despite growing customer expenses by 25% numbers Revised OFCF target of GBP 150 million ~
Slide 6: Committed to executing on the strategic growth plan
Committed to executing on the strategic growth plan • We will split our company into a ‘digital future’ & a ‘legacy past’ • We will grow our capital-light, fee-based platform business providing customer solutions ‘to & through’ retirement via multiple distribution channels • We will upgrade customer
Slide 7: Priorities going forward
Priorities going forward 7
Slide 8: Executing on strategy
Executing on strategy • Digital engagement to drive asset • Maintain stable cost base consolidation and growth • Simplify the business by splitting into • Capturing more of the value chain Digital Solutions & Legacy and fulfill customer promise • Continue upgrading clients to the • Further expand wo
Slide 9: Strong growth potential in the UK
Strong growth potential in the UK Driving customers to lower …in one of the biggest markets …has created the need to rethink cost digital platform & in the world… traditional business models Retiready… Projected AUM Growth 2013-20 Advisor 3% pa Fuelled by pension freedom reforms £343bn Key value dri
Slide 10: Leading the UK market in transforming the customer journey
Leading the UK market in transforming the customer journey Multi-channel, ‘to & thru’ proposition on …which is delivering significant …creating a low cost platform with a single digital platform… momentum… sustainable income streams Existing business £6.4bn Pro- tection Annuity Pension book book Pla
Slide 11: Clear competitive space to be the retirement expert
Clear competitive space to be the retirement expert… 243,000 Decumulation £3.7bn of assets added to the Aegon platform Aegon platform in 2015 customers in 2015 Investment & asset Risk based products management capabilities Omni channel: Retail, Advice partnerships Workplace & Non-advised Upgrade New
Slide 12: Simplifying our business
Simplifying our business 12
Slide 13: Simplified financial reporting (DAC)
Simplified financial reporting (DAC) Upgrade Plan • Change the DAC recoverability test to reflect managing Change in the UK as two separate businesses – Digital Solutions DAC policy and Existing Business • Engaging customer-centric, digital • Recognizing the upgrade plan service • Improved communica
Slide 14: Exploring options for the annuity book
Exploring options for the annuity book GBP 170 million p.a. ~GBP 9 billion ~GBP 1 billion ~250,000 customers new business from of reserves of capital supporting internally vesting (net of reinsurance) our annuity book annuities • New vesting annuities from our existing • Aegon UK stopped actively wr
Slide 15: Cash and capital deployment
Cash and capital deployment 15
Slide 16: Solid Solvency II capital position
Solid Solvency II capital position • Year-end 2015 ratio estimated to be ~140% based on the approved partial internal model Solvency II SCR by risk type (in %) • Remaining uncertainty is the extent of the loss- absorbing capacity of taxes. Potential impact on Solvency II ratio is approximately minus
Slide 17: Remittances to the group to be resumed in 2017
Remittances to the group to be resumed in 2017 Capital management zones • Aegon UK’s Solvency II ratio Assessment of accelerated growth and/or is estimated to be ~140% at Opportunity additional shareholder distribution year-end 2015 150% SCR • The target capitalization range Capital deployment and d
Slide 18: Solvency II sensitivities are relatively limited
Solvency II sensitivities are relatively limited Key drivers Solvency II sensitivities • Digital Solutions and existing business (in percentage points) income is exposed to equity markets ∆ SII OFCF • Annuities and pension scheme are Scenario Impact (GBP million per year) exposed to longevity improv
Slide 19: Drivers for OFCF movements
Drivers for OFCF movements Main categories affecting Solvency II operational free cash flows • We continue to grow our platform to scale which is targeted in 2017 • As we focus on building our digital business and consider our options for our residual unit-linked business, the expense assumptions ma
Slide 20: Delivering on UK platform promise as #1 retirement specialist
Delivering on UK platform promise as #1 retirement specialist Management actions Delivering results Existing business Operational excellence • Generate annual cash flows Pro- • Maintain cost base at competitive level tection of ~GBP 100 million • Continue upgrading clients to platform Annuity Pensio
Slide 21: Appendix
Appendix 21
Slide 22: Regulatory change has been approached as an opportunity
Regulatory change has been approached as an opportunity 2009 2015 Solvency II & Regulatory change Established Independent Retail distribution Unprecedented 2012 governance committee review Retail distribution 2013 2015 2011 DWP introduce Pensions DWP introduce auto review live charge caps Flexibilit
Slide 23: Capturing more of the value chain to fulfill customer promise
Capturing more of the value chain to fulfill customer promise Asset Protection Product administration Advice and management and guarantees and platforms customer experience • Work with Kames to • Deliver and grow best of • Complete digitisation, • Leverage leading position manufacture ‘own label’ br
Slide 24: For questions please contact Investor Relations
For questions please contact Investor Relations +31 70 344 8305 [email protected] P.O.Box 85 2501 CB The Hague The Netherlands
Slide 25: Disclaimer
Disclaimer Cautionary note regarding non-IFRS measures This document includes the following non-IFRS financial measures: underlying earnings before tax, income tax and income before tax. These non-IFRS measures are calculated by consolidating on a proportionate basis Aegon’s joint ventures and assoc