Aegon Ltd. · EURONEXT:AGN
Aegon — Corporate Update (October 2008)
21 slides from Aegon's corporate update, Oct 28, 2008
Slide 1: AEGON secures EUR 3 billion of core capital
AEGON secures EUR 3 billion of core capital Alex Wynaendts – CEO AEGON N.V. October 28, 2008 1
Slide 2: Highlights
Highlights o AEGON to reinforce capital buffer substantially above AA level requirements – AEGON secures EUR 3 billion of core capital from the Dutch State, via Vereniging1 AEGON – Acceleration of de-risking and capital release actions – AEGON to forego final dividend for 2008 o AEGON expects to rep
Slide 3: Background to an exceptional situation
Background to an exceptional situation o AEGON expects to report strong capital position per end Q3: – EUR 300 million in excess of its operating units AA rating requirements – Insurance Group Directive (IGD) capital surplus of EUR 5 billion (solvency ratio of 160%) o Severe market disruption since
Slide 4: Structure
Structure Capital facility EUR 3 billion Public Market Vereniging AEGON Dutch State EUR ~89% of ~11% of 100% of EUR common common preferred Non-voting securities shares shares shares EUR 3 billion AEGON N.V. 4
Slide 5: Summary of term sheet
Summary of term sheet Instrument Securities qualifying as core capital o No voting rights o Non-transferable o Minimize any future dilution Maturity Perpetual Issue Price EUR 4 per security Repurchase option AEGON can repurchase securities at any time o 250 million within first year at price between
Slide 6: Governance & remuneration
Governance & remuneration o Dutch State representation on AEGON Supervisory Board - Two seats granted - Formal appointment by Annual General Meeting of Shareholders - Membership of Audit and Compensation and Nominating Committees o State representatives approval required on certain decisions o AEGON
Slide 7: Key benefits of the structure
Key benefits of the structure The structure provides the following benefits to AEGON Enhanced financial strength Capital buffer against severe stress scenario Flexible structure Ability to repurchase Permanence of capital AEGON’s option to convert Regulatory & rating agency Enhanced capital ratios c
Slide 8: Q3 results impacted by financial markets
Q3 results impacted by financial markets o Underlying earnings before tax expected to be approximately EUR 500 million, mainly affected by lower equity markets and unfavorable mortality experience. o Net loss of approximately EUR 350 million mainly impacted by – Underperformance of fair value items
Slide 9: Equity market sensitivity increased due to market deterioration
Equity market sensitivity increased due to market deterioration Based on equity markets as of September 30, 2008 Impact on earnings Impact on capital (12 month period, EUR million) (EUR million) Assumed Assumed equity market equity market decline of 20% 40% decline of 20% 40% -700 -900 -1,600 -1,900
Slide 10: Interest rate sensitivity
Interest rate sensitivity Based on interest rates as of September 30, 2008 Impact on earnings Impact on capital (12 month period, EUR million) (EUR million) Assumed* Assumed* interest rate interest rate decline of 1% 2% decline of 1% 2% 270 175 -250 -450 o Lower funding costs o Reserve strengthening
Slide 11: Impact of potential credit impairments
Impact of potential credit impairments 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 (USD millio
Slide 12: Capital position
Capital position AEGON to reinforce capital buffer significantly above AA level requirements Expected Expected June 30, 2008 September 30, 2008 changes in Q4 Capital Base Ratio + Underlying 74% 71% earnings (debt / equity ratio) S&P risk-based insurance - Market capital model excess movements EUR 84
Slide 13: Ongoing acceleration of de-risking and capital release
Ongoing acceleration of de-risking and capital release Capital preservation and risk mitigation actions important to enhance capital buffer Complete execution on identified capital preservation and risk mitigation actions, including: o Lowering investment risk – New money – Existing portfolio o Risk
Slide 14: 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 15: Conclusions
Conclusions o AEGON secures EUR 3 billion of core capital o Commitment to maintaining strong capital position o Ongoing acceleration of capital release and risk reduction o Liquidity remains strong o A sound business model 15
Slide 16: Q&A
Q&A 16
Slide 17: 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 17
Slide 18: Appendix: Supervisory Board decisions that require approval of State representatives
Appendix: Supervisory Board decisions that require approval of State representatives o State representatives approval required on certain decisions: o Issue or repurchase of AEGON shares o Listing and delisting on stock exchange o Acquisitions or divestitures amounting to 25% or more of AEGON’s equi
Slide 19: Appendix: Vereniging AEGON
Appendix: Vereniging AEGON o The purpose of the Vereniging is the balanced representation of the interests of AEGON, as well as those of policyholders, employees, shareholders and other relations of the Company o The Vereniging is committed to the long-term continuity of AEGON o Represents approxima
Slide 20: Upcoming events
Upcoming events Jos Streppel, 6 November 2008 AEGON Q3 2008 Results Eric Goodman 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 20
Slide 21: 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