Aegon Ltd. · EURONEXT:AGN
Aegon — Q1 2009 Earnings Presentation
18 slides from Aegon's earnings presentation, May 14, 2009
Slide 1: First quarter 2009 results; Embedded Value 2008
First quarter 2009 results Embedded Value 2008 Alex Wynaendts, CEO May 14, 2009
Slide 2: Key messages
Key messages o Executing on long term strategy and short term priorities o Earnings improved significantly in Q1 o Resilient profitable sales and deposits o Strong capital position o Embedded value per share of EUR 11.35 Local knowledge. Global power. 2
Slide 3: Execution of strategic priorities
Execution of strategic priorities o Capital release of EUR 0.9 billion in Q1 2009 Capital o Target capital release of EUR 1.5 billion in 2009 o EUR 150 million cost measures in 2009 Costs o Approximately 1/3 realized in Q1 Contingency o Majority of additional EUR 3 billion core capital not used o Do
Slide 4: Net loss due to capital market effects and impairments
Net loss due to capital market effects and impairments o Net income mainly impacted by financial markets – Underlying earnings affected by lower capital markets – Impairments on bonds (EUR 320 million) and shares (EUR 66 million) – Under US GAAP, impairments would have been ~EUR 160 million lower –
Slide 5: Equity market decline in Q1 has been reversed quarter-to-date
Equity market decline in Q1 has been reversed quarter-to-date o Accelerated amortization of DPAC and reserve strengthening take quarter- end equity market levels into account – S&P index down 12% from 903 at year-end 2008 to 798 at March 31, 2009 – Fully reserved for S&P index level of 798 – Index r
Slide 6: Relatively stable new life sales
Relatively stable new life sales o New life sales of EUR 543 million – Americas sales lower due to retail life and BOLI/COLI – Group pension sales in the Netherlands held up well, decline in retail life – Increased annuities sales in the UK, more than offset by drop in pensions – Strong new life sal
Slide 7: Strong net deposits
Strong net deposits o Net deposits of EUR 1.1 billion* – Growth driven by fixed and variable annuities o Gross deposits of EUR 6.4 billion* – Continued strong fixed annuities sales – Other countries higher due to inclusion of asset management JV in China and European variable annuities Fixed (FA) an
Slide 8: Resilient value of new business
Resilient value of new business o Value of new business of EUR 201 million, up 8% – VNB in Americas flat* – VNB in the Netherlands driven by margin improvement in mortgage business – Higher VNB in the UK driven by higher annuity sales and higher margins – Lower VNB in Other countries mainly driven b
Slide 9: Solid progress on cost reduction
Solid progress on cost reduction Americas Netherlands United Kingdom o No wage increases o Reductions of contract o Restructuring IT, o Staff reductions services marketing, customer o Deferred hiring o Process re-engineering services o Reorganization o General cost savings o Cost containment o Agenc
Slide 10: Capital position remains strong
Capital position remains strong December 31, 2008 March 31, 2009 Insurance Group Directive EUR 5.6 billion ~EUR 4.6 billion (IGD) surplus capital (183%) (~170%) S&P risk-based insurance capital model excess capital EUR 2.9 billion EUR 2.7 billion above AA level o Decline in IGD surplus capital mainl
Slide 11: Excess capital supported by pro-active capital management
Excess capital supported by pro-active capital management Excess capital development Q1 2009 (EUR billion) 2.9 (0.2) (0.6) 0.3 2.7 0.6 (0.6) 0.3 Impact from capital markets : EUR 1.4 billion Q4 08 Excess Credit Rating Interest rates Capital De-risking Other Q4 Q1 09 Excess capital impairments migrat
Slide 12: US impairments Q1 2009
US impairments Q1 2009 EUR million IFRS US GAAP ABS 133 CMBS - RMBS 72 Subtotal structured assets 205 Corporate – private 2 Corporate – public 91 Subtotal corporate 93 Commercial mortgage loans 27 Subtotal net credit impairments 325 Common equity impairments 5 Total recoveries -2 Total net impairmen
Slide 13: Active portfolio management
Active portfolio management o Increased allocation to cash, treasuries and short term paper in US portfolio o Prudent to invest in low risk investments in periods of widening credit spreads o Run-off of institutional spread-based balances accelerates in 2H09 o Begin reinvestment in credit risk in se
Slide 14: Embedded value EUR 11.35 per share
Embedded value EUR 11.35 per share Δ constant EUR billion, except per share data 2008 2007 Δ currency Embedded value life insurance 22.9 25.9 (11)% (10)% Total embedded value (TEV) 18.5 21.7 (15)% (13)% TEV per common share* 11.35 13.44 (16)% (14)% Value of new business 0.8 0.9 (10)% (2)% Embedded V
Slide 15: Capital markets impact Embedded Value Life Insurance
Capital markets impact Embedded Value Life Insurance Embedded value life insurance movement (EUR billion) Capital markets impact 0.9 (3.2) 0.8 25.9 (2.0) EV operating return 0.5 22.9 EUR 1.7 billion (0.3) 0.4 2007 Value of new Inforce Long term Change in Currency Other Capital 2008 business performa
Slide 16: Key messages
Key messages o Executing on long term strategy and short term priorities o Earnings improved significantly in Q1 o Resilient profitable sales and deposits o Strong capital position o Total embedded value of EUR 18.5 billion o Fundamentals of our business remain strong Local knowledge. Global power.
Slide 17: Q&A
Q&A For questions please contact: Greg Tucker Dick Schiethart +31 70 344 8956 [email protected] Local knowledge. Global power. 17
Slide 18: 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