-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J3aUUoI3M+lBH2wDc9OPpCr8QordphiGdyxokBS5HR/5BcWsT5nDTTGozn2hjyjK NWw2kDG8WuSbcveiEoB6BQ== 0001193125-10-120172.txt : 20100514 0001193125-10-120172.hdr.sgml : 20100514 20100514112318 ACCESSION NUMBER: 0001193125-10-120172 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20100514 FILED AS OF DATE: 20100514 DATE AS OF CHANGE: 20100514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AEGON NV CENTRAL INDEX KEY: 0000769218 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10882 FILM NUMBER: 10831409 BUSINESS ADDRESS: STREET 1: AEGONPLEIN 50 STREET 2: PO BOX 85 CITY: THE HAGUE STATE: P7 ZIP: 2501 CB BUSINESS PHONE: 011-31-70-344-7308 MAIL ADDRESS: STREET 1: AEGONPLEIN 50 STREET 2: PO BOX 85 CITY: THE HAGUE STATE: P7 ZIP: 2501 CB 6-K 1 d6k.htm FORM 6-K Form 6-K

Securities and Exchange Commission

Washington, D.C. 20549

Form 6-K

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d/16 of

the Securities Exchange Act of 1934

May 2010

AEGON N.V.

AEGONplein 50

2591 TV THE HAGUE

The Netherlands


AEGON’s press release, dated May 12, 2010, is included as appendix and incorporated herein by reference.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

     

AEGON N.V.

      (Registrant)
Date: May 14, 2010     By  

/s/    E. Lagendijk

      E. Lagendijk
      Executive Vice President and
      General Counsel
EX-99.1 2 dex991.htm EXHIBIT 99.1 Exhibit 99.1

Exhibit 99.1

LOGO

AEGON posts strong results for first quarter 2010

 

¡    Increase in underlying earnings and net income

 

  - Underlying earnings before tax increase to EUR 488 million, supported by improved financial markets

 

  - Impairments decline to EUR 150 million, their lowest level in seven quarters

 

  - Net income amounts to EUR 372 million, a strong improvement compared with first quarter 2009

 

  - Return on equity of 10%

 

¡    Robust sales in key areas

 

  - New life sales of EUR 538 million, increase in Americas and Central & Eastern Europe offset by Spain and United Kingdom

 

  - Gross deposits, excluding run-off businesses, of EUR 7.8 billion, driven mainly by strong pension sales in the Americas

 

  - Value of new business declines mainly due to decrease in fixed annuity sales in United States and immediate annuities in United Kingdom as a result of repricing

 

¡    Continued strong capital position

 

  - Excess capital amounts to EUR 3.7 billion, as earnings contribution was offset by higher capital requirements

 

  -

Insurance Group Directivea capital surplus of EUR 7.0 billion, equivalent to solvency ratio of 205%

 

  - Shareholders’ equity increases to EUR 7.28 per common share

Statement of Alex Wynaendts, CEO

AEGON’s first quarter results demonstrate the strength of our business during what continues to be an uncertain economic environment. We saw improved underlying earnings and net income, as well as strong deposits and new life sales. AEGON’s excess capital continues to provide the substantial buffer we feel is necessary at this time. During the first three months of the year, deposits totaled EUR 7.8 billion, a substantial increase of 16% over the previous quarter and a further indication of the continued strength of AEGON’s franchise. In the current environment, we decided to reprice fixed annuities in the United States as well as immediate annuities in the United Kingdom. These actions led to a modest decline in sales in the quarter and a lower value of new business overall. Impairments to AEGON’s investment portfolio showed consecutive improvement, continuing their downward trend. All in all, we are pleased with these first results of 2010 as they confirm that our strategic priorities are the right ones.”

KEY PERFORMANCE INDICATORS

 

      Notes    Q1 2010     Q4 2009     %     Q1 2009     %  

amounts in EUR millions

   b                               

Underlying earnings before tax

   1    488      478      2      (98   —     

Net income

   2    372      393      (5   (173   —     

New life sales

   3    538      557      (3   567      (5

Gross deposits excluding run-off businesses

   4    7,775      6,723      16      7,532      3   

Value of new business (VNB)

      146      216      (32   201      (27

Return on equity

   5    10.1   9.4   7      (5.1 %)    —     

For notes see page 17.

Supplements: AEGON’s Q1 2010 Financial Supplement and Condensed Consolidated Interim Financial Statements are available on www.aegon.com


 

 

STRATEGIC HIGHLIGHTS

 

  

 

LOGO

 

 

 

 

¡

   Completed sale of Dutch funeral insurance business

 

¡

   Operating expenses decline 4% mainly as a result of cost saving measures

 

¡

   Run-off of US institutional spread-based business on track

 

¡

   Received 9th provincial license in China

Portfolio review

AEGON is continuing to assess its businesses to ensure they meet requirements in terms of earnings growth, cash flow potential, return on capital and customer life cycle needs. As part of this review, AEGON earlier this year announced the sale of its funeral insurance business in the Netherlands for EUR 212 million. The transaction was completed on April 1 and will result in a modest book gain in the second quarter 2010.

Cost savings

To improve returns from its businesses, AEGON implemented a number of measures to reduce operating expenses. As a result, operating expenses declined 4% compared with the first quarter of 2009 to EUR 812 million mainly driven by cost reductions, lower restructuring expenses and currency movements, partly offset by higher regulatory costs.

Operational excellence

AEGON differentiates itself by competing on customer service levels and quality products and, in general, not on pricing. Though AEGON is already a cost-efficient provider, the company has identified possible further efficiencies, such as reducing the number of administration platforms, reducing processing time and increasing productivity, while improving the level of customer service. AEGON is also investing in its web capabilities to further improve customer service levels, lower distribution costs and improve communications with customers.

Capital preservation

During the first quarter, a further EUR 0.1 billion in capital was released from AEGON’s businesses, primarily the result of a reduction in asset balances from run-off businesses. The release in the first quarter of 2010 was substantially lower than in previous quarters.

Manage AEGON as an international company

Starting with the first quarter of 2010, AEGON will report results from AEGON Asset Management separately within its ‘New Markets’ segment. AEGON Asset Management was launched at the beginning of October 2009 and brings together asset management businesses from around the world.

AEGON’S AMBITION

To be a global leader in helping customers secure their financial futures

AEGON’S STRATEGIC PRIORITIES

 

 

¡

   Rebalance capital allocation towards businesses with higher growth and higher return prospects

 

¡

   Improve growth and returns from existing businesses

 

o

   Reduce financial markets risk

 

o

   Manage AEGON as an international company
   …resulting in sustainable profitable growth.

 

 

   Page 2 of 19


 

  

 

LOGO

 

 

 

FINANCIAL OVERVIEW

 

EUR millions

   Q1 2010     Q4 2009     %     Q1 2009     %  

Underlying earnings before tax

          

Americas

   379      350      8      (146   —     

The Netherlands

   104      95      9      72      44   

United Kingdom

   28      33      (15   8      —     

New markets

   46      48      (4   31      48   

Holding and other

   (69   (48   (44   (63   (10
                      

Underlying earnings before tax

   488      478      2      (98   —     

Fair value items

   (16   (164   90      (167   90   

Realized gains/(losses) on investments

   126      315      (60   144      (13

Impairment charges

   (150   (212   29      (385   61   

Other income/(charges)

   23      5      —        (24   —     

Run-off businesses

   (60   (47   (28   77      —     
                      

Income before tax

   411      375      10      (453   —     

Income tax

   (39   18      —        280      —     
                      

Net income

   372      393      (5 )    (173   —     
                      

Net income / (loss) attributable to:

          

Equity holders of AEGON N.V.

   371      393      (6   (173   —     

Minority Interest

   1      —        —        —        —     

Net underlying earnings

   381      390      (2 )    (64   —     
                      

Commissions and expenses

   1,586      1,406      13      1,635      (3

of which operating expenses

   812      840      (3   847      (4
                      

New life sales

          

Life single premiums

   1,930      2,017      (4   1,974      (2

Life recurring premiums annualized

   345      355      (3   370      (7
                      

Total recurring plus 1/10 single

   538      557      (3 )    567      (5

New life sales

          

Americas

   145      143      1      142      2   

The Netherlands

   62      93      (33   62      —     

United Kingdom

   265      247      7      279      (5

New markets

   66      74      (11   84      (21
                      

Total recurring plus 1/10 single

   538      557      (3 )    567      (5

New premium production accident and health insurance

   148      125      18      164      (10

New premium production general insurance

   14      21      (33   12      17   
                      

Gross deposits (on and off balance)

          

Americas

   5,403      4,404      23      5,936      (9

The Netherlands

   743      1,107      (33   462      61   

United Kingdom

   36      35      3      52      (31

New markets

   1,593      1,177      35      1,082      47   
                      

Total gross deposits excluding run-off businesses

   7,775      6,723      16      7,532      3   

Run-off businesses

   —        (4   —        674      —     
                      

Total gross deposits

   7,775      6,719      16      8,206      (5

Net deposits (on and off balance)

          

Americas

   524      385      36      2,004      (74

The Netherlands

   67      619      (89   55      22   

United Kingdom

   29      29      —        49      (41

New markets

   121      18      —        (314   —     
                      

Total net deposits excluding run-off businesses

   741      1,051      (29 )    1,794      (59

Run-off businesses

   (2,199   (6,513   66      (2,954   26   
                      

Total net deposits

   (1,458   (5,462   73      (1,160   (26
                      

 

REVENUE GENERATING INVESTMENTS

 

          
      Mar. 31,
2010
    Dec. 31,
2009
    %              

Revenue generating investments (total)

   387,912      362,832      7       

Investments general account

   142,254      134,205      6       

Investments for account of policyholders

   135,385      125,845      8       

Off balance sheet investments third parties

   110,273      102,782      7       

 

 

   Page 3 of 19


 

 

OPERATIONAL HIGHLIGHTS

 

  

 

LOGO

 

 

 

Underlying earnings before tax

AEGON’s underlying earnings before tax increased to EUR 488 million in the first quarter, a considerable improvement compared with the same period last year, the result mainly of improved financial markets and cost savings measures.

In the Americas, underlying earnings totaled USD 524 million compared with a loss of USD 189 million a year earlier. A recovery in equity markets and higher account balances and investment income led to better results.

Underlying earnings in the Netherlands increased to EUR 104 million, up from EUR 72 million in the first quarter last year. This increase was mainly the result of higher investment income and lower operating expenses.

In the United Kingdom, underlying earnings amounted to GBP 25 million, a substantial increase from GBP 9 million in the first quarter 2009, as investment income and fees benefitted from the improvement in equity and bond markets. Technical results also improved, as a result of lower than expected claims.

Underlying earnings from New Markets increased to EUR 46 million due to improved results from most operating units and the inclusion for the first time of earnings from AEGON Asset Management.

Expenses for AEGON’s holding company increased in the first quarter 2010 to EUR 69 million, primarily a result of higher funding costs.

Fair value items

In the first quarter, fair value items showed an overall underperformance of EUR 16 million, a significant improvement compared with last year.

Overperformance in the Netherlands is mainly a result of movements in the fair value of guarantees and related hedges. This was offset by an under-performance in the Americas, due primarily to a decline in the value of both the company’s macro equity hedge and its real estate related assets. In addition, a further narrowing of AEGON’s own credit spread and fair value movements of derivatives resulted in a loss of EUR 27 million for the holding company.

Gains on investments

In the first quarter, realized gains on investments amounted to EUR 126 million. In both the United States and the Netherlands, gains were related primarily to the sale of bonds, driven by asset and liability management.

Impairment charges

Compared with the first quarter of 2009, net impairments decreased sharply to EUR 150 million, their lowest level for seven quarters, though still above AEGON’s long-term average expectations. Included are impairments related to the US-based financial services provider Ambac of EUR 43 million.

Run-off businesses

AEGON’s run-off businesses in the Americas recorded a loss for the first quarter of EUR 60 million, in line with the company’s expectations.

Income tax

Tax charges in the first quarter amounted to EUR 39 million and included a EUR 43 million tax benefit related to cross-border intercompany reinsurance transactions between the United States and Ireland.

New life sales

Increased new life sales in the Americas and Central & Eastern Europe were more than offset by decreases in the United Kingdom and Spain, resulting in total new life sales for the first quarter of 2010 of EUR 538 million.

Deposits

Gross deposits, excluding run-off businesses, rose 3% to EUR 7.8 billion compared with the first quarter last year. US pensions and third-party asset management showed increases, while deposits of fixed annuities were significantly lower following repricing. All country units recorded net deposits in the first quarter, which totaled EUR 741 million, excluding run-off businesses. The company’s US pension business added a new bank distribution partner during the quarter, and accounted for the majority of net deposits.

 

 

   Page 4 of 19


 

  

LOGO

 

 

 

Value of new business

AEGON’s value of new business declined to EUR 146 million in the first quarter. Higher value of new business from the Netherlands and variable annuities in Europe was more than offset by decreases in the United Kingdom, the Americas and Spain. In the United Kingdom immediate annuity sales and in the United States fixed annuity sales declined following repricing, while lower sales of risk products led to a lower value of new business in Spain. AEGON’s internal rate of return on new business increased to 19% in the first quarter, due to improvements in both the Americas and the Netherlands.

Revenue-generating investments

Revenue-generating investments totaled EUR 388 billion, an increase of 7% compared with year-end 2009. The increase was due primarily to a strengthening of the US dollar against the euro and improvements in market values.

Capital management

 

-

At the end of the first quarter, AEGON’s core capital, excluding revaluation reserves, amounted to EUR 17 billion, or 74% of the company’s total capital base6,7.

 

- Revaluation reserves at March 31, 2010 amounted to a negative EUR 474 million, a significant improvement from year-end 2009 levels, mainly due to an increase in the value of fixed income securities.

 

- Shareholders’ equity improved to EUR 14.5 billion as a result of improved revaluation reserves, strengthening of the US dollar against the euro and net income of EUR 372 million for the first quarter.

 

- At March 31, 2010, AEGON’s Insurance Group Directive (IGD) capital surplus totaled EUR 7.0 billion, equivalent to a solvency ratio of 205%.

 

- Excess capital above AA capital adequacy requirements totaled EUR 3.7 billion.

Risk management

Standard & Poor’s has upgraded its assessment of AEGON’s enterprise risk management (ERM) framework to ‘strong’, reflecting significant advances the company has made in developing its risk management framework and the fact that this framework is now fully embedded in its business.

AEGON is engaged in the process of obtaining the European’s Commission’s final consent to the terms relating to AEGON’s participation in the capital support program of the Dutch government at the end of 2008. In November 2009, AEGON submitted a plan, through the Dutch Ministry of Finance, to the European Commission to demonstrate that its businesses are fundamentally sound and viable. This plan is a requirement for all financial institutions that received state support during the financial crisis. AEGON is not in a position to speculate about the timing or final outcome of this process; nor to discuss any details relating to the process underway.

 

 

   Page 5 of 19


 

 

APPENDIX I • Americas •The Netherlands •United Kingdom •New Markets

 

  

 

LOGO

 

 

 

FINANCIAL OVERVIEW, Q1 2010 GEOGRAPHICALLY

 

                 amounts in million EUR (unless otherwise stated)  
     Americas     The
Netherlands
    United
Kingdom
    New
Markets
    Holding,
other
activities &
eliminations
    Total
EUR
 

Underlying earnings before tax by line of business

            

Life

   148      39      21      21      —        229   

Individual savings and retirement products

   138      —        —        (6   —        132   

Pensions

   62      47      9      4      —        122   

Life reinsurance

   30      —        —        —        —        30   

Non-life

   —        7      —        8      —        15   

Distribution

   —        11      (2   —        —        9   

Asset Management

   —        —        —        7      —        7   

Other

   —        —        —        —        (69   (69

Share in underlying earnings before tax of associates

   1      —        —        12      —        13   
                                    

Underlying earnings before tax

   379      104      28      46      (69   488   

Fair value items

   (86   91      3      3      (27   (16

Realized gains/(losses) on investments

   24      96      3      3      —        126   

Impairment charges

   (139   (1   (8   (2   —        (150

Other income/(charges)

   —        —        23      —        —        23   

Run-off businesses

   (60   —        —        —        —        (60
                                    

Income before tax

   118      290      49      50      (96   411   

Income tax

   39      (67   (26   (13   28      (39
                                    

Net income

   157      223      23      37      (68   372   
                                    

Net underlying earnings

   295      77      25      32      (48   381   
EMPLOYEE NUMBERS   
     At
Mar. 31,
2010
    At
Dec. 31,
2009
                         

Employees excl. agents

   25,204      25,090           

Agents

   3,044      3,292           
                    

Total number of employees excluding Associates

   28,248      28,382           

AEGON’s share of employees (including agents) in Associates

   2,854      2,582           
                    

Total

   31,102      30,964           

 

 

   Page 6 of 19


 

  

 

LOGO

 

 

 

AMERICAS

 

USD millions

   Q1 2010     Q4 2009     %     Q1 2009     %  

Underlying earnings before tax by line of business

          

Life and protection

   194      237      (18   198      (2

Fixed annuities

   121      116      4      72      68   

Variable annuities

   69      50      38      (489   —     

Retail mutual funds

   —        (3   —        (4   —     
                      

Individual savings and retirement products

   190      163      17      (421   —     

Employer solutions & pensions

   86      69      25      47      83   

Life reinsurance

   42      22      91      (30   —     

Canada

   11      21      (48   21      (48

Latin America

   1      (2   —        (4   —     
                      

Underlying earnings before tax

   524      510      3      (189   —     

Fair value items

   (120   (222   46      (1   —     

Realized gains/(losses) on investments

   33      153      (78   (4   —     

Impairment charges

   (191   (231   17      (370   48   

Other income/(charges)

   —        —        —        1      —     

Run- off businesses

   (83   (64   (30   100      —     
                      

Income before tax

   163      146      12      (463   —     

Income tax

   54      120      (55   290      (81
                      

Net income

   217      266      (18 )    (173   —     
                      

Net income / (loss) attributable to:

          

Equity holders of AEGON N.V.

   217      266      (18   (173   —     

Net underlying earnings

   408      423      (4 )    (121   —     
                      

Commissions and expenses

   1,355      1,159      17      1,325      2   

of which operating expenses

   501      559      (10   565      (11
                      

New life sales

          

Life single premiums

   194      184      5      91      113   

Life recurring premiums annualized

   183      197      (7   176      4   
                      

Total recurring plus 1/10 single

   202      216      (6 )    185      9   

Life & protection

   121      124      (2   107      13   

Employer solutions & pensions

   9      6      50      10      (10

Life reinsurance

   47      58      (19   52      (10

Canada

   15      20      (25   12      25   

Latin America

   10      8      25      4      150   
                      

Total recurring plus 1/10 single

   202      216      (6 )    185      9   

New premium production accident and health insurance

   184      184      —        203      (9
                      

Gross deposits (on and off balance) by line of business

          

Life & protection

   3      2        3      —     

Fixed annuities

   185      641      (71   2,114      (91

Variable annuities

   809      785      3      708      14   

Retail mutual funds

   976      859      14      306      —     
                      

Individual savings & retirement products

   1,970      2,285        3,128      (37

Employer solutions & pensions

   5,217      4,232      23      4,514      16   

Life reinsurance

   1      —        —        —        —     

Canada

   286      197      45      85      —     
                      

Total gross deposits excluding run-off businesses

   7,477      6,716      11      7,730      (3 ) 

Run-off businesses

   —        27        877      —     
                      

Total gross deposits

   7,477      6,743      11      8,607      (13 ) 
                      

Net deposits (on and off balance) by line of business

          

Life & protection

   (15   (10     (21   29   

Fixed annuities

   (543   (128   —        1,075      —     

Variable annuities

   (23   (4   —        (2   —     

Retail mutual funds

   418      387      8      (251   —     
                      

Individual savings & retirement products

   (148   255        822      —     

Employer solutions & pensions

   1,386      516      169      1,878      (26

Life reinsurance

   (15   (17   12      (20   25   

Canada

   (482   (85   —        (49   —     
                      

Total net deposits excluding run-off businesses

   726      659      10      2,610      (72 ) 

Run-off businesses

   (3,043   (9,430     (3,847   21   
                      

Total net deposits

   (2,317   (8,771   74      (1,237   (87 ) 
                      
REVENUE GENERATING INVESTMENTS           
     Mar. 31,
2010
    Dec. 31,
2009
    %              

Revenue generating investments (total)

   305,832      307,431      (1 )     

Investments general account

   125,186      123,560      1       

Investments for account of policyholders

   73,214      71,915      2       

Off balance sheet investments third parties

   107,432      111,956      (4    

For the amounts in euro see the Financial Supplement.

 

 

   Page 7 of 19


 

  

 

LOGO

 

 

 

AMERICAS

 

 

¡

   Underlying earnings before tax increase to USD 524 million

 

¡

   Impairments decline to USD 191 million, their lowest level in seven quarters

 

¡

   Gross deposits remain strong at USD 7.5 billion, helped by demand for pension products

Underlying earnings before tax

Underlying earnings totaled USD 524 million compared with a loss of USD 189 million a year earlier. A recovery in equity markets and higher account balances and investment income led to better results.

 

 

¡

   Earnings from Life & Protection amounted to USD 194 million, a slight decrease compared with the first quarter 2009, mainly driven by adverse claim experience in the protection business.

 

¡

   Individual Savings & Retirement earnings increased to USD 190 million as variable annuities and mutual funds profited from a recovery in equity markets. Fixed annuities, meanwhile, benefited from wider spreads.

 

¡

   Earnings from Employer Solutions & Pensions increased to USD 86 million, primarily the result of further business growth and improved margins.

 

¡

   Life reinsurance earnings increased to USD 42 million, as a result of a recovery in equity markets, improved mortality and higher investment income.

 

¡

   Earnings from AEGON’s operations in Canada amounted to USD 11 million, a decline compared with last year, mainly as a result of lower mortality results.

 

¡

   Latin America, which represents AEGON’s joint ventures in Brazil and Mexico, contributed USD 1 million to earnings.

Net income

Net income from AEGON’s operations in the Americas amounted to USD 217 million, a considerable improvement from the same quarter last year. This improvement was the result of substantially higher underlying earnings, realized gains on investments and a strong decline in impairments. These factors more than offset an underperformance in fair value items and lower earnings from AEGON’s run-off businesses.

The underperformance in fair value items totaled USD 120 million, due primarily to a decline in the value of both the company’s macro equity hedge and its real estate related assets.

Realized gains on investments amounted to USD 33 million in the first quarter this year, and were related to corporate investment grade bonds sold in order to extend the average duration of assets held in some of AEGON’s investment portfolios.

At USD 191 million, net impairments remain above AEGON’s long-term expectations. Of the impairments during the first quarter, USD 60 million was related to US financial firm Ambac. The majority of these impairments consisted of structured assets for which AEGON no longer values the Ambac guarantee. Of the total impairments, USD 151 million was attributable to US housing related assets.

AEGON’s run-off businesses in the Americas recorded a loss in the first quarter of USD 83 million, in line with expectations.

Net income from AEGON’s operations in the Americas included a tax benefit of USD 54 million in the first quarter as tax charges on underlying earnings were more than offset by tax benefits on both the company’s non-underlying earnings and on cross-border intercompany reinsurance treaties.

Operating expenses

Operating expenses declined to USD 501 million as a result of lower restructuring and employee benefit plan costs and the transfer of asset management activities to AEGON Asset Management. Adjusted operating expenses remained stable as continued cost savings initiatives offset growth in the business.

Sales and deposits

New life sales increased 9% compared with the first quarter 2009 to USD 202 million. This was a result of growth across most of the company’s distribution channels, and particularly in the retail life insurance businesses across the Americas. New premium production for accident and health products declined to USD 184 million however, as higher sales from worksite marketing were more than offset by the effects of the closure of AEGON’s automotive credit business in the United States in 2009.

 

 

   Page 8 of 19


 

  

 

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Gross deposits excluding run-off businesses decreased 3% to USD 7.5 billion as higher pension, variable annuity and mutual fund deposits were offset by lower fixed annuity deposits, following repricing. In addition, written pension sales were up strongly and a new bank distribution partner for retirement products was added during the quarter. Net deposits excluding run-off businesses totaled USD 0.7 billion as pension and mutual fund inflows were partly offset by outflows from variable annuities in Canada and fixed annuities in the United States.

Value of new business

Value of new business declined to USD 71 million despite higher margins on variable annuities and mutual funds. The reduction in the value of new business was primarily the result of lower fixed annuity sales and higher assumed reserve financing costs. The internal rate of return for the quarter rose to 13%.

Revenue-generating assets

Revenue-generating assets declined to USD 306 billion, as new money inflows and the effect of improved financial markets were offset by outflows from AEGON’s run-off businesses and the transfer of assets to AEGON Asset Management.

 

 

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THE NETHERLANDS

 

EUR millions

   Q1 2010     Q4 2009     %     Q1 2009     %  

Underlying earnings before tax by line of business

          

Life and Savings

   39      34      15      35      11   

Pensions

   47      53      (11   26      81   

Non life

   7      9      (22   2      —     

Distribution

   11      1      —        9      22   

Share in underlying earnings before tax of associates

   —        (2   —        —        —     
                      

Underlying earnings before tax

   104      95      9      72      44   

Fair value items

   91      (31   —        (218   —     

Realized gains/(losses) on investments

   96      178      (46   138      (30

Impairment charges

   (1   7      —        (78   99   
                      

Income before tax

   290      249      16      (86   —     

Income tax

   (67   (45   (49   45      —     
                      

Net income

   223      204      9      (41   —     

Net income / (loss) attributable to:

          

Equity holders of AEGON N.V.

   223      204      9      (41   —     

Net underlying earnings

   77      72      7      55      40   

Commissions and expenses

   264      321      (18   307      (14

of which operating expenses

   182      258      (29   217      (16

New life sales

          

Life single premiums

   397      638      (38   391      2   

Life recurring premiums annualized

   22      29      (24   23      (4
                      

Total recurring plus 1/10 single

   62      93      (33 )    62      —     

Life and Savings

   27      21      29      23      17   

Pensions

   35      72      (51   39      (10
                      

Total recurring plus 1/10 single

   62      93      (33 )    62      —     

New premium production accident and health insurance

   11      4      175      7      57   

New premium production general insurance

   8      7      14      7      14   

Gross deposits (on and off balance) by line of business

          

Life and Savings

   683      1,017      (33   450      52   

Pensions

   60      90      (33   12      —     
                      

Total gross deposits

   743      1,107      (33 )    462      61   

Net deposits (on and off balance) by line of business

          

Life and Savings

   82      454      (82   (67   —     

Pensions

   (15   165      —        122      —     
                      

Total net deposits

   67      619      (89 )    55      22   
REVENUE GENERATING INVESTMENTS           
     Mar. 31,
2010
    Dec. 31,
2009
    %              

Revenue generating investments (total)

   70,867      70,861      —         

Investments general account

   36,294      36,144      —         

Investments for account of policyholders

   23,665      21,749      9       

Off balance sheet investments third parties

   10,908      12,968      (16    

 

 

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THE NETHERLANDS

 

  

 

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o    Underlying earnings before tax rise to EUR 104 million; all businesses contribute to increase
o    Net income rises to EUR 223 million
o    New life sales remain high at EUR 62 million

Underlying earnings before tax

Underlying earnings increased to EUR 104 million, up from EUR 72 million in the first quarter last year. This increase was mainly the result of higher investment income and lower operating expenses.

 

 

¡

   Earnings from Life & Savings increased to EUR 39 million, mainly the result of improved margins on savings account balances.

 

¡

   Pension earnings of EUR 47 million were the result of improved underwriting results, higher interest results and cost saving measures.

 

¡

   Non-life earnings improved to EUR 7 million mainly as a result of lower costs.

 

¡

   Earnings from Distribution increased to EUR 11 million, primarily the result of the sale last year of the loss-making brokerage activities.

Net income

Net income from AEGON’s operations in the Netherlands increased to EUR 223 million. The improvement was the result of higher underlying earnings, positive results on fair value items and lower impairment charges, partly offset by a decline in gains on investments and an increase in tax charges.

Fair value items showed an overperformance of EUR 91 million mainly as a result of movements in the fair value of guarantees and related hedges. As a result of adjustments in the investment portfolio for asset and liability management purposes, realized gains on investments totaled EUR 96 million.

Operating expenses

Operating expenses declined 16% to EUR 182 million in the first quarter, the result of cost saving initiatives implemented last year, as well as the transfer of asset management activities in the Netherlands to AEGON Asset Management.

Sales and deposits

New life sales of EUR 62 million were in line with the first quarter last year, as higher Individual life sales were offset by lower pension sales.

Following recent changes in government regulations, more of the disability insurance market in the Netherlands is now open to private sector insurers. As a result, AEGON’s accident & health premium production rose to EUR 11 million in the first quarter of this year.

Value of new business

Higher volumes and margins in the life business as well as improved margins on pensions resulted in an increase in the value of new business in the first quarter of 2010 to EUR 49 million. The internal rate of return amounted to 19% over the first three months of the year, driven mainly by a change in business mix.

Revenue-generating investments

Revenue-generating investments were stable at EUR 70.9 billion, compared with the previous quarter. This was primarily the result of a combination of lower risk-free interest rates and higher equity markets during the quarter and the transfer of third party assets to AEGON Asset Management.

 

 

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UNITED KINGDOM

 

GBP millions

   Notes    Q1 2010     Q4 2009     %     Q1 2009     %  

Underlying earnings before tax by line of business

             

Life

      18      10      80      7      157   

Pensions

      9      27      (67   5      80   

Distribution

      (2   (8   75      (3   33   
                         

Underlying earnings before tax

      25      29      (14 )    9      178   

Fair value items

      2      6      (67   1      100   

Realized gains/(losses) on investments

      2      24      (92   6      (67

Impairment charges

      (7   (49   86      (13   46   

Other income/(charges)

   8    21      8      163      (22   —     
                         

Income before tax

      43      18      139      (19   —     

Income tax attributable to policyholder return

      (21   (8   (163   22      —     
                         

Income before income tax on shareholders return

      22      10      120      3      —     

Income tax on shareholders return

      (2   3      —        5      —     
                         

Net income

      20      13      54      8      150   

Net income / (loss) attributable to:

             

Equity holders of AEGON N.V.

      20      13      54      8      150   

Net underlying earnings

      22      29      (24 )    11      100   

Commissions and expenses

      170      179      (5   153      11   

of which operating expenses

      95      109      (13   96      (1

New life sales

   9           

Life single premiums

      1,139      1,037      10      1,199      (5

Life recurring premiums annualized

      121      121      —        133      (9
                         

Total recurring plus 1/10 single

      235      224      5      253      (7 ) 

Life

      26      31      (16   71      (63

Pensions

      209      193      8      182      15   
                         

Total recurring plus 1/10 single

      235      224      5      253      (7 ) 

Gross deposits (on and off balance) by line of business

             

Variable annuities

      32      32      —        47      (32
                         

Total gross deposits

      32      32      —        47      (32 ) 

Net deposits (on and off balance) by line of business

             

Variable annuities

      25      27      (7   45      (44
                         

Total net deposits

      25      27      (7 )    45      (44 ) 

REVENUE GENERATING INVESTMENTS

             
          Mar. 31,
2010
    Dec. 31,
2009
    %              

Revenue generating investments (total)

      53,572      53,160      1       

Investments general account

      7,498      7,030      7       

Investments for account of policyholders

      46,074      43,362      6       

Off balance sheet investments third parties

      —        2,768      —         

For the amounts in euro see the Financial Supplement.

 

 

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UNITED KINGDOM

 

  

 

LOGO

 

 

 

 

 

¡

   Underlying earnings before tax increase to GBP 25 million as financial markets improve

 

¡

   Net income increases to GBP 20 million

 

¡

   New life sales down to GBP 235 million, mainly the result of lower annuity sales

Underlying earnings before tax

Underlying earnings before tax from AEGON’s businesses in the United Kingdom increased to GBP 25 million in the first quarter as a result of improved financial markets and growth in the business.

 

 

¡

   Earnings from Life & Protection increased to GBP 18 million due to a strong performance from annuities and lower than expected claims in the employee benefit business, which was closed last year.

 

¡

   Pension earnings increased to GBP 9 million as the positive effects of improved equity and credit markets and further business growth were offset partly by higher expenses.

 

¡

   AEGON’s distribution businesses benefited from improved market conditions, limiting their losses for the first quarter to GBP 2 million.

Net income

Net income in the first quarter 2010 increased to GBP 20 million mainly as a result of higher underlying earnings and a decline in impairments. Impairments totaled GBP 7 million, their lowest level for five quarters. Fair value items made a positive contribution on the back of stronger equity markets, while realized gains on investments decreased.

Operating expenses

Operating expenses decreased 1% to GBP 95 million as higher costs were offset by the transfer of asset management activities at the beginning of the year to AEGON Asset Management.

Sales and deposits

New life sales decreased to GBP 235 million. Higher sales of pension and retirement products were offset by a decrease in sales of immediate annuities following repricing and the impact of the closure of AEGON’s employee benefit business in the United Kingdom in the second quarter last year. Also, the comparable quarter last year included existing AEGON group personal pension business that was transferred internally to new group pension contracts. AEGON has decided not to include these rewrites as part of new business reporting in the future as this gives a clearer indication of new premium secured.

Value of new business

AEGON’s value of new business declined to GBP 12 million as a result of repricing immediate annuities and the decision to adopt a more conservative investment strategy and invest new assets in gilts. The internal rate of return on new business was 11%.

Revenue-generating investments

Revenue-generating investments amounted to GBP 53.6 billion as increases in both the general account and for account of policyholders investments were offset by the transfer of third-party investments to AEGON Asset Management.

 

 

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NEW MARKETS

 

EUR millions

   Q1 2010     Q4 2009     %     Q1 2009     %  

Underlying earnings before tax

          

Central Eastern Europe

   27      29      (7   26      4   

Asia

   (6   (6   —        (8   25   

Spain & France

   20      24      (17   14      43   

Variable Annuities Europe

   (2   1      —        (1   (100

AEGON Asset Management

   7        —        —        —     
                      

Underlying earnings before tax

   46      48      (4 )    31      48   

Fair value items

   3      (2   —        3      —     

Realized gains/(losses) on investments

   3      —        —        2      50   

Impairment charges

   (2   (21   90      (4   50   

Other income/(charges)

   —        (4   —        —        —     
                      

Income before tax

   50      21      138      32      56   

Income tax

   (13   (2   —        (24   46   
                      

Net income

   37      19      95      8      —     

Net income / (loss) attributable to:

          

Equity holders of AEGON N.V.

   36      19      89      8      —     

Minority Interest

   1      —        —        —        —     

Net underlying earnings

   32      36      (11 )    7      —     

Commissions and expenses

   175      103      70      111      58   

of which operating expenses

   133      62      115      59      125   

New life sales

          

Life single premiums

   108      110      (2   192      (44

Life recurring premiums annualized

   55      63      (13   65      (15
                      

Total recurring plus 1/10 single

   66      74      (11 )    84      (21 ) 

Life

   53      59      (10   50      6   

Associates

   13      15      (13   34      (62
                      

Total recurring plus 1/10 single

   66      74      (11 )    84      (21 ) 

Central Eastern Europe

   19      22      (14   15      27   

Asia

   10      8      25      14      (29

Spain & France

   37      44      (16   55      (33
                      

Total recurring plus 1/10 single

   66      74      (11 )    84      (21 ) 

New premium production accident and health insurance

   4      1      —        2      100   

New premium production general insurance

   6      14      (57   5      20   

Gross deposits (on and off balance)

          

Central Eastern Europe

   226      235      (4   179      26   

Asia

   44      —        —        4      —     

Spain & France

   25      32      (22   8      —     

Variable Annuities Europe

   188      160      18      146      29   

AEGON Asset Management

   1,110      750      48      745      49   
                      

Total gross deposits

   1,593      1,177      35      1,082      47   

Net deposits (on and off balance)

          

Central Eastern Europe

   69      142      (51   94      (27

Asia

   25      —        —        1      —     

Spain & France

   25      (17   —        (9   —     

Variable Annuities Europe

   79      21      —        43      84   

AEGON Asset Management

   (77   (128   40      (443   83   
                      

Total net deposits

   121      18      —        (314   —     
REVENUE GENERATING INVESTMENTS           
     Mar. 31,
2010
    Dec. 31,
2009
    %              

Revenue generating investments (total)

   28,233      17,045      66       

Investments general account

   2,941      2,707      9       

Investments for account of policyholders

   5,629      5,355      5       

Off balance sheet investments third parties

   19,663      8,983      119       

 

 

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NEW MARKETS

 

  

 

LOGO

 

 

 

 

¡

   Underlying earnings before tax increase to EUR 46 million

 

¡

   Net income up to EUR 37 million

 

¡

   New life sales decline to EUR 66 million, primarily a result of lower sales in Spain

Underlying earnings before tax

Underlying earnings before tax amounted to EUR 46 million as a result of improved results in most units and the inclusion for the first time of earnings from AEGON Asset Management.

 

 

¡

   Earnings from Central & Eastern Europe increased to EUR 27 million, as higher results from the life insurance business following strict underwriting and cost savings were partly offset by lower earnings from the pension and non-life insurance businesses.

 

¡

   Operations in Asia made a loss of EUR 6 million. Life insurance results were positively affected by the sale last year of AEGON’s loss-making life insurance activities in Taiwan. Individual Savings and Retirement Products recorded a loss as a result of the company’s variable annuity business in Japan. In addition, results last year included earnings from AEGON’s asset management operations. These earnings are now reported separately.

 

¡

   Earnings from Spain and France increased to EUR 20 million, mainly due to a higher contribution from La Mondiale in France.

 

¡

   Variable Annuities Europe reported a loss of EUR 2 million, while earnings from AEGON Asset Management amounted to EUR 7 million.

Net income

Net income from New Markets increased in the first quarter to EUR 37 million as a result of higher underlying earnings and lower tax charges. Net income for the same period last year had included an impairment on deferred tax assets in Taiwan, which resulted in an exceptionally high effective tax rate.

Operating expenses

Operating expenses amounted to EUR 133 million. The increase compared with last year is due to the inclusion of AEGON Asset Management in New Markets, effective from the first quarter this year.

Sales and deposits

New life sales for New Markets declined to EUR 66 million in the first quarter. Sales growth in both Central & Eastern Europe and China was more than offset by lower sales of both recurring and single premiums in Spain.

 

 

¡

   All countries in Central & Eastern Europe contributed to a 27% increase in new life sales to EUR 19 million, while new premium production for non-life insurance increased to EUR 6 million, despite increased competition.

 

¡

   In Asia, new life sales amounted to EUR 10 million as both China and India reported increased sales. In China, the company’s joint-venture received a license to sell its products in the province of Hubei.

 

¡

   In Spain, due to the difficult economic environment, total new life sales for AEGON in Spain declined by 33% in the first quarter of 2010 to EUR 37 million.

Gross deposits from New Markets increased 47% to EUR 1.6 billion primarily as a result of higher third-party asset management inflows.

Value of new business

New Markets’ value of new business amounted to EUR 31 million. Higher contributions from Central & Eastern Europe, AEGON’s European variable annuity business and the company’s operations in China were more than offset by a decline in the value of new business in Spain. The internal rate of return remained high.

Revenue-generating investments

Revenue-generating investments increased to EUR 28.2 billion, driven by the inclusion for the first time of AEGON’s Asset Management and off-shore bond business in Dublin and a further improvement in financial markets.

 

 

   Page 15 of 19


 

 

APPENDIX II

 

  

 

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VALUE OF NEW BUSINESS AND IRR

 

EUR millions, after tax

              VNB
Q1 2010
   VNB
Q1 2009
    %  

Americas

        52    79      (34

The Netherlands

        49    31      58   

United Kingdom

        14    58      (76

New Markets

        31    34      (9
                  

Total

        146    201      (27 ) 
                IRR %    IRR%        

EUR millions, after tax

              Q1 2010    Q1 2009        

Americas

        12.6    10.3     

The Netherlands

        19.2    14.1     

United Kingdom

        10.7    15.0     

New Markets

        34.2    35.5     
                  

Total

        19.3    17.8     
MODELED NEW BUSINESS, APE AND DEPOSITS             
                Premium business
APE
 

EUR millions

   Notes          Q1 2010    Q1 2009     %  
   10          

Americas

        245    266      (8

The Netherlands

        93    78      19   

United Kingdom

        265    224      18   

New Markets

        80    202      (60
                  

Total

        683    769      (11 ) 
                Deposit business
Deposits
 

EUR millions

              Q1 2010    Q1 2009     %  

Americas

        3,926    5,252      (25

United Kingdom

        34    —        —     

New Markets

        307    137      124   
                  

Total

        4,267    5,389      (21 ) 
VNB/PVNBP SUMMARY             
          Premium business  
          VNB     PVNBP    VNB/
PVNBP
    VNB/
APE
 

EUR millions

   Notes    Q1 2010    %     %  
   11          

Americas

      27      1,042    2.6      11.2   

The Netherlands

      49      708    7.0      53.1   

United Kingdom

      14      1,724    0.8      5.2   

New Markets

      22      589    3.8      28.0   
                  

Total

      113      4,064    2.8      16.5   
          Deposit business  
          VNB     PVNBP    VNB/
PVNBP
    VNB/
Deposits
 

EUR millions

   Notes    Q1 2010    %     %  
   11          

Americas

      24      5,554    0.4      0.6   

United Kingdom

      (0   34    (0.7   (0.7

New Markets

      9      504    1.8      2.9   
                  

Total

      33      6,091    0.5      0.8   

 

 

   Page 16 of 19


 

  

 

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Notes:

 

1)

For a definition of underlying earnings and the reconciliation from underlying earnings to income before tax we refer to Note 3 “Segment information” of our Condensed consolidated interim financial statements.

2)

Net income refers to net income attributable to equity holders of AEGON N.V. and minority interest.

3)

New life sales is defined as new recurring premiums + 1/10 of single premiums.

4)

Deposits on and off balance sheet. Run-off businesses includes results of business units where management has decided to exit the market and to run-off the existing block of business.

5)

Return on equity is calculated by dividing the net underlying earnings after cost of leverage by the average shareholders’ equity excluding the preferred shares and the revaluation reserve.

6)

Capital securities that are denominated in foreign currencies are, for purposes of calculating the capital base ratio, revalued to the period-end exchange rate.

7)

All ratios exclude AEGON’s revaluation reserve.

8)

Included in other non-operating income/(charges) are charges made to policyholders with respect to income tax. There is an equal and opposite tax charge which is reported in the line Income tax attributable to policyholder return.

9)

Includes production on investment contracts without a discretionary participation feature of which the proceeds are not recognized as revenues but are directly added to our investment contract liabilities.

10)

APE = recurring premium + 1/10 single premium.

11)

PVNBP: Present Value New Business Premium.

 

a) The calculation of the IGD (Insurance Group Directive) capital surplus and ratio are based on Solvency I capital requirements on IFRS for entities within the EU (Pillar I for AEGON UK), and local regulatory solvency measurements for non-EU entities. Specifically, required capital for the life insurance companies in the US is calculated as two times the upper end of the Company Action Level range (200%) as applied by the National Association of Insurance Commissioners in the US. The calculation of the IGD ratio excludes the available and required capital of the UK With-Profit funds. In the UK solvency surplus calculation the local regulator only allows the available capital number of the With-Profit funds included in overall local available capital to be equal to the amount of With-Profit funds’ required capital.
b) The results in this release are unaudited.

Currencies

Income statement items: average rate 1 EUR = USD 1.3838 (2009: USD 1.3023).

Income statement items: average rate 1 EUR = GBP 0.8865 (2009: GBP 0.9070).

Balance sheet items: closing rate 1 EUR = USD 1.3479 (2009: USD 1.3308; year-end 2009: USD 1.4406).

Balance sheet items: closing rate 1 EUR = GBP 0.8898 (2009: GBP 0.9308; year-end 2009: GBP 0.8881).

 

 

   Page 17 of 19


 

 

About AEGON

 

  

 

 

As an international life insurance, pension and investment company based in The Hague, AEGON has businesses in over twenty markets in the Americas, Europe and Asia. AEGON companies employ approximately 28,000 people and have more than 40 million customers across the globe.

 

Key figures - EUR

   First quarter 2010    Full year 2009

Underlying earnings before tax

   488 million    1.2 billion

New life sales

   538 million    2.1 billion

Gross deposits (excl. run-off)

   7.8 billion    28 billion

Revenue generating investments

   388 billion    363 billion

(end of period)

     

 

 

 

Contact information    ADDITIONAL INFORMATION
   The Hague, May 12, 2010
Media relations: Greg Tucker    Media conference call
+31(0)70 344 8956    08:15 CET
gcc-ir@aegon.com    Audio webcast on www.aegon.com
Investor relations: Gerbrand Nijman    Analyst & investor conference call
+31 (0)70 344 8305    15:00 CET
877 548 9668 – toll free USA only      
   Audio webcast on www.aegon.com
ir@aegon.com    Call-in numbers (listen only):
   USA:    +1 480 629 9822
www.aegon.com    UK:    + 44 208 515 2302
   NL:    +31 20 796 5332

Supplements

AEGON’s Q1 2010 Financial Supplement and Condensed Consolidated Interim Financial Statements are available on www.aegon.com.

 

 

   Page 18 of 19


 

       

 

 

Cautionary note regarding non-GAAP measures

This press release includes certain non-GAAP financial measures: underlying earnings before tax and value of new business. The reconciliation of underlying earnings before tax to the most comparable IFRS measure is provided in Note 3 “Segment information” of our Condensed consolidated interim financial statements. Value of new business is not based on IFRS, which are used to report AEGON’s quarterly statements and should not viewed as a substitute for IFRS financial measures. AEGON believes that these non-GAAP measures, together with the IFRS information, provide a meaningful measure for the investment community to evaluate AEGON’s business relative to the businesses of our peers.

Local currencies and constant currency exchange rates

This press release contains certain information about our results and financial condition in USD for the Americas and GBP for the United Kingdom, because those businesses operate and are managed primarily in those currencies. Certain comparative information presented on a constant currency basis eliminates the effects of changes in currency exchange rates. None of this information is a substitute for or superior to financial information about us presented in EUR, which is the currency of our primary financial statements.

Forward-looking statements

The statements contained in this press release that are not historical facts are forward-looking statements as defined in the US Private Securities Litigation Reform Act of 1995. The following are words that identify such forward-looking statements: aim, believe, estimate, target, intend, may, expect, anticipate, predict, project, counting on, plan, continue, want, forecast, goal, should, would, is confident, will, and similar expressions as they relate to our company. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. We undertake no obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which merely reflect company expectations at the time of writing. Actual results may differ materially from expectations conveyed in forward-looking statements due to changes caused by various risks and uncertainties. Such risks and uncertainties include but are not limited to the following:

 

 

¡

   Changes in general economic conditions, particularly in the United States, the Netherlands and the United Kingdom;

 

¡

   Changes in the performance of financial markets, including emerging markets, such as with regard to:
  

-        The frequency and severity of defaults by issuers in our fixed income investment portfolios; and

  

-        The effects of corporate bankruptcies and/or accounting restatements on the financial markets and the resulting decline in the value of equity and debt securities we hold;

 

¡

   The frequency and severity of insured loss events;

 

¡

   Changes affecting mortality, morbidity and other factors that may impact the profitability of our insurance products;

 

¡

   Changes affecting interest rate levels and continuing low or rapidly changing interest rate levels;

 

¡

   Changes affecting currency exchange rates, in particular the EUR/USD and EUR/GBP exchange rates;

 

¡

   Increasing levels of competition in the United States, the Netherlands, the United Kingdom and emerging markets;

 

¡

   Changes in laws and regulations, particularly those affecting our operations, the products we sell, and the attractiveness of certain products to our consumers;

 

¡

   Regulatory changes relating to the insurance industry in the jurisdictions in which we operate;

 

¡

   Acts of God, acts of terrorism, acts of war and pandemics;

 

¡

   Effects of deliberations of the European Commission regarding the aid we received from the Dutch State in December 2008;

 

¡

   Changes in the policies of central banks and/or governments;

 

¡

   Lowering of one or more of our debt ratings issued by recognized rating organizations and the adverse impact such action may have on our ability to raise capital and on our liquidity and financial condition;

 

¡

   Lowering of one or more of insurer financial strength ratings of our insurance subsidiaries and the adverse impact such action may have on the premium writings, policy retention, profitability of its insurance subsidiaries and liquidity;

 

¡

   The effect of the European Union’s Solvency II requirements and other regulations in other jurisdictions affecting the capital we are required to maintain;

 

¡

   Litigation or regulatory action that could require us to pay significant damages or change the way we do business;

 

¡

   Customer responsiveness to both new products and distribution channels;

 

¡

   Competitive, legal, regulatory, or tax changes that affect the distribution cost of or demand for our products;

 

¡

   The impact of acquisitions and divestitures, restructurings, product withdrawals and other unusual items, including our ability to integrate acquisitions and to obtain the anticipated results and synergies from acquisitions;

 

¡

   Our failure to achieve anticipated levels of earnings or operational efficiencies as well as other cost saving initiatives; and

 

¡

   The impact our adoption of the International Financial Reporting Standards may have on our reported financial results and financial condition.

Further details of potential risks and uncertainties affecting the company are described in the company’s filings with Euronext Amsterdam and the US Securities and Exchange Commission, including the Annual Report on Form 20-F. These forward-looking statements speak only as of the date of this document. Except as required by any applicable law or regulation, the company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

 

 

   Page 19 of 19
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