Segment information

12 Months Ended

Dec. 31, 2023

Text block [abstract]

Segment information

5 Segment information

Aegon’s operating segments are based on the businesses as presented in internal reports that are regularly reviewed by the Executive Director which is regarded as the chief operating decision maker. All reportable segments are involved in insurance or reinsurance business, asset management or services related to these activities. The reportable segments are:

∎ Americas: which covers business units in the United States, including any of the units’ activities located outside of the United States;

∎ The Netherlands: which covered businesses activities from Aegon the Netherlands (no longer a reporting segment following the completion of the transaction with a.s.r.);

∎ United Kingdom: which covers businesses activities from platform business and traditional insurance in the United Kingdom;

∎ International: which covers operations in Spain & Portugal, China, Brazil, Bermuda, Hong Kong, and Singapore including any of the units’ activities located outside these countries;

∎ Asset Management: which covers business activities from AAM Global Platforms and Strategic Partnerships;

∎ Holding and other activities: which includes financing, employee and other administrative expenses of holding companies.

Aegon’s segment information is prepared by consolidating on a proportionate basis Aegon’s joint ventures and associated companies except for its 29.99% stake in a.s.r.. The result of associate a.s.r. is included in Other income / (charges).

Performance Measure

Aegon uses the non-IFRS performance measure operating result. Similar as under the previous accounting policies, operating result reflects Aegon’s profit before tax from underlying business operations and mainly excludes components that relate to accounting mismatches that are dependent on market volatility, updates to best estimate actuarial and economic assumptions and model updates or events that are considered outside the normal course of business.

Aegon believes that its performance measure operating result provides meaningful information about the operating results of Aegon’s business, including insight into the financial measures that Aegon’s senior management uses in managing the business. While many other insurers in Aegon’s peer group present substantially similar performance measures, the performance measures presented in this document may nevertheless differ from the performance measures presented by other insurers.

The reconciliation from result before tax from continuing operations, being the most comparable IFRS measure, to operating result is presented in the tables in this note.

There have been changes in the calculation of the items excluded from operating result (fair value items, realized gains or losses on investments, impairment charges/reversals, other income or charges and share in earnings of joint ventures and associates - these items are further discussed below) due to the adoption of IFRS 9 and IFRS 17. For example:

∎ Fair value items have reduced significantly, reflecting fewer accounting mismatches under the new accounting policies.

∎ Realized gains/(losses) on investments now includes realized gains and losses on financial assets measured at amortized cost and financial assets classified at FVOCI.

∎ Impairment losses and reversals of impairment losses reflect the change in ECL for financial assets.

∎ Other non-operating results continue to include items that cannot be directly allocated to a specific line of business and items that are outside the normal course of business. It no longer includes all impacts of actuarial and economic assumption and model updates as most of these are recorded in CSM, but only:

∎ the impact of changes in actuarial assumptions and model updates on onerous contracts, and

∎ the impact of changes in financial assumptions and the passage of time on onerous groups of VFA contracts to which no risk mitigation is applied.

Fair value items

Fair value items include the following:

∎ Over- or underperformance of investments and guarantees held at fair value for which management’s best estimate investment return is included in operating result;

∎ Hedge ineffectiveness on hedge transactions, fair value changes on economic hedges without natural offset in earnings and for which no hedge accounting is applied and fair value movements on real estate are included under fair value items;

∎ Certain assets held by Aegon are carried at fair value and managed on a total return basis, with no offsetting changes in the valuation of related liabilities. These include assets such as investments in hedge funds, private equities, real estate (limited partnerships), convertible bonds and structured products;

∎ Certain products offered by Aegon Americas contain guarantees and are reported on a fair value basis and include the total return annuities and variable annuities. The earnings on these products are impacted by movements in equity markets and risk-free interest rates. Short-term developments in the financial markets may therefore cause volatility in earnings;

∎ Changes in value of VFA products that result in (a reversal of) onerous contracts;

∎ Changes in discount rates for General model insurance contracts, including the revaluation of changes in non-financial assumptions and experience adjustments that adjust CSM to current interest rates.

Other income / (charges)

Other income / (charges) include the following:

∎ Items which cannot be directly allocated to a specific line of business;

∎ The impact of changes in actuarial assumptions and model updates on onerous contracts;

∎ The impact of changes in financial assumptions and the passage of time on onerous groups of VFA contracts to which no risk mitigation is applied, and;

∎ Items that are outside the normal course of business, including restructuring charges.

In the Consolidated income statement, for onerous contracts, actuarial assumption and model updates are included in “Insurance service result”. Restructuring charges are included in “Other operating expenses”.

Share in earnings of joint ventures and associates

Earnings from Aegon’s joint ventures in China, India, Spain & Portugal, and Aegon’s associates in France and United Kingdom are reported as part of operating result.

Segment results

The following table presents Aegon’s segment results.

Income statement - Operating result	Americas		The Nether- lands	1)	United Kingdom		International		Asset Manage- ment		Holding and other activities		Eliminations		Segment total		Joint ventures and associates eliminations		Consoli- dated
Year ended December 31, 2023
Operating result	1,107		-		214		196		145		(173	)	10		1,498		19		1,517
Fair value items	138		-		(76	)	(1	)	(8	)	24		(1	)	76		9		85
Realized gains / (losses) on investments	(683	)	-		-		24		-		-		-		(659	)	(30	)	(689	)
Impairment losses / (reversals)	(62	)	-		-		(23	)	-		(7	)	-		(92	)	2		(90	)
Non-operating items	(607	)	-		(76	)	(1	)	(8	)	17		(1	)	(675	)	(19	)	(695	)
Other income / (charges)	(961	)	(65	)	(85	)	(110	)	(31	)	110		2		(1,140	)	(90	)	(1,230	)
Result before tax	(460	)	(65	)	52		85		106		(46	)	11		(317	)	(91	)	(408	)
Income tax (expense) / benefit	214		-		(23	)	(69	)	(36	)	31		-		118		91		209
Net result	(246	)	(65	)	29		16		70		(14	)	11		(199	)	-		(199	)
Inter-segment operating result	(569	)	(48	)	(75	)	256		150		286
Revenues
Insurance contracts revenue
- Insurance contracts: direct part.	9,468		-		600		1,095		-		-		(51	)	11,112		(1,490	)	9,622
- Insurance contracts: without direct part.	-		-		-		700		-		-		-		700		-		700
Investment contracts with discretionary participation features revenue
- Insurance contracts: direct part.	-		-		64		-		-		-		-		64		-		64
- Insurance contracts: without direct part.	-		-		-		-		-		-		-		-		-		-
Insurance revenue	9,468		-		663		1,795		-		-		(51	)	11,876		(1,490	)	10,386
Interest revenue on financial instruments calculated using the effective interest method	3,108		-		58		87		2		90		(6	)	3,339		(3	)	3,336
Interest revenue on financial instruments measured at FVPL	339		-		486		1		-		-		-		826		-		826
Other investment income	14		-		1,818		104		14		498		(498	)	1,950		(116	)	1,833
Fee and commission income	1,653		-		214		34		632		-		(158	)	2,376		(215	)	2,160
Other revenues	-		-		-		37		1		-		-		38		(38	)	-
Total revenues	14,582		-		3,239		2,058		649		589		(713	)	20,404		(1,862	)	18,541
Inter-segment revenues	49		-		-		1		172		500

1  The net result represents the standalone result of ‘The Netherlands’. After elimination, the remaining result is EUR (17). See note 45 Held for sale and discontinued operations for more details.

On July 4, 2023, Aegon announced the completion of the combination of its Dutch pension, life and non-life insurance, banking, and mortgage origination activities with a.s.r., and the beginning of its asset management partnership with a.s.r. As part of the transaction, Aegon received EUR 2.2 billion in cash proceeds and almost a 30% stake in a.s.r. In light of the transaction, Aegon the Netherlands is no longer reported as a separate segment, and its first half 2023 result is included in Other charges in the income statement.

The other charges of the Americas in 2023 are mainly due to unfavorable assumption updates and restructuring charges.

Income statement - Operating result	Americas		The  Nether- lands	1)	United  Kingdom		International		Asset  Manage- ment		Holding and other activities		Eliminations		Segment total		Joint  ventures and associates eliminations		Consoli- dated
Year ended December 31, 2022
Operating result	1,433		-		211		202		193		(220	)	(17	)	1,802		(59	)	1,743
Fair value items	(85	)	-		(71	)	38		(3	)	(21	)	(76	)	(218	)	8		(209	)
Realized gains / (losses) on investments	(518	)	-		-		30		-		7		-		(481	)	(16	)	(497	)
Impairment losses / (reversals)	(78	)	-		(11	)	(14	)	-		(18	)	-		(122	)	1		(121	)
Non-operating items	(681	)	-		(83	)	54		(3	)	(32	)	(76	)	(820	)	(7	)	(827	)
Other income / (charges)	(117	)	(1,373	)	(64	)	326		(19	)	(118	)	-		(1,365	)	(19	)	(1,384	)
Result before tax	636		(1,373	)	64		582		171		(371	)	(93	)	(384	)	(85	)	(469	)
Income tax (expense) / benefit	(102	)	-		2		(57	)	(67	)	68		-		(156	)	85		(71	)
Net result	533		(1,373	)	67		526		104		(303	)	(93	)	(540	)	-		(540	)
Inter-segment operating result	(458	)	(94	)	(75	)	236		188		203
Revenues
Insurance contracts revenue
- Insurance contracts: direct part.	10,174		-		628		967		-		-		(32	)	11,736		(1,210	)	10,526
- Insurance contracts: without direct part.	-		-		-		651		-		-		-		651		-		651
Investment contracts with discretionary participation features revenue
- Insurance contracts: direct part.	-		-		74		-		-		-		-		74		-		74
- Insurance contracts: without direct part.	-		-		-		-		-		-		-		-		-		-
Insurance revenue	10,174		-		701		1,618		-		-		(32	)	12,461		(1,210	)	11,251
Interest revenue on financial instruments calculated using the effective interest method	3,105		-		12		191		-		2		(5	)	3,306		(3	)	3,303
Interest revenue on financial instruments measured at FVPL	228		-		399		(3	)	-		-		-		624		-		624
Other investment income	32		-		1,530		100		12		425		(425	)	1,673		(110	)	1,564
Fee and commission income	1,756		-		223		62		693		-		(187	)	2,548		(254	)	2,294
Other revenues	-		-		-		25		5		-		-		30		(30	)	-
Total revenues	15,295		-		2,865		1,993		710		427		(648	)	20,642		(1,607	)	19,035
Inter-segment revenues	33		-		-		-		208		426

1  The net result represents the standalone result of ‘The Netherlands’. After elimination and considering the result included in the Holdings and other activities, the remaining result is EUR (1,746). See note 45 Held for sale and discontinued operations for more details

The Americas recorded other charges of EUR 117 million in 2022 mainly due to unfavorable assumption updates and restructuring charges.

Operating result reconciliation

The reconciliation from operating result to result before tax, being the most comparable IFRS measure, is presented in the table below. For those items that cannot be directly reconciled to the respective notes, the explanation is provided below the table.

Presentation Non-operating items and other income/ (charges)	Note		2023		2022
Result before tax from continuing operations			(391	)	827
Elimination of share in earnings of joint ventures and associates			(19	)	59
Insurance revenue	6		(15	)	1
Insurance service expenses	7		427		442
Net income / (expenses) on reinsurance held	8		(23	)	(40	)
Net fair value change of financial investments at fair value through profit or loss, other than derivatives	9.4 / 10.4		(224	)	183
Net fair value change of derivatives			(7	)	-
Realized gains and losses on financial investments	9.4 / 10.4		683		670
Net fair value change on investments in real estate	9.4 / 10.4		(2	)	(1	)
Impairment (losses) reversals	9.5 / 10.5		90		121
Insurance finance income / (expenses)	9		375		(614	)
Net reinsurance finance income / (expenses) on reinsurance held	9		(85	)	68
Investment contract income / (expenses)	10		(5	)	(2	)
Net fair value change on borrowings and other financial liabilities			-		(5	)
Fee and commission income	12		(11	)	(14	)
Commissions and expenses	13		596		378
Other income	14		(18	)	(341	)
Other charges	14		79		-
Results of businesses disposed during reporting periods			48		70
Operating result			1,498		1,802

∎ Insurance service expenses are mainly driven by two items:

∎ Assumption changes on onerous contracts amounting to a loss of EUR 497 million (2022: loss of EUR 93 million), which is included in Other income / (charges).

∎ Change in value of VFA products that result in (a reversal of) onerous contracts, amounting to a gain of EUR 129 million (2022: loss of 273 million), which is included in Fair value items.

∎ Net income / (expenses) on reinsurance held mainly consist of assumption changes that relate to (a reversal of) underlying onerous contracts, amounting to a gain of EUR 31 million (2022: gain of EUR 38 million), which is included in Other income / (charges).

∎ Net fair value change of financial investments at fair value through profit or loss, other than derivatives reflects the over- or underperformance of investments and guarantees held at fair value for which the expecting long-term return is included in operating result.

∎ Insurance finance income / (expenses) mainly relate to changes in discount rates, amounting to a loss of EUR 354 million (2022: a gain of EUR 614 million), which is included in Fair value items.

∎ Net reinsurance finance income / (expenses) on reinsurance held relate to changes in discount rates, amounting to a gain of EUR 84 million (2022: loss of EUR 70 million), which is included in Fair value items.

∎ Commissions and expenses, which are included in Other income / (charges), relate to items which can cannot be directly allocated to a specific line of business and restructuring charges.

Other selected income statement items

	Americas	United   Kingdom	International	Asset  Management	Holding and other activities	Total
2023
Amortization of deferred expenses and future servicing rights	24	2	1	6	-	33
Depreciation	64	12	5	2	14	97
Impairment losses / (reversals) on financial assets, excluding receivables	59	-	-	-	-	59
Impairment losses / (reversals) on non- financial assets and receivables	32	-	21	-	7	60
2022
Amortization of deferred expenses and future servicing rights	34	2	3	-	-	38
Depreciation	67	11	6	2	17	103
Impairment losses / (reversals) on financial assets, excluding receivables	78	-	13	-	-	92
Impairment losses / (reversals) on non- financial assets and receivables	17	11	-	-	18	46

Number of employees

Number of employees	Americas	United   Kingdom	International	Asset  Management	Holding and other activities	Total
2023
Number of employees - headcount	6,967	2,591	3,654	1,409	1,037	15,658
Of which Aegon’s share of employees in joint ventures and associates1)	-	49	2,936	219	-	3,204
2022
Number of employees - headcount	6,153	2,621	4,281	1,464	958	15,478
Of which Aegon’s share of employees in joint ventures and associates	-	62	3,239	206	-	3,507

1  Excludes a.s.r. as the results of this associate is not included in Operating result

Summarized assets and liabilities per segment

	Americas	United  Kingdom	International	Asset  manage- ment	Holding and other activities	Eliminations		Total
2023
Assets
Cash and Cash equivalents	1,042	200	106	246	2,479	-		4,074
Assets held for sale	-	432	-	-	-	-		432
Investments	161,715	102,795	1,678	176	18	-		266,382
Investments in joint ventures	-	-	1,034	397	-	-		1,430
Investments in associates	-	-	5	279	2,622	-		2,906
Reinsurance contract assets	16,563	2	5,656	-	-	(5,613	)	16,608
Insurance contract assets	181	-	3	-	-	-		185
Deferred expenses	428	19	-	-	-	-		447
Other assets	6,486	1,818	183	359	8,095	(7,823	)	9,118
Total assets	186,415	105,265	8,664	1,457	13,215	(13,436	)	301,581
Liabilities
Reinsurance contract liabilities	396	-	211	-	-	-		608
Insurance contract liabilities	136,116	40,329	6,628	-	-	(5,626	)	177,446
Investment contracts with discretionary participating features	-	21,594	-	-	-	-		21,594
Investment contracts without discretionary participating features	35,181	40,085	-	-	-	-		75,266
Liabilities held for sale / disposal groups	-	389	-	-	-	-		389
Other liabilities	11,257	1,418	219	397	3,660	(228	)	16,723
Total liabilities	182,950	103,815	7,058	397	3,660	(5,854	)	292,026

	Americas	The  Nether- lands		United  Kingdom	Interna- tional	Asset  manage- ment	Holding  and other activities	Elimina- tions		Total
2022
Assets
Cash and Cash equivalents	1,097	-		182	116	367	1,639	-		3,402
Assets held for sale	-	88,664		-	-	-	-	-		88,664
Investments	160,624	-		91,463	2,497	136	39	-		254,759
Investments in joint ventures	-	-		-	959	471	-	-		1,430
Investments in associates	-	11		-	20	129	16	(11	)	165
Reinsurance contract assets	16,520	-		369	6,273	-	-	(6,223	)	16,939
Insurance contract assets	36	-		-	-	-	-	-		36
Deferred expenses	432	-		20	-	-	-	-		452
Other assets	9,652	1,076		1,973	336	146	16,455	(14,774	)	14,864
Total assets	188,362	89,751		94,007	10,201	1,249	18,148	(21,008	)	380,711
Liabilities
Reinsurance contract liabilities	62	-		-	208	-	-	-		270
Insurance contract liabilities	137,195	(0	)	37,621	7,570	-	-	(6,266	)	176,120
Investment contracts with discretionary participating features	-	-		21,055	-	-	-	-		21,055
Investment contracts without discretionary participating features	32,788	-		32,440	-	-	-	-		65,227
Liabilities held for sale / disposal groups	-	84,183		-	-	-	-	-		84,183
Other liabilities	14,920	934		1,344	281	424	7,213	(2,196	)	22,922
Total liabilities	184,965	85,117		92,460	8,059	424	7,213	(8,462	)	369,777

Amounts included in the tables on investments are presented on an IFRS basis, which means that investments in joint ventures and associates are not consolidated on a proportionate basis. Instead, these investments are included on a single line using the equity method of accounting.

Investments

	Americas	United  Kingdom	International	Asset  Management	Holding and other activities	Eliminations		Total
2023
Shares	267	16,192	23	9	-	-		16,491
Debt securities	47,547	6,916	1,295	52	-	-		55,811
Unconsolidated investment funds	92,520	74,719	173	-	-	-		167,411
Loans	10,156	2,269	3	-	18	-		12,446
Other financial assets	11,187	2,266	166	115	-	-		13,735
Investments in real estate	38	433	17	-	-	-		488
Total investments on balance sheet	161,715	102,795	1,678	176	18	-		266,382
Off-balance sheet investments third parties	225,090	135,270	3,711	195,304	-	-		559,375
Total revenue-generating investments	386,806	238,064	5,389	195,480	18	-		825,757
Investments
Financial assets measured at FVOCI
Backing insurance contracts without direct participation	42,973	-	1,439	-	-	-		44,412
Backing investment contracts without direct participation	5,854	-	-	-	-	-		5,854
Non-insurance related assets	-	-	1	97	-	-		98
Financial assets measured at FVPL
Backing direct participation insurance contracts	67,532	40,008	173	-	-	-		107,714
Backing insurance contracts without direct participation	9,696	1,243	27	-	-	-		10,967
Backing direct participation investment contracts	24,988	22,771	-	-	-	-		47,759
Backing investment contracts without direct participation	386	-	19	-	-	-		405
Non-insurance related assets	92	38,339	-	27	-	-		38,458
Financial assets measured at amortized cost	10,156	-	1	52	18	-		10,227
Investments in real estate	38	433	17	-	-	-		488
Total investments on balance sheet	161,715	102,795	1,678	176	18	-		266,382
Investments in joint ventures	-	-	1,034	397	-	-		1,430
Investments in associates	-	-	5	279	2,622	-		2,906
Other assets	24,700	2,470	5,948	606	10,575	(13,436	)	30,863
Consolidated total assets	186,415	105,265	8,664	1,457	13,215	(13,436	)	301,581

	Americas		The Netherlands		United Kingdom		International		Asset Manage- ment		Holding and other activities		Eliminations			Total
2022
Shares		315		-		15,518		21		7		1		-			15,863
Debt securities		51,008		-		6,455		1,864		15		-		-			59,341
Unconsolidated investment funds		89,535		-		64,776		431		-		-		-			154,741
Loans		10,406		-		2,354		14		-		38		-			12,812
Other financial assets		9,318		-		1,917		150		114		-		-			11,500
Investments in real estate		42		-		443		17		-		-		-			502
Total investments on balance sheet		160,624		-		91,463		2,497		136		39		-			254,759
Off-balance sheet investments third parties		216,060		-		122,742		3,384		141,067		-		-			483,253
Total revenue-generating investments		376,684		-		214,205		5,881		141,203		39		-			738,013
Investments
Financial assets measured at FVOCI
Backing insurance contracts without direct participation		46,665		-		-		1,900		-		-		-			48,565
Backing investment contracts without direct participation		5,482		-		-		-		-		-		-			5,482
Non-insurance related assets		-		-		-		81		96		-		-			177
Financial assets measured at FVPL
Backing direct participation insurance contracts		66,344		-		36,843		140		-		-		-			103,327
Backing insurance contracts without direct participation		8,164		-		1,083		305		-		-		-			9,552
Backing direct participation investment contracts		23,191		-		22,262		-		-		-		-			45,453
Backing investment contracts without direct participation		285		-		-		47		-		-		-			331
Non-insurance related assets		46		-		30,832		-		40		1		-			30,918
Financial assets measured at amortized cost		10,406		-		-		9		-		38		-			10,453
Investments in real estate		42		-		443		17		-		-		-			502
Total investments on balance sheet		160,624		-		91,463		2,497		136		39		-			254,759
Investments in joint ventures		-		-		-		959		471		-		-			1,430
Investments in associates		-		11		-		20		129		16		(11	)		165
Other assets		27,399		89,740		2,544		6,726		513		18,094		(20,658	)		124,357
Consolidated total assets		188,023		89,751		94,007		10,201		1,249		18,148		(20,669	)		380,711

Insurance, reinsurance and investment contracts with discretionary participation feature

Summarized assets and liabilities per segment	Americas	United  Kingdom	International	Eliminations		Total
2023
Insurance contracts
Direct participating contracts	70,436	39,687	193	-		110,315
Without direct participation contracts	65,499	642	6,393	(5,626	)	66,907
Contracts measured under the PAA	-	-	39	-		39
Investment contracts with DPF
Direct participating contracts	-	21,594	-	-		21,594
Insurance contracts and investment contracts without participation features	135,934	61,922	6,625	(5,626	)	198,855
Reinsurance contracts held	16,166	2	5,445	(5,613	)	16,000

Summarized assets and liabilities per segment	Americas	United   Kingdom	International	Eliminations		Total
2022
Insurance contracts
Direct participating contracts	69,163	36,694	187	-		106,044
Without direct participation contracts	67,996	927	6,944	(6,266	)	69,600
Contracts measured under the PAA	-	-	439	-		439
Investment contracts with DPF
Direct participating contracts	-	21,055	-	-		21,055
Insurance contracts and investment contracts without participation features	137,159	58,676	7,570	(6,266	)	197,139
Reinsurance contracts held	16,458	369	6,065	(6,223	)	16,669