Company: AEGOF
Filing Date: 2025-05-16
Form Type: 6-K
Source: 0001193125-25-121236
Chunk: 48

Company: AEGON LTD.
Filing Date: 2025-05-16
Form: 6-K
Chunk 48
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 and consumer expectations. This increases competition, not just among peers, but also from new competitors and disruptors. AI, particularly Generative AI, is facilitating the creation of new data and content, which can impact decision-making processes and customer interactions. When used, Aegon strives to do this in an ethical and prudent way. Therefore internal policies and standards are set up which address these items. During 2024 AI was an increased attention item in our risk management practices.

| 36 |     | | Aegon Financial Condition Report 2024 |

| Risk profile  How risks of the insurance group are mitigated |

C.2 How risks of the insurance group are mitigated including the methods used and the process to monitor the effectiveness of these methods Market risk Aegon has generally positive impacts from equity market increases and negative impacts from equity market declines as it earns fees on policyholder account balances and in certain cases provides minimum guarantees for account values. Hedging of exposures may change those effects significantly and equity hedges are used extensively to manage the equity market risk related to products with guarantees that have underlying equity funds. In Transamerica, regulatory capital ratios are currently exposed to negative impacts when equity markets decrease, and also if equity markets increase, due to the effect of cash surrender value flooring. Any negative impacts due to rising equity markets are expected to be short term and reverse over time, as long as the associated policies don’t immediately surrender. Equity risk is split into three types: (1) direct equity risk; (2) equity guarantee risk and (3) equity fee risk. Aegon sets a limit at Group and Regional level for each of these types of equity risk. Hedging programs are in place that are designed to manage the risks within these defined indicator levels. Equity hedge programs use equity options, dynamic option-replicating strategies and unit matching specifically in the UK to provide protection against the impact of equity market declines. Aegon employs sophisticated interest rate risk measurement techniques. Fixed interest assets along with interest rate swap and swaption derivatives are used extensively to manage the interest rate risk exposure. Aegon sets a limit on interest rate risk at Group and regional levels. All derivative use is governed by Aegon’s Derivative Use Policy. Aegon sets a limit on currency risk at Group and regional levels. Subsidiaries do not engage in currency speculation or program trading. Any assets or liabilities not in the functional currency of the business are hedged to that currency. In any case where