Company: AEGOF
Filing Date: 2025-05-16
Form Type: 6-K
Source: 0001193125-25-121236
Chunk: 38

Company: AEGON LTD.
Filing Date: 2025-05-16
Form: 6-K
Chunk 38
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 low interest rate levels may adversely affect Aegon’s profitability and shareholders’ equity. Aegon is exposed to interest rate risk, as both its assets and liabilities are sensitive to movements in long- and short-term interest rates. The majority of Aegon’s products are long term in nature and as a consequence low interest rates or high interest rate volatility may adversely affect Aegon’s profitability and shareholders’ equity. It is also the case that a very rapid rise in interest rates could have negative consequences for Aegon. For example, in such a scenario policy loans, surrenders and withdrawals may increase. This may result in cash payments by Aegon requiring the sale of invested assets at a time when the prices of those assets have fallen due to the increase in market interest rates. A rapid rise in interest rates will also create a liquidity strain due to collateral calls for interest rate derivatives. Currency risk As an international group, Aegon is subject to foreign currency translation risk. Fluctuations in currency exchange rates may affect Aegon’s profitability and shareholders’ equity. From a Group Solvency capital adequacy perspective Aegon does not consider currency translation risk as a risk. Foreign currency exposure also exists when policies are denominated in currencies other than Aegon’s functional currency of the Euro. Currency risk in the investment portfolios backing insurance and investment liabilities is managed using asset liability matching principles. Assets allocated to equity are kept in local currencies to the extent shareholders’ equity is required to satisfy regulatory and Aegon’s self-imposed capital requirements. Currency exchange rate fluctuations may therefore affect the level of Aegon’s consolidated shareholders’ equity as a result of translation of the equity of Aegon’s subsidiaries into Euro, Aegon’s reporting currency. Aegon holds the remainder of its capital base (capital securities, subordinated and senior debt) in various currencies in amounts that are targeted to correspond to the book value of Aegon’s business units. This balancing is intended to mitigate currency translation impacts on equity and leverage ratios. Aegon may also hedge the expected dividends from its principal business units that maintain their equity in currencies other than the Euro.

| 30 |     | | Aegon Financial Condition Report 2024 |

| Risk profile  Material risks |

Market risk assessment Aegon UK and Aegon Ltd. use a Partial Internal Capital Model (PICM) while the entities in Spain/Portugal use the Standard Formula (SF) to measure exposure to market risks.