2 Data per Share 3 Share Price 4 Annual Growth Rates, P/E, Dividend Yield and Exchange Rates 5 Net Income and Assets 6 Gross Margin, Expenses and Employees 7 Income before Tax 8 Investments Insurance Activities 9 Insurance Income before Tax and Insurance Investments 10 Net Income and Insurance Investments Americas 11 Net Income and Insurance Investments the Netherlands 12 Net Income and Insurance Investments United Kingdom 13 Net Income and Insurance Investments Other Countries 14 Premiums and Deposits 15 Deposits and New Premium Production 16 Premiums and Revenues 17 Investment Income and Capital Gains 18 Summarized Balance Sheet 19 Shareholders’ Equity, Capital Base and Shares Outstanding 20 Worldwide Ranking Listed Insurers
Interest charges and other — — — — — — —93 —192 —198 —242 —443
Income before tax general account — — — — — — — — — —9 57 Income before tax policyholders account2 — — — — — — — — — —3 0 in EUR billion
Pre-tax Profit Margin (%) Insurance Activities4 —0.7 —0.9 —1.6 —0.2 0.1 0.3 3.1 4.6 3.1 —1.0 3.4
Synthetic GICs — — — — — — — — — 4,888 6,379 Mutual funds and other managed assets — — — — — — — — — 4,599 10,507 Total Production Off Balance Sheet — — — — — — — — — 9,487 16,886
Investment expenses equities and real estate — — — 18 17 14 16 21 12 12 17 Market value equities and real estate 3,222 3,721 3,993 5,309 4,538 4,949 5,972 6,556 7,053 11,044 10,755 Average Pre-tax Return Based on Reported Investment Income3 7.3% 8.1% 8.2% 7.2% 7.0% 7.6% 8.1% 7.4% 7.7% 7.4% 8.1% Average Pre-tax Return Based on Market Performance4 —4.9% 11.0% 8.3% 21.6% —3.6% 10.0% 27.8% 27.0% 15.0% 18.2% 2.4%
22 The Americas 26 The Netherlands 29 United Kingdom 31 Other countries
2 H. DE RUITER (DUTCH) — VICE-CHAIRMAN Retired Managing Director of Royal Dutch Petroleum Company and Group Managing Director of Royal Dutch/Shell Group of Companies
Under Dutch corporate law, our main responsibilities as a nonexecutive Board are to supervise and advise the Executive
(Covadonga). Furthermore, we have approved the divestitures of Labouchere and various non-core activities, as well as the decision to retain certain non-insurance activities acquired with Transamerica following careful evaluation of the alternatives. In a separate meeting we discussed and reviewed AEGON’s strategy at length.
Supervisory Board, Gerard van Schaik, for their assistance in helping to make my transition into the chairmanship both effective and pleasant.
Intermediaries, as well as insurers, must keep abreast of changes in tax law and regulation, and understand new product offerings and technology tools. It is increasingly important to achieve adequate scale, which occurs only when they successfully attract and retain talented personnel; and secure adequate capital for continuity and growth.
In keeping with the Group’s decentralized operating strategy, websites are designed and operated at the business unit level, though several longer-term initiatives, such as AEGON USA’s Enterprise Client System, aiming at interlinking individual customer touchpoints into a seamless network. The Group’s e-commerce presence is supported through some 200 websites. Particularly companies like AEGON, which already maintain a sound infrastructure and organization, will profit most from internet activities. In practice, it appears that the existing ‘old’ economy companies — the ‘dotcorps’ — are more successful than the so called ‘new’ economy companies, the ‘dotcoms’ in swiftly exploiting the profits from internet. The
AEGON USA priorities for 2001 are to build on the established market leadership positions, while focusing on expense control and aggressively pursue operating efficiencies. The company will also explore cross-selling opportunities across all distribution channels and will use technology initiatives to drive competitive growth.
Professional asset management becomes increasingly important. AEGON The Netherlands has therefore restructured the existing competence center into a business unit with its own profit responsibility. This unit will be strongly expanded and will concentrate on both the internal and external market for third party money. Thus, the unit will be able to continue to add value to internal and external portfolios by capitalizing effectively on
with Albert Heijn, the Netherlands’ leading supermarket chain, to distribute easy to use products through its store network.
These and similar initiatives enabled AEGON The Netherlands to continue to improve its cost/revenue ratio, for the fifteenth consecutive year.
On account of policyholder products the policyholders carry the investment risk. AEGON earns management and administration fees and mortality results.
employees contributed personally to the construction of houses. In Hungary, ÁB-AEGON
An active investor relations program aims at providing investors around the world with timely information and access to senior management, and at keeping AEGON attuned to changes in the markets. Along with periodic news releases and shareholder reports, investor and analyst briefing materials, financial interviews and a highly regarded corporate web site, mainstays of the program include management ‘road shows’ and investor days, webcasts and teleconferencing. In addition, investor relations personnel in the Netherlands and the United States are available to answer questions and maintain the dialogue between AEGON and its key financial supporters.
to EUR 95 million as a result of the sale of Bank Labouchere.
Gross annuity and GIC deposits totaled USD 23,555 million, up 27%, of which fixed annuities amounted to USD 4,592 million, up 19%, and variable annuities contributed USD
Sensitivity analyses are performed on Group level, in close cooperation with the business units, in order to quantify exposures of the Group to a wide array of risks.
By the nature of its business, the AEGON Group is exposed to interest rate risk. The sensitivity analysis shows, however, that because of the balance between interest sensitive and non-interest sensitive liabilities, the potential effect of interest rate changes on forecasted 2001 net income is limited.
As well as the annual report, we publish a separate booklet, historical data booklet 1990-2000, which provides further information and trend data over an 11-year period. Both these publications are now available on our corporate web site, which contains investor information and press releases in browsable and downloadable formats.
–785 –648 Corporation tax 11 –1,873 –850 –611 27 0 Net income unconsolidated group companies 12 64 29 0
These financial statements have been drawn up in accordance with the rules for financial statements of insurance companies in the Netherlands, embodied in Section 15 of Title 9, Book 2 of the Dutch Civil Code. A summarized consolidated income statement has been added to the required formats for balance sheet and profit and loss account in order to present a comprehensible view of the results of the AEGON Group. AEGON’s accounting policies are in accordance with the guidelines for insurance companies of the Netherlands Council for Annual Reporting. For some of the information recommended in the guidelines, refer to the separate publication of AEGON’s Historical Data 1990 — 2000.
The results of Transamerica and Guardian, both acquired in 1999, are included for a whole year whereas the 1999 figures include amounts for about five and six months respectively.
Real estate is shown at market value, being the selling-value under normal market circumstances. Each property is revalued at least once in every 5-year period. Valuation is for a large part based on external appraisal. In 2000 97% of the portfolio has been revalued.
USD 225 million 713⁄20% Capital Trust Pass-through Securities 1996/26 533 242 224
Profit sharing and rebates 222 219 482 1Of which the balance of deposits and withdrawals is EUR 904 million.
The provision for life insurance is calculated according to the assumptions on which the premiums have been based. Regularly the assumptions are tested against actual data. If these tests reveal a negative outcome, the provision is recalculated according to the actual data. Future costs of processing benefits are included in the provision. This provision also includes the provision for unearned premiums and unexpired risks as well as the provision for claims outstanding, both as far as related to the life insurance business.
The provision for pension regarding own employees amounts to EUR 1,450 million (1999: EUR 1,533 million).
Bonds and other fixed rate securities 4,242 216 0 4,458 9,824
Stock Stock Shares options Exercise Exercise Market options Exercise held in the balance at price price price balance at price company January 1 EUR Granted EUR Exercised Date EUR December 31 EUR December 31
Interest charges & other –242 1,418 156 Income before tax business units 1,337 861 237 44 –56 0
Average number of employees (incl. agents) 12,857 3,786 3,255 1,048 753 371 22,070 1Calculated as the sum of income before tax and commissions and expenses. In the Netherlands excluding Labouchere, the amounts are: EUR 1,374 million for 2000 and EUR 1,262 million for 1999.
— — Savings deposits — 3,661 — — — — 3,661 18,501 — Total production on balance sheet 17,445 3,661 — — — — 21,106
By virtue of acquisition in accordance with article 98, paragraph 5 of Book 2 of the Dutch Civil Code, per balance sheet date AEGON kept 31,407,080 own common shares with a face value of EUR 0.12 each. The shares have been purchased to hedge stock option rights granted to executives and employees.
We have audited the financial statements of AEGON N.V., The Hague, for the year 2000. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
During another year of strong growth for AEGON, the Supervisory Board carried out its responsibilities in close cooperation with the Executive Board. In 2000, the Supervisory Board held five regular meetings and one extra meeting, and almost all members attended the Annual General Meeting of Shareholders (AGM) held on May 4, 2000.
The following table lists AEGON’s long-term liabilities, subordinated loans and capital securities at December 31,2000. All loans that are shown separately relate to AEGON NV except when stated otherwise. All items of EUR 50 million or more are shown separately.
NLG 275 million 61/2% subordinated Eurobonds 1993/03 September 15 102 102
–202 –194 –189 –200 –785 Corporation tax –205 –207 –209 –229 –850 –1,873