British Insurers. Mr. Grace was appointed Chief Operating Officer of Aegon UK in February 2010, and then CEO in March 2011.
�� Reduced safety net. Fewer economically active people fund the traditional safety net of pay-as-you-go state pensions. As a result, governments, particularly in Europe, are under pressure to reform pension systems. At the same time, individuals increasingly rely on private sector providers to help them finance their retirement. The private sector providers are well-positioned to offer this service, while facing the challenge of low interest rates and volatile equity market returns.
This further supports the company’s shift from spread-based business to fee-based business.
�� Aegon successfully rolled-out a branding campaign around the “Transform Tomorrow” theme for its Transamerica businesses and adopted this same tagline in its own brand positioning.
�� In restructuring its main businesses in the United States, the
necessary for employees to realize their full potential, while fostering a customer-centric culture that embraces new thinking and new approaches for responding to opportunities and customer demand.
History and development of Aegon Aegon N.V., domiciled in the Netherlands, is a public limited liability company organized under Dutch law. Aegon N.V. was formed in 1983 through the merger of AGO and Ennia, both of which were successors to insurance companies founded in the 1800s.
Aegon N.V., through its member companies that are collectively referred to as Aegon or the Aegon Group, is an international life insurance, pensions and asset management company. Aegon is headquartered in the Netherlands and employs, through its subsidiaries, approximately 24,000 people worldwide. Aegon’s common shares are listed on stock exchanges in Amsterdam
Brazil and Mexico), the Netherlands, the United Kingdom, and New Markets, which includes a number of countries in CEE and Asia, Spain, France, Aegon Asset Management, and Variable Annuities Europe.
Earnings per common share 1 Excluded from the income statements prepared in accordance with IFRS are receipts related to investment-type annuity products and investment contracts.
Amsterdam’s first working day of the financial year to which the dividend relates. Apart from this, no other dividend is paid on the preferred shares. This resulted in a rate of 2.75% for the year 2011. Applying this rate to the weighted average paid-in capital of its preferred shares during 2011, the total amount of annual dividends Aegon made in 2012 on its preferred shares for the year 2011 was EUR 59 million. The rate for annual dividends, if any, on preferred shares to be made in 2013 for the year 2012, as determined on January 1, 2012, is 2.75% and the annual dividends, if any, on preferred shares for the year 2012, based on the weighted average paid-in capital on the preferred shares during 2012 will be EUR 59 million.
Aegon’s common shares traded on NYSE Euronext Amsterdam and, as a result, are likely to impact the market price of Aegon’s common shares in the United States. Such fluctuations will also affect any US dollar amounts received by holders of common shares upon conversion of any cash dividends paid in euros on
EUR 52 million driven by positive results on the guarantee portfolio in the Netherlands, partially offset by negative results in the Americas and in the United Kingdom on hedges, due to higher equity markets.
Americas and the United Kingdom, partially offset by decreases in the Netherlands and New Markets. Gross deposits increased by 25% driven by variable annuity, retail mutual fund, retirement plan and asset management deposits. New premium production for accident and health insurance increased by 19% for the year mainly driven by travel and supplemental health insurance sales in the Americas and growth in Central & Eastern Europe.
Accident and health insurance premiums 1,672 216 - 179 - 2,067 - 2,067
In the United Kingdom, underlying earnings before tax declined significantly to GBP 5 million. This was mainly due to charges and expenses related to an ongoing program to correct historical issues within customer policy records and the execution of this program partly offset by the benefit of changes to employee benefit plans. The sale of Guardian during the third quarter 2011, and the subsequent loss of earnings, also contributed to the decrease.
Aegon aims to maintain at least 1.5 times holding expenses as a buffer in the holding, in 2011 equivalent to approximately
USD 326 million as a result of continued strong growth of the business and rate increases for synthetic guaranteed investment contracts.
A fixed interest account is available on most products and the underlying funds are selected by a policyholder, within certain boundaries, based on the policyholder’s preferred level of risk.
In most cases, the manager remains with the investment company and acts as a sub-adviser for Aegon USA’s mutual funds. Aegon USA earns investment management fees on these investment products. Aegon USA also earns direct investment management fees through affiliated managers acting as sub-advisers.
The policyholder can surrender the annuity prior to maturity and receive the cash value less surrender charges. Fixed deferred annuities have a specified crediting rate that can be reset periodically at the company’s discretion after an initial guarantee period. Fixed deferred annuity contracts in the United States also offer guaranteed minimum surrender values and payout options.
Through Transamerica Employee Benefits, Transamerica offers voluntary payroll deduction life and supplemental health to companies ranging in size from just five employees to more than 100,000. Products and services are marketed to employees at their place of work and are designed to supplement employees’
Transamerica Retirement Solutions also provides pre-retirees the guidance and decision support needed to make a successful transition to and through retirement.Transamerica Retirement
Aegon believes the best and most enduring competitive advantages are relationships and service.
products sold to defined contribution plans, as well as other insurance products, would be adversely affected if it was decided that these products should be regulated as derivatives.
US Congress that target foreign owned companies, such as a proposal containing a corporate residency provision that threatens to redefine some historically foreign-based companies as US corporations for US tax purposes.
The Aegon USA companies manage their asset liability matching through the work of several committees. These committees review strategies, define risk measures, define and review asset liability management studies, examine risk-hedging techniques, including the use of derivatives, and analyze the potential use of new asset classes. Cash flow testing analysis is performed using computer simulations, which model assets and liabilities under projected interest rate scenarios and commonly used stress-test interest rate scenarios. Based on the results of these simulations an investment portfolio is constructed to best match the cash flow and interest sensitivity of the underlying liabilities while trying to maximize the spread between the yield on the portfolio assets and the rate credited on the policy liabilities.
EUR 265 million before tax related to the acceleration of product improvements for unit-linked insurance products. Realized gains on investments totaled EUR 138 million for the year and were mainly the result of asset liability management related trading activity and selective de-risking. Results on fair value items amounted to a gain of EUR 164 million and impairments amounted to EUR 29 million.
�� In 2012, the distribution businesses recorded an underlying earnings before tax of EUR 16 million, an improvement compared to 2011 due to cost savings and lower amortization of value of business acquired following an impairment in 2011.
Pensions business line, serves large corporations and financial institutions such as company and industry pension funds.
Netherlands. The direct channel is used by Aegon Bank (mainly for savings) and there is a strategic partnership with the Dutch retailer Kruidvat for products sold by Aegon Schadeverzekering.
Products Aegon the Netherlands provides full service pension solutions and administration-only services to company and industry pension funds and some large companies. The full service pension products for account of policyholders are separate account group contracts with or without guarantees.
Income tax on shareholders return 14 52 (73%) 17 60 (72%)
GBP 66 million driven mostly by the non-recurrence of a GBP 15 million benefit and recurring charges for Corporate Center expenses.
�� In Asia, new life sales declined to EUR 53 million in 2012.
Aegon Romania in 2008 only, Aegon is not a significant player in these countries, just like Aegon’s business in Turkey that was acquired in 2008.
In addition to legal regulation, insurance companies are subject to a number of self-regulatory groups in their respective countries. These self-regulatory groups are the main forums for discussion among insurance companies. Their specialized departments (e.g., actuarial, financial, and legal departments)
AA- rated (S&P) reinsurance companies. The credit standing of the reinsurance partners is held under strict monitoring, being assessed by the Risk & Capital Committee on a quarterly basis.
Japan’s leading insurance companies, in early 2007. Operations were launched in 2009 and the joint venture has signed up with one “mega bank’’ and six regional banks as distribution partners as well as Sony Life’s Life Planner channel consisting of over 4,000 professionals as of the end of December 2012.
In China, Aegon sells its products through multiple distribution channel such as agents, independent brokers, banks, DM and the group channel. As of December 2012, Aegon’s bancassurance network in China totals 736 outlets.
Many competitors in China are actively developing new distribution channels or new tools for insurance sales in line with the regulatory call to promote multiple distribution channels in
2 Source: Monthly New Business Report from the Insurance Regulatory and Development Authority (IRDA) website.
Policyholder behavior risks are managed through a combination of product design, pricing techniques, and through hedge construction and rebalancing to reflect emerging experience, and are reflected in the reinsurance premium that is charged by SARe to Aegon Sony Life. In addition to these pricing and hedging risk mitigation techniques, for certain products capital will contain a provision for adverse deviation. As such, increases in capital due to unexpected deviations in policyholder behavior or an unfavorable basis error are cushioned by applying an assumption for hedge effectiveness in capital (and reflected in pricing) that is lower than is expected to be realized based on results from a ten year back test of Aegon Sony Life’s hedge strategy (the back test spans the period June 1999 to June 2009). SARe’s Risk &
India - Aegon Religare Reinsurance arrangements are regulated through IRDA’s regulations. Aegon Religare has reinsurance treaties with
EUR 30,000 and EUR 60,000 per life insured. Aegon Spain remains contingently liable with respect to the amount ceded should the reinsurance company fail to meet its obligations.
United Kingdom and the Netherlands. Sales in France are through AG2R La Mondiale. Aegon N.V. has a 35% stake in
International bonds In the United Kingdom, the distribution channels are Aegon’s
AXA and Allianz are the only other providers offering variable annuities, with AXA leading the market. In other European markets competitors such as Canada Life, ING, Generali and
Aegon is required to submit annual returns to the Central Bank and is subject to annual review meetings and themed visits.
The Central Bank has wide powers of intervention in all areas of
By setting certain predefined tolerances and adhering to policies that limit the overall risk the company is exposed to, Aegon is able to accept risk with the knowledge of potential returns and losses.
�� To institute a proper system of checks and balances and ensuring that senior management is aware at all times of material risk exposure.
also has an individual responsibility in this regard and a direct reporting line to the Chairman of the SBRC.
Aegon’s liquidity management strategy ensures the company will not be a forced seller of assets even in a severe stress scenario.
In Europe, countries such as Greece, Ireland, Italy, Portugal, Spain and Cyprus have been particularly affected by the recent financial and economic conditions, creating a heightened perceived risk of default on the sovereign debt of those countries, with the possibility of a Greek default and rising concerns about the contagion effect it would have on other European Union economies and the ongoing viability of the euro currency and the
Disruptions in the overall economy due to failure to avoid the
to satisfy their financial obligations. Due to the weak economic environment, Aegon incurred significant investment impairments due to defaults and overall declines in the capital markets.
Union (IFRS), are also at risk if returns are not sufficient to allow amortization of deferred policyholder acquisition costs
December 31, 2012, Aegon has borrowed or swapped amounts in proportion to the currency mix of capital in units, which was denominated approximately 53% in US dollars, 29% in euro, 11% in UK pounds and 6% in Canadian dollars.
USA. Also, in 2012, Standard and Poor’s put a negative outlook on its insurer financial strength rating for Scottish Equitable
Court could elect to follow the advice of the Attorney General or to refer the case back to another court for reassessment on different or additional grounds. If instead the decision of the
proposed by the European Commission on October 20, 2011, if adopted, may require Aegon to mandatorily trade certain types of OTC derivative transactions on regulated trading venues and clear certain types of transactions currently traded in the OTC
Aegon’s ability to satisfy its debt obligations or pay its operating expenses.
(“SCOR”), Munich Re, RGA and Swiss Re. The major reinsurers of
�� Approving a tender offer, merger, sale of all or substantially all of the assets or other business combination.
hybrid capital securities. Dated subordinated and senior debt accounted for the remaining 3%. Aegon achieved its year-end 2012 goal to improve the quality of its capital base, excluding revaluation reserves, by increasing the proportion of core capital to at least 75%.
Aegon’s liquidity position At December 31, 2012, Aegon N.V. held, at group level, a balance of EUR 2.2 billion in excess cash compared with EUR 1.5 billion as at the end of 2011.
A final dividend to common shareholders for 2011 of EUR 0.10 per common share was announced on May 16, 2012, with an interim dividend for 2012 of EUR 0.10 subsequently announced on August 9, 2012. At the annual General Meeting of Shareholders on May 15, 2013, the Supervisory Board will, absent unforeseen circumstances, propose a final dividend for 2012 of EUR 0.11 per common share related to the second half of 2012 (at shareholder’s option in cash or in stock).
During the June meeting the Board also paid a visit to Knab.
Supervisory Board discussed with management the preparation for the Analyst & Investor conference later that month.
Exchange Commission, capital updates, internal control systems and compliance, the external auditor’s engagement letter and the audit plan for 2012, tax matters and information technology
Framework and the various policies and related procedures. This included, for example, reviewing and/or approving the ex-ante assessments, any exemption requests under the remuneration policies or changes to the list of Identified Staff. In addition, the
During meetings throughout the year, the Committee was kept updated on developments regarding executive remuneration, exchanges of views with DNB and regulatory and legislative matters.
Mr. Storm is not regarded as independent within the definition of the Code as he served as Chairman of Aegon’s Executive
General compensation practices Aegon has a pay philosophy which is based on total compensation. This means that total remuneration for fully functioning employees is aimed at being consistent with compensation levels in the market in which it operates and competes for employees. Total compensation typically consists of base salaries and, where in line with local market practices, variable compensation. Market survey information from reputable sources is used to provide information on competitive compensation levels and practices.
Aegon’s Executive Board Remuneration Policy has four main objectives: �� To enable Aegon to attract and retain highly-qualified members for its Executive Board.
Consistent with the Executive Board Remuneration Policy, the total compensation for Executive Board members will consist of fixed compensation and variable compensation.
Executive Board contain provisions entitling them to severance payments, should their employment be terminated as a result of a merger or takeover. The Supervisory Board has taken appropriate steps to ensure the contractual arrangements of members of the Executive Board are in line with the Executive
H.Transfer of shares There are no restrictions on the transfer of common shares. As regards the transferability of preferred shares, please refer to clause 10.5 of the Amendment to the 1983 Merger Agreement1.
Dutch Corporate Governance Code. Aegon endorses the Code and strongly supports its principles for sound and responsible corporate governance. Aegon regards the Code as an effective means of helping ensure that the interests of all stakeholders are duly represented and taken into account.
and CFO are specifically excluded from voting on issues directly related to Aegon or their position within it. Aegon’s Supervisory
Board holds the view that, given the historic relationship between Aegon and Vereniging Aegon, it would not be in the company’s best interests to prevent them participating in discussions and decision-making related to Vereniging Aegon.
1 The 1983 Merger Agreement, as amended is published on Aegon’s website (aegon.com).
Supervisory Board. The Executive Board is the executive body and its members are employed by the company1. Members of the
United States. The remuneration policy as regards the members of the Executive Board is adopted by the General Meeting of
Amounts in EUR million (except per share data) Note 2012 2011 2010
Coupons on non-cumulative subordinated notes - (23) - - - (23) - (23)
Net income / (loss) recognized in the income statement - 869 - - - - 869 3 872
The standard applies to financial years beginning on or after January 1, 2013, and provides a definition of fair value and a single source of fair value measurement, and disclosure requirements for use across IFRSs. Aegon expects the impact of IFRS 13 on the Group’s financial position or performance to be insignificant. In addition, IFRS 13 requires more disclosures on Level III investments.
b. Jointly controlled entities Joint ventures are contractual agreements whereby the Group undertakes with other parties an economic activity that is subject to joint control.
2.4 Foreign exchange translation a. Translation of foreign currency transactions The Group’s consolidated financial statements are presented in euros. Items included in the financial statements of individual group companies are recorded in their respective functional currency which is the currency of the primary economic environment in which each entity operates. Transactions in foreign currencies are initially recorded at the exchange rate prevailing at the date of the transaction.
Aegon’s senior management is compensated based in part on Aegon’s results against targets using the non-IFRS measures presented here. While many other insurers in Aegon’s peer group present substantially similar non-IFRS measures, the non-IFRS measures presented in this document may nevertheless differ from the non-IFRS measures presented by other insurers. There is no standardized meaning to these measures under IFRS or any other recognized set of accounting standards and readers are cautioned to consider carefully the different ways in which Aegon and its peers present similar information before comparing them.
It is derecognized when the interest in the subsidiary or joint venture is disposed of.
Valuations of both investments in real estate and real estate held for own use are conducted in full by independent external appraisers at least every three years and reviewed at least once a year by qualified internal appraisers to ensure the value correctly reflects the fair value at the balance sheet date. Appraisals are different for each specific local market, but are based on market guidelines such as International Valuation Standards or guidelines issued by the Investment Property Databank. Valuations are mostly based on active market prices, adjusted for any difference in the nature, location or condition of the specific property. If such information is not available, other valuation methods are applied, considering the current cost of reproducing or replacing the property, the value that the property’s net earning power will support and the value indicated by recent sales of comparable properties. Discount rates used in the valuation of real estate reflect the risk embedded in the projected cash flows for the asset being valued. For property held for own use, appraisers consider the present value of the future rental income cash flows that could be achieved had the real estate been let out.
Dividends and other distributions to holders of equity instruments are recognized directly in equity, net of tax. A liability for non-cumulative dividends payable is not recognized until the dividends have been declared and approved.
Third-party pricing services will often determine prices using recently reported trades for identical or similar securities. The thirdparty pricing service makes adjustments for the elapsed time from the trade date to the balance sheet date to take into account available market information. Lacking recently reported trades, third-party pricing services and brokers will use modeling techniques to determine a security price where expected future cash flows are developed based on the performance of the underlying collateral and discounted using an estimated market rate. Also included within the modeling techniques for RMBS, CMBS and CDO securities are estimates of the speed at which the principal will be repaid over their remaining lives. These estimates are determined based on historical repayment speeds (adjusted for current markets) as well as the structural characteristics of each security.
Mortgage loans, policy loans and private loans (held at amortized cost) For private loans, fixed interest mortgage loans and other loans originated by the Group, the fair value used for disclosure purposes is estimated by discounting expected future cash flows using a current market rate applicable to financial instruments with similar yield, credit quality and maturity characteristics.
Commercial mortgage-backed securities (CMBS) are monitored and reviewed on a monthly basis. Detailed cash flow models using the current collateral pool and capital structure on the portfolio are performed quarterly. Model output is generated under base and several stress-case scenarios by Aegon’s CMBS asset specialists. For conduit securities, a widely recognized industry modeling software is used to perform a loan-by-loan, bottom-up approach to modeling. For non-conduit securities, a CMBS asset specialist works closely with Aegon’s real estate valuation group to determine underlying asset valuation and risk. Both methodologies incorporate external estimates on the property market, capital markets, property cash flows, and loan structure. Results are then closely analyzed by the asset specialist to determine whether or not a principal or interest loss is expected to occur. Aegon will impair a particular tranche to fair value where it would not be able to receive all contractual cash flows.
Mortgage loans - carried at amortized cost 27,129 1,450 - 1,567 35,806 - 2 38,825 12,707 1,011
(2011: EUR 31 million) and EUR 158 million corporate exposure (2011: EUR 137 million).
Of which held by Aegon Americas, NL and UK 96,086 8,288 (3,204) 101,170 79,800 21,370
The table below summarizes vintage and quality of the AFS RMBS - reverse mortgages portfolio of Aegon USA.
Commercial mortgage-backed securities Aegon Americas, Aegon The Netherlands and Aegon UK hold EUR 5,606 million of AFS commercial mortgage-backed securities
USA, and the total net unrealized gain on ABSs is EUR 43 million, of which EUR 51 million net losses relates to positions of Aegon
USA. These are securitizations of underlying pools of credit card receivables, auto financing loans, small business loans, bank loans, and other receivables. The underlying assets of the asset backed securities have been pooled together and sold in tranches with varying credit ratings. The breakdown of quality of the available-for-sale ABS portfolio of Aegon USA is as follows:
(including certain Tier 1, Upper Tier 2, preference and B shares) for two years from April 30, 2010. As such, in 2010, Aegon impaired its RBS securities with optional deferral language and non-cumulative coupons. The coupon ban has since expired. RBS continues to make progress on its restructuring plan, showing improvement in the profitability levels of its core businesses, lowering balance sheet leverage, improving capital ratios, reducing reliance on wholesale funding, and significantly increasing liquidity reserves. Aegon evaluated the near-term prospects of the issuer and it is believed that the contractual terms of these investments will be met and these remaining investments are not impaired as of December 31, 2012.
EUR 30 million, of which EUR 28 million relates to holdings below investment grade. BAC is one of the largest banking organizations in the US. While challenges remain for BAC, particularly in the mortgage business, the process of stabilization in the credit profile appears to be ongoing, including an emphasis on actions to build capital, reduce non-core assets and restore confidence. Payments continue to be made on Aegon’s holdings in accordance with the original bond agreements. Aegon evaluated the near-term prospects of the issuer and it is believed that the contractual terms of these investments will be met and these investments are not impaired as of December 31, 2012.
The majority of the unrealized losses relate to investment grade holdings where credit spreads have widened in the near term in conjunction with concerns over the current macroeconomic conditions.
Gains and (losses) on investments in real estate 10 (53) (49) 135
Amortization of deferred expenses, VOBA and future servicing rights 830 83 295 140 - 1,348
Insurance contracts for account of policyholders 43,909 24,488 2,091 2,937 - - 73,425
Included in fee and commission income is EUR 79 million of fees on trust and fiduciary activities (2011: EUR 76 million; 2010: EUR 109 million). EUR 3 million of fees were recognized on financial assets and liabilities that are not carried at fair value with changes in the fair value recognized in the income statement (2011: EUR 4 million; 2010: EUR 3 million).
Net fair value changes on for account of policyholder financial assets at fair value through profit or loss are offset by Claims and benefits paid to policyholders reported in Policyholder claims and benefits (note 12).
that relates to equipment, software and real estate held for own use. The direct operating expenses relating to investments in real estate that generated rental income was EUR 92 million (2011: EUR 92 million; 2010: EUR 83 million). Minimum lease payments recognized as expense amounted to EUR 15 million (2011: EUR 7 million; 2010: EUR 7 million). Included in employee expenses is
The costs related to the share options amount to EUR (2) million (2011: EUR (1) million and 2010: EUR (7) million) and are recognized in the income statement as part of “Commissions and expenses”.
For more details on impairments on financial assets, excluding receivables, refer to note 4 Financial and insurance risks.
The number of share options that has not been included in the weighted average number of common shares used in the calculation of diluted earnings per share amounted to 13.922.977 (2011: 18,778,361; 2010: 21,844,693). In 2012, 2011 and 2010 the average share price did not exceed the exercise price. At December 31, 2012, the exercise prices of these share options range from EUR 8.93 to
Notes to the consolidated financial statements of Aegon N.V. Note 22 22 Investments Investments for general account comprise financial assets, excluding derivatives, as well as investments in real estate.
of direct operating expenses is related to investment property that did not generate rental income during the period.
Upon sale of the associate, any revaluation reserve needs to be recycled through the income statement. Considering possible alternative outcomes of the arbitration process, Aegon expects that it will recover at least the book value as at December 31, 2012.
The reinsurance business being retained by Aegon, which is comprised primarily of the variable annuity guarantee business, is substantially hedged for financial market risks and produces normalized results which are negligible. In addition, various administration, service and asset management contracts are part of the transaction. The combined result, consisting primarily of the amortization of the deferred cost of reinsurance, is approximately EUR 29 million (USD 40 million) before tax per annum initially. These costs will vary with the volume of ultimate novations.
In 2012, Aegon issued 33,203,150 and 29,172,394 new common share with a par value of EUR 0.12 in respect of the final dividend for 2011 which was paid in May 2012 and the interim dividend paid in September 2012, respectively.
EUR 0.25 (total proceeds of EUR 10 million) in order to avoid dilution of its voting rights following the issuance of 10% new common shares completed on March 1, 2011.
In 2012, Other reflects the release of earn out provisions which were directly deducted from goodwill.
Defined benefit plans are mainly operated by Aegon USA, Aegon The Netherlands and Aegon UK. The following sections contain a general description of the plans in each of these subsidiaries, a summary of the principal actuarial assumptions applied in determining the value of defined benefit plans and a description of the basis used to determine the overall expected rate of return on plan assets.
Health care cost trend rate assumed for next year 2.00% 2.00%
Target allocation of plan assets for retirement benefit plans for the next annual period is
Notes to the consolidated financial statements of Aegon N.V. Note 46 a. Financial guarantees In the United States and the United Kingdom, a guaranteed minimum withdrawal benefit (GMWB) is offered directly on some variable annuity products Aegon issues and is also assumed from a ceding company. Variable annuities allow a customer to provide for the future on a tax-deferred basis and to participate in equity or bond market performance. Variable annuities allow a customer to select payout options designed to help meet the customer’s need for income upon maturity, including lump sum payment or income for life or for a period of time. This benefit guarantees that a policyholder can withdraw a certain percentage of the account value, starting at a certain age or duration, for either a fixed period or during the life of the policyholder.
all other variables constant in the valuation model, 2012 income before tax would have been EUR 284 million and EUR 299 million higher or lower respectively (2011: EUR 268 million and EUR 289 million higher or lower).
In its decision, the Court ruled that customers are required to pay a reasonable premium. However, the Court went on to define what it considers to be a reasonable premium at a level below that charged by Aegon. The Court based its decision on a single industry example, which Aegon believes is not representative. Aegon believes that, based on the arguments presented, the Court’s ruling was wrongly decided and, in October 2011, appealed the decision taken by the Amsterdam Court of Appeal to the Supreme Court in the Netherlands.
As is customary in connection with appeals to the Supreme Court, the Attorney General (Procureur Generaal) issued advice to the
�� Transferred financial assets that are derecognized in their entirety, but where Aegon has a continuing involvement: �� securitizations whereby mortgage loans are transferred to a securitization vehicle which is not part of the Group and where
50.1 Transferred financial assets that have not been derecognized in their entirety The following table reflects the carrying amount of financial assets that have been transferred to another party in such a way that part or all of the transferred financial assets do not qualify for derecognition. Furthermore, it reflects the carrying amounts of the associated liabilities.
On December 20, 2012 Aegon entered into an exclusive 25-year strategic partnership with Banco Santander. Under the terms of the agreement, Aegon will acquire a 51% stake in both a life insurance company as well as in a non-life insurance company for a consideration of EUR 220 million. Depending on the performance of the partnership, Aegon may pay an additional amount after five years. Furthermore, Aegon Spain will provide the back-office services to the joint venture companies. The transaction is expected to close in the first half of 2013, subject to regulatory approval and will be financed from existing resources.
EUR 212 million. The actual proceeds from the sale amounted to EUR 162 million, the remainder was upstreamed as a dividend prior to the sale. The value of the assets and liabilities sold amounted to EUR 1,084 million and EUR 933 million respectively. The assets included an amount of EUR 320 million of cash. Included in the gain are unrealized gains in an amount of EUR 22 million, reflecting revaluation reserves which were recycled through the income statement. In 2009, Aegon’s funeral insurance business generated
New Markets �� Aegon-CNOOC Life Insurance Company Ltd, Shanghai (China), life insurance company (50%)
�� Aegon Industrial Fund Management Co., Ltd, Shanghai (China), investment management company (49%)
On February 15, 2013, Aegon N.V. and Vereniging Aegon reached an agreement to exchange, subject to approval by the Annual General
Variable compensation was split 50/50 in a cash payment and an allocation of shares. Of the variable compensation related to performance year 2011 40% was payable in 2012. However, Mr. Wynaendts and Mr. Nooitgedagt both waived the cash payment of EUR 164 and EUR 106 respectively. The number of shares that was made available in 2012 related to performance year 2011 was 34,607 and 22,501 for Mr. Wynaendts and Mr. Nooitgedagt respectively, with the exception of shares sold to meet income tax obligations. To the vested shares a retention (holding) period is applicable for a further three years, before they are at the disposal of the Executive Board members.
Auditor's responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
Coupons and premium on convertible core capital securities and coupon on perpetual securities, net of tax - - - - - (927) - - (927)
4. The profits remaining after application of 2 and 3 above shall be put at the disposal of the General Meeting of Shareholders. The
Major shareholders General As of December 31, 2012, Aegon’s total authorized share capital consisted of 3,000,000,000 common shares with a par value of
Following shareholder approval and subsequent execution of the transaction, Vereniging Aegon will hold a total of 307 million 1 common shares and a total of 2,080 million common shares will be outstanding.
Issuance, repurchase and coupons of non-cumulative subordinated notes 241 - -
Netherlands Gift and Inheritance Tax Act 1956, However, inheritance tax will be due in the case of a gift of Aegon common shares by, or on behalf of, a holder who at the date of the gift was neither a resident nor deemed to be a resident of the Netherlands for the purposes of the Netherlands Gift and Inheritance Tax Act 1956, but such holder dies within 180 days after the date of the gift, and at the time of his or her death is a resident or deemed to be a resident of the Netherlands for the purposes of the Netherlands Gift and Inheritance Tax Act 1956. A gift made under a condition precedent is deemed to be made at the time the condition precedent is fulfilled.
Value Added Tax In general, no value added tax will arise in respect of payments in consideration for the issue of Aegon common shares or in respect of a cash payment made under Aegon common shares, or in respect of a transfer of Aegon common shares.
Principal accountant fees and services Ernst & Young Accountants has served as Aegon’s independent public accountant for each of the fiscal years in the three-year period ended December 31, 2012, for which audited financial statements appear in this Annual Report.
certain responsibilities, and as a result, the entity has created a valid expectation on the part of those other parties that it will discharge those responsibilities.
Share in underlying earnings before tax of associates 14 8 7 3 32 9 16 9 7 41
New premium production general insurance 14 13 12 16 55 13 14 12 13 52
�� Lowering of one or more of insurer financial strength ratings of Aegon’s insurance subsidiaries and the adverse impact such action may have on the premium writings, policy retention, profitability and liquidity of its insurance subsidiaries.