Acquisitions and disposals Aegon UK's business strategy is focused on developing the business as the leading platform savings, investments and pensions provider in the market and has made a number of strategic changes in order to align its business model with its strategy.
Overview of sales and distribution channels In the United Kingdom, Aegon has two main distribution channels: retail and workplace intermediaries. These are supported by Aegon
Aegon UK offers two distinct versions of the proposition targeted at distinct market segments:  A 'fund wrap' service, which includes multiple wrapper choices, fully open architecture fund choice and digital advisor/customer self-service access; and  ‘One Retirement’, a standalone pension accumulation and drawdown product, designed to be a single-point solution for customers that do not have a broader set of needs.
Advisors (IFAs) to large Employee Benefit Consultants (EBCs). Services that Aegon UK offers include:  ‘Workplace Aegon Retirement Choices’, a comprehensive pension proposition that manages workplace pensions for employers in a seamless and streamlined way, enabling them to offer employees a choice of savings wrappers;  Employers’ auto-enrolment obligations, which are supported through Aegon’s SmartEnrol capability;  Support for the governance of the workplace pension scheme, which is offered through the sophisticated analytics of Aegon’s Smart Governance;  Employee access to Retiready, which enables employers to cater for all levels of employee investment knowledge and confidence, in addition to moving with their employees throughout their working life; and  ‘TargetPlan’, Aegon UK’s dedicated offering for large employers. This offers both a Trust, Master Trust and Contract-based version underpinned by Aegon’s market-leading employee engagement services.
Following the completion of the BlackRock Part VII transfer, Aegon is now aiming to use its proposition breadth to build towards being the largest workplace pension platform in the UK. This will combine Aegon’s traditional strengths in employee engagement and online services with BlackRock’s experience tailoring solutions to meet the distinct needs of larger employers.
The majority of customers receive the service having been 'upgraded' from Aegon UK's existing business, thereby allowing longstanding customers to benefit from the advantages of a modern digital pension. Retiready customers have access to a number of tools to help them better engage with and manage their retirement savings. Since inception, approximately 400,000 customers, with assets of around GBP 7.8 billion, have been upgraded to Aegon UK's new proposition.
The Digital Solutions business is responsible for Aegon UK's new digital platform propositions sold through Retail Advisor and
Workplace channels, together with the protection lines. The majority of new assets going forward will be accumulated in this business.
In addition, where appropriate, Aegon UK is upgrading customers from its Existing Business to Digital Solutions to ensure an enhanced customer experience, a more engaged relationship, and lower cost to serve.
Choices, giving opportunities to leverage sales and promotional activity. In addition, Aegon UK offers a range of protection products for small- to medium-sized companies that wish to insure key personnel.
Traditional Pensions Traditional Pensions include a variety of individual and corporate pensions and with-profits products. These products are not actively marketed, but have a large number of existing customers.
The Aegon Master Trust will be subject to regulatory oversight by the Pensions Regulator following industry changes to authorise
Solvency II Under Solvency II, life insurance companies are required to maintain certain levels of shareholders' equity in accordance with
Traditional general account life insurance mainly consists of index-life products that are not unit-linked, but have guaranteed interest rates, in addition to group life and preferred term life products.
In Hungary, Aegon offers a wide range of life insurance products: including term life, whole life, group life insurance, accidental life and traditional saving type products, in addition to unit-linked policies, which are frequently accompanied with riders. These riders provide customers – in addition to the main coverage – with additional financial support in the event of, for instance: having an accident, becoming disabled, or being hospitalized. Aegon is a significant market player in Hungary in the unit-linked segment.
In Romania, Aegon undertakes life insurance business via a branch of Aegon Poland Life Insurance Company. The Romanian branch sells unit-linked, term life and endowment insurance policies.
Overview – Central & Eastern Europe  Central & Eastern Europe  Central & Eastern Europe  Central & Eastern Europe
In Turkey, Aegon provides only traditional life insurance products, the most important of which are pure term life with several riders, term life with premium refund on maturity, and saving-type endowment products. Aegon’s insurance portfolio is growing significantly in Turkey due to the country's high growth rate.
Mortgage loans Aegon Hungary first offered mortgage loans to retail customers in 2006 via Aegon Hungary Mortgage Finance Co., a subsidiary of Aegon Hungary Composite Insurance Company. After its launch, the mortgage loan business was affected by several legislative changes.
On June 4, 2018, Aegon agreed to sell its performing mortgage loan portfolio to Raiffeisen Bank Zrt., member of the Raiffeisen Bank
International Group. This was followed by the sale of Aegon Hungary Mortgage Finance Co. to Intrum Justitia Zrt., being the Hungarian subsidiary of Intrum Justitia AB, the Swedish public company engaged in credit management. The transaction was subject to customary regulatory approval, and was closed on October 8, 2018.
Pensions Aegon’s pension business in Central & Eastern Europe was impacted by reforms to the pension system in several countries in the region during recent years. In 2018 Aegon was active in the (formerly mandatory) private pension market in Slovakia, Poland and Romania.
As of December 31, 2018, Aegon managed the savings of 3.1 million pension fund members in Central & Eastern Europe. In terms of assets under management, Aegon’s private pension funds in Poland, Slovakia and Romania, and its voluntary pension fund in Hungary, are significant market players in the respective countries. In terms of numbers of members, Aegon has a significant market presence in Poland, Romania, and Hungary.
As part of Aegon’s regional expansion, Aegon Hungary has operated branch offices selling household insurance policies in Slovakia since 2010 and in Poland since 2011.
Competition In 2017, Aegon was the third largest life insurance provider in Hungary, based on annual standardized premium income, and the third largest provider in the non-life insurance market. In Turkey, Aegon was ranked fifth in the life insurance market based on written premium at the end of 2018. Aegon is a less significant market participant in Poland, Slovakia, the Czech Republic and Romania.
Regulation and supervision In the European Union, a single insurance company may only be licensed for and conduct either a life insurance business or a nonlife insurance business; not both. In Hungary, however, insurance companies established before 1995 are exempt from this rule. This exemption therefore applies to Aegon Hungary, which is a composite insurance company.
In addition to legal regulation, insurance companies are members of a number of self-regulatory groups in their respective countries.
The foundation and operations of voluntary pension funds are regulated in Hungary by the country's Voluntary Mutual Pension Funds
Management Companies and Respective Notices Act (43/2004). The private pension business is under the supervision of the National
and the voluntary pension system is subject to the Voluntary Pension Law (204/2006), both complemented by individual regulations
Funds Act. In Turkey, the voluntary pension funds are under the supervision of the Undersecretariat of Treasury and the companies are subject to Individual Retirement Saving and Investment System Law No. 4632.
Aegon Spain Holding BV (hereafter referred to as Aegon Spain) operates in Spain through Aegon España S.A.U. de Seguros y Reaseguros. In addition, Aegon Spain operates in Spain through long-term partnerships with Banco Santander S.A. (offering both life and general insurance products) and Liberbank, S.A. (offering life products).
Aegon Administracion y Servicios A.I.E., a separate legal entity, provides administration and operations services to all Aegon companies in Spain and Portugal, including joint ventures with third parties.
Organizational structure Aegon’s main subsidiaries and affiliates in Spain & Portugal are:  Aegon España S.A.U. de Seguros y Reaseguros;  Aegon Administracion y Servicios A.I.E.;  Aegon Activos A.V, S.A.;  Aegon Mediación, S.L.U.;  Santander Generales Seguros y Reaseguros S.A. (51%);  Santander Vida Seguros y Reaseguros S.A. (51%);  Liberbank Vida y Pensiones, Seguros y Reaseguros, S.A. (50%);  Aegon Santander Portugal Não Vida-Companhia de Seguros S.A. (51%);  Aegon Santander Portugal Vida-Companhia de Seguros de Vida S.A. (51%).
In the Portuguese market, where all business is written through the bancassurance channel with approximately 61% of pure life risk premiums, where credit-related policies mostly related to mortgages play a significant role and 39% of non-life insurance premiums
Aegon Spain's agreement with Banco Santander S.A. initially concerned pure life risk and general insurance products (accident, home and commercial multi-risk insurance, and critical illness). These products are developed through two insurance entities: Santander Vida for pure life risk products and health; and Santander Generales for general insurance products. Aegon Spain and Banco Santander are both shareholders of these entities: Aegon Spain's share in each entity is 51%; and Banco Santander S.A. owns the remaining 49%.
Santander Portugal Vida, for pure life risk products; and Aegon Santander Portugal Não Vida, for general insurance products. Aegon
– consisting of 174 branches and 370,000 clients – to the current distribution network of Aegon Santander Portugal Vida and Aegon
The expansion covers term life and selected lines of non-life insurance following Banco Santander’s acquisition of the Banco Popular franchise in 2017 as well as the acquisition of the term life and selected lines of non-life insurance portfolios of Banco Popular.
The transaction is expected to close following the technological migration of the portfolios in 2019.
Aegon Spain own network Aegon Spain's own network offers life insurance, health insurance, pension products and mutual funds. It uses two main distribution channels: its own network of brokers and agents for the products of its full subsidiaries, which comprises 90% of the total; and a direct channel, which comprises 10% of the total.
In 2018, Aegon Spain implemented an efficiency plan in order to its streamline its core activities. The project, which focused on transforming the health insurance business and simplifying operational processes and improving efficiency in general. A substantial number of positions was restructured on the basis of a social plan. New expenses control tools and processes were implemented in order to make savings last in time. Aegon Spain also ceased the activities of its subsidiary Aegon Activos A.V. S.A., mainly distributing mutual funds.
Overview of business lines Aegon Spain focuses primarily on retail customers. It offers individual life, pensions, general insurance, accident and health products through different distribution channels, including its own channels (agents, brokers and direct), together with bancassurance products through its joint venture partnerships with Liberbank S.A. and Banco Santander Group, the latter of which in both Spain & Portugal.
For Aegon Spain's health and general insurance products, the main competitors are both foreign and local companies. Grupo Mutua
With respect to the life insurance Portuguese market, Fidelidade and Ocidental Vida are the main players with a combined market share in 2018 of 56% (based on issued premiums of insurance contracts and deposits of financial products).
In the non-life, Fidelidade is also the main player with a market share of 26%, followed by a new company named Seguradoras Unidas with 16%. Seguradoras Unidas is the result of a merger of several insurance companies, including Tranquilidade and Açoreana.
Regulation and supervision Insurance companies in Spain are required to report on a quarterly basis to the Dirección General de Seguros y Fondos de Pensiones
Insurance companies are required to report to the ASF on a monthly basis (issued premiums and claims costs per line of business) and more extensively on a quarterly basis. Portuguese regulations also incorporate all requirements from the relevant EU directives.
Organizational structure Aegon’s main operating companies in Asia (including Aegon’s ownership percentages) are:  Aegon THTF Life Insurance Co. Ltd. (50%);  Aegon Life Insurance Co. Ltd. (49%);  Aegon Sony Life Insurance Co. Ltd. (50%);  SA Reinsurance Ltd. (50%); and  Transamerica Life (Bermuda) Ltd. (100%).
Joint ventures Aegon operates in China through a joint venture with Tsinghua Tongfang Co. Ltd (THTF) called Aegon THTF Life Insurance Co. Ltd.
(Aegon THTF). Aegon THTF is licensed to sell both life insurance and accident and health products in China. Since 2003, the company has expanded its network of offices and business in China. Having established 13 branches, its geographic presence has access to a potential market of over 656 million people, primarily in the coastal provinces of eastern China.
Since 2009, Aegon has been operating in Japan through a joint venture with Sony Life, one of Japan's leading insurance companies, named Aegon Sony Life Insurance Co., Ltd. (Aegon Sony Life). The primary focus of Aegon Sony Life is variable annuity sales in Japan.
Aegon Insights is a marketing, distribution and administration services business operating in the Asia-Pacific region with new business discontinued since 2017 due to change in consumer preferences. The Aegon Insights business, currently maintains operations in Australia, Hong Kong, Indonesia, Japan and Thailand to serve existing customers.
Aegon Sony Life in Japan has two distribution channels: the Sony Life Planner channel (operated by Sony Life), with over 5,100 agents; and the bank distribution channel, which consists predominately of mega banks and regional banks.
TLB distributes its products to high-net-worth consumers through relationships with local and international brokers, as well as through bancassurance channels.
Overview of business lines High-net-worth businesses TLB's main products consist of USD denominated Universal Life and USD denominated Term Life Insurance plans for the high-networth market segment. Universal Life products are TLB's key products to meet the needs of high-net-worth individuals, supporting estate planning by providing life protection, while also helping to preserve and accumulate wealth. In addition to the Universal Life products, Term Life products are also offered with financial protection at a guaranteed level rate for up to 30 years.
Aegon Insights Aegon Insights primarily worked with local insurers to develop marketing, distribution and administration solutions tailored to the needs of specific markets and customers. With changes in consumer preferences, the ongoing focus is on exploring opportunities in the emerging digital distribution landscape, in addition to continuing to provide services to existing customers. Revenue is primarily generated through reinsurance arrangements and fee income from marketing services, product distribution and administration. During 2017, Aegon made the strategic decision to discontinue Aegon Insights’ outbound telemarketing businesses.
Strategic partnerships In China and India, Aegon provides a broad range of life insurance products including unit-linked, universal life, and traditional life products. Aegon also offers variable annuities in Japan through Aegon Sony Life.
Other products, such as participating annuity and endowment (via agency), whole life insurance products (via brokers) and personal accident (via direct marketing) are, however, also offered through these channels. Regular premium critical illness, whole-life insurance, traditional or participating annuity and single premium annuity are the key products offered in the bancassurance channel, while the digital channel is currently focused on offering protection products. Aegon THTF also offers non-life products (primarily consisting of short-term accident and short-term health products) through all channels. Non-life sales are, however, concentrated in the group channel, where the main products are group medical policies.
In India, Aegon Life offers term life plans, traditional participating and non-participating savings products, and unit-linked life insurance plans through the direct sales force and e-sales channels.
Japan: Aegon Sony Life There are seven active companies in Japan's variable annuities market. In 2018, Aegon Sony Life ranked second in terms of market share behind Dai-ichi Frontier Life, followed by Nippon Life and Credit Agricole Life.
Regulation and supervision China: Aegon THTF The insurance industry in China is regulated by the China Banking and Insurance Regulatory Commission (CBIRC). During 2018, the CBIRC’s main focus was on strengthening weak links, tightening supervision, deepening reforms, accelerating opening-up of the sector and joint supervision. Consequently, The CBIRC increased supervision on liquidity risks, solvency risks, product risks, sales practices and anti-money laundering. It also reformed regulations around foreign investment and selling insurance online.
Kong was until June 26, 2017, regulated by the Office of the Commissioner of Insurance (OCI). Changes to the Insurance Companies
Ordinance in 2015 provided for the establishment of a new independent insurance authority (IA, which came into operation and started regulating insurance companies in June 2017). The IA is expected to take over the regulation of insurance intermediaries from the three
Solvency II Solvency II requirements became effective for Aegon Group as of January 1, 2016. Aegon’s Asian insurance activities are included in the Aegon Group Solvency II ratio through Deduction & Aggregation. For TLB and Japan, Deduction & Aggregation is applied using available and required capital as per the local capital regime. The regulatory regime of Bermuda and Japan were granted full provisional equivalence on December 7, 2015.
Overview of Aegon Asset Management Aegon Asset Management is an active investment manager that uses its investment management expertise to help people achieve a lifetime of financial security.
Organizational structure Aegon Asset Management is a provider of investment management expertise to institutional and private investors around the world.
In addition, Aegon Asset Management operates two key strategic partnerships:  In China, Aegon Asset Management owns 49% of Aegon Industrial Fund Management Company (AIFMC), a Shanghai-based asset manager that offers mutual funds, segregated accounts and advisory services; and  In France, Aegon Asset Management owns 25% of La Banque Postale Asset Management. La Banque Postale Asset Management offers a comprehensive range of investment strategies to French institutional clients, and to private investors through La Banque
Aegon Investment Management B.V. (the Netherlands), Kames Capital plc (United Kingdom) and Aegon Hungary Asset Management
Company Zrt. Depending on regulatory requirements and the local business environment, boards of local operating entities may include oversight through independent non-executive directors.
Strategic direction and global oversight of business performance is executed by the Global Board of Aegon Asset Management, which has both global and local roles and responsibilities. This Board is supported by the Governance Risk & Compliance Committee and the Human Resources Committee, together with a Global Strategic Change Committee. Members of the Global Board are appointed by Aegon N.V.. The Risk Advisory Committee and Remuneration Committee support Aegon’s oversight of Aegon Asset Management.
As of January 1, 2018, the activities of Aegon Investment Management B.V. and Kames Capital plc have been governed by a joint
The statutory boards of Aegon Investment Management B.V. and Kames Capital plc remain ultimately responsible for the entities, and have the duty to oversee the delegated authorities. As part of this integration in Europe, Aegon Asset Management plans to merge the operating entities Aegon Investment Management B.V. and TKP Investments B.V. on January 1, 2019. The brand TKPI and services offered thereunder will continue to exist.
The Target Operating Model program (TOM), which started in January 2018, is a multi-year initiative that will upgrade operational capabilities in Europe and the US in support of Aegon Asset Management’s wider business strategy. The TOM addresses four key themes (capability convergence, data as a service, pace of change and governance) and will deliver a robust data infrastructure, streamlined and upgraded global systems, and operational efficiencies that will enable Aegon Asset Management to become more responsive to changing client needs.
Overview of sales and distribution channels Aegon Asset Management uses a variety of sales and distribution channels in the Americas, Europe and Asia. These include, among others: affiliated companies, direct to institutional clients, independent investment advisors, investment consultants, joint ventures and third-party investment platforms.
For third-party business sourced externally, Aegon Asset Management distributes its investment strategies directly to its clients.
The wholesale businesses typically sell collective investment vehicles (mutual funds) to customers through wholesale distributors and independent intermediaries. The main asset classes are fixed income and equities, and the funds are usually managed against a benchmark or peer group target. The institutional businesses typically sell tailored services to large corporations or pension funds.
In the United Kingdom, Aegon Asset Management focuses on offering investors fixed income, equities, real estate, multi-asset, absolute return and ethical investments. It serves institutional clients and their advisors, and is active in the wholesale market. Primary competitors in the UK include Ashmore, BlackRock, Henderson Global Investors and Standard Life Aberdeen.
It competes against a wide range of locally-based asset managers including Alibaba's Yuebao fund China Universal Asset Management,
Regulation and supervision Regulation of asset management companies in general differs to that of insurers. Aegon Asset Management's global holding company, Aegon Asset Management Holding B.V., is regulated by the Dutch Central Bank (DNB) as a financial holding company according to the Dutch Financial Supervision Act (Wft). Local operating entities are regulated by their local regulators, most notably the Dutch Authority for the Financial Markets (AFM) (conduct of business supervision) and the DNB (prudential supervision) for
and the Commodity Futures Trading Commission (CFTC) for the US-based entities. Kames Capital is also regulated by the SEC for its activities in the US market. From a regulatory perspective, the asset management activities of the US-based entities of Aegon Asset
MiFID II MIFID II requirements became effective for Aegon Asset Management as of January 3, 2018, and the Company adheres to the regulation. In line with most of its peers, the European Aegon Asset Management entities (Aegon Investment Management B.V.,
Aegon’s results of operations and financial condition may be materially affected from time to time by uncertainty, fluctuations or negative trends in general economic conditions, such as economic growth, levels of unemployment, consumer confidence, inflation and interest rate levels in the countries in which Aegon operates. The global financial crisis has shown that financial markets can experience extreme volatility and disruption.
Aegon also considers credit risk to include spread risk, that is, the value of a bond declines due to a general widening of credit spreads.
Additionally, Aegon is indirectly exposed to credit risk on the investment portfolios underlying separate account liabilities. Changes to credit risk can result in separate account losses, which increase the probability of future loss events. In the United States and
Risk factors Aegon N.V. Risk factors Aegon N.V. Risk factors Aegon N.V. Risk factors Aegon N.V.
risks in their separate account portfolio. Reduced separate account values also decrease fee income and may accelerate deferred policy acquisition costs (DPAC) amortization. Reconsideration of assumptions might also affect the DPAC amortization schedule. These factors may have a material adverse effect on Aegon’s results of operations and financial position.
Although most of the risk remains with the policyholder, guarantees within certain products may transfer some or all of this risk to Aegon. Lower investment returns also reduce the asset management fee that Aegon earns on the asset balance in these products and prolonged investment under-performance may cause existing customers to withdraw funds and potential customers not to grant investment mandates.
Aegon manages its investments and derivative portfolio, considering a variety of factors, including the relationship between the expected duration of its assets and liabilities. However, if interest rates remain low, the yield earned upon reinvesting interest payments from current investments, or from their sale or maturation, may decline. Reinvestment at lower yields may reduce the spread between interest earned on investments and interest credited to some of Aegon’s products and accordingly net income may decline.
In addition, borrowers may prepay or redeem fixed maturity investments or mortgage loans in Aegon’s investment portfolio in order to borrow at lower rates. Aegon can lower crediting rates on certain products to offset the decrease in spread. However, its ability to lower these rates may be limited by contractually guaranteed minimum rates or competition.
In general, if interest rates rise, there will be unrealized losses on assets carried at fair value that will be recorded in other comprehensive income (available-for-sale investments) or as negative income (investments at fair value through profit or loss)
Aegon may not manage risks associated with the reform and replacement of benchmark rates effectively.
Various supranational institutions, central banks, regulators, benchmark administrators and industry working groups play a role in the benchmark reform and the preparation for the replacement of IBORs. At this moment there is still a lot of uncertainty around a timetable and mechanisms for implementation. Accordingly, it is not currently possible to determine whether, or to what extent, any such changes would affect Aegon. However, the implementation of alternative benchmark rates may have a material adverse effect on Aegon’s business, financial condition, customers and operations.
The sensitivity of Aegon’s net income and shareholders’ equity to foreign exchange translation risk is provided in the notes to the financial statements, note 4 Financial risks, section “Currency exchange risks” of Aegon’s Annual Report 2018.
Some liabilities can be surrendered, while some assets, such as privately placed loans, mortgage loans, real estate and limited partnership interests, are to some degree illiquid. In depressed markets, Aegon may be unable to sell or buy significant volumes of assets at quoted prices.
The necessity to issue securities can be driven by a variety of factors, for instance Aegon may need liquidity for operating expenses, debt servicing and the maintenance of capital levels of insurance subsidiaries. Although Aegon manages its liquidity position for extreme events, including greatly reduced liquidity in capital markets, if these conditions were to persist for an extended period of time,
Volatile financial markets may significantly increase requirements to grant collateral and adversely affect its liquidity position. Further, a downgrade of Aegon’s credit ratings may also result in additional collateral requirements.
Underwriting risk relates to the products sold by Aegon insurance entities. The underwriting process requires, among others, the setting of assumptions. Aegon’s reported results of operations and financial condition may be affected by differences between actual claims experience and underwriting and reserve assumptions both due to incurred gains/losses and from potential changes in best estimate assumptions that are used to value insurance liabilities.
Aegon’s earnings depend significantly upon the extent to which actual claims experience is consistent with the assumptions used in setting the prices for Aegon’s products and the extent to which the established technical provisions for insurance liabilities, both
Sources of underwriting risk include policyholder behavior (such as lapses or surrender of policies), policy claims (such as mortality and morbidity) and expenses. For some product lines, Aegon is at risk if policy lapses increase, as sometimes Aegon is unable to fully recover up-front sales expenses despite the presence of commission recoveries or surrender charges and fees. In addition, some policies have embedded options which at times are more valuable to the client if they stay (lower lapses) or leave (higher lapses), which may result in losses to Aegon’s businesses. Aegon sells certain types of policies that are at risk if mortality or morbidity increases, such as term life insurance and accident insurance. Aegon also sells certain other types of policies, such as annuity products, that are at risk if mortality decreases (longevity risk). For example, certain current annuity products, as well as products sold in previous years, have seen their profitability deteriorate as longevity assumptions have been revised upward. If the trend toward increased longevity persists,
Aegon’s annuity products may continue to experience adverse effects due to longer expected benefit payment periods. Aegon is also at risk if expenses are higher than assumed.
Certain of Aegon’s products have guarantees that may adversely affect its results, financial condition or liquidity.
Certain products, particularly Aegon’s variable annuity products and defined benefit pension business in the Netherlands, include death benefit guarantees, guarantees of minimum surrender values or income streams for stated periods or for life, which may be in excess of account values. These guarantees are designed, among other things, to protect policyholders against downturns in equity markets and interest rates. As a result, a drop in the value of underlying assets or more volatile markets could result in an increase in the valuation of Aegon’s liabilities associated with these products. An increase in these liabilities may decrease its net income. Aegon uses a variety of hedging and risk management strategies to mitigate these risks. However, these strategies may not be fully effective and hedging instruments may not fully offset the costs of guarantees or may otherwise be insufficient in relation to its obligations.
Models rely on, among other things, correct and complete Data inputs. If incorrect Data is entered into even a well-founded Model, the resulting information will be incorrect. However, even if Data is input correctly, Model prices may differ substantially from market prices, especially for securities with complex characteristics. Investments selected with the use of Models may perform differently than expected as a result of the design of the Model, inputs into the Model or other factors. There can be no assurance that the use of Models will result in effective investment decisions for an investment product. Additionally, if investment products offered by Aegon’s affiliates experience Model errors or use erroneous Data, this could result in regulatory actions and/or litigation brought against Aegon and/or its affiliates.
Prudential regulatory requirements such as with respect to the calculation of technical provisions, capital requirements, the eligibility of own funds and the regulatory treatment of investments may change, resulting in increased technical provisions, higher amounts of regulatory capital, more stringent requirements with respect to investments and/or the qualification of own funds. Aegon cannot predict specific proposals that might be adopted, or what impact, if any, such proposals or, if enacted, such laws, may have on its businesses, results of operations, or financial condition. For example, the European Union, the National Association of Insurance
Commissioners (NAIC) in the US or US state regulators may adopt revisions to applicable risk-based capital formulas and local regulators in other jurisdictions in which Aegon’s subsidiaries operate may increase their capital requirements.
Furthermore, Aegon and the Aegon Group may be impacted by further changes to the capital adequacy requirements it is subject to as a result of the development of the Insurance Capital Standard (ICS) as part of the Common Framework for the Supervision of Internationally Active Insurance Groups (ComFrame) (a set of international regulatory standards focusing on the effective groupwide supervision of internationally active insurance groups (IAIGs)). For further detail on this development, we refer to the section
Framework for Systemic Risk in the Insurance Sector. As expressed in the consultation document, IAIS is of the view that the implementation of a holistic framework should remove the need for an (annual) G-SII identification by the FSB and national authorities and be replaced by an enhanced set of policy measures and supervisory powers of intervention that might be applied to a broader set of insurers than are currently on the FSB-list. For further detail on this development, we refer to the section ''Regulation and supervision'' of Aegon’s Annual Report 2018.
Furthermore, such requirements may constrain Aegon’s ability to provide guarantees and increase the cost to Aegon of offering certain products resulting in price increases, discontinuance of offering of certain products or reducing the amount of risk Aegon takes on.
In the United States, the NAIC is seeking to better align the Risk-Based Capital charges with the appropriate risk level for invested assets. This may lead to higher risk-based charges for such assets.
In addition, Actuarial Guideline XXXVIII, (commonly known as AG38), which is intended to clarify Regulation XXX, requires insurers to establish additional statutory reserves for certain universal life insurance policies with secondary guarantees. Virtually all of Aegon’s newly issued term and universal life insurance products in the United States are affected by Regulation XXX and AG38, respectively.
Subsequently, the NAIC adopted regulations to monitor and provide transparency for insurer-affiliated captive reinsurers. Captive reinsurance structures have been used to manage ‘economically redundant’ reserves for term and secondary guarantee universal life policies. Since the January 1, 2017 enactment of US principle-based reserves for new business, new captive reinsurance structures are no longer required for new issuances of these term and secondary guarantee universal life products and the Company does not anticipate entering into any new captive reinsurance arrangements for such products. The new reserves requirements for US life insurance products are intended by regulators to represent a more economically supported view of the resources required to honor the promises to policyholders. For existing business held in a captive, Aegon may continue to be subject to the risks of adverse publicity and changes in regulations related to captive reinsurance.
Aegon utilizes affiliated captive insurance companies to manage risks of various insurance policies, including universal life with secondary guarantees and level term life insurance. Through these structures, Aegon finances certain required regulatory reserves at a lower cost. To the extent that state insurance departments restrict Aegon’s use of captives and regulatory reserve requirements remain unchanged, this could increase costs, limit the ability to write these products in the future or lead to increased prices to consumers on those products. The NAIC continues to consider changes to corporate governance and insurers’ use of captives. Due to the uncertainty of the proposals it is not possible to provide an estimate of the effects at this time.
(e.g. policyholders), rather than holders of Aegon shares, capital securities and debt instruments. Changes in existing laws and regulations may affect the way in which Aegon conducts its businesses, the profitability of its businesses and the products offered.
Other initiatives, such as the development of International Capital Standards (ICS) by the International Association of Insurance
In the Netherlands, the Dutch Central Bank provided guidance with regard to assumptions underlying Aegon’s factor for the loss absorbing capacity of deferred taxes (LAC-DT). Reduction of this factor would impact the Group Solvency II ratio. The factor of LAC-DT is taken into account in Aegon the Netherlands' Solvency II ratio, and remained unchanged at 75%. The factor is reassessed quarterly. The Solvency II sensitivity for a 25-percentage point change in the factor is given in the section "Capital and liquidity management" of Aegon’s Annual Report 2018. The treatment of LAC-DT under the Solvency II framework is also one of the elements of the Solvency II review and resulted in some changes with respect to the internal governance requirements regarding the determination of the LAC-DT. A further review of the Solvency II framework has recently commenced. While details on possible changes are yet unknown, the outcomes of this review (referred to as the Solvency II 2020 review) and potential changes to the relevant regulations, guidelines or opinions, or their application by national supervisory authorities may have an impact on the determination of the LAC-DT that may be taken into account by Aegon going forward.
The NYDFS regulation could have a material adverse impact on annuity sales; however, the bigger impact could be with life sales by firms conducting business in the state. It is expected that other states will propose similar regulations impacting the sale of annuities and life insurance products.
For example, in Hungary, the mandatory pension business has been nationalized and therefore Aegon in Hungary has liquidated its mandatory pension business. Similarly, in December 2013, the Polish Parliament approved legislation to overhaul the existing state pension system, which was a reason for Aegon to write down its intangible assets.
Risks of application of intervention measures may adversely affect Aegon’s business, results of operations and financial position.
The R&R Act allows DNB to intervene in situations where a Dutch insurer or reinsurer, is faced with financial difficulties. The powers under the R&R Act may also extend to the level of the Group and to entities, other than in insurance or reinsurance entities in the Netherlands, which are part of the group, such as Aegon N.V..
In addition, the R&R Act will allow DNB to require a Dutch insurance or reinsurance company or a group to remove, ex ante, impediments to effective resolution of a Dutch insurance or reinsurance undertaking (such as the revision of financing arrangements, the reduction of exposures, the transfer of assets, the termination or limitation of business activities, or the prohibition to start certain business activities, change the legal or operational structure of the group, or securing certain critical business lines). The use of this tool may adversely affect Aegon’s business, results of operations and financial position.
Aegon N.V. fail or are likely to fail, could be applied to mixed financial holding companies such as Aegon N.V., including the right of bail-in of creditors.
Aegon faces significant risks of litigation as well as regulatory investigations and actions relating to its and its subsidiaries' insurance, pensions, retirement administration, securities, investment management, investment advisory and annuities businesses as well as Aegon’s corporate compliance, including compliance with employment, sanctions, anti-corruption and tax regulations.
or the imposition of monetary fines, penalties and/or disgorgement as well as other remedies, sanctions, damages and restitutionary amounts. There can be no assurance that government and regulatory investigations will not have a material and adverse effect on Aegon’s reputation, financial position, and results of operations or liquidity.
Vereniging Woekerpolis.nl filed a claim against Aegon in court. The claim related to a range of unit linked products that Aegon sold in the past, including Aegon products involved in the earlier litigation. In June 2017, the court issued a verdict which upheld the principle that disclosures must be evaluated according to the standards at the time when the relevant products were placed inforce. Most of the claims of Vereniging Woekerpolis.nl were dismissed under this standard, although the court found that Aegon did not adequately disclose certain charges on a limited set of policies. The district court did not decide on the reasonableness of the cost levels and whether the previous compensation arrangements provide sufficient compensation. This court decision has been appealed by both parties. Aegon expects the claims and litigation, whether collective or on an individual basis and in court or through alternative dispute resolution mechanisms, on unit linked products to continue for the foreseeable future. Developments in similar cases against other Dutch insurers currently before regulators and courts may also affect Aegon.
Sprintplan. Allegations include, among other things, a lack of a proper license of the brokers involved. In October 2017, the district court of The Hague ruled in favor of Aegon that the Sprintplan liability had been conclusively determined in earlier proceedings and there were no grounds to hold further collective proceedings. The plaintiff appealed. The case is now pending at the court of appeal
There can be no assurances that these matters will not ultimately result in a material adverse effect on Aegon’s business, results of operations and financial position.
For additional information on proceedings in which Aegon is involved, refer to the notes to the consolidated financial statements, note 48 “Commitments and contingencies” of Aegon’s Annual Report 2018.
Local statutes and regulators may limit the aggregate amount of dividends payable by Aegon’s subsidiaries and Aegon N.V., thereby limiting Aegon’s ability to make payments on debt obligations.
Tax risk also includes the risk of consequences arising from failure to comply with procedures required by tax authorities. Failure to manage tax risks may lead to increased tax charges, including financial or operating penalties. This tax risk may have a direct materially adverse effect on Aegon’s profits, capital and financial condition.
Any changes in tax laws, interpretation of tax laws, later jurisprudence or case law, or the introduction of new taxes or tax laws in all countries in which Aegon operates or invests, which affects Aegon’s products, may also have a materially adverse effect on Aegon’s businesses, results of operations, capital and financial condition.
Legislators have from time to time, considered possible legislation that may make Aegon’s products less attractive to consumers, including legislation that would reduce or eliminate the deferral of taxation on the accretion of value within certain annuities and life insurance products. This may have an impact on insurance products and sales.
Legislators also consider from time to time tax law changes that may increase the amount of taxes due by Aegon or may even introduce new taxes. In the US, effective January 1, 2018, the Tax Cuts and Jobs Act made significant changes to the computation of tax reserves, capitalized policy acquisition costs and the dividends received deduction available to life insurance companies, increasing the amount of tax that Aegon is required to pay. However, effective January 1, 2018 the Tax Cuts and Jobs Act also lowered US corporate tax from 35% to 21%, reducing the amount of tax that Aegon is required to pay.
Even the perceived lack of creditworthiness of a government or financial institution (or a default by any such entity) may lead to market- wide liquidity problems and losses or defaults by Aegon or by other institutions. This risk is sometimes referred to as
Reinsurers to which Aegon has ceded risk may fail to meet their obligations.
Under the terms of the reinsurance agreements, the reinsurer agrees to reimburse for the ceded amount in the event a covered claim is paid. However, Aegon’s insurance subsidiaries remain liable to their policyholders for ceded insurance if any reinsurer fails to meet the obligations assumed by it. A bankruptcy or insolvency or inability of any of Aegon’s reinsurance counterparties to satisfy its obligations may have a materially adverse effect on Aegon’s financial position and results of operations. Refer to Schedule IV of
Aegon’s acquisitions may result in additional indebtedness, costs, contingent liabilities and impairment expenses related to goodwill and other intangible assets. Divestitures of existing operations may result in Aegon assuming or retaining certain contingent liabilities. Aegon may not be able to divest assets within the time or at the price planned. All of these factors may adversely affect
in certain parts of the world and created additional uncertainty as to future trends and exposure. Generally, Aegon seeks to reduce its exposure to these events through individual risk selection, monitoring risk accumulation, and purchasing reinsurance. However, such events may lead to considerable financial losses to Aegon’s businesses. Furthermore, natural disasters, terrorism, civil unrest, military actions and fires may disrupt Aegon’s operations and result in significant loss of property, key personnel and information about
Aegon relies on a combination of contractual rights with third parties and copyright, trademark, patent and trade secret laws to establish and protect Aegon’s intellectual property. Third parties may infringe on or misappropriate Aegon’s intellectual property, and it is possible that third parties may claim that Aegon has infringed on or misappropriated their intellectual property rights. Any resulting proceedings in which Aegon would have to enforce and protect its intellectual property, or defend itself against a claim of infringement of a third-party's intellectual property, may require significant effort and resources and may not prove successful.
Aegon’s operational effectiveness. Further, employee error, unethical behavior and/or misconduct may be difficult to detect and prevent under all circumstances and may result in significant losses.
Aegon may not be able to find an adequate alternate provider, and instead experience financial loss, reputational harm, operational difficulties, increased costs, a loss of business and other negative consequences, all of which could have a material adverse effect
Aegon’s reputation, result in regulatory and litigation exposure, investigation and remediation costs, and materially and adversely affect
collection, processing and retention of personal data and reporting of data breaches, and provides for significantly increased penalties for non-compliance. The New York Department of Finance Services (NYDFS), pursuant to its cybersecurity regulation, requires financial institutions regulated by the NYDFS, including certain Aegon subsidiaries, to, among other things, satisfy an extensive set of minimum cyber security requirements, including but not limited to governance, management, reporting, policy, technology and control requirements. Numerous other U.S. laws also impose various information security and privacy related obligations with respect to various Aegon subsidiaries operating in the U.S., including but not limited to the Gramm-Leach-Bliley Act and related state laws
(GLBA), and the Health Insurance Portability and Accountability Act (HIPAA), among many others. Other legislators and regulators with jurisdiction over our businesses are considering potential enhanced information security risk management and privacy rules and regulations. A number of Aegon’s subsidiaries are also subject to contractual restrictions with respect to the information of our clients and business partners. Aegon, and numerous of its systems, employees and business partners have access to, and routinely process, the personal information of consumers. Aegon relies on various processes and controls to protect the confidentiality, integrity and availability of personal information and other confidential information that is accessible to, or in the possession of, Aegon, its systems, employees and business partners. It is possible that an Aegon employee, business partner or system could, intentionally or unintentionally, inappropriately disclose or misuse personal or confidential information. Aegon’s data or data in its possession could also be the subject of an unauthorized cyber intrusion or cybersecurity attack. If Aegon fails to maintain adequate processes and controls or if Aegon or its business partners fail to comply with relevant laws and regulations, policies and procedures, misappropriation or intentional or unintentional inappropriate disclosure or misuse of personal information or other confidential information could occur.
Such control inadequacies or non-compliance could cause disrupted operations and misstated or unreliable financial data, materially damage Aegon’s reputation or lead to increased regulatory scrutiny or civil or criminal penalties or litigation, which, in turn, could have a material adverse effect on Aegon’s business, financial condition and results of operations. In addition, Aegon analyzes personal information and customer data to better manage its business, subject to applicable laws and regulations and other restrictions. It is possible that additional regulatory or other restrictions regarding the use of such techniques may be imposed. Additional privacy and security obligations have been imposed by various governments with jurisdiction over Aegon or its subsidiaries in recent years, and more such obligations are likely to be imposed in the near future. Such restrictions and obligations could have material impacts on Aegon’s business, financial conditions and/or results of operations.
As of December 31, 2018, there were 2,095,648,244 common shares and 585,022,160 common shares B issued. Of these, Vereniging
Following the 1983 Amended Merger Agreement between Aegon N.V. and Vereniging Aegon Vereniging Aegon has a call option on common shares B. which Vereniging Aegon may exercise to keep or restore its total stake at 32.6%, irrespective of the circumstances which cause the total shareholding to be or become lower than 32.6%.
As a matter of Dutch corporate law, common shares and common shares B offer equal full voting rights, as they have equal nominal values (EUR 0.12). The financial rights attached to a common share B are 1/40th of the financial rights attached to a common share. The Voting Rights Agreement between Aegon N.V. and Vereniging Aegon ensures that under normal circumstances, i.e. except in the event of a Special Cause, Vereniging Aegon will no longer be able to exercise more votes than is proportionate to the financial rights represented by its shares. This means that in the absence of a Special Cause Vereniging Aegon will cast one vote for every common share it holds and one vote only for every 40 common shares B. It is at the sole discretion of Vereniging Aegon if a Special
For example, the price of Aegon’s common shares may become more volatile and may be depressed by investors' anticipation of the potential resale in the market of substantial amounts of Aegon’s common shares received at maturity or otherwise.
Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 requires Aegon to disclose whether Aegon N.V. or any of its affiliates has engaged during the calendar year in certain Iran-related activities, including any transaction or dealing with the Government of Iran that is not conducted pursuant to a specific authorization of the U.S. government. The amounts in this section are reported in EUR 1 or GBP 1.
based subsidiaries of Aegon N.V. do operate in compliance with applicable laws and regulations of the various jurisdictions where they conduct business.
Aegon UK has six UK resident customers who have one active Individual Pension Plan (IPP) and are UK-based employees of a British registered charity that appears on the SDN (Specially Designated Nationals) List with the identifier [SDGT] (Specially Designated Global
Terrorist); the charity makes contributions to the pensions. The customers are not SDNs; the charity does not own, benefit from, or have control over the pensions. All payments have been paid in UK Sterling from a UK bank account. The pensions are managed in line with applicable legislation and regulation in the UK and the charity is not subject to sanctions in the UK or EU. The relationships are under close ongoing review. IPP #1 has a value of GBP 10,365 as at January 30, 2019, and regular monthly contributions of GBP 69.41 are being received into this policy. IPP #2 has a value of GBP 4,410 as at January 30, 2019, and regular monthly contributions of GBP 18.61 are being received. IPP #3 has a value of GBP 199,455 as at January 30, 2019, and regular monthly contributions of GBP 527.91 are being received. IPP #4 has a value of GBP 8,622 as at January 30, 2019, and no further contributions are being received. IPP #5 has a value of GBP 43,012 as at January 30, 2019, and no further contributions are being received. IPP #6 has a current value of GBP 8,131 as at January 30, 2019, and no further contributions are being received. The related annual net profit arising from these contracts, which is difficult to calculate with precision, is estimated to be no greater than GBP 8,219.
In the Netherlands, Aegon Levensverzekering N.V. has one Dutch resident customer who is a party subject to U.S. sanctions for whom two active IPPs and one individual life investment linked insurance policy are held. This person is on the Foreign Sanctions Evaders
The individual life investment linked insurance policy has a value of EUR 65,640 as at January 1, 2019, and regular monthly contributions of EUR 198.60 are being received; all contributions have been paid in Euros from a Dutch bank account. The policy is managed in line with applicable legislation and regulation in the Netherlands; the individual is not subject to sanctions in the Netherlands or EU. The end date of this policy is February 1, 2023. The related annual net profit arising from this contract, which is difficult to calculate with precision, is estimated to be EUR 500 per year.
Property, plant and equipment In the United States, Aegon owns many of the buildings that the Company uses in the normal course of its business, primarily as offices. Aegon owns 14 offices located throughout the United States with a total square footage of 2 million. Aegon also leases space for various offices located throughout the United States under long-term leases with a total square footage of 1 million.
Aegon’s principal offices are located in Little Rock, AR; Denver, CO; Cedar Rapids, IA; St. Petersburg, FL; Atlanta, GA; Louisville, KY; Baltimore, MD; Harrison, NY; Exton, PA; and Plano, TX.
employees. The Central Works Council has certain defined powers at the level of the Dutch subsidiary company Aegon Nederland N.V., including the right to make non-binding recommendations for appointments to its Supervisory Board and the right to enter objections against proposals for appointments to that Supervisory Board.
A break-down of the number of employees is provided below: Central & Eastern Europe 2,318 2,337 2,317
Of which Aegon’s share of employees in joint ventures and associates 6,854 6,497 5,944
Property, plant and equipment Property, plant and equipment Property, plant and equipment Property, plant and equipment
Aegon’s common shares are also listed on NYSE New York under the symbol “AEG”.
Common characteristics of the common shares and common shares B  All shares are in registered form;  All shares have dividend rights except for those shares (if any) held by Aegon as treasury stock. Dividends which have not been claimed within five years lapse to Aegon;  Each currently outstanding share is entitled to one vote except for shares held by Aegon as treasury stock. There are no upward restrictions;  However, under normal circumstances, i.e. except in the event of a Special Cause, based on the Voting Rights Agreement1,
Actions necessary to change the rights of shareholders A change to the rights of shareholders would require an amendment to the Articles of Association. The General Meeting of Shareholders (Annual General Meeting or extraordinary General Meeting) may only pass a resolution to amend the Articles of Association pursuant to a proposal of the Executive Board with the approval of the Supervisory Board. The resolution requires a majority of the votes cast at the meeting in order to pass. The actual changes to the text of the Articles of Association will be executed by a civil law notary.
Furthermore, a resolution of the General Meeting of Shareholders to amend the Articles of Association which has the effect of reducing the rights attributable to holders of a specific class shall be subject to the approval of the meeting of holders of such class.
Taxation This chapter contains the following two sections: i Certain netherlands tax consequences for holders of shares ii Taxation in the United States i Certain Netherlands tax consequences for holders of shares The following section outlines certain material Netherlands tax consequences of the acquisition, holding, redemption and disposal of Aegon common shares, but does not purport to be a comprehensive description of all Netherlands tax considerations that may be relevant. This section is intended as general information only and each prospective investor should consult a professional tax adviser with respect to the tax consequences of an investment in Aegon common shares.
Residents of the Netherlands If a holder of Aegon common shares is a resident, or deemed to be a resident of the Netherlands for Netherlands corporate or individual income tax purposes, Netherlands dividend withholding tax which is withheld with respect to proceeds from Aegon common shares will generally be creditable for Netherlands corporate income tax or Netherlands income tax purposes.
EU member state, Norway, Iceland or Liechtenstein if (i) this holder of Aegon common shares is not subject to Netherlands individual income tax or Netherlands corporate income tax with respect to the income from the Aegon common shares and (ii) such Netherlands dividend withholding tax is higher than the Netherlands individual income tax or Netherlands corporate income tax would have been had this holder of Aegon common shares been tax resident in the Netherlands, after taking into account a possible refund based on the Netherlands Dividend Withholding Tax Act 1965 (Wet op de dividendbelasting 1965) or a refund based on a treaty for the avoidance of double taxation with respect to taxes on income, and (iii) no credit based on a treaty for the avoidance of double taxation with respect to taxes on income is granted in the state in which the holder of Aegon common shares is tax resident, for the full amount of Netherlands dividend withholding tax withheld, and (iv) this holder of Aegon common shares does not have a similar function as an investment institution (fiscale beleggingsinstelling) or exempt investment institution (vrijgestelde beleggingsinstelling).
Corporate and individual income tax Residents of the Netherlands If a holder of Aegon common shares is a resident or deemed to be a resident of the Netherlands for Netherlands corporate income tax purposes and is fully subject to Netherlands corporate income tax or is only subject to Netherlands corporate income tax in respect of an enterprise to which Aegon common shares are attributable, income derived from Aegon common shares and gains realized upon the redemption or disposal of Aegon common shares are generally taxable in the Netherlands (at up to a maximum rate of 25%) under the Netherlands Corporate Income Tax Act 1969 (Wet op de vennootschapsbelasting 1969).
If an individual is a resident or deemed to be a resident of the Netherlands for Netherlands individual income tax purposes, income derived from Aegon common shares and gains realized upon the redemption or disposal of Aegon common shares are taxable at progressive rates (at up to a maximum rate of 51.75%) under the Netherlands Income Tax Act 2001 (Wet inkomstenbelasting 2001) if: i. The individual is an entrepreneur (ondernemer) and has an enterprise to which Aegon common shares are attributable or the individual has, other than as a shareholder, a co-entitlement to the net worth of an enterprise (medegerechtigde), to which enterprise Aegon common shares are attributable; or ii. Such income or gains qualify as income from miscellaneous activities (resultaat uit overige werkzaamheden), which includes but is not limited to activities with respect to Aegon common shares that exceed regular, active portfolio management (normaal, actief vermogensbeheer).
If neither condition (i) nor condition (ii) above applies to the holder of the Aegon common shares, taxable income with regard to the Aegon common shares must be determined on the basis of a deemed return on income from savings and investments (sparen en beleggen), rather than on the basis of income actually received or gains actually realized. This deemed return on income from savings and investments is fixed at percentage of the individual's yield basis (rendementsgrondslag) at the beginning of the calendar year (1 January), insofar as the individual's yield basis exceeds a certain threshold (heffingsvrij vermogen). The individual's yield basis is determined as the fair market value of certain qualifying assets held by the holder of Aegon common shares less the fair market value of certain qualifying liabilities on 1 January. The fair market value of Aegon common shares will be included as an asset in the individual's yield basis. The deemed return percentage to be applied to the yield basis increases progressively depending on the amount of the yield basis. The deemed return on income from savings and investments is taxed at a rate of 30%.
is, other than by way of securities, entitled to a share in the profits of an enterprise that is effectively managed in the Netherlands and to which enterprise Aegon common shares are attributable. Income and gains derived from Aegon common shares as specified under (1) and (2) by an individual are subject to individual income tax at up to a maximum rate of 51.75%. Income derived from a share in the profits of an enterprise as specified under (3) that is not already included under (1) or (2) will be taxed on the basis of a deemed return on income from savings and investments (as described above under 'Residents of the Netherlands'). The fair market value of the share in the profits of the enterprise (which includes Aegon common shares) will be part of the individual's Netherlands yield basis.
Gift and inheritance tax Residents of the Netherlands Generally, gift tax (schenkbelasting) or inheritance tax (erfbelasting) will be due in the Netherlands in respect of the acquisition of Aegon common shares by way of a gift by, or on behalf of, or on the death of, a holder of Aegon common shares that is a resident or deemed to be a resident of the Netherlands for the purposes of the Netherlands Gift and Inheritance Tax Act 1956 (Successiewet 1956) at the time of the gift or his or her death. A gift made under a condition precedent is for the purposes of the Netherlands Gift and Inheritance Tax Act 1956 deemed to be made at the time the condition precedent is fulfilled and is subject to gift tax if the donor is, or is deemed to be, a resident of the Netherlands at that time.
Gift and Inheritance Tax Act 1956 if he or she has been resident in the Netherlands and makes a gift within a twelve-month period after leaving the Netherlands. The same twelve-month rule may apply to entities that have transferred their seat of residence out of the Netherlands.
Non-residents of the Netherlands No gift or inheritance tax will arise in the Netherlands in respect of the acquisition of Aegon common shares by way of a gift by, or as a result of the death of, a holder that is neither a resident nor deemed to be a resident of the Netherlands for the purposes of the 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
It may therefore be altered prior to any implementation, the timing of which remains unclear. Additional EU Member States may decide to participate. Prospective holders of Aegon common shares are advised to seek their own professional advice in relation to the FTT.
ii Taxation in the United States This section describes certain US Federal income tax consequences to beneficial holders of common shares that are held as capital assets. This section does not address all US Federal income tax matters that may be relevant to a particular holder. Each investor should consult their tax advisor with respect to the tax consequences of an investment in the common shares. This section does not address tax considerations for holders of common shares subject to special tax rules including, without limitation, the following:  Financial institutions;  Insurance companies;  Dealers or traders in securities or currencies;  Tax-exempt entities; and  Regulated investment companies;  Persons that at any time hold the common shares as part of a 'hedging' or 'conversion' transaction or as a position in a 'straddle'
or as part of a 'synthetic security' or other integrated transaction for US Federal income tax purposes;  US expatriates and former citizens or long-term residents of the United States;  Persons subject to special tax accounting rules as a result of any item of gross income with respect to the stock being taken into account in an applicable financial statement;Holders that own (or are deemed to own for US Federal income tax purposes) 10%
If an entity treated as a partnership for U.S. federal income tax purposes holds common shares, the tax treatment of a partner in the partnership will depend on the status of the partner, the activities of the partnership and certain determinations made at the partner level. Accordingly, partnerships holding common shares and the partners in such partnerships should consult their tax advisors regarding the US federal income tax consequences to them.
limitation purposes. Subject to certain conditions and limitations, any Dutch income tax withheld on dividends may be deducted from taxable income or credited against a US holder’s Federal income tax liability. The limitation on foreign taxes eligible for the US foreign tax credit is calculated separately with respect to "passive category income" and "general category income". Dividends distributed by Aegon generally will constitute "passive category income", or, in the case of certain US holders, "financial services income", which is treated as general category income. Each US holder should consult their tax advisor regarding the availability of the foreign tax credit under their particular circumstances.
US dollars on the date received by the US holder, the US holder generally should not be required to recognize any gain or loss on such conversion.
Code, relating to the scope of the insurance business exception to the passive foreign investment company (PFIC) rules. Aegon does not believe it is a PFIC for 2018 under the amended PFIC rules and does not expect that it will become a PFIC in the foreseeable future.
Non-US holders that provide the required tax certifications of exempt or foreign status will generally be exempt from US information reporting requirements and backup withholding. However, distributions with respect to common shares and sales proceeds a non-US holder receives on a sale of common shares through a broker may be subject to information reporting and backup withholding if the non-US holder is not eligible for an exemption.
Principal accountant fees and services PricewaterhouseCoopers Accountants N.V. (PwC) has served as Aegon’s independent public accountant for each of the years in the three-year period ended December 31, 2018, for which audited financial statements appear in this Annual Report.
The following table presents the aggregate fees for services rendered by PwC in 2018, 2017 and 2016.
Total number of shares purchased as part of publicly announced plans or programs
Maximum number of shares that may yet be purchased under the plans or programs at end of month 1 The shares have been purchased as part of a share purchase program, to neutralize the dilution effect of issued stock dividends and agent-related incentive programs. Excluding Aegon shares purchased by index funds controlled by Aegon. Such purchases are made to the extent necessary to maintain a basket of securities within the relevant fund reflecting the underlying index. Please refere to note 20 ‘’Dividend per common share’’ and to the section ‘’Major shareholders’’ in the ‘’Other information’’.
First Half Second Half Full Year First Half Second Half Full Year
Gross deposits (on and off balance sheet) 63,949 57,751 121,700 59,436 66,339 125,776
New premium production property & casualty insurance 61 60 121 57 52 109
Other non-financial information 418 Other non-financial data 421 Basis of preparation 425 Reference tables 425  Global Reporting Initiative (GRI) standards 433  International Integrated Reporting Council (IIRC) framework 434  EU directive on Non-Financial Information 434  UN Principles for Sustainable Insurance (PSI)
(customers, employees, business partners, investors and wider community). Some figures may not add due to rounding. Year-on-year changes have been calculated using pre-rounded numbers.
Total number of customers 28.5 million 28.1 million1 1.3% 26.7 million
Netherlands, have also been incorporated. Top line shows percentage of businesses ranking in the top half, weighted by customer numbers. Figures below provide the breakdown by quartile. Figures for 2017 and 2016 have been restated; this is to reflect changes in weighting and to exclude results from Hungary (which had been included in previous years).
% of women in workforce 49%1 53% (4 pp) 53% 102-8
% of women in senior management 33% 28% 5 pp 27% 102-8
Salaries EUR 1.2 billion EUR 1.5 billion (15.9%) EUR 1.5 billion 201-1
Spending on training and career development EUR 12.5 million EUR 13.8 million (9.7%) EUR 15.0 million 1 Figure for 2018 does not include Aegon’s operations in China. 2 Index developed by Culture Amp. Employee engagement measures the degree of employee motivation and commitment to the Company. Score for 2016 is taken from survey conducted in February 2017. All scores are out of 100. 3 Figures cover all employment costs relating to both staff and CEO.
Amount spent on goods and services EUR 1.5 billion EUR 1.4 billion 3.7% EUR 1.3 billion 201-1
Incidents of fraud involving employees, intermediaries and third parties 3,652 551 562.8% 196
Dividend payments1 EUR 570 million EUR 439 million 29.8% EUR 491 million 201-1
Dividend payments due /share EUR 0.29 EUR 0.27 7.4% EUR 0.26
Community investment EUR 10.1 million EUR 8.9 million 12.6% EUR 8.8 million 201-1
Taxes borne by Aegon EUR 620 million EUR 444 million NA EUR 750 million 201-1
Corporate income tax4 EUR 36 million (EUR 173 million) NA EUR 94 million
UK EUR 30 million EUR 33 million NA (EUR 46 million)
Others EUR 40 million EUR 17 million NA EUR 28 million
Renewable energy as % of total consumption 24% 26% (2 pp) 1 Figures based on average employee expenses across the Company.
5 Gross figures for emissions exclude effects of renewable energy purchased in the UK and the Netherlands. Under the Greenhouse Gas Protocol guidelines for Scope 2 emissions, net CO
NA – not applicable NM – not measured pp – percentage points
Basis of preparation Frameworks Aegon’s aim in producing this report is to provide a balanced overview of the Company’s operations, strategy and performance, as well as its approach to long-term value creation. This is an integrated report, prepared in accordance with standards published by the Global Reporting Initiative (GRI) and the International Integrated Reporting Council (IIRC). The basis of preparation for the financial information can be found in note 2 Significant accounting policies on page 151.
Content and approval All content is based on extensive reporting from Aegon businesses around the world. Content is reviewed by the
Company’s Disclosure Committee and is subject to formal approval by Aegon’s Management, Executive and Supervisory
Boards before publication. Aegon decided not to seek external assurance for the non-financial information in this report. This is to allow further time for improvement in the Company’s non-financial reporting and data collection processes.
Scope and reporting boundaries Non-financial data in this report covers the full year 2018
(January-December), unless otherwise stated. All necessary notes, explanations and definitions are provided in the text or accompanying tables. Until now, our non-financial data has been reported separately in our Annual Review. Our previous
Where possible, the Company also includes secondary impacts on the wider community (local economies, communities, public services etc.)
Materiality applies to both Aegon’s own businesses and to the Company’s relations with its main stakeholders (see
Basis of preparation Basis of preparation Basis of preparation Basis of preparation
report (see pages 17-20). For the purposes of the assessment, these topics are defined as those most likely to affect
The assessment used in this report was carried out in December 2017. Results from this assessment were incorporated into
January to December 2018. Taking part in the assessment were members of Aegon’s Management Board, Supervisory Board and the following stakeholders (representing the Company’s five main stakeholder groups): Customers Aegon customer panels in the US, UK and the Netherlands.
Employees Employee panels in the US, UK and Netherlands, representatives from Aegon’s European Works Council.
Business partners Financial advisors, brokers, bancassurance partners, joint venture partners, reinsurers, suppliers (technology suppliers and external consultants).
Wider community Regulators (US, UK and the Netherlands), non-governmental organizations, and academics.
Global non-financial indicators Our strategy aims to build life-long relationships with customers to enable financial security and well-being to and through retirement. Our strategy helps us address the material topics that are important to our customers, employees, investors and other stakeholders; this strategy will also strengthen our ability to create long-term value. Aegon has selected six global non-financial indicators; these will be used to assess progress against specific aspects of the Company’s strategy
Additional non-financial data In addition to the data in this report, Aegon collects other non-financial data. This includes data on working conditions, use of social media in customer support, consumption of gas and electricity etc. Further details may be found on the Company’s website (www.aegon.com).
Climate Change Report in September 2017. Both are available at www.aegon.com.
Customers are those with individual, group or corporate policies. We also include those participating in pension plans controlled by trustees or who have white label products serviced by Aegon or Transamerica. There may be some duplications in markets where we operate under more than one brand. Customers of our joint ventures are included on a 100% basis.
Number of digitally connected customers (as % of total number of customers)
New hires (less than 3 months employed) do not participate. Joint ventures participate on a voluntary basis. Approximately 25% of employee data is processed in local HR systems and may be subject to a different level of certainty with regard to completeness. Exceptionally contractors as participants were allowed for one business unit (0.3% of all participants).
Number of customers ● ● ● ● ● ● ● NA
Customer investments in ethical or socially responsible investment (SRI) funds ●
Number of employees ● ● ● ● ● ● ● ●
Work-related injuries and illnesses ● ● ● ● ● ● ● ●
Employee engagement score ● ● ● ● ● ● ● ●
Premiums paid to reinsurers ● ● ● ● ● ● ● ●
% of goods and services spend covered by a Supplier Sustainability Declaration ● ● ● ● ●
Global Reporting Initiative (GRI) standards, issued in 2016. Tables below show Aegon’s compliance with these reporting standards and principles. Aegon has been using GRI standards since the Company’s first Corporate Responsibility Report in 2003.
Within the topic-specific standards, there are three series of indicators:  GRI 200 series (economic)  GRI 300 series (environmental)  GRI 400 series (social)
Companies are free to select indicators from these series based on their business and chosen material topics. Organizations applying the GRI standards are said to be ‘in accordance’.
Reporting organizations have a choice between core and comprehensive, depending on the extent of their reporting.
For its 2018 report, Aegon has chosen the core option. For more information, see www.globalreporting.org.
GRI 101 (Foundation) Reporting principles for defining report content and quality: Principles for defining report content
The reporting organization shall identify its stakeholders and explain how it has responded to their reasonable expectations and interests.
Stakeholder engagement • Definition of stakeholders (Our stakeholders – page 16) • Identification of main stakeholder groups
The report shall present the reporting organization’s performance in the wider context of sustainability.
1.3 Materiality The report should cover aspects that: • Reflect the organization’s significant economic, environmental and social impacts; or • Substantively influence the assessments and decisions of stakeholders.
Operating environment • Definition of material topics (Our material topics –
Note: These are linked explicitly to Aegon’s strategy (from page 21) and performance (from page 28)
1.4 Completeness The report shall include coverage of material topics and their boundaries, sufficient to reflect significant economic, environmental, and social impacts, and to enable stakeholders to assess the reporting organization’s performance in the reporting period.
Basis of preparation • Overview of review and approval process (Content and approval – page 421) • Report of independent registered public accounting firm
Board (Statement of materiality, significant audiences and responsibility – page 98)
(Materiality principle – page 421) • Definition of target audience (Statement of Materiality,
Principle GRI definition Details of compliance 1.7 Clarity The reporting organization shall make information available in a manner that is understandable and accessible to stakeholders using that information.
Basis of preparation • Definition of scope (Scope and reporting boundaries
(Materiality principle – page 421) • Glossary (page 437) • Definitions of non-financial indicators (page 423)
1.9 Reliability The reporting organization shall gather, record, compile, analyze and report information and processes used in the preparation of the report in a way that they can be subject to examination, and that establishes the quality and materiality of the information.
(Content and approval – page 421) • Report of independent registered public accounting firm
Note: this Report was published in March 2019, in line with regulatory requirements and in time to allow informed discussion of strategy and performance at Aegon’s General Meeting of Shareholders, scheduled for May 2019.
102-6 Markets served Page 8 (Aegon today) Page 10 (Our Businesses)
102-7 Scale of the organization Page 8 (Aegon today) Page 10 (Our Businesses)
102-9 Supply chain Page 14 (Our value chain) Page 34 (Suppliers) Page 66 (Non-financial policies, procedures and outcomes)
Page 6 (Main events of 2018) Page 17 (Our operating environment) Page 34 (Suppliers)
102-11 Precautionary principle or approach Page 16 (Dilemmas - stakeholder engagement) Page 19 (Risk and oportunities - material topics) Page 90 (Risk management) Page 66 (Non-financial policies, procedures and outcomes)
Ethics and integrity 102-16 Values, principles, standards and norms of behavior Page 27 (Culture and values) Page 66 (Non-financial policies, procedures and outcomes) Page 69 (Code of Conduct)
102-19 Delegating authority Page 42 (Corporate governance) Page 70 (Regulation and supervision)
Page 42 (Corporate governance) Page 98 (Statement of Materiality, Significant Audiences and Responsibilities)
Page 49 (Members of the Supervisory Board) Page 49 (Membership of Supervisory Board committees)
102-24 Nominating and selecting the highest governance body Page 49 (Members of the Supervisory Board)
102-25 Conflicts of interest Page 42 (Corporate governance) Page 66 (Non-financial policies, procedures and outcomes)
102-27 Collective knowledge of highest governance body Page 49 (Members of the Supervisory Board) Page 47-49 (Members of the Supervisory Board and the Executive Board) Page 53 (Educational sessions)
102-31 Review of economic, environmental and social topics Page 17 (Our operating environment)
102-35 Remuneration policies Page 59 (Remuneration Report) Page 66 (Non-financial policies, procedures and outcomes)
1 All page numbers in this table refer to Aegon's 2018 Integrated Annual Report, unless otherwise stated. Where there are several examples, we have included principal references only.
Note: approximately half Aegon's employees are covered by collective labor agreements.
102-43 Approach to stakeholder engagement Page 16 (Engagement - Stakeholder engagement)
102-46 Defining report content and topic boundaries Page 421 (Basis of preparation - Scope and boundaries)
102-48 Restatements of information Any restatements or corrections are included in the report where relevant 102-49 Changes in reporting Page 421 (Basis of preparation)
102-51 Date of most recent report Page 421 (Basis of preparation)
102-56 External assurance Page 100 (Report of independent registered public accounting firm)
Explanation of the material topic and its boundary 103-1 Reputation & trust Page 19 (Degree of influence or control /risks and opportunities)
New technologies & digital transformation Page 19 (Degree of influence or control /risks and opportunities)
New technologies & digital transformation Page 21 (Financial security and well-being)
Material topics: • Changing consumer behavior • Low interest rates • New technologies & digital transformation Strategy: value creation, financial security and well-being, secure retirement and healthy aging, clean energy and sustainable real estate
Page 13 (Value creation) Page 21 (Our strategy) Page 30 (Value created and shared with our stakeholders) Page 432 (Economic value generated and distributed)
201-2 Financial implications and other risks and opportunities due to climate change
417-2 Incidents of non-compliance concerning product and service information and labeling
Material topics: • Reputation & trust Strategy: financial security and well-being
Material topics: • Cyber security & information security • Changing consumer behavior Strategy: financial security and well-being
In addition to the indicators above, GRI recommends a third indicator: economic value retained. This is effectively economic value generated minus economic value distributed. Aegon does not use this indicator for management purposes. The following calculation is based on IFRS reporting and is included for information purposes only: Direct economic value (2016 – 2018, all figures in EUR million)
Operating costs Total charges excluding 'employee expenses' and 'interest charges and related fees'
Connectivity of information We identify our material topics (page 17); these material topics are linked directly to risks and opportunities, both for Aegon and its stakeholders (page 19) and to the Company's strategy (Our vision - page 21)
Conciseness Pages 1-40 are structured around our material topics, the risks, opportunities, strategy and performance associated with these; we have also applied a materiality principle to content (see page 421 - Basis of preparation)
Consistency and comparability This Report is prepared in accordance with IFRS standards, as adopted by the European Union, as well as the IIRC framework and reporting standards issued by the Global Reporting Initiative (page 425). This is Aegon's first fully combined Annual Report, but its eighth integrated report. Each of these integrated reports has used the GRI framework; we have used the IIRC framework (in combination with the GRI) since 2014.
Outcome of these policies Non-financial policies, procedures and outcomes (page 66)
Note: Value shared with our stakeholders (pages 30-39) also includes an in-depth description of outcomes by stakeholder group.
Note: Our strategy (page 21) describes in detail our approach to managing the risks and opportunities associated with our most important environmental, social and employees matters.
Performance highlights (page 7) Results, performance and targets (page 28) Non-financial policies, procedures and outcomes (page 66)
1 The EU Directive was transposed into Dutch law through two decrees relating respectively to non-financial information and diversity policy (Bekendmaking niet-financiële informatie /Bekendmaking diversiteitsbeleid).
We engage regularly with all stakeholders, including customers and business partners; we use their feedback to help improve our products and services (see Stakeholder engagement – page 16; Customers – page 30; Business partners – page 34)
Contribution to target 1.2 • Products for low-income customers, including micro-insurance in Brazil (page 31) • Investments in international development banks that work for poverty reduction and job creation in developing countries (page 37) • Investment in micro-finance institutions to provide loans and savings to people without access to traditional financial services (page 37) • Working with customers in financial difficulty – budget coaches in the Netherlands /
Alzheimer’s (page 37) • Investment in Dementia Discovery Fund, dedicated to finding treatments for the condition (pages 6, 22) • Exclusion of tobacco from investments to help address health concerns over smoking
Contribution to target 7.2/7.3/7.a • Significant investments in renewable energy – primarily wind and solar power (page 37) • Launch of new mortgage feature in the Netherlands, allowing customers to finance energy efficiency improvements to their homes (page 39) • Investments in green bonds and green residential mortgage-backed securities (page 37) • Working for greater energy efficiency in Amvest's real estate fund in the Netherlands
(page 36) • Inclusion of minimum labor standards in Aegon responsible investment and procurement policies (pages 36, 34)
Climate action Take urgent action to combat climate change and its impacts
(page 22) • Exclusion of oil sands extraction and transportation from investment (page 22) • Exclusion of thermal coal production from investment (page 36)
• Support for US Federal Family Education Loan Program to help children from low and middle-income families into university (page 37)
• Products to support women suffering from cervical and breast cancer (page 31) • Signatory to Talent to the Top initiative in the Netherlands (page 33) • Local diversity and inclusion initiatives aimed at promoting gender diversity (page 32) • Reporting on gender pay gap in the UK and equal pay study in the Netherlands (page 32)
• Significant investments in social /affordable housing in US and Netherlands (page 37) • Launch of new US affordable housing fund in US (page 6)
Life on land Protect, restore and promote sustainable use of terrestrial eco-systems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss
• Exclusion of controversial weapons from investment (page 36) • Internal policies and guidelines covering bribery, corruption and money laundering
Binomial option pricing model uses a binomial lattice that represents possible paths that might be followed by the underlying asset's price over the life of the option, for a given number of time steps between valuation date and option expiration. Each node in the lattice represents a possible price of the underlying asset, at a particular point in time.
Constructive obligation is an obligation that derives from an entity´s actions whereby an established pattern of past practice, published policies or a sufficiently specific current statement, the entity has indicated to other parties that it will accept 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.
That are contractually based on:  The performance of a specified pool of contracts or a specified type of contract;  Realized and/or unrealized investment returns on a specified pool of assets held by the issuer; or  The profit or loss of the Company, fund or other entity that issues the contract.
Excess cash in the holding, which is rather a measure of Holdings liquidity, can be defined as the sum of the Holding company assets, less capital investments, less matched short term assets, less other adjustments. Aegon’s internal policy for the management of excess cash in the holding is based on a similar approach as the management of the Group and
Financial asset is any asset that is:  Cash;  An equity instrument of another entity;  A contractual right to receive cash or another financial asset from another entity or to exchange financial instruments with another party under conditions that are potentially favorable; or  A contract that will or may be settled in the entity's own equity instruments; and is  A non-derivative for which the entity is or may be obliged to receive a variable number of the entity’s own equity instruments; or  A derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity's own equity instruments.
Financial liability is any liability that is:  A contractual obligation to deliver cash or another financial asset to another entity or to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable to the entity; or  A contract that will or may be settled in the entity’s own equity instruments; and is  A non-derivative for which the entity is or may be obliged to deliver a variable number of the entity's own equity instruments; or  A derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity's own equity instruments.
of shareholders’ equity, and is the reserve for the exchange differences recognized from the financial statements of the group entities. On the consolidation, the financial statements of group entities with a foreign functional currency are translated to euro, the currency in which the consolidated financial statements are presented. Assets and liabilities are translated at the closing rates on the reporting date. Income, expenses and capital transactions (such as dividends) are translated at average exchange rates or at the prevailing rates on the transaction date, if more appropriate. The resulting exchange differences are recognized in the FCTR.
Guaranteed benefits are payments or other benefits to which a particular policyholder or investor has an unconditional right that is not subject to the contractual discretion of the issuer.
Negative amortization mortgages are loans whereby the payment made by the borrower may be less than the accrued interest due and the difference is added to the loan balance.
These are insurance policies issued by an insurer that is not a related party of the reporting entity, if the proceeds of the policies:  Can be used only to pay or fund employee benefits under a defined benefit plan; and  Are not available to the reporting entity's own creditors.
Standard Formula is a risk-based approach to the calculation of an insurer's solvency capital requirement, prescribed by the regulator.
Temporary differences are differences between the carrying amount of an asset or liability in the statement of financial position and its tax base that will reverse over time.
Volatility adjustment is a volatility adjustment to the discount rates for calculating technical provisions aims at avoiding pro-cyclical investment behavior of insurers when bond prices deteriorate owing to low liquidity of bond markets or exceptional expansion of credit spreads. The adjustment has the effect of stabilizing the capital resources of insurers and will be calculated by EIOPA.
Disclaimer Cautionary note regarding non-IFRS-EU measures This document includes the following non-IFRS-EU financial measures: underlying earnings before tax, income tax and income before tax. These non-IFRS-EU measures are calculated by consolidating on a proportionate basis Aegon’s joint ventures and associated companies. The reconciliation of these measures to the most comparable IFRS-EU measure is provided in note 5 Segment information of this report.
Aegon believes that these non-IFRS-EU measures, together with the IFRS-EU information, provide meaningful supplemental information about the underlying operating results of Aegon’s business including insight into the financial measures that senior management uses in managing the business.
United Kingdom;  Changes in the performance of financial markets, including emerging markets, such as with regard to:  The frequency and severity of defaults by issuers in
 The effects of declining creditworthiness of certain private sector securities and the resulting decline in the value of government exposure that Aegon holds;  Changes in the performance of Aegon’s investment portfolio and decline in ratings of Aegon’s counterparties;  Consequences of a potential (partial) break-up of the euro;  Consequences of the anticipated exit of the United Kingdom from the European Union;  The frequency and severity of insured loss events;  Changes affecting longevity, mortality, morbidity, persistence and other factors that may impact the profitability of Aegon’s insurance products;  Reinsurers to whom Aegon has ceded significant underwriting risks may fail to meet their obligations;  Changes affecting interest rate levels and continuing low or rapidly changing interest rate levels;  Changes affecting currency exchange rates, in particular the
Global Systemically Important Insurer (G-SII);  Changes in customer behavior and public opinion in general related to, among other things, the type of products Aegon sells, including legal, regulatory or commercial necessity to meet changing customer expectations;  Acts of God, acts of terrorism, acts of war and pandemics;  Changes in the policies of central banks and/or governments;  Lowering of one or more of Aegon’s debt ratings issued by recognized rating organizations and the adverse impact such action may have on Aegon’s ability to raise capital and on its liquidity and financial condition;  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; Disclaimer Disclaimer Disclaimer Disclaimer
and other regulations in other jurisdictions affecting the capital Aegon is required to maintain;  Litigation or regulatory action that could require Aegon to pay significant damages or change the way Aegon does business;  As Aegon’s operations support complex transactions and are highly dependent on the proper functioning of information technology, a computer system failure or security breach may disrupt Aegon’s business, damage its reputation and adversely affect its results of operations, financial condition and cash flows;  Customer responsiveness to both new products and distribution channels;  Competitive, legal, regulatory, or tax changes that affect profitability, the distribution cost of or demand for
This document contains information that qualifies, or may qualify, as inside information within the meaning of Article 7(1), 7(1)a and 7(4) of the EU Market Abuse Regulation
(596/2014). Further details of potential risks and uncertainties affecting Aegon are described in its filings with the Netherlands
Exchange Commission, including the Annual Report. These forward-looking statements speak only as of the date of this document. Except as required by any applicable law or regulation,