In this publication all the euro amounts have been calculated at 1 EUR = NLG 2,20371
AEGON N.V. is the holding company of one of the world’s ten largest listed life insurance groups, ranked by market capitalization and assets. Founded in 1983, but with roots in the Netherlands extending back over 150 years.
The AEGON Group is a truly connected organization, operating through locally managed units in three major markets: the Americas — including the United States,
Hong Kong, Italy, Luxembourg, the Philippines, Taiwan and has representative offices in China and India. The Group employs over 24,000 people worldwide and has its headquarters in The Hague, the Netherlands.
A consistent, disciplined strategy that combines the benefits of freedom and connectivity, focusing on core business, organic growth, decentralized management and profitability has enabled AEGON to achieve one of the strongest growth records in its sector. This record is outlined in this brochure.
Interim dividend — option stock — — — 1/79 1/78 1/95 1/73 1/113 1/194 1/166 1/144
Final dividend — option cash 0.08 0.09 — — — — — — — — — Final dividend — option stock 3.5% 1/28 1/32 1/35 1/35 1/51 1/93 1/140 1/141 1/119 N.A.
Dividend yield world life insurers %3 3.6 3.1 2.9 2.1 2.3 2.3 2.3 2.0 1.6 1.9 1.8
1 In EUR million 2 Calculated as closing price divided by net income per share over the year 3 Source: Datastream 4 Calculated as dividend paid in previous year divided by closing share price over the year 50 P/E AEGON trailing earnings
Corporation tax —79 —89 —107 —140 —170 —180 —201 —286 —387 —611 —850 Transamerica non-insurance — — — — — — — — — 0 29
Investments for account of policyholders 3.3 4.1 5.3 19.5 22.0 25.4 34.1 50.0 58.3 108.3 114.3
Deferred policy acquisition costs —313 —380 —419 —472 —648 —635 —695 —905 —1,031 —1,480 —2,393
Gross Margin in EUR million Commissions and Expenses in EUR million
Traditional life — — — — — — — — — 1,176 1,581 Fixed annuities — — — — — — — — — 338 461 GICs and funding agreements — — — — — — — — — 132 179 Life for account policyholders — — — — — — — — — 372 543 Variable annuities — — — — — — — — — 55 141 Fee business — — — — — — — — — 53 98
Interest charges and other — — — — — — —93 —192 —198 —242 —443 1 As of 1996 the interest charges and as of 1997 the overhead expenses are no longer allocated to the business units but reported separately 2 Up to and including 1994 this line also contains the figures of the United Kingdom
Off balance sheet investments2 — — — — — — — 16.2 20.2 39.5 46.9 1 Up to and including 1994 this line also contains the figures of the United Kingdom 2 The amount for 1999 has been restated 120 Americas
Total Insurance Income before Tax 366 414 473 587 646 719 928 1,368 1,726 2,268 3,235 in EUR billion
Income before Tax Life Insurance in EUR million Income before Tax Accident & Health Insurance in EUR million
Income before Tax by Activity Traditional life — — — — — — — — — 615 853 Fixed annuities — — — — — — — — — 359 426 GICs and funding agreements — — — — — — — — — 140 165 Life for account policyholders — — — — — — — — — 54 95 Variable annuities — — — — — — — — — 58 130 Fee business — — — — — — — — — 59 74
Commissions and expenses — — — — — — — — 1,644 2,162 2,762 Expenses/Gross margin ratio — — — — — — — — 61.7 60.4 59.6 1 As of 1996 the interest charges and as of 1997 the overhead expenses are no longer allocated to the business units but reported separately 2 Includes variable annuities and fees 3 Calculated as % of average investments (whereby pre-tax profit margin excludes fee business)
Income before tax general account — — — — — — — — — 572 643 Income before tax policyholders account2 — — — — — — — — — 134 150
Off balance sheet investments — — — — — — — — 0.0 1.0 3.3 in EUR million
Commissions and expenses — — — — — — — — 611 664 534 Expenses/Gross margin ratio — — — — — — — — 45.2 43.5 37.6 1 As of 1996 the interest charges and as of 1997 the overhead expenses are no longer allocated to the business units but reported separately 2 Includes fees 3 Calculated as % of average investments (whereby pre-tax profit margin excludes fee business)
Income before Tax by Activity The Netherlands in EUR million 40 Investments general account
Accident & health insurance — — — — — — — — — — — General insurance — — — — — — — — — — —
Income before tax general account — — — — — — — — — 33 31 Income before tax policyholders account2 — — — — — — — — — 123 188
Corporation tax — — — — — —13 —19 —24 —27 —40 —59 in GBP billion
Pre-tax Profit Margin (%) Insurance Activities3 — — — — — — 0.5 0.6 0.6 0.6 0.7
Income before Tax by Activity United Kingdom in GBP million 40 Investments general account
Commissions and expenses — — — — — — — — 194 200 212 Expenses/Gross margin ratio — — — — — — — — 87.4 106.4 78.8 1 As of 1996 the interest charges and as of 1997 the overhead expenses are no longer allocated to the business units but reported separately 2 Includes fees 3 Up to and including 1994 this line also contains the figures of the United Kingdom 4 Calculated as % of average investments (whereby pre-tax profit margin excludes fee business)
Income before Tax by Activity Other countries in EUR million 2.0 Investments general account
Life general account single — — — — — — — — 1,236 1,318 2,224 Life general account recurring — — — — — — — — 2,334 3,881 4,953 Life policyholders account single — — — — — — — — 3,681 4,848 6,823 Life policyholders account recurring — — — — — — — — 2,162 2,755 3,983
Gross Deposits Fixed annuities — — — — — — — — — 3,645 4,972 Variable annuities — — — — — — — — — 4,738 8,987 GICs and funding agreements — — — — — — — — — 9,062 11,547 Total Annuities and GICs Deposits 1,430 1,831 2,256 2,150 2,741 2,546 2,779 4,679 6,723 17,445 25,506
Total Deposits Production On Balance Sheet — — — — — — — — 10,527 21,106 29,034
Investment contracts — — — — — — — — — 465 938
New Premium Production Life Insurance Single premium — — — — — — — — — 5,748 8,565 Recurring annualized — — — — — — — — — 1,237 1,717 Total Recurring plus 1/10 Single — — — — — — — — — 1,812 2,574 1 Excluding annuities
Americas Fixed annuity deposits — — — — — — — — — 3,866 4,592 Variable annuity deposits — — — — — — — — — 5,025 8,299 GICs deposits and funding agreements — — — — — — — — — 9,610 10,664 Total Deposits Production On Balance Sheet — — — — — — — — — 18,501 23,555 Synthetic GICs — — — — — — — — — 5,184 5,891 Mutual funds and other — — — — — — — — — 4,075 7,425 Total Deposits Production Off Balance Sheet — — — — — — — — — 9,259 13,316
New Premium Production Life Insurance Single premium — — — — — — — — — 1,050 1,966 Recurring annualized — — — — — — — — — 600 970 Total Recurring Plus 1/10 Single — — — — — — — — — 705 1,167 in EUR million
The Netherlands New Premium Production Life Insurance Single premium — — — — — — — — — 948 1,292 Recurring annualized — — — — — — — — — 263 172 Total Recurring Plus 1/10 Single — — — — — — — — — 358 301 Savings Deposits — — — — — — — — — 3,661 3,528 Investment Contracts — — — — — — — — — 465 938 in GBP million
Other Countries New Premium Production Life Insurance Single premium — — — — — — — — — 165 248 Recurring annualized — — — — — — — — — 100 101 Total Recurring Plus 1/10 Single — — — — — — — — — 116 126
Income from banking and other activities 231 284 298 382 470 557 548 674 626 704 372 1 Excluding annuities 2 Up to and including 1994 this line also contains the figures of the United Kingdom
Gross Premiums Accident & Health Insurance in EUR million 1,500 Americas
Provision with investments for the account of policyholders 3.3 4.1 5.3 19.5 22.0 25.4 34.1 50.0 58.3 108.3 114.3
Senior debt not related to banking activities — — — — — — — 952 1,041 3,583 3,245
By Assets (1999) in USD billion 5 American International Group 268 6 Prudential (UK) 244 8 Zurich Financial Services 212 10 Hartford Financial Services 166 1 Insurance operations only; ReliaStar and Aetna pro forma included Source: Wall Street Journal September 26, 2000
8 With our customers 10 By the strength of our products 12 Through flexible distribution channels 14 To our local markets 16 By smart technologies 18 With our combined strengths 20 In our shared success 22 REVIEW OF OPERATIONS
Asia 34 Product line overview 38 Corporate responsibility 40 Financial review 49 FINANCIAL SECTION
businesses in local markets around the world; giving each of them the freedom to grow in its own way and the underlying strength it needs to do so.
A company in which good ideas are shared: with new products, services and processes successfully migrated across market boundaries; and the latest technology, innovative marketing and distribution channels used to bring us closer to our customers and our partners.
1 M. TABAKSBLAT (DUTCH) — CHAIRMAN Chairman of Reed Elsevier PLC and a retired Chairman and CEO of Unilever
He joined the Board in 1997; his current term will end in 2001. He is chairman of the Audit Committee.
4 SIR MICHAEL JENKINS KCMG (BRITISH) Vice-chairman of Dresdner Kleinwort Wasserstein (London, UK)
She was appointed in 1992; her current term expires in 2004. She is a member of the Nominating Committee.
7 J.F.M. PETERS (DUTCH) Retired Chairman of the Executive Board of AEGON N.V.
He joined the Supervisory Board in 1997; his current term expires in 2001.
9 MS T. REMBE (AMERICAN) A partner of Pillsbury Winthrop LLP (San Francisco, USA)
10 W.F.C. STEVENS (DUTCH) A senior partner of Caron & Stevens/Baker & McKenzie
He was appointed in 1990; his current term will end in 2004. He is a member of the Compensation Committee.
Works Council in the Netherlands, the external auditors and other outside professional advisors.
Corporate governance continues to attract our Board’s careful consideration as we measure AEGON’s practices against
Our objective, shared with the Executive Board, is to ensure that AEGON remains well-managed, with the quality of governance and reporting befitting a truly international company. Our Board’s international composition is an invaluable aid in this regard.
On May 3, 2001 Jaap Peters will retire from the Supervisory
Board, with the active assistance of three specialized committees, decides on Board nominations and resignations, compensation and the quarterly and annual accounts, including internal control procedures and accounting principles.
The Supervisory Board has three separate committees from among its eleven members. These are the Nominating, Audit and Compensation committees. Further details are available on page 98.
AEGON focuses on the financial protection and asset accumulation needs of its clients.
Multidomestic and multibranded approach, giving a high degree of autonomy to the management of the individual country and business units, encouraging entrepreneurial spirit and action. AEGON requires local management to run local businesses.
AEGON supplements its autonomous growth with selective acquisitions. Acquisitions are preferred in countries where
> Divestiture Labouchere in the Netherlands > Integration Transamerica in the USA
We strengthened our decentralized international organization, integrating recent acquisitions and solidifying our position as one of the top five life insurers in six of our seven main national markets, while laying the groundwork for further targeted geographic expansion. We developed and extended our product offering and distribution channels, drawing on new technology and old-fashioned entrepreneurial drive. And we coped with the myriad daily challenges and opportunities of doing business in an increasingly sophisticated and competitive marketplace. As a result, we can look forward with confidence to another strong performance in 2001.
Our success reflects, and indeed depends on, the ability of AEGON’s growing family of associates — now approximately 24,000 staff — to stay connected with customers, business partners and investors, understanding and satisfying their changing needs. This is a real challenge under any circumstances, but particularly so in view of AEGON’s major acquisitions, which have placed heavy organizational demands on our people. We are proud and highly appreciative of the way they have risen to the challenges of integration over the past several years, while keeping their existing businesses healthy and growing. AEGON’s popular worldwide employee stock option plan, that covers virtually all eligible staff, gives tangible expression to this and encourages the special effort and focus that leads to profitable growth.
Our success is also based on staying connected with our roots and our values, as powerful and relevant today as ever.
Achieving our objectives of growth and balance within our fast-changing core businesses requires an organization that is at once flexible and disciplined, equally comfortable with change and continuity, connected internally and to the world around us. We trust that, along with last year’s facts and figures of our performance, this report will provide useful insight into how we are meeting these highly important challenges.
The year 2000 saw continued marked evolution of our multibranded product offering to tap into the fastest growing segments of life insurance and related financial products. We have built leading market positions in variable and unit-linked life insurance products in our major markets such as the
While adding well-targeted new products, we have continued to refine our traditional offerings: we have found that a mix of new and traditional products allows us to satisfy and meet the individual requirements of our customers and distribution partners and build volumes whatever the fashions of the day. And, a broadly diverse product line also reduces the impact of interest rates, currency or stock market swings.
Last year, for example, AEGON USA once again achieved record sales of variable insurance and annuities, mutual funds and other equity-linked products, serving customers seeking capital appreciation, but also posted record sales of conventional life insurance and fixed annuities for those looking for a safe harbor from stock market volatility. And, despite some gloomy market predictions, AEGON The
Diversity is also central to our distribution strategy: empowering the customer means allowing each to find precisely the right products and service levels for his or her needs and budget. Therefore, our distribution channels range from the professional intermediary, offering comprehensive service and sophisticated, value-adding advice all the way to, for instance, the supermarket checkout counter, where since
February 2001 Albert Heijn customers in the Netherlands can use their loyalty cards to build up savings easily.
Multibranding enables different business units to serve a range of market segments without cannibalizing sales or blurring the image of our strongest brands, including AEGON,
Although ‘customer-facing’ e-commerce sales volumes have remained small, the back-office benefits of improved communications and sales support, speedy processing and secure, convenient access to information have been considerable. As one example of the positive impact that information technology is having on our business, average new policy issuance time in the Netherlands last year fell from
‘several weeks’ to ‘the same week’ — a gratifying improvement in service which was accompanied by an equally gratifying reduction in issuance costs and error rates.
Though as professional risk managers we remain attentive to potential political, economic and legal threats, we are optimistic about the current year outlook and see various opportunities ahead of us. Having digested recent acquisitions and reinforced our infrastructure, we are well positioned for further growth at a time when acquisition and joint venture opportunities are on the rise. Demand for AEGON’s core expertise in asset accumulation and financial security, already strong, is becoming increasingly widespread with the aging of populations, the scaling back of traditional social security programs and the growth of affluence. Changes in tax codes, financial services regulation and technology are providing new competitive opportunities.
Consistent with AEGON’s decentralized approach, each of the main country units has set its own priorities for achieving profitable growth in the current year. AEGON USA’s priority is to build on its established market leadership positions, while focusing on expense control, and aggressively pursuing operating efficiencies and service levels to customers. It will also explore cross-selling opportunities and technology initiatives across all distribution channels.
Mexico will work to complete the insurance product package offered through the extensive Banamex branch network and to strengthen Afore Banamex AEGON’s leading position in the pensions and annuity market.
Marketing Services in the USA. This again is an excellent example of a transaction that fulfills our strategic and financial guidelines. Although it may sometimes take longer to get where we want to go, the return of well over 20% realized upon the disposals of our banking activities, completed last year, underscores the virtues of being patient.
The year 2000 was also characterized by the early retirement of Henk B. van Wijk, who had been a member of the Executive
Services operations from J.C. Penney in the USA, we expect an increase in 2001 earnings and earnings per share between
But along with the challenges, the empowerment of the customer has also created unparalleled opportunities for those financial service providers who can provide multiple touchpoints for the customer and stay connected with the markets they serve. The needs of customers for protection, investment and accessibility have increased along with the increased levels of wealth.
The market for these services is greater than ever, driven by such trends as affluence, aging, the scaling back of traditional social security and the erosion of regulatory barriers. The market for
AEGON’s decentralized structure with its multibrand strategy, focuses on a wide range of profitable market segments within its core markets and provides the connection with the customer. Its financial strength, robust infrastructure and disciplined capital allocation practices ensure long-term portfolio quality and profitability. And its ‘win-win’ culture, aiming at long-term mutually beneficial relationships among the customer, distributor and Company, is based on providing value-adding products and services, and respect for the individual. All this exemplifies the importance, and our pleasure, in connecting to all our customers.
To improve its insight into actual as well as potential customer needs, AEGON
USA is designing a new central database that draws together customer information from across its entire range of decentralized activities. When completed, the Enterprise Client System will provide a comprehensive view of a customer’s relationship with the Company facilitating more effective interactions and greater convenience for the customer.
United Kingdom, Canada, Mexico, Hungary and Spain served almost two million participants in more than 35,000 group pension programs.
To provide investors and shareholders with an added insight into AEGON’s progress, the Group expanded its product line reporting in 2000. A detailed product overview, summarizing the main product groups covered by the new reporting, is presented on pages 34 to 38.
Along with volume growth, the product range has been renewed, reflecting both AEGON’s customer-centered niche strategy and, more generally, the growing importance of wealth accumulation and financial planning products among individual and institutional clients alike.
To optimize market profile and distribution, AEGON’s decentralized business units utilize a multibrand strategy to approach different market segments: in the US for example, the Transamerica brand, with its almost universally recognized ‘pyramid’ logo, has proved to be a powerful consumer marketing support, while the AEGON name, familiar in financial circles as a hallmark of quality, has resonated with institutional customers for guaranteed investment contracts (GICs). In the Netherlands, the UK and Spain, the
individual insurance, pension or investment needs conveniently and at the desired level of service and cost. For most individuals and businesses, the professional intermediary remains the preferred service provider. The familiarity of face-to-face contact, the value of informed, personalized service and professional advice all remain powerful, competitive advantages that enable professional intermediaries to maintain and even selectively increase their overall market share despite many new forms of distribution.
In most of our key markets, where AEGON companies have traditionally relied on intermediaries as the principal distribution channel for our insurance, investment and pension products, support for the intermediaries in meeting these challenges has been systematic and effective. Competition is a fact of life, and by helping its distribution partners to thrive, AEGON shares in their success.
For certain types of insurance and savings products, particularly those traditionally offered by banks, e-commerce and direct marketing provide a cost-effective massmarket channel. Spaarbeleg pioneered this in the Netherlands, and MoneyMaxx, its international version, is now up and running in six other countries. In the United States, the Special Markets Group is continuously expanding its state-of-the-art direct marketing activities, while e-commerce opportunities are being pursued under the
Italy and Hungary, its franchising activities in the Netherlands and Spain, its innovative venture with supermarket chain Albert Heijn in the Netherlands and its successful collaboration with the World Marketing Alliance in the United States and the Philippines.
Group. This diversity is reflected in the products, distribution, investment activities and growth strategies of the units.
Over the past 14 years, Spaarbeleg has achieved explosive growth in the Netherlands, based on offering simple savings and unit-linked insurance products to the mass market, using low-cost distribution options. Now, AEGON The Netherlands has developed an international version, MoneyMaxx, utilizing ‘virtual’ business technology as well as more conventional distribution methods. Through close cooperation between AEGON The
Netherlands and other AEGON country units, local versions of MoneyMaxx have also been rolled out in six countries outside the Netherlands: Germany, Belgium, Spain, Hungary, Italy and the United States (GoalTender). In each of these markets, the basic MoneyMaxx concept has undergone careful adaptation to local market conditions. MoneyMaxx’s international future appears bright and additional markets are under evaluation.
Financial Advisors (IFAs), AEGON UK’s Scottish Equitable is working closely with its major
Technology is playing a key role in connecting AEGON people within and across organizational lines as well as with customers and distributors. We recognize the importance of improving productivity and enhancing the speed and quality of customer service by sufficiently investing in hardware, software and training.
MoneyMaxx, now in six countries outside the Netherlands and still growing, are adding to AEGON’s knowledge and experience into this fast developing distribution channel, though production volumes are still relatively low.
Other technologies of growing importance to AEGON include wireless voice and datalinks, which greatly increase the mobility, speed and accuracy of the sales and service force; and ‘virtual office’ and telecommuting technologies, which reduce overhead and increase flexibility by facilitating outsourcing.
A key area of integration at country level is Information and Communications Technology, where a sophisticated central facility can provide uniform automated support for the entire organization, delivering one-time cost savings and productivity increases, while supporting speed and quality of performance. Acquisitions and autonomous growth ensured that 2000 was a busy year for the central data facilities: > Following the successful integration of Providian’s insurance operations and a successful Y2K
> AEGON UK’s successful transition of data, voice and desktop services for Guardian Financial
> AEGON Spain’s expanded and upgraded data center provided management with improved reporting, allowing better marketing support and tighter control of the agency networks, and consequently better quality financial control.
Complementing its decentralized operating strategy is AEGON’s unique culture of shared success, captured in its motto ‘Respect People, Make Money, Have Fun’. Longevity of service, shared objectives, some time for fun, and a range of internal networking opportunities give
A few examples are the Optiek all employee meetings, annual international management conferences, AEGON University for management development and Inner Circles to share ideas. Furthermore, there are informal national networks, such as
Aeconnection for newly employed in the Netherlands and AEGON Academy for middle management in the United States.
Investment Advisors’ pensions venture with the Bank of America. Sometimes it is more formally structured, as with Transamerica Capital, whose broker-dealer products are designed and supported by a number of different AEGON USA divisions. AEGON units also provide each other with technical advice and assistance — for example, AEGON The Netherlands is supporting other country units with regards to the introduction of the MoneyMaxx concept. Finally, shared success is also a motivating principle in AEGON’s human resources policy, whether through career development programs such as AEGON The Netherlands’ Personal Development Plan scorecard or
AEGON USA’s Diversity Training to help managers stay connected with an increasingly diverse and individualistic workforce.
AEGON units collectively manage some EUR 281 billion (USD 261 billion) in investments
EUR 114 billion; USD 106 billion for the account of policyholders), making AEGON one of the larger asset managers in the world. Reflecting the local nature of insurance markets and the
Group’s decentralized operating structure, asset management is conducted on a country-bycountry basis, with the local investment unit responsible for asset liability management and for providing investment product support to the local business units. Besides serving their respective markets, AEGON The Netherlands and AEGON UK will both concentrate increasingly on the market of third-party asset management. The AEGON Asset Management business units will focus on delivering top quality service to both internal and external clients.
ACQUISITION OF TRANSAMERICA IN MID-1999, WHILE NET INCOME GREW BY 33%.
The management team of AEGON USA from left to right: Douglas C. Kolsrud, Donald J. Shepard, Chairman, President and CEO, Bart Herbert jr, Patrick S. Baird, Tom A. Schlossberg, Brenda K. Clancy
THE AMERICAN OPERATIONS OF THE AEGON GROUP, WHICH INCLUDE AEGON USA AND
With twelve divisions serving a broad range of specialized market segments and providing a healthy mix of stability and growth, AEGON USA is one of the leading life insurers in one of the world’s largest markets. Integration of Transamerica was a major focus in the year under review with the process now nearly complete; the acquisition is more than meeting synergy and growth expectations. Three new business units were established within
AEGON USA’s decentralized structure, while the balance of Transamerica’s activities were merged into five existing AEGON business units: Transamerica corporate functions performed in San Francisco and Los Angeles were consolidated in Cedar Rapids, yielding important savings. The Transamerica data center in Los Angeles was fully integrated into
A number of non-core activities acquired with Transamerica were disposed of in the course of the year, realizing aggregate proceeds of over USD 1 billion. After a review of available options, it was decided for the present to retain certain non-insurance activities, principally distribution and inventory finance, real estate tax services and container leasing, conducted by Transamerica Finance Corporation.
The four divisions of the Agency Group offer a broad range of insurance and investment products, primarily through over 100,000 insurance and investment professionals: independent insurance agents, financial advisors, career agents, marketing companies and registered representatives who typically develop long-term relationships with end consumers by providing value-added financial planning advice, products and services.
is now one of the leading providers of these flexible, investment-linked products, which continue to find great favor with consumers as a savings and retirement tool. Specialized products such as bank- and corporate-owned life insurance (BOLI/COLI) also achieved extraordinary growth, driven by focused marketing and the quality of AEGON’s financial ratings. Traditional life and fixed annuities’ sales grew at a more moderate pace, but were important contributors to profits. Collectively, the Agency Group boosted its income contribution and accounted for 44% of AEGON USA’s pre-tax income last year.
(financial institutions, direct sales, internet, worksite marketing, securities brokers), the five divisions of the Alternative Markets Group increased their profit contribution in 2000, accounting for 41% of AEGON USA’s total. The Alternative Markets Group’s flagship, the
Capitalizing on its heightened profile in the wake of the acquisition announcement and on the excellent performance ratings of its revitalized investment management activities,
Mexico’s leading bank, in the bancassurance and pension fund management markets respectively, continued their progress. They now rank nationally 6th in life insurance, 4th in pensions and 2nd in asset size of the pension fund management business.
CONTINUED TO GROW REVENUES AND PROFITS IN ITS HIGHLY COMPETITIVE MARKET BY
Variable universal life and similar unit-linked products now account for fully 60% of
AEGON Personal Lines’ new production, with single premium products replacing traditional recurring premium policies. Sales of security leasing products grew substantially at AEGON
Personal Lines and the products were labeled for Nederlandse Verzekeringsgroep and
AXENT/AEGON. Securities leasing products enable the consumer to build a stock portfolio through installment purchasing. Spaarbeleg, providing mass-market investment products, has been notably successful in cross-selling more sophisticated products to traditional savers. It fielded a new ‘paper-free’ savings product via the internet, while also introducing a hugely successful securities leasing product. All business units have now integrated the internet into their business activities, with some thirty websites launched to date.
AEGON’s disciplined approach in equity and fixed income investments and the company’s structured tactical asset allocation decision making.
The Group life and pension business units serving many of the Netherlands’ leading corporations as well as a host of small and medium-sized enterprises also grew successfully last year, gaining market share. Working closely with AEGON’s corporate pension clients were the worksite marketing specialists from Financieel Compleet, who sell value-adding products and services for individual plan participants developed by other business units that supplement group pension programs. Financieel Compleet’s popular, cost-effective individual products and its face-to-face advice have become important supports for AEGON marketing to potential group clients, as well as generating a stream of profitable on-going supplementary business.
Non-life insurance activities remained profitable, notwithstanding the Enschede disaster, emphasizing loss prevention programs and maintaining a disciplined under-
Income before tax in EUR Income before tax life insurance in EUR
Kamerbeek Meeùs Groep, a large professional intermediary, while many of Financieel
AEGON franchisee. A particularly innovative joint venture has been established by AEGON
AEGON UK OUTPERFORMED ITS MARKET AND REINFORCED ITS POSITION AS A KEY PROVIDER OF
LIFE, PENSION AND INVESTMENT PRODUCTS AND SERVICES FOR THE CORPORATE AND PERSONAL
THE COURSE OF THE YEAR, YIELDING GREATER THAN ANTICIPATED ECONOMIES AND AN
The success of this strategy can be seen in Scottish Equitable’s strong positioning in the emerging competition for stakeholder pensions. Fostered by new fiscal legislation and enjoying broader bipartisan political support than many previous government initiatives, stakeholder pensions are designed to encourage pension savings by lower and lower middle income wage-earners not currently covered by conventional private pension schemes. The run-up to the introduction of stakeholder pensions has also stimulated the general pensions market as companies are reassessing their existing programs in light of the new legislation. Scottish Equitable is well placed to take advantage of the resulting business opportunities. Scottish Equitable’s substantial investment in recent years in state-of-the-art information systems and electronic customer service capabilities, such as its ‘SmartScheme’ web-based service for IFAs, plan sponsors and individual participants in its existing portfolio of group pension plans, has given it the capacity and cost structure
The management team of AEGON The United Kingdom from left to right: Otto Thoresen, Russell Hogan, Graham Dumble, David Henderson, Chairman, Bill Stewart, Roy Patrick
The Personal Investment products and services of Scottish Equitable and Scottish
Equitable International have continued to show rapid growth and now account for over 25% of total premium within the AEGON UK group of companies. AEGON Asset
IN A GENERALLY FAVORABLE ECONOMIC CLIMATE, AEGON HUNGARY CONTINUED TO ACHIEVE
STRONG ORGANIC GROWTH IN SALES AND EARNINGS AS WELL AS ASSETS UNDER MANAGEMENT.
Despite the continued run-off of the old state insurance portfolio and lukewarm political support for expanding the new private pension system, AEGON Hungary’s sales of modern
AEGON branded life insurance and pension products rose by over 50% during the year, as increasing affluence and the spread of private sector employee benefit plans, particularly among foreign investors, underpinned both individual and group demand. Like their counterparts elsewhere, Hungarian consumers increasingly demand a combination of life insurance-investment products, as reflected in the fourfold increase in single premium product sales. While creating exciting new sales opportunities, this shift is putting pressure on margins and increasing the need for flexible, customer-responsive marketing and service.
In the spring of 2000, MoneyMaxx Hungary was introduced with a simple, high yield unit-linked product.
The management team of AEGON Spain from left to right: Simón Escudero, Ramón Escobar, Enrique Marazuela, Jésus Quintanal, Chairman, Luis Tejero, Mercedez Vázquez
AEGON Taiwan almost tripled its size in terms of both premium income and assets, thanks to continued strong organic growth in life insurance sales and integration of
Transamerica branches are being converted into a subsidiary. This is expected to be achieved in the middle of 2001. The enlarged operation will concentrate on autonomous growth, with priorities on expanding the existing sales network and adding new distribution channels, while in the meantime actively pursuing acquisition opportunities.
In the Philippines, where AEGON’s local unit works closely with the World Marketing
Comprises permanent and term life insurance. Permanent life insurance provides life-long financial protection. Most permanent policies have a cash value feature with minimum rate guarantee that accumulates tax-deferred, over the life of the policy and can be used to help fund financial goals such as retirement. Whole life insurance is a common form and premiums remain constant over the life of the policy.
Universal life insurance is a flexible premium, adjustable benefit contract that allows the customer to pay premiums at any time, in virtually any amount, subject to a minimum and a maximum. The interest rate at which the cash value accumulates adjusts periodically.
Term insurance covers the insured for a specific period of time. The policy pays death benefits only if the insured dies during the term. Policies can usually be renewed upon expiration and premiums normally increase upon renewal. This category also includes life insurance sold as part of defined benefit pension plans, endowment policies and post-retirement annuity products. Bank- or company-owned life insurance (BOLI/COLI) funds the costs of employee benefits, usually with key employees of the company as the insured persons.
These are contracts issued to tax-qualified investors, guaranteeing a rate of return on assets for a fixed period and payment of principal and accumulated interest at the end of the period (usually between three and five years). GICs are sometimes used to fund the fixed-income plan in defined contribution plans, e.g. 401(k) plans.
Tax-qualified: brokers United States pension funds direct Internationally financial institutions (independent) agents from the USA
Includes savings accounts and investment contracts (i.e. security lease products). Both products generate investment spread income for AEGON.
Savings accounts offer attractive interest rate whilst retaining flexibility. Security lease products provide a convenient combination of monthly interest payments on a loan and a final payout based on the performance of the investments.
Long-term care insurance protects the insured's income and retirement savings from the costs of long-term nursing home or home health care.
individuals (independent) agents United States marketing organizations Netherlands financial institutions United Kingdom worksite marketing Canada IFAs Spain franchise organizations Hungary individuals (independent) agents United States marketing organizations Canada brokers financial institutions individuals (independent) agents United States pension funds marketing organizations Netherlands asset managers financial institutions United Kingdom individuals direct marketing Netherlands (independent) agents supermarkets franchise organizations individuals (independent) agents United States companies brokers Netherlands
Dedication and the desire to be connected to others, also in terms of a wider corporate, social and environmental perspective, are important tools for respectful entrepreneurship. Nowadays companies are judged not only on the basis of their financial results, but also as responsible corporate citizens. In 2000, AEGON again expressed its belief in the importance of good relationships with the different communities.
AEGON continued its support of the ‘international community’ through a great variety of sponsorships and initiatives. An important project, for instance, is in health care and research: the oncological research by the university clinics of Johns Hopkins, Baltimore and Vrije Universiteit
In another area, AEGON was also committed to address its social responsibilities. One example is the settlement last year of any possible remaining and yet unclaimed Holocaust-era insurance policies for Holocaust survivors, their heirs or beneficiaries. Inquiries were received, verified and, if rightful, honored by the independent Holocaust Foundation for Individual Insurance Claims.
Another project that received AEGON’s continued support is Habitat for Humanity, which helps people in destitute housing circumstances the world over. Projects were supported in many countries, including the Philippines, Hungary and in the United States, where AEGON
also sponsored a large number of charities and organizations in the field of science and education, culture and the arts. As a result, ÁB-AEGON was granted the
AEGON recognizes that commitments towards the environment and sustainability have become vital success factors. AEGON’s connection with the environment is expressed through a large number of activities and interests, both on Group level and in the individual country units. With its regular sustainable investment portfolios and reviews, the Group remains connected to to society connected >
the environment and finds recognition among official regulatory and authoritative bodies. The
AEGON Group was included in the Dow Jones Sustainability Index and ranked among the top 10%
Netherlands. The agreement with the Dutch Government to reduce energy consumption by 23% by 2006 is on schedule. Emphasis is placed on the recycling and reduction of waste, the use of environmentally friendly products and materials and the training of employees for better environmental management.
which enhanced a dialogue among employees on respectful treatments of each other and of customers. This program provided key information on a culturally diverse work environment, available mechanisms and training. Other initiatives completed during the year included a new collective labor agreement negotiated by AEGON The Netherlands, which gives employees more flexibility in scheduling their working hours, and a Balance Score Card system to measure employee satisfaction which was introduced by ÁB-AEGON.
Investment income for the –3,228 14,352 account of policyholders –7,702 –3,495 13,533
Gross deposits in: Net deposits2 in: –259 66 — Savings accounts –617 –280 62
Outstanding common shares: — Number of common shares x 1,000 1,350,524 1,336,852
— Weighted average number x 1,000 1,315,382 1,225,363 1 Including Group overhead expenses. These expenses are not allocated to the lines of business and country units. 2 Balance of deposits and withdrawals. 3 Based on the weighted average number of common shares. 4 For 2000 proposed. 5 Based on the number of common shares outstanding at the end of the period.
In the United States, where AEGON’s shares trade on the New York Stock Exchange (NYSE), the Providian and Transamerica acquisitions, partially paid for with AEGON shares, added many thousands of new individual and institutional holders to its register. In Europe, where the shares are included in many major indices and are listed on the stock exchanges in London,
Amsterdam, Frankfurt and Zurich, the growth of equity investing and the unification of currency and financial markets within the European Community has increased trading activity. Moreover, regular issues of short- and long-term debt — including some
AEGON’s disclosure practices and accounting standards have been developed over many years with due consideration of the needs of our shareholders and other stakeholders, including the various regulators and research analysts. In recent years, substantive supplemental information has been added to our annual and quarterly accounts.
The segment information on page 80 contains all expanded numerical information on AEGON’s results for 2000. Starting with the presentation of the full year’s results for 2000, AEGON provides a further segmentation of life insurance earnings in order to provide greater transparency of
United States. Regulation FD requires equal access to material information for all investors. While AEGON — as a non-domestic company listed on the New York Stock Exchange — is exempt from the reporting requirements of Regulation FD, it has been and will continue to be AEGON’s practise, to provide equal access to material information to all investors.
(the UK life operations of Guardian Royal Exchange) continued to have a positive effect on the earnings increase in 2000, which was partly offset by the sale of Labouchere in August 2000.
Total revenues rose to EUR 30.8 billion (USD 28.4 billion), an increase of 37% (11% autonomous). Total premium income grew 39% (13% autonomous) to EUR 20.8 billion
(USD 19.2 billion), with the majority of the difference accounted for by currency exchange differences. Overall new life insurance premium production increased 42% on a standardized basis. Gross deposits increased 38% totaling
EUR 29.0 billion. The overall increase in gross margin was 29%, while commissions and expenses increased 27%.
(USD 4.6 billion) and variable annuity deposits increased 90% to EUR 9.0 billion (USD 8.3 billion), largely driven by increased production from AEGON USA’s autonomous operations. GIC and funding agreement deposits rose 27%
EUR 3,003 million in 2000, comprising 90% of the Group’s income before tax, excluding interest and other charges.
In comparing the earnings increase in the fourth quarter of 2000 with the increase in the same period of the previous year, it should be taken into account that in the fourth quarter of 1999 a relatively large proportion of Transamerica earnings, as well as six months Guardian earnings, were included in AEGON’s results.
General insurance results increased from a EUR 2 million loss in 1999 to a EUR 60 million profit in 2000. Results in
GIC deposits) increased 51% to USD 6,846 million (1999: USD 4,521 million). The increase was in large part due to the inclusion of Transamerica premium income, an increase in bank-owned life insurance (BOLI) production and of variable universal life premium. New life insurance premium production totaled USD 1,167 million on a standardized basis, up 66%.
Pre-tax income of AEGON’s activities in Canada amounted to USD 76 million in 2000, including the effect of the NN Life acquisition.
Afore Banamex AEGON in Mexico further increased to USD 63 million (up 31%), reflecting the continued positive development of these businesses. Seguros Banamex AEGON’s earnings were positively influenced by a continued favorable claims experience.
Higher investment income in the pensions business and an increase in profitability within the life insurance business units contributed to the rise in income before tax.
Anticipating changes in the tax laws, consumers have purchased more life insurance, opting more often for single premium products instead of recurring premium policies.
a preponderance of single premium products and investment contracts is reflected in the 16% overall decrease in new life insurance premium production, on a standardized basis, which totaled EUR 301 million. Conversely, investment contract sales increased 102%, totaling EUR 938 million.
AEGON Bank earnings growth was driven by continued strong spread performance at Spaarbeleg Bank and high sales of security lease products at Spaarbeleg Bank and
New premium production of GBP 538 million, measured on a standardized basis, including Guardian, increased by 21%.
Total life insurance income before tax from other countries totaled EUR 28 million. Life insurance premium income increased 32% to EUR 509 million. Standardized new life insurance premium production was EUR 126 million, up 9%.
AEGON Spain’s net income rose to EUR 13 million (1999: EUR 51 million loss). The life insurance operations in Spain are being supported by the growth in the life insurance market and the acquisition of Covadonga. Several organizational actions, such as cleaning of the portfolio and rate increases, resulted in an increase of income before tax from non-life insurance activities to EUR 8 million (1999: EUR 55 million loss).
Following the accounting change effected as per June 30, net earnings of USD 27 million (EUR 29 million) from these activities have been included in AEGON’s 2000 results.
EUR 113 billion (USD 105 billion) during 2000 and now represent 40% of total investments. This part of AEGON’s investment portfolio represents assets accumulated relating to products on which AEGON carries the investment risk and earns a spread. In the Americas and the Netherlands, the increase, mainly in fixed income securities, is primarily the result of increased new production. The general account portfolios in the Netherlands and the Americas, which comprise 98% of total general account investments, outperformed their respective benchmarks. The investment portfolio was slightly rebalanced from equities towards fixed income during the year. At the end of 2000, 90% of the general account portfolio was invested in fixed income securities and 10% in equity securities and real estate. The quality of the fixed income portfolio was stable, with no major adjustments to the credit profile or the diversity of the total portfolio. The performance of the general account portfolios
Americas and the Netherlands is detailed in the respective country sections of the annual report.
Investments for the account of policyholders, which include unit-linked products and separate accounts, increased by EUR 6 billion (USD -2.4 billion) to EUR 114 billion and represent 41% of total investments. The investment risk on these assets is borne by the policyholders, and the assets generate fee income for AEGON. The gradual shift from investments in fixed income securities to equity securities in this category continued during 2000. The largest part (58%)
of the investments for the account of policyholders is allocated to equities. The investment portfolio for banking activities equated in 2000 at EUR 5.5 billion (USD 5.1 billion) at year-end.
Off balance sheet investments, on which AEGON also earns fees, increased to EUR 47.0 billion, representing 17%
of the total investment portfolio. This category includes assets, which are related to third party managed assets, mutual funds and synthetic GICs. Growth in this investment category was mainly driven by the strong growth of mutual fund sales in the United States.
As an international life insurance company, AEGON is exposed to currency fluctuations, to changes in the market value of its investments, the impact of interest rate changes and changes in mortality and longevity.
AEGON’s shareholders’ equity expressed in euro. The remainder of AEGON’s capital base (capital securities and subordinated and senior debt) is held in various currencies relative to the book value of AEGON’s activities in those currencies. As a result, AEGON’s debt-to-total-capital ratio will not be materially affected by currency volatility. In 1999,
AEGON employs established policies and procedures to manage its exposures to changes in interest rates. The local investment departments of the AEGON Group units are responsible for managing their investment portfolios. Their investment policies are guided by sound asset and liability management principles. This approach applies throughout the various Group units. The portfolio yields in all our country units continue to be substantially higher than the minimum rate guarantees on our insurance liabilities. Our assets are managed in a way so that they are aligned with the technical provisions for that part of our portfolio for which we guarantee a minimum return. Also, for new production, the yields on acquired assets comfortably exceed guaranteed levels.
During 2000, the biggest effect on AEGON’s capital base was the accounting change regarding the Transamerica non-insurance businesses. Shareholders’ equity decreased from EUR 13.5 billion to EUR 12.8 billion. Positive effects on shareholders’ equity include retained earnings
EUR 505 million, as well as the goodwill charge related to the accounting change for the Transamerica non-insurance businesses, which more than offset the gain on the sale of
AEGON has further employed its excellent access to the capital markets through private placements issued under its
USD 3 billion Euro Medium Term Notes Program. Additionally, a USD 2 billion Euro Commercial Paper Program facilitates access to international and domestic money markets when required. AEGON maintains back-up credit facilities for outstanding debt under its Commercial Paper programs.
The composition of the capital base was relatively stable during 2000 despite EUR 2,254 million of goodwill charged to shareholders’ equity directly. As a percentage of total capital base, equity decreased to 69% from 71% at year-end 1999. AEGON’s financial policies require that shareholders’
equity represents at least 70% of total capital. Policies are continuesly aimed at restoring this ratio. Additionally, AEGON
applies capital adequacy measures for its operating units in setting internal dividends, which are aimed at maintaining strong capitalization. These self-imposed standards substantially exceed those of regulatory bodies in the various countries. We manage the business to these standards through application of our financial strategies and policies, including acquisition funding and external dividend policy. We remain committed to a strategy, which assures continued financial strength. In addition to our strong credit ratings, this is reflected in the excellent insurance financial strength ratings assigned by both Standard & Poor’s and Moody’s to our operating units in the United States, the Netherlands and the
The sensitivity analysis on forecasted 2001 net income and shareholders’ equity — presented in the table on page 47 —
is performed for each risk category independently. No assumptions are made regarding correlations between markets or risks, possible management actions or changing conditions for all other assets and liabilities. It should be noted that the effects presented only relate to 2001 forecasted net earnings and shareholders’ equity; no conclusions should be drawn for subsequent years.
The sensitivity analysis shows the effect of movements in the exchange rates of 15% of AEGON’s most important currencies (the US dollar, the Canadian dollar and the pound sterling which represent around 70% of AEGON’s forecasted earnings in 2001) relative to the euro on forecasted net income and shareholders’ equity. The table on page 47 shows that a decrease of 15% in non-euro currency exchange rates would result in a negative impact on net income of around 11% and on shareholders’ equity of approximately 11%, mainly as a result of currency translation. Conversely, an
AEGON’s accounting policy of deferring and amortizing capital gains on equity and real estate investments in the general account portfolio makes our net income less sensitive to the effects of volatile equity markets than it would otherwise be. However, as the allocation of investments held for account of policyholders is over 60% in equity securities, net income will become more sensitive to the fees related to these assets. Net income would be approximately 7,5% lower and shareholders’ equity approximately 9.5% lower after a decrease of 15% in equity and real estate markets.
The total dividend for the year is composed of an interim dividend, declared at the publication of the six months’ results in August and a final dividend proposed with the release of the year-end results in March and to be approved at the Annual
General Meeting of Shareholders (AGM). Under normal circumstances the interim dividend is equal to 50% of the total dividend of the preceding year. For the financial year 2000 a total dividend of EUR 0.74 per common share of
The Board has proposed an increased dividend for the 17th year in a row. Calculated on a payout ratio of 47%, the proposed 2000 dividend represents an increase of 23% over
Parallel yield curve shift up of 100 basis points between –0.5% and –1.5% — Parallel yield curve shift down of 100 basis points between 0.5% and 1.5% —
Increase versus the euro of USD, GBP and CAD of 15% between 10.5% and 11.5% between 10.5% and 11.5% Decrease versus the euro of USD, GBP and CAD of 15% between –10.5% and –11.5% between –10.5% and –11.5%
2 The effect of interest rate movements is reflected as the effect of a one-time parallel shift up or down of all relevant yield curves on 1 January 2001. 3 The effect of currency movements is reflected as a one-time shift in value of the US dollar, the Canadian dollar and the UK pound up or down on 1 January 2001. Movements of other currencies have a negligible influence on both net income and shareholders’ equity.
103 Information based on US accounting principles 105 Long-term liabilities, subordinated loans and capital securities 106 Quarterly results 108 Survey of major AEGON investment funds 109 Corporate and shareholder information 110 Financial calendar
The financial statements have been drawn up in euros, as well as in dollars and guilders.
CONSOLIDATED BALANCE SHEETS AT DECEMBER 31 (after profit appropriation) In accordance with Dutch Accounting Principles Amounts in millions
Receivables 2,416 1,332 Receivables out of direct insurance 6 5,723 2,597 1,326
Technical provisions 13 665 537 Unearned premiums and unexpired risks 1,575 715 534
SUMMARIZED CONSOLIDATED INCOME STATEMENTS In accordance with Dutch Accounting Principles Amounts in millions
Investment income allocated to the non-technical account 10 –2,071 –940 –718
Change in technical provision unearned premiums and unexpired risks Gross –436 –198 –145
Investment income allocated to the non-technical account 10 –60 –27 –51
Cash flow from operating activities 3,004 22,032 Increase technical provisions net of reinsurance 7,168 3,253 20,775 1,186 939 Amortization of policy acquisition costs 2,830 1,284 885 109 122 Amortization of interest rate rebates 260 118 115
–549 –418 Indirect return real estate and shares –1,311 –595 –394
–2,546 –19,567 Change in investments for account of policyholders –6,076 –2,757 –18,451
Cash flow from financing activities 543 700 Change in subordinated loans and other long-term loans 1,296 588 660
Effective June 30, 2000, the non-insurance businesses are carried in the balance sheet at their net asset value as unconsolidated holdings, while the net income of these businesses have been included in AEGON’s earnings from July 1, 2000. The difference between net asset value and the prior carrying value of EUR 2 billion has been charged as goodwill directly to equity. The consolidated financial statements of these businesses have been included in the notes on page 76 and following.
On April 7, 2000 the AEGON subsidiary Transamerica Life Insurance Company of Canada and ING Canada entered into a strategic marketing alliance under which Transamerica acquired 100% of NN Life Insurance Company and ING Canada will distribute Transamerica life insurance products. Transamerica Life and NN Life merged into a single organization. Economically, the transaction has taken effect from January 1, 2000.
On September 29, 2000, AMVEST, the joint venture of AEGON and PGGM, and Rodamco Continental Europe completed combining their real estate portfolios and investment activities in the retail and office sectors under the name Rodamco Europe. The transaction was materialized by the issuance of new shares to the AMVEST shareholders along with a loan of EUR 555 million provided by the AMVEST shareholders, which — at the option of Rodamco Europe — might be repaid in whole or in part two years after the transaction through a Rodamco Europe share swap at a fixed price of EUR 43.50 per share. Economically, the bundling of activities has taken effect from March 1, 2000. The shares of Rodamco Europe are recognized under investments in shares.
Since the introduction of the indirect return method by AEGON in 1995, the method became an accepted accounting policy in the Netherlands. In 1997 AEGON has put a cap of 7% after tax on the indirect return. To bring the application of this method in line with current general practice, the cap on indirect return will be removed in 2001.
Notional amounts of foreign currency contracts and interest rate contracts are not included in the balance sheet and are shown, together with other off balance sheet derivatives, under commitments and contingencies. They represent aggregate notional amounts only and are therefore not a measure of the exposure of the Company.
Income statement items in foreign currencies are converted at the average currency exchange rates for the reporting period. Currency exchange rate differences resulting from using year-end exchange rates as well as average exchange rates are charged or credited directly to shareholders’ equity under the caption currency exchange rate differences. Currency exchange rate differences from not hedging shareholders’ equity of subsidiaries not accounted for in euro, including results and related costs from the hedging transactions on those subsidiaries, are also charged or credited to shareholders’ equity under the caption currency exchange rate differences.
New property is valued at construction cost including interest during the construction period, or at purchase price. Unrealized and realized gains and losses on real estate investments as well as results, expenses and currency exchange rate differences from hedging transactions are recognized in the revaluation account, taking into account the related (deferred) taxes.
The participation in AMVEST Vastgoed is accounted for under this caption. Purchase price of the portfolio amounts to EUR 1,724 million (1999: EUR 2,163 million).
Interests in companies in which AEGON is able to influence operating policy, as well as group companies which are not consolidated because of their relative financial insignificance, are accounted for by inclusion of AEGON’s proportion of the equity and the net income of the companies. Loans to group companies and participations are valued at face value. Interests in short-term holdings are valued at cost less provisions where necessary. Dividends declared are included in the consolidated income statements.
The Transamerica non-insurance businesses are accounted for under shares in group companies. These group companies have not been consolidated because of their diversity in operations. Consolidated financial statements have been included on page 76 and following.
Market value of these investments amounts to EUR 61,191 million (1999: EUR 55,561 million). For a proper understanding it should be noted that this market value is not part of the matching of these investments with the related insurance liabilities, which are not stated at market value either. The provision for doubtful debts for these investments amounts to EUR 110 million (1999: EUR 137 million).
Market value of policy loans is equated with book value. The market value of receivables out of share lease agreements and others amounts to EUR 2,281 million (1999: EUR 1,470 million). The provision for doubtful debts amounts to EUR 34 million (1999: EUR 32 million).
Debentures related to reinsurance contracts that are not at free disposal. Market value amounts to EUR 27 million (1999: EUR 28 million).
Changes in investments Currency exchange rate Balance at Disposed differences Balance at Balance at January 1, and Revalu- and other December 31, December 31, 2000 Acquired redeemed ations changes 2000 2000 EUR EUR EUR EUR EUR EUR NLG
Group companies and participations 4,001 784 –767 — –1,718 2,300 5,069
Bonds and other fixed rate securities 56,739 38,157 –37,816 — 4,160 61,240 134,955
The provision for doubtful debts for these receivables amounts to EUR 47 million (1999: EUR 16 million).
Interest rate 8%, coupon date June 8 2005 250 114 114
Interest rate 71/8%, coupon date March 4 2011 450 203 203
Interest rate 71/4%, coupon date October 14 2008 300 136 136
Interest rate 67/8%, coupon date December 20 2005 992 450 —
Total perpetual cumulative subordinated loans 2,792 1,267 817 1Year of first possibility for redemption.
This item comprises the following loans USD 100 million 74⁄5% Capital Trust Pass-through Securities 1996/26 236 107 100
Full conversion at the balance sheet date would result in the issuance of 2,940,480 EUR 0.12 common shares, increasing the number of outstanding common shares by 0.2%.
The market value of these loans amounts to EUR 796 million (1999: EUR 873 million).
Increase Exchange rate Balance at charged to fluctuations Balance at Balance at January 1, the income and other December 31, December 31,
The average interest rate used is 5.39% (1999: 5.24%). Taking into account the capitalized interest rate rebates, the average interest rate used is 5.67% (1999: 5.59%).
Deferred policy acquisition costs of insurance contracts with fixed premiums are generally amortized over periods not to exceed the premium-paying periods or the contract periods. For flexible insurance contracts and investment type contracts the amortization is generally in proportion to emerging gross profits.
Interest rate rebates granted are amortized over the period of the contracts concerned in yearly increasing amounts.
The provision for unexpired risks amounts to EUR 32 million (1999: EUR 30 million).
Policy acquisition costs are costs that are directly or indirectly related to the conclusion or renewal of insurance contracts. The deferred policy acquisition costs are deducted from the technical provision for unearned premiums and include both renewal commission paid related to unearned premiums, amortized over the related premium period, and first year commission on health insurance policies, amortized over the contract period.
The following amounts on account of reinsurance have been deducted from the technical provisions: Unearned premiums and unexpired risks 35 16 34
Decrease Exchange rate Balance at credited to fluctuations Balance at Balance at January 1, the income and other December 31, December 31,
The deferred taxation is calculated on the basis of the difference between book value and valuation for tax purposes of the appropriate assets and liabilities.
The provision is equal to the discounted value of the future tax liabilities. In the calculation discounted tax rates ranging from 0% to nominal rates are used.
Deferred gains and losses on fixed rate investments 441 200 570
Bonds and registered debentures: Other: Notional Notional Fair Book Notional Fair Book amounts amounts value value amounts value value
These function mainly as collateral granted by AEGON subsidiaries abroad, to meet legal requirements. This item also includes collateral guarantees given by subsidiaries under reciprocal insurance contracts.
In the United States commitments prevail related to Guaranteed Investment Contracts, which in the form of Trust GICs have been issued to plan sponsors, pursuant to which the plan sponsor retains legal title to the assets and receives the investment performance related to these contracts. Guarantees have been given to provide benefit responsiveness, which may take the form of annuities, in the event that qualified plan benefit requests exceed plan cash flows. The plan sponsor agrees to reimburse for such benefit payments with interest. In return for this guarantee, a premium is received that varies based on such elements as benefit responsive exposure and contract size. Funding requirements to date have been minimal and management does not anticipate any future funding requirements that would have a material effect on reported financial results. Per December 31, 2000 the value of the outstanding GICs together with the value of all other off balance managed assets amount to EUR 47 billion (USD 43.7 billion), (1999: EUR 39.5 billion).
The agreement between AEGON and Grupo Financiero Banamex-Accival (Banacci) provides for the purchase by AEGON of aggregate 49% participations in the equities of Seguros Banamex AEGON and Afore Banamex. The equity consideration to be paid by AEGON to Banacci will be adjusted in either direction based upon the growth and profitability of the joint ventures over the years up to and including 2005.
Legal Marine, Accident liability Other transport General Other & health motor motor and aviation Fire liability branches Total Total
Gross claims incurred –1,512 –167 –110 –32 –168 –33 –2 –2,024 –4,460
Investment income allocated to the non-technical account –15 –5 –2 –1 –3 –1 0 –27 –60
Result technical account non-life 157 –11 17 3 16 15 8 205
Gross claims incurred –888 –184 –127 –24 –173 –37 –2 –1,435
Gross operating expenses –477 –59 –39 –10 –94 –23 –7 –709
Investment income allocated to the non-technical account –37 –6 –2 –2 –2 –1 –1 –51
Result technical account non-life 107 –30 –6 4 8 7 1 91
Amortization of deferred policy acquisition costs 1,143 141 — 1,284 2,830
In the other countries pension costs are fully charged to the income statements in the years in which they occur.
Salary payments1 Pension 2000 1999 1Under an annual bonus scheme of EUR 22,700 (NLG 50,000) per member per percent point increase in the preceding year earnings per share over the rate of inflation, with a maximum of that year’s salary. The USA board member has an additional short-term incentive plan based on prior year’s earnings increase.
At the balance sheet date, J.B.M. Streppel had a 5% mortgage loan of EUR 680,700. According to the contract no redemptions were received on this loan in 2000.
Addition to provision for doubtful debts 132 3 7 142 313
Other income and expenditure 9 –6 –11 –8 10 Investment income allocated to the non-technical account
The tax burden for AEGON as a group is made up of the direct and future taxes payable on profits of the units operating in the various countries. The effective tax rates of these units reflect tax benefits available in the local environment and could therefore be below nominal rates.
The tax burden in the Netherlands reflects the benefit of special tax rules for which the Company and its subsidiaries qualify, including an equalization reserve and tax exempt investment in subsidized housing and certain participations.
NOTES TO THE CONSOLIDATED INCOME STATEMENTS Amounts in millions 12 Net income unconsolidated group companies
Since their acquisition, AEGON has been accounting for the non-insurance businesses of Transamerica as participations and has recorded them at cost. Following a change in accounting, resulting from the decision to retain and continue to develop these businesses as operating units of the group, these businesses are carried at net asset value in the balance sheet as of
Income reported by AEGON: Net income reported from July 1, 2000 145 66 —
The business credit unit of the commercial lending operation provides revolving lines of credit, letters of credit and standby letters of credit. At December 31 borrowers’ unused credit available under such arrangements totaled EUR 2,569 million.
The Company has entered into arrangements in which it securitized and services inventory floorplan, equipment finance and leasing, insurance premium finance receivables and residential mortgage as well as small business administration loans. Securitized assets at December 31 totaled EUR 3,481 million.
— — Banking activities Labouchere5 — 48 — — — — 48
Income 140 — GICs and funding agreements 132 — — — — — 132
SEGMENT INFORMATION — RESULTS amounts in million EUR (unless otherwise stated)
— — Income from banking activities — 372 — — — — 372
Total revenues business units (NLG) 37,545 12,636 15,168 661 1,289 304
— — Income from banking activities — 704 — — — — 704
— — Investment contracts1 — 938 — — — — 938
Deposits 9,610 — Fixed GICs and funding agreements 9,062 — — — — — 9,062
The United Other In % Americas Netherlands Kingdom countries Total of 31 December 2000 in USD in EUR in GBP in EUR in EUR total
High yield (BB+ or less) 4,321 41 — 10 4,694 4
The United Other In % Americas Netherlands Kingdom countries Total of 31 December 1999 in USD in EUR in GBP in EUR in EUR total
High yield (BB+ or less) 4,616 27 0 4 4,626 4
Total investments for account policyholders 42,231 15,477 31,327 372 108,276 100
FACE VALUE AND TOTAL SUMS INSURED amounts in million EUR (unless otherwise stated)
USD GBP Life insurance Americas Netherlands Kingdom Hungary Spain countries EUR
Total sums insured at year-end 1Includes one-time effect of acquisitions in Americas and United Kingdom.
AEGON UK plc, London Guardian Assurance plc, Lytham St Annes Guardian Linked Life Assurance Limited, Lytham St Annes Guardian Pensions Management Limited, Lytham St Annes Scottish Equitable plc, Edinburgh AEGON Asset Management UK plc, London Scottish Equitable International Holdings plc, London
ÁB-AEGON Általános Biztosító Rt., Budapest (Hungary) AEGON Unión Aseguradora S.A. de Seguros y Reaseguros, Madrid (Spain) (99.95%) AEGON Lebensversicherungs-AG, Dusseldorf (Germany)
BALANCE SHEETS OF AEGON N.V. AT DECEMBER 31 (after profit appropriation) Amounts in millions number NLG EUR EUR
In the financial year 130 million preferred shares with a nominal value of EUR 0.12 per share were called in.
In compliance with regulations stock options cannot be exercised in black-out periods.
Stock options number1 20001 20001 EUR NLG Exercise period3 1Adjusted for the stock splits in 1995, 1998 and 2000 as appropriate.
The fair value of the stock options granted during the year amounts to EUR 74 million (1999: EUR 67 million). This value was estimated using the binomial option pricing model, taking into account that the options granted cannot be exercised within the first three years.
The minimum of the revaluation account for the consolidated investments as required by law amounts to EUR 1,214 million (1999: EUR 3,763 million).
Realized gains and losses on real estate and shares 5,756 2,612 717
The indirect income is released from these revaluations if and as far as the balance is positive. Moreover, the minimum reserve as required by law should be maintained. This reserve consists of the unrealized difference between the book value and the cost price of real estate and shares. In relation to this, as at December 31, 2000, an amount of EUR 4,963 million after tax is presently available for release from the revaluations whereas the remainder is only available after realization.
Goodwill is the difference between acquisition price and net asset value, based on AEGON accounting principles. The calculated amount is charged to shareholders’ equity in the year of acquisition. The amount largely relates to the required accounting change regarding Transamerica’s non-insurance operations following the decision to retain these businesses.
In the offering circular of the USD 600,000,000 4.75% convertible subordinated bonds 1994-2004 it is stated that ‘Holders may elect upon conversion to receive either Ordinary Shares or New York Shares. The Company may elect to pay holders upon conversion cash in lieu of Shares based upon the opening and closing price of the Shares on the five trading days prior to and including the day of conversion (the “Conversion Date”).’
AEGON N.V. has guaranteed and is severally liable for the following: Due and punctual payment of payable by AEGON Funding Corp. I as well as AEGON Funding Corp. II in respect of bonds and notes issued by AEGON Funding Corp. I and II as well as notes issued in connection with AEGON Funding Corp. I and II’s Commercial Paper Programs.
Due and punctual payment of payable by Transamerica Finance Corp. in respect of notes issued in connection with Transamerica Finance Corp.’s Commercial Paper Program.
M. Tabaksblat K.J. Storm H. de Ruiter P. van de Geijn D.G. Eustace D.J. Shepard Sir Michael Jenkins J.B.M. Streppel O.J. Olcay J.F.M. Peters K.M.H. Peijs G.A. Posthumus T. Rembe W.F.C. Stevens F.J. de Wit
4 The remaining profit shall be put at the disposal of the general meeting of shareholders. 5 Provided it appears from an interim statement of assets signed by the Executive Board that the requirement mentioned in paragraph 2 concerning the position of the Company’s assets has been fulfilled, the Executive Board may, subject to the approval of the Supervisory Board even before the approval of the balance sheets and the income statements of any financial year distribute one or more interim dividends on account of the dividend to the holders of shares, with regard to preferred shares, however, subject to the maximum mentioned in paragraph 3.
Upon approval of the annual accounts, which contain the profit appropriation, a dividend for the year 2000 of EUR 0.74 (NLG 1.63) per common share of EUR 0.12 par value will be paid, which after taking into account the EUR 0.30 (NLG 0.66) interim dividend, leads to a final dividend of EUR 0.44 (NLG 0.97) per common share.
In order to take full advantage of the prevailing market price of AEGON N.V. common shares within the indication provided, the number of dividend coupons that gives entitlement to a new common share of EUR 0.12 will be determined on May 18, 2001, after 5.00 p.m., based upon the average share price (quotation Euronext Amsterdam) in the five trading days from May 14 up to and including May 18, 2001.
In accordance with Article 24, paragraph 3 of the Articles of Incorporation, a dividend equal to 4.75% of the paid up amount of the preferred stock will be distributed in cash.
On March 8, 2001 AEGON announced that it had entered into a binding agreement providing for AEGON’s acquisition of J.C. Penney’s Direct Marketing Services operations for USD 1.3 billion in cash. The transaction will be financed with the proceeds of an equity offering of AEGON N.V. common shares to be executed in the course of 2001. As part of the agreement, J.C. Penney and AEGON will enter into a 15-year strategic marketing alliance designed to offer an expanded range of financial and membership services products to J.C. Penney customers. The J.C. Penney Direct Marketing Services businesses will operate as a part of the AEGON USA companies. The transaction is anticipated to be finalized during the second quarter of 2001 and will be subject to customary conditions of closing, including receipt of the usual approvals of regulatory bodies.
Vereniging AEGON is the continuation of the former mutual insurer AGO. In 1978 AGO demutualized and Vereniging AGO became the only shareholder of AGO Holding N.V., which was the holding company of its insurance operations. In 1983 AGO Holding N.V. and Ennia N.V. merged into AEGON N.V. Vereniging AGO initially received approximately 49% of the common shares (which shareholding was reduced gradually to 40%) and all of the preferred shares in AEGON N.V., giving it voting majority in AEGON N.V. and changed its name to Vereniging AEGON.
The Vereniging has an Executive Committee consisting of eight members, half of whom, including the chairman and the Vice-Chairman, are not, nor have been associated with the AEGON Group; the other half consists of the four above-mentioned members who hold a position within AEGON N.V. When a vote in the Executive Committee results in a tie, the General Meeting of Members has the deciding vote.
In accordance with the Board’s internal Rules and Regulations, the regular meetings and the AGM were preceded by a preparatory meeting between the Chairman and the Vice-Chairman of the Supervisory Board, and the Chairman (and, in most instances, one other member) of the Executive Board.
As usual, special meetings of the Supervisory Board were dedicated to AEGON’s business strategy and its budget for 2001. For AEGON’s business strategy, please refer to page 4. The Board’s meetings in 2000 dealt with many other items as well, including actuarial analyses, the development of AEGON’s embedded value, dividend and dividend policy, the Group-wide risk management Report, AEGON’s ‘Funding Plan’ and ‘Currency Exposure’ and AEGON’s worldwide employee and management stock option plans for 2000. Management development issues were also discussed. The consequences of the advice from the Dutch ‘SER’ (Social Economic Council) with regard to corporate governance were discussed extensively and this issue will be closely watched in 2001 by both the Executive and Supervisory Boards.
The Supervisory Board appointed Mr. Streppel as an Executive Board member as per May 4, 2000, to succeed Mr. Van Wijk who, as was announced in 1999, retired from the Executive Board on that same day, after 19 years of service. The Board also said farewell to Mr. Herringer who resigned as an Executive Board member on May 4, 2000 and also to Mr. Van Schaik, who retired on that same day, after 17 years of Supervisory Board membership. The latter was succeeded, as Chairman of the Supervisory Board, by Mr. Tabaksblat.
The Audit Committee, active since 1983, held two meetings in 2000. All Executive Board members, the Directors of the Group Finance Department and the Corporate Actuarial Department and Ernst & Young, AEGON’s external auditor, also attended these meetings.
The Chairman of the Supervisory Board attended a meeting of the Central Works Council of AEGON The Netherlands in 2000 to discuss AEGON N.V.’s 1999 annual accounts, together with the Chairman of the Executive Board. Most of the Board members attended AEGON’s annual ‘Meeting on a Specific Theme’, together with members of the Executive Board, members of AEGON The Netherlands’ Management Board and members of the Dutch Central Works Council (CWC). Several participated in the annual ‘AEGON University’ management development programs in Baltimore, USA, and in Nyenrode in the Netherlands as guest speakers.
At the conclusion of the 2001 AGM, to be held on May 3, the current terms of office of Messrs. Eustace, Posthumus, Stevens and Tabaksblat will expire. They are eligible for reappointment and are willing to continue their membership of the Board. As required by Dutch law, shareholders and the Dutch CWC have been invited to make recommendations; they also have the right to object to any intended reappointment. Shareholders have not made any recommendation and the CWC has specifically recommended the reappointment of Mr. Posthumus. The Supervisory Board intends to reappoint all four candidates. The CWC has raised no objections and shareholders have the right to object to the intended reappointments during the 2001 AGM. At the same time, Mr. Peters will step down because of his reaching retirement age. As was already announced in 2000, this vacancy will not be filled and the number of Supervisory Board members will thus be brought down to 10, in accordance with the Profile of the Supervisory Board. The vacancy in the Audit Committee has been filled by appointing Mr. Posthumus as Mr. Peters’ successor, as from May 3, 2001. There will be no reappointments in 2002. For personal data on all members of the Supervisory Board, please refer to page 102.
This annual report includes the annual accounts for 2000, adopted by us as prepared and submitted by the Executive Board and as advised upon by the Audit Committee. We recommend that you approve these annual accounts. According to Article 23 of the Articles of Incorporation, shareholders can decide, and we propose that they do so, to discharge the Executive Board from all liability with regard to its management, and to discharge the Supervisory Board from all liability with regard to its supervision of this management. Upon approval of the 2000 annual accounts, and this will include the profit appropriation, a dividend for 2000 will be paid of EUR 0.74 (NLG 1.63) per common share. Please refer to page 95 for further details.
The Hague, March 8, 2001 On behalf of the Supervisory Board, Morris Tabaksblat, Chairman
AEGON N.V., in its Articles of Incorporation, has incorporated the complete two-tier provisions as set out in Dutch corporate law, referred to as the ‘Structure Regime’. It has not made use of the exemption available with regard to certain provisions. Consequently, the Supervisory Board possesses certain rights, which would otherwise belong to shareholders. This enables AEGON, in accordance with its statutory objectives, to serve equally and fairly the interests of all parties directly or indirectly involved with the company. The main duties of the Supervisory Board are supervising the Executive Board’s management and advising the Executive Board. Management by the Executive Board and supervision by the Supervisory Board are completely separate responsibilities.
In the performance of their duties, the members of the Supervisory Board shall follow the interests of the company and its business. The Supervisory Board currently consists of eleven members and acts as a body with collective responsibility and accountability. The members of the Board are (re)appointed by the Board itself, each time for a term of office of four years. They must retire at the latest at the conclusion of the Annual General Meeting of Shareholders (AGM) in the year in which they reach the age of 70 years. Shareholders, the Central Works Council in the Netherlands (CWC) and the Executive Board have the legal right to recommend candidates for the Supervisory Board. Moreover, shareholders and the CWC have the legal right to object to any candidate. The requirements, which the composition of the Board and the individual members have to meet, are outlined in the ‘Profile’. This Profile was updated in 1997 and is available for shareholders at the secretariat of the Executive Board. According to the Profile, only one of the Supervisory Board members may be a former member of the Executive Board and Supervisory Board members may not be dependent on any interests associated with the company and must fulfil their duties without mandate. (Re)Appointments have to be prepared and advised on by the Nominating Committee. The aim, in due course, is to decrease the number of Supervisory Board members to ten. Supervisory Board members are entitled to a fixed fee and an expense allowance. According to Dutch corporate law and the Articles of Incorporation, the Supervisory Board is the body that is authorized to appoint or discharge members of the Executive Board and to adopt the annual accounts. Moreover, certain important Executive Board resolutions, among which those concerning securities’ issues, are subject to the approval of the Supervisory Board.
Besides the Nominating Committee, the Board has constituted a further two committees from among its members which, without prejudice to the Board’s responsibility, will discuss certain subjects in more detail and advise the Board about them. The Compensation Committee prepares proposals concerning the remuneration of Executive Board members and the fees for Supervisory Board members. In the Audit Committee, the audit of the annual accounts as well as the ‘accounting principles’ are discussed each year with the external auditor, as well as the external auditor’s report about the internal control system. The tasks and working methods of the Audit Committee are laid down in a Charter for internal use.
The Executive Board, as a body, is charged with the management of the company, whereby each individual member has specific areas of interest, within an allocation of duties as approved by the Supervisory Board. In principle, Executive Board members will be appointed for an indefinite period of time and shareholders have to be informed of an intended appointment. They can retire at the age of 60 and have to retire at the age of 62. The Supervisory Board determines the conditions of employment.
O.J. Olcay, 64 (American), is Vice-Chairman and Managing Director of Fischer, Francis, Trees & Watts, Inc. (New York, USA). He joined the Board in 1993; his current term will end in 2004. Mr. Olcay is also a member of the Nominating Committee. He is Chairman of FFTW Funds Inc. in New York, FFTW Funds Selection in Luxembourg and FFTW Funds in Dublin.
Ms. K.M.H. Peijs, 56 (Dutch), is a member of the European Parliament. She was appointed in 1992; her current term expires in 2004. Ms. Peijs is a member of the Nominating Committee. She is also a Supervisory Board member of Royal Vendex KBB and DaimlerChrysler Nederland.
G.A. Posthumus, 68 (Dutch), is a member of the Council of State in the Netherlands. He joined the Supervisory Board in 1997; his current term expires in 2001. He is also a former member of the Executive Board of the IMF.
M. Tabaksblat, 63 (Dutch), Chairman, is Chairman of Reed Elsevier PLC and a retired Chairman and CEO of Unilever. He was appointed in 1990; his current term expires in 2001. He is the Chairman of the Compensation and Nominating Committees and a member of the Audit Committee, respectively. He is also a member of the Supervisory Board of TNT Post Groep and of the Advisory Boards of Ernst & Young, Salomon Smith Barney (USA) and Renault Nissan. He is also a member of the Executive Committee of Vereniging AEGON.
The aggregate amount of AEGON N.V. common shares hold by the Supervisory Board members was 49,447 as per December 31,2000. Members of the Supervisory Board do not hold options on AEGON N.V. shares.
The consolidated financial statements of AEGON N.V. have been prepared in accordance with Dutch accounting principles which differ in certain respects from those generally accepted in the United States (US GAAP). The following information is a summary of the approximate effect on the Group’s capital and reserves and net income of the application of US GAAP, which is in further detail included in the Form 20-F report filed with the Securities and Exchange Commission. This report is as usual available on request, free of charge, and can also be retrieved from the EDGAR database of the SEC at www.sec.gov.
The Netherlands: amortized cost for bonds, private placements and preferred shares
The Netherlands: charged to shareholder’s equity United States: capitalized and amortized over various periods not exceeding 20 years
The Netherlands: deferred and released to income over the estimated average remaining maturity term
Realized gains and losses on shares and real estate — — 999 408
Other comprehensive income, net of tax: Foreign currency translation adjustments 659 1,342
LONG-TERM LIABILITIES, SUBORDINATED LOANS AND CAPITAL SECURITIES AT DECEMBER 31, 2000 in EUR millions
USD 100 million 93/8% Domestic Debentures (Transamerica Corp.) 1996/08 March/Sept 1 107 100
USD 500 million 7% Eurobonds (AEGON Funding Corp.) 1999/04 September 10 537 398
USD 250 million 73/8% Eurobonds (AEGON Funding Corp.) 2000/05 July 25 269 —
Trust Pass-through Securities USD 100 million 74/5% (Transamerica Corp.) 1996/26 Jun/Dec 1 107 100
USD 225 million 713/20% (Transamerica Corp.) 1996/26 Jun/Dec 1 242 224
USD 190 million 75/8% (Transamerica Corp.) 1997/37 May/Nov 15 204 188
Total long-term liabilities, subordinated loans and capital securities 6,528 5,735 1Of which EUR 68 million relate to AEGON NV (1999: EUR 273 million) 2Year of first possibility for redemption
In the years 2001 through 2005 the following amounts are due: EUR 465 million in 2001, EUR 815 million in 2002, EUR 179 million in 2003, EUR 1,109 in 2004 and EUR 419 million in 2005.
–83 –82 –123 –121 –409 Interest charges & other –84 –88 –134 –137 –443 –976
1999 USD 1999 EUR I II III IV total I II III IV total
NB Participation in most of our funds can only be done by buying an insurance product that is linked to these funds.
The AEGON N.V. Annual General Meeting of Shareholders will be held at AEGON headquarters, Mariahoeveplein 50, The Hague, the Netherlands on Thursday 3 May, 2001 at 2.30 CET.
14 March Announcement of Dexia’s intention to acquire Labouchere in the Netherlands 4 May Appointments/changes in Supervisory Board and Executive Board of AEGON N.V.
Post balance sheet date events 25 January 2001 AEGON increases EUR 450 million perpetual subordinated cumulative bonds 6 February 2001 AEGON increases EUR 450 million perpetual subordinated cumulative bonds to EUR 700 million 8 February 2001 AEGON issues EUR 350 million Eurobonds 8 March 2001 Announcement of the acquisition of the Direct Marketing Services operations from J.C. Penney in the USA
Important dates in 2001 3 May Annual General Meeting of Shareholders; results first three months 2001 4 May Start election period optional final dividend (up to and including 11 May)
14 September Interim dividend payable 8 November Results first nine months 2001
These forward-looking statements involve risks and uncertainties including, but not limited to, the following: (1) changes in general economic conditions, including the performance of financial markets and interest rates; (2) customer responsiveness to both new products and distributions channels; (3) competitive, regulatory or tax changes that affect the cost of or demand for the company’s products; (4) the Company’s ability to render its computer systems Year 2000 compliant that may affect the profitability of the company; (5) acts of God; (6) mortality, morbidity and other factors that may affect the profitability of the Company’s insurance products; and (7) the company’s failure to achieve anticipated levels of earnings or operational efficiencies in connection with the merger, as well as other cost-saving initiatives.
Photos front cover: Elzard Schipper, Harm (l) & Tjaart (r) Schipper, the Netherlands Carolina Ortez, Spain Garry McLuckie, United Kingdom Annie Hawskins, United States (on screen) Necolle Robinson, United States