A further increase in deposits this year is a clear demonstration of not only retaining the trust of existing customers, but also earning the trust of many new customers. Furthermore, revenue-generating assets increased significantly, exceeding
needs throughout the entire customer life cycle, up to and including retirement.
Tom Grondin (1969, Canadian) Chief Risk Officer of Aegon N.V. Member of the Management Board Tom Grondin was appointed Chief Risk Officer of Aegon N.V.
Releasing its third annual global Retirement Readiness Survey, raising awareness of retirement needs and Aegon brands. Based on the findings of this report, Aegon published an additional report: ‘Women: balancing family, career & financial security’.
Development Portal and Global Job Vacancy overview, and upgrading Aegon’s careers website; �� Promoting workforce diversity by supporting initiatives such as joining Workplace Pride, a foundation that promotes greater acceptance of LGBT (Lesbian, Gay, Bisexual and Transgender)
Japanese bonds8 showed significantly lower yields than those of the US and UK (0.5% and 0.3% versus 2.2% and 1.8%
3 Source: For economic data in this paragraph: European Economic Forecast Winter 2015. 4 Source: For economic data in this paragraph: IMF World Economic Outlook Database October 2014. 5 Source: For economic data in this paragraph: IMF World Economic Outlook Database October 2014. 6 Source: Stock index data in this paragraph: Bloomberg.com.
The financial results in this Annual Report are based on Aegon’s consolidated financial statements, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.
Aegon’s results against targets using the non-IFRS measures presented herein. While many other insurers in Aegon’s peer group present substantially similar non-IFRS measures, the non-IFRS measures presented in this document may nevertheless differ from the non-IFRS measures presented by other insurers.
Net income Net income increased to EUR 1,186 million compared with 2013 as lower underlying earnings before tax, higher other charges and lower income before tax from run-off businesses were more than offset by lower losses from fair value items, higher realized gains and lower net impairments.
Other charges Other charges amounted to EUR 240 million. These were mostly caused by a charge in the Netherlands (EUR 95 million)
EUR 3.0 billion and a one-time transfer of pension assets to the
Capital management In 2014, shareholders’ equity increased EUR 6.7 billion compared with December 31, 2013 to EUR 24.3 billion. This was driven by lower interest rates, which resulted in higher revaluation reserves, and favorable currency exchange rates. During the year, the revaluation reserves increased by EUR 5.3 billion to EUR 8.3 billion. Aegon’s shareholders’ equity, excluding revaluation reserves and defined benefit plan remeasurements, amounted to EUR 17.6 billion on December 31, 2014.
Of which Income tax from certain proportionately consolidated joint ventures and associates included in income before tax (8) (15) 47%
These divisions, described in greater detail below, represent groups of products and services that Aegon USA’s operating companies sell through a number of distribution methods and sales channels. The business structure is designed to enable
Products offered include whole life, universal life, variable universal life, indexed universal life and term life insurance, in addition to supplemental health, specialty insurance, and long-term care protection.
Indexed Universal Life (IUL) insurance provides permanent death benefit protection and cash value accumulation with flexible premium payments. What distinguishes it from other types of cash value insurance is the way interest earnings are credited. Net premiums may be allocated to either a fixed account or indexed accounts. Indexed accounts credit interest based in part of the performance of one or more major stock market indices. The credited interest is based on the index but with a floor and a cap.
Whole (or permanent) life insurance provides lifelong death benefit protection provided that the premiums required are paid, while accumulating tabular cash values based on statutory requirements. Premiums are generally fixed and usually payable over the life of the policy.
Life products also include life insurance sold as part of defined benefit pension plans, single premium products, and additional optional benefits.
Investments & Retirement The operations of two former divisions, Individual Savings &
Retirement and Employer Solutions & Pensions, merged on July 1, 2014. Individual Savings & Retirement focused on the individual investor in mutual funds and variable and fixed annuities, while
Employer Solutions & Pensions primarily served the employer market with retirement plan products and services. Together, they offer a wide range of investment solutions to serve customers to and through retirement – first, as they accumulate assets, and second, as they manage them to generate retirement income.
United States; �� Deferred compensation plan - a plan or agreement that defers the payment of a portion of the employee’s compensation to a future date, and that may also include a contribution made by the employer for the employee’s benefit; �� Defined benefit - a pension plan in which an employer promises a specified monthly benefit on retirement that is predetermined by a formula based on the employee’s earnings history, tenure of service and age; �� Defined contribution - a plan in which the contributions made to the plan by the employee and/or employer are allocated to the employee’s individual account under the plan. Examples of defined contribution plans include 401(k) plans, 403(b)
companies have paid, or have been informed that the regulators may seek, restitution, fines or other monetary penalties or changes in the way that business is conducted. The impact of any such fines or other monetary penalties is not expected to have a material impact on Aegon USA’s financial position, net income or cash flow. Since the early 2000s, there has been an increase in litigation across the industry, together with new legislation, regulations, and regulatory initiatives, all aimed at curbing alleged improper annuity sales to seniors. As many of the estimated 78 million baby boomers are reaching the age of 60, the industry will likely see an increase in senior issues presented in various legal arenas. In addition, certain industry practices in respect of market conduct have been the subject of investigations by various state regulators. Management expects any significant marketplace volatility to drive further regulation and litigation, which could increase costs and limit Aegon USA’s ability to operate.
federal government and set forth in discussion drafts and whitepapers on comprehensive federal tax reform legislation.
Council (FSOC), which is responsible for identifying ‘systemically significant’ companies that are to be subject to additional oversight and heightened and other prudential standards imposed by the Federal Reserve Board. While Aegon USA has not to date been identified by FSOC as systemically significant, the likelihood of future identification of Aegon USA as systemically significant and/or the impact of any designation of other insurers as systemically significant on the competitive position of Aegon
Realized gains on investments totaled EUR 431 million, and were mainly the result of the sale of a private equity investment and repositioning the fixed income portfolio in anticipation of
EUR 558 million compared with 2013. Higher underlying earnings before tax in Life & Savings and Non-life more than offset lower underlying earnings before tax from Pensions. �� Underlying earnings before tax from Life & Savings increased 36% to EUR 336 million compared with 2013, and were mostly a result of higher investment income, primarily generated by mortgage production, and improved margins on savings. An employee benefit reserve release resulting from legislation changes accounted for EUR 20 million of the increase.
Net income Net income from Aegon’s businesses in the Netherlands amounted to EUR 389 million. Realized gains on investments totaled EUR 342 million and were primarily the result of adjustments to the asset mix to bring it in line with the new regulatory yield curve and selective de-risking activities. Results on fair value items amounted to a loss of EUR 217 million, which was primarily driven by adverse real estate revaluations of EUR 74 million and a loss in the guarantee portfolio of
Sales and distribution Most of Aegon the Netherlands’ pensions are sold through sales and account management and Aegon’s intermediary channel.
Aegon the Netherlands holds approximately 1.4%3 of Dutch household savings, and is therefore small in comparison to banks such as Rabobank, ING, ABN AMRO and SNS Bank.
Regulations for the supervision of financial institutions are included in the Financial Supervision Act (2007) (‘Wet op het financieel toezicht’). This law applies to financial institutions, such as banks, insurance companies, investment firms, investment funds and fund management companies. In many instances, the Financial Supervision Act applies similar provisions to the different types of financial institutions, with the aim of creating, where appropriate, consistent requirements for the entire financial sector in the Netherlands.
Financial supervision of insurance companies The European Union Insurance Directives referred to collectively as Solvency I are incorporated into Dutch law. The Directives are based on the ‘home country control’ principle: i.e. an insurance company with a license issued by the regulatory authorities in its home country is permitted to conduct business in any European
The SCR calculation will be used by DNB in the ladder of intervention to intervene in the event of potential breaches of solvency requirements, as defined by the Financial Supervision
Act. The Financial Supervision Act incorporates the requirements of Directive 2006/48/EC, Directive 2006/49/ EC (together referred to as CRD II), and Directive 2010/76/EU (CRD III).
Underlying earnings before tax Underlying earnings before tax in the United Kingdom improved 1% to GBP 74 million compared to 2012. The positive impact of higher equity markets was partly offset by adverse persistency related to RDR and investments in technology.
Workplace channel �� Platform based Workplace Aegon Retirement Choices proposition includes a choice of savings wrappers, enables employees to receive personal finance advice, and can be maintained by employees even after they have left their existing employer. Employers’ auto-enrolment obligations are supported through Aegon’s SmartEnrol capability.
Below is a summary of Aegon UK’s overall approach to the management of the with-profit fund.
Guarantees With the exception of ‘Aegon Secure Lifetime Income’ and ‘5 for
Aegon does not yet defer its acquisition expenses. �� Earnings from Spain & France decreased 52% to
EUR 7 million, mainly resulting from growth of the business. �� Earnings from Aegon Asset Management declined 6% to
On April 1, 2014, Aegon Hungary Mortgage Finance Company suspended its lending activities.
In terms of assets under management, Aegon’s private pension funds in Poland1, Slovakia2 and Romania3, and voluntary pension fund in Hungary4, are among the largest in the respective countries. In terms of member numbers, Aegon has a significant market presence in Poland5, Romania3, and Hungary6. As of December 2014, Aegon had over 2.1 million pension fund members in Central & Eastern Europe. Since 2009, a series of legislative changes implemented in Aegon’s regional country units has had a significant impact on this line of business.
Competition Aegon is among the biggest providers operating in the life insurance market in Hungary. In 2014, it was the third largest2 provider in Hungary, based on the first nine months’ standardized premium income, and the third largest2 provider in the non-life insurance market. Aegon is also a significant market participant in Poland3 and Ukraine4 As of June 2014, it was ranked fifth3 for unit-linked products in Poland, based on gross written premiums.
Sony Life, one of Japan’s leading insurance companies, to establish Aegon Sony Life Insurance Co., Ltd. (Aegon Sony Life).
Overview of sales and distribution In China and India, Aegon-CNOOC and Aegon Religare, offer products through multiple distribution channels: agents, independent brokers, banks, direct marketing, group, and e-sales.
Universal life and term products TLB’s main products consist of USD universal life and USD term plans for the high-net-worth market. A new range of products was launched in the fourth quarter of 2013 and over the course of 2014.
Insurance Industry’. It was stated that by 2020, a modern insurance industry should be constructed, featuring comprehensive protection, complete functions, stability, security, integrity, compliance, strong service, innovation and international competitiveness, in order to match China’s social and economic development. The State Council also stated that the insurance industry should be transformed from a ‘large’ insurance country to a ‘powerful’ insurance country, by achieving an insurance penetration rate of 5% and insurance density of RMB 3,500.
regulates, promotes and encourages the orderly growth of insurance and reinsurance businesses in India. Established by the
S.A.U., which were merged by Aegon España, as of January 1, 2011. Aegon Administracion y Servicos A.I.E.,a separate legal entity, provides administration and operations services to all
Aegon Spain generally uses only reinsurance companies that have a Standard & Poor credit rating of ‘A’ or higher. Aegon’s
Background Aegon began a partnership with mutual insurer La Mondiale in 2002 through the acquisition of a minority interest in
Definition and tolerances For Aegon, risk management involves: �� Understanding which risks the Company is able to underwrite; �� Establishing a company-wide framework through which the risk-return trade-off associated with these risks can be assessed; �� Establishing risk tolerances and supporting policies to limit exposure to a particular risk or combination of risks; and �� Measuring and monitoring risk exposures and actively maintaining oversight of the Company’s overall risk and solvency positions.
In order to ensure the holding company’s ability to fulfil its cash obligations, it is Aegon’s policy that the holding company holds liquid assets in reserve to fund a minimum of 1.5 years of holding company operating and funding expenses, without having to rely on the receipt of funds from its subsidiaries and without the need to access capital and money markets.
Executive Board, under the supervision of the Supervisory Board and its Audit Committee, is responsible for determining the overall internal audit work and for monitoring the integrity of the financial statements of Aegon N.V.
Sessions – meetings of the Supervisory Board without the presence of members of either the Executive or Management
On December 16, 2014, at a meeting in Cedar Rapids, Iowa
Finally, in compliance with regulations in the Netherlands, all members of the Board took or made the financial sector oath, aimed at reinforcing the focus on the interests of Aegon’s customers.
Secretary, interviewed each member of the Board on the basis of a completed written questionnaire. The review assessed the collective performance of the Board and its Committees, and the performance of the Chairman. The Supervisory Board met to review the results in the absence of management. The Board agreed that it had continued to make progress in 2014, and that it functioned well and fulfilled its duties and responsibilities in a satisfactory way. In the same meeting, the Board listed the priorities for the Board to address in 2015.
Compensation Committee reviewed and discussed the legislation and its consequences for Aegon’s remuneration practices.
Mr. Bailey is also a member of the Board of Directors of Hospira,
Global Remuneration Framework and associated practices are aligned with the defined risk tolerances and behaviors. In this respect, risk mitigating measures undertaken prior to the payout of compensation to individual employees (regardless of whether the compensation is deferred) are considered ex-ante measures. Retribution measures applied after payouts, or concerning allocated but deferred payments (before vesting of these payments) to ensure sustainability of performance, are considered ex-post measures.
Board is aimed at ensuring fair compensation, and protecting the independence of the Board’s members. Terms and conditions for members of the Supervisory Board are part of Aegon’s broader
Board’s Committees; �� An attendance fee for each Committee meeting attended, be it in person or through video and/or telephone conference; and �� An additional fee for attending meetings that require intercontinental travel between the Supervisory Board member’s home location and the meeting location.
Meeting of Shareholders on May 12, 2011. The Policy will remain in force until such time as the Supervisory Board proposes changes or amendments.
Risk adjustment methodology (ex-ante) At the end of the performance period, but prior to allocation of variable compensation, the Supervisory Board assesses whether (downward) modifications are needed. For this purpose, quantitative and qualitative measures at group, regional unit and individual level is taken into account, such as: �� Breaches of laws and regulations; �� Breaches of internal risk policies (including compliance); �� Significant deficiencies or material weaknesses relating to the
The Supervisory Board asks the Compensation Committee to review these criteria in detail at each moment of vesting and document its findings. Based on this analysis, the Committee may then put forward a proposal to the Supervisory Board to adjust unvested variable compensation. Deferred variable compensation may only be adjusted downwards. Ex-post, risk-based assessments concern deferred variable compensation, not fixed compensation.
General Meeting of Shareholders on May 20, 2015, variable compensation for Executive Board members is set in cash and shares, based on both their individual and the Company’s performance. Targets for the performance indicators have been set in line with the agreed variable compensation targets and 2014 company budgets. Actual performance is measured over 2014. Under the Executive Board Remuneration Policy 2011, the variable compensation that Executive Board members are entitled to is paid out over a number of years.
Impact of ex-ante and ex-post assessment on attribution of variable compensation No variable compensation from previous performance years payable in 2014 has been adjusted downwards in 2014.
Shareholders. At present, Aegon’s Supervisory Board consists of nine non-executive members.
Composition of the Executive Board The Executive Board of Aegon has two members: Alex R.
of the votes. The SEC filing also shows that of this number of shares Dodge & Cox International Stock Fund holds 125,227,471 common shares, which represents 4.6% of the issued capital as at December 31, 2014. The remainder of the common shares registered in name of Dodge & Cox with the SEC are held by
Dodge & Cox on behalf of its other clients, including investment companies registered under the Investment Company Act of 1940 and other managed accounts.
Aegon N.V. does not entitle Mr. Button to any special terms under these circumstances.
Notes to the financial statements 1 General information 288 2 Summary of significant accounting policies 288 3 Shares in group companies 291 4 Loans to group companies 291 5 Other investments 291 7 Other assets 292 8 Share capital 292 9 Shareholders’ equity 294 10 Other equity instruments 297 11 Subordinated borrowings 298 12 Long-term borrowings 299 13 Other liabilities 299 14 Number of employees 300 15 Accountants remuneration 300 16 Events after the balance sheet date 300
Equity movements of joint ventures - - - - (4) - (4) - (4)
Aegon adopted one single group-wide accounting policy for deferred policy acquisition costs as of January 1, 2014. Upon initial adoption of IFRS, entities were permitted to continue existing accounting policies for insurance contracts even though such policies were often non-uniform between countries. Through adoption of a uniform, group-wide accounting policy, Aegon will eliminate this lack of uniformity for the deferral of policy acquisition costs thereby providing the users of the financial statements with more meaningful information. Details for the deferred policy acquisition costs are included in note 2.13 Deferred expenses.
Notes to the consolidated financial statements of Aegon N.V. Note 2 2013 1) Change in accounting policy
The voluntary changes in accounting policies have had no impact on the cash flows as presented in the cash flow statement.
When unrealized gains or losses arise on available-for-sale assets, VOBA is adjusted to equal the effect that the realization of the gains or losses (through a sale or impairment) would have had on VOBA. The adjustment is recognized directly in shareholders’
With the exception of goodwill, impairment losses are reversed when there is evidence that there has been a change in the estimates used to determine the asset’s recoverable amount since the recognition of the last impairment loss. The reversal is recognized in the income statement to the extent that it reverses impairment losses previously recognized in the income statement. The carrying amount after reversal cannot exceed the amount that would have been recognized had no impairment taken place.
Charges arising from assumption and model updates included in underlying earnings before tax amounted to EUR 221 million: �� A charge for actuarial assumption updates in the Americas Life & Protection business amounted to EUR 265 million, and was primarily related to updated mortality assumptions for the older ages. Model updates, including changes to modeled premium persistency, had a negative impact of EUR 29 million; and �� Actuarial assumption changes and model updates in the Americas Individual Savings & Retirement business resulted in a gain of EUR 100 million. Updated assumptions in variable annuities related to policyholder behavior on partial withdrawals accounted for the majority of an aggregated EUR 129 million benefit. A EUR 29 million charge was mainly caused by updated assumption for the asset portfolio at fixed annuities.
Credit rating general account investments, excluding reinsurance assets - impact from change in rating methodology on 20131)
Of the EUR 510 million (2013: EUR 751 million) indirect exposure on the monoline insurers, 40% relates to MBIA, 14% to AMBAC, and 36% to FSA (2013: 34% related to MBIA, 28% to AMBAC, 24% to FSA and 7% to FGIC).
RMBS of Aegon USA are monitored and reviewed on a monthly basis. Detailed cash flow models using the current collateral pool and capital structure on the portfolio are updated and reviewed quarterly. Model output is generated under base and stress-case scenarios. Aegon’s RMBS asset specialists utilize widely recognized industry modeling software to perform a loan-by-loan, bottom-up approach to modeling. Key assumptions used in the models are projected defaults, loss severities, and prepayments. Each of these key assumptions varies greatly based on the significantly diverse characteristics of the current collateral pool for each security.
Loan-to-value, loan size, and borrower credit history are some of the key characteristics used to determine the level of assumption that is utilized. Defaults were estimated by identifying the loans that are in various delinquency buckets and defaulting a certain percentage of them over the near-term and long-term. Assumed defaults on delinquent loans are dependent on the specific security’s collateral attributes and historical performance.
(December 31, 2013: EUR 82 million) by Aegon the Netherlands. CMBS are securitizations of underlying pools of mortgages on commercial real estate. The underlying mortgages have varying risk characteristics and are pooled together and sold in different rated
CDOs backed by ABS, Corp. bonds, Bank loans 730 612 359 97 180 1,978 1,950 1 For 2013, the credit classification is restated for the change in rating methodology.
There are no individual issuers rated below investment grade in the sovereign sector which have unrealized loss positions greater than EUR 25 million.
Impairment losses on shares The table below provides the length of time the shares held by Aegon Americas, Aegon the Netherlands and Aegon UK were below cost prior to their impairment in 2014 and 2013.
Total 2013 1 Common shares in Holding and other activities includes the elimination of treasury shares in the general account for an amount of EUR 2 million.
Off-balance sheet investments third parties 112,611 994 287 60,951 - - 174,843
Included in fee and commission income is EUR 35 million of fees on trust and fiduciary activities (2013: EUR 40 million; 2012: EUR 34 million).
Other charges of EUR 172 million in 2014 mainly include EUR 95 million related to the settlement with Optas (refer to note 48
Weighted average number of common shares outstanding (in million) 2,094 2,035 1,907
Weighted average number of common shares B outstanding (in million) 580 366 -
The interim dividend 2014 was paid in cash or stock at the election of the shareholder. The stock dividend amounted to one new Aegon common share for every 58 common shares held. The stock dividend and cash dividend are approximately equal in value. The interim dividend was payable as of September 19, 2014. The interim dividend 2014 for common shares B amounted to 1/40th of the dividend paid on common shares.
Goodwill in Aegon USA is allocated to its divisions. Value in use calculations of Aegon USA have been actuarially determined based on business plans covering a period of typically five years and pre-tax risk adjusted discount rates. The value in use test in the USA for the Individual Savings & Retirement cash-generating unit (EUR 120 million; 2013: EUR 106 million) assumes business plans covering a period of five years further extrapolated to ten years where the new business levels for years 6-10 assumed a 5% growth rate
Derivatives designated as cash flow hedges Aegon has entered primarily into interest rate swap agreements that effectively convert certain variable-rate assets and liabilities to a fixed-rate basis in order to match the cash flows of the assets and liabilities within Aegon’s portfolio more closely. These agreements involve the payment or receipt of variable-rate interest amounts in exchange for fixed-rate interest amounts over the life of the agreement without the exchange of the underlying principal amounts. Aegon hedges its exposure to the variability of future cash flows from the interest rate movements for terms up to 29 years for hedges converting existing floating-rate assets and liabilities to fixed-rate assets.
On May 7, 2013, Aegon finalized exiting its life, health and pension joint venture with Unnim and sold its 50% stake to Unnim.
Summarized statement of financial position Cash and cash equivalents 111 52
Banca Civica, partly offset by the acquisition of Liberbank and purchases of software.
In 2013, Aegon issued 19,668,540 and 19,047,386 common shares with a par value of EUR 0.12 in respect of the final dividend for 2012, which was paid in June 2013 and the interim dividend paid in September 2013, respectively.
Shareholders on May 15, 2013. For details refer to the ‘major shareholders’ section included in the ‘other information’ to the financial statements of Aegon N.V.
USD 18 million 1) Floating Quarterly, July 23 2004 2034 n.a. - 14
Non-life insurance - Unearned premiums and unexpired risks 4,572 3,886 - Incurred but not reported claims 737 680
EUR 750 million, while an amount of EUR 1,168 million was repaid.
EUR 842 million 'SAECURE 9' RMBS Note 1), 7) Floating Quarterly 2010 / 16 624 670
6 The first optional redemption date is February 2016; the legal maturity date is February 2094. Notes are fully collateralized by mortgage loans which are part of Aegon’s general account investments.
Aegon the Netherlands also has a post-retirement medical plan that contributes to the health care coverage of employees and beneficiaries after retirement. For this plan, the Aegon the Netherlands has the responsibility to administer the plan in accordance with its terms, and decides questions related to eligibility and determines plan provisions and benefit amounts. In addition,
The weighted average duration of the defined benefit obligation is 24.0 years (2013: 24.4 years).
Deferred corporate income tax asset dependent on retaining bonds and similar investments until the earlier of market recovery or maturity 641 1,201 224 420
Non-controlling interests and share options not yet exercised 33, SOFP 2) 103 109
Aegon N.V. is subject to legal restrictions on the amount of dividends it can pay to its shareholders. Under Dutch law, the amount that is available to pay dividends consists of total shareholders’ equity less the issued and outstanding capital and less the reserves required by law. The revaluation account and legal reserves, foreign currency translation reserve and other, cannot be freely distributed. In case of negative balances for individual reserves legally to be retained, no distributions can be made out of retained earnings to the level of these negative amounts. Total distributable reserves under Dutch law amounted to EUR 10,129 million at December 31, 2014
Assets carried at fair value Available-for-sale investments Shares Broker quote n.a. 134 n.a. 203 n.a.
Liabilities carried at fair value Derivatives Embedded derivatives in insurance contracts Discounted cash flow Credit spread 2,939 0.3% 1,213 0.5%
Other loans - held at amortized cost 2,516 - 2,144 372 2,516
Proceedings in which Aegon is involved In March 2014, consumer interest group Vereniging Woekerpolis.nl filed a claim against Aegon in court. The claim relates to a range of unit-linked products that Aegon sold in the past, including products over which Aegon was involved in litigation in the past, like the KoersPlan product. The new claim challenges a variety of elements of these products, on multiple legal grounds, including allegations made in earlier court cases. There can be no assurance that the claim from Vereniging Woekerpolis.nl may not ultimately have a material adverse effect on Aegon’s results of operations or financial position.
The following tables present the fair value of the assets received in relation to securities lending and reverse repurchase activities: Securities lending 2014 2013
On October 15, 2014, Aegon reached an agreement with Wilton Re to sell its Canadian operations for a total consideration of
New Markets �� Aegon España S.A., Madrid (Spain) (99.98%); �� Aegon Magyarország Általános Biztosító Zártkörűen Működő Részvénytársaság, Budapest (Hungary); �� Aegon Towarzystwo Ubezpieczeń na Życie Spółka Akcyjna, Warsaw (Poland); �� Aegon Life Ukraine PJSC, Kiev (Ukraine); and �� Aegon PENSII - Societate de Administrare a Fondurilor de Pensii Private S.A., Clui (Romania). �� Transamerica (Bermuda) Ltd., Hamilton, Bermuda.
2.7 Other assets and receivables Other assets include fixed assets, derivatives with positive fair values, other receivables and prepaid expenses. Other receivables are recognized at fair value and are subsequently measured at amortized cost.
2.9 Equity Financial instruments that are issued by the Company are classified as equity if they represent a residual interest in the assets of the
The money market and other short-term investments fully consist of investments in money market funds.
The weighted average number of EUR 0.12 common shares B for 2014 was 580,391,240 (2013: 366,439,040).
Basis of consolidation and notes 29 Assets and liabilities held for sale and 51 Business combinations.The Company announced the sale of its Canadian business for CAD 600 million which is expected to result in an expected book loss of EUR 0.8 billion at completion of the transaction in 2015. As at December 31, 2014, the sale transaction is pending approval from the Canadian regulators and is expected to close in 2015. As at December 31, 2014, the Company has presented the Canadian business as held-for-sale in its consolidated statement of financial position and recorded a loss of EUR 15 million related to the reduction of the carrying value of the non-current assets in its consolidated income statement. The remaining loss on the sale will be recorded when the transaction closes.
May 28, 2015 up to and including June 12, 2015. The dividend will be payable as of June 19, 2015.
EU member states, as well as for groups with insurance and/or reinsurance activities in the EU. These capital requirements should, compared to the current Solvency I and IGD framework, better reflect the actual risk profile of insurance and reinsurance companies and insurance groups. For groups such as Aegon, with significant activities outside the EU, it is particularly important how such entities are taken into account for the purpose of group supervision, either against local capital requirements, or against Solvency II requirements, in order to safeguard that groups like Aegon are not disadvantaged competitively by the application of Solvency II group requirements, compared to local non EU insurers or reinsurers or groups based outside the EU. Furthermore, differences in interpretation of Solvency
GBP 4,363.37 as of December 31, 2014. Regular monthly contributions of GBP 69.41 are received into this policy. The second plan
Risk factors Aegon faces a number of risks, some of which may arise from internal factors, such as inadequate compliance systems. Others, such as movements in interest rates or unexpected changes in longevity or mortality trends, are external in nature. Aegon’s most significant risk is to changes in financial markets, particularly related to movements in interest rates, equity and credit markets. These risks, whether internal or external, may affect the Company’s operations, its earnings, its share price, the value of its investments, or the sale of certain products and services. The next two sections describe risks relating to Aegon’s businesses and risks relating to Aegon’s common shares.
Union, are also at risk if returns are not sufficient to allow amortization of DPAC, which may impact the reported net income as well as shareholders’ equity. Volatile or poor market conditions may also significantly reduce the demand for some of Aegon’s savings and investment products, which may lead to lower sales and net income. Deteriorating general economic conditions may again result in significant decreases in the value of Aegon’s equity investments. The equity market conditions experienced through 2014 led to a recognized impairment loss on equity securities held in general account of EUR 5 million (2013: EUR 3 million, 2012: EUR 8 million).
Reliance on various (financial) models to measure risk, price products and establish key results, is critical to Aegon’s operations.
Other risks Valuation of Aegon’s investments, allowances and impairments is subjective, and discrepant valuations may adversely affect Aegon’s results of operations and financial condition.
(or the potential for such a downgrade) of Aegon or any of its rated insurance subsidiaries may, among other things, materially increase the number of policy surrenders and withdrawals by policyholders of cash values from their policies. These withdrawals may require the sale of invested assets, including illiquid assets, at a price that may result in realized investment losses. These cash payments to policyholders would result in a decrease in total invested assets and a decrease in net income. Among other things, early withdrawals may also cause Aegon to accelerate amortization of DPAC, reducing net income.
of G-SIIs is updated annually and published by the FSB each November based on new data, most recently in November 2014. Aegon is not included on this list. Should, in future, Aegon be designated as a G-SII by the FSB, it would also become subject to the policy measures, described above.
KoersPlan product. The new claim challenges a variety of elements of these products, on multiple legal grounds, including allegations made in earlier court cases. There can be no assurance that the claim from Vereniging Woekerpolis.nl may not ultimately have a material adverse effect on Aegon’s results of operations or financial position.
State statutes and regulators may limit the aggregate amount of dividends payable by Aegon’s subsidiaries and Aegon N.V., thereby limiting Aegon’s ability to make payments on debt obligations.
Competition in Aegon’s business segments is based on service, product features, price, commission structure, financial strength, claims paying ability, ratings and name recognition. Aegon faces intense competition from a large number of other insurers, as well as noninsurance financial services companies such as banks, broker-dealers and asset managers, for individual customers, employers, other group customers, agents and other distributors of insurance and investment products. Consolidation in the global financial services industry can enhance the competitive position of some of Aegon’s competitors by broadening the range of their products and services, and increasing their distribution channels and their access to capital. In addition, development of alternative distribution channels for certain types of insurance and securities products, including through the internet, may result in increasing competition as well as pressure on margins for certain types of products. Traditional distribution channels are also challenged by the ban on sales-based commissions in some countries. These competitive pressures may result in increased pricing pressures on a number of products and services, particularly as competitors seek to win market share. This may harm Aegon’s ability to maintain or increase profitability.
The simplification of the capital structure also entailed the amendment of the Voting Rights Agreement between Aegon N.V. and
Vereniging Aegon’s voting rights will increase to 32.64% for up to six months.
Federal income tax principles. Therefore, US holders of Aegon shares will generally be taxed on all distributions as dividends, even if some portion of the distributions might otherwise be treated as a non-taxable return of capital or as capital gain if the amount of
New premium production general insurance 17 17 16 22 73 14 14 16 18 61
Securities Litigation Reform Act of 1995. The following are words that identify such forward-looking statements: aim, believe, estimate, target, intend, may, expect, anticipate, predict, project, counting on, plan, continue, want, forecast, goal, should, would, is confident, will, and similar expressions as they relate to Aegon. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Aegon undertakes no obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which merely reflect company expectations at the time of writing. Actual results may differ materially from expectations conveyed in forward-looking statements due to changes caused by various risks and uncertainties. Such risks and uncertainties include but are not limited to the following: �� Changes in general economic conditions, particularly in the United States, the Netherlands and the United Kingdom; �� Changes in the performance of financial markets, including emerging markets, such as with regard to: �� The frequency and severity of defaults by issuers in Aegon’s fixed income investment portfolios; �� The effects of corporate bankruptcies and/or accounting restatements on the financial markets and the resulting decline in the value of equity and debt securities Aegon holds; �� The effects of declining creditworthiness of certain private sector securities and the resulting decline in the value of sovereign exposure that Aegon holds; �� Changes in the performance of Aegon’s investment portfolio and decline in ratings of Aegon’s counterparties; �� Consequences of a potential (partial) break-up of the euro; �� The frequency and severity of insured loss events; �� Changes affecting longevity, mortality, morbidity, persistence and other factors that may impact the profitability of Aegon’s insurance products; �� Reinsurers to whom Aegon has ceded significant underwriting risks may fail to meet their obligations; �� Changes affecting interest rate levels and continuing low or rapidly changing interest rate levels; �� Changes affecting currency exchange rates, in particular the EUR/USD and EUR/GBP exchange rates; �� Changes in the availability of, and costs associated with, liquidity sources such as bank and capital markets funding, as well as conditions in the credit markets in general such as changes in borrower and counterparty creditworthiness; �� Increasing levels of competition in the United States, the Netherlands, the United Kingdom and emerging markets; �� Changes in laws and regulations, particularly those affecting Aegon’s operations, ability to hire and retain key personnel, the products Aegon sells, and the attractiveness of certain products to its consumers; �� Regulatory changes relating to the insurance industry in the jurisdictions in which Aegon operates; �� Changes in customer behavior and public opinion in general related to, among other things, the type of products also Aegon sells, including legal, regulatory or commercial necessity to meet changing customer expectations; �� Acts of God, acts of terrorism, acts of war and pandemics; �� Changes in the policies of central banks and/or governments; �� Lowering of one or more of Aegon’s debt ratings issued by recognized rating organizations and the adverse impact such action may have on Aegon’s ability to raise capital and on its liquidity and financial condition;