Aegon N.V. is referred to in this document as 'Aegon', or
Officer, and has been CEO and Chairman of the Executive Board and Management Board since April 2008. Mr. Wynaendts was reappointed as member of the Executive Board at the Annual
(‘Operational Excellence’); �� Valuing and supporting Aegon employees as the Company's greatest asset by engaging and enabling them with the tools, training, and culture needed to exceed customers’
Brazil; the Netherlands; the United Kingdom; and New Markets, which includes a number of countries in Central & Eastern Europe and Asia, as well as Spain, Portugal, and the reporting units
Selected consolidated income statement information In EUR million (except per share amount) 2015 2014 2013 2012 2011
Selected consolidated balance sheet information In million EUR (except per share amount) 2015 2014 2013 2012 2011
The high and low exchange rates for the US dollar per euro for each of the last six months through February 2016 are set forth below: Closing rates Sept. 2015 Oct. 2015 Nov. 2015 Dec. 2015 Jan. 2016 Feb. 2016
�� Spain & Portugal Distribution partnerships with Santander in Spain & Portugal and with Liberbank in Spain. Includes life insurance, accident and health insurance, general insurance and investment products.
Run-off businesses 52 (21) Income before tax (excluding income tax from certain proportionately consolidated joint ventures and associates) 786 1,458 (46%)
Total life insurance gross premiums 7,046 2,240 5,650 2,565 (102) 17,400 (431) 16,969
(EUR 35 million), a provision for the modification of unit-linked policies in Poland (EUR 23 million), and a change in the valuation of fixed assets in Aegon’s Canadian business in anticipation of its divestment (EUR 15 million).
Run-off businesses The results of run-off businesses amounted to a loss of
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
~215%. The Pillar 1 ratio in the United Kingdom, including the with-profit fund, was approximately 140% at the end of 2014 reflecting the negative impact of de-risking of the asset portfolio in preparation for Solvency II.
New premium production accident and health insurance 1,003 1,193 (16%) 904 898 1%
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.
Transamerica Retirement Solutions provides plan sponsors with access to a wide array of investment options. Depending on the product chosen by the plan sponsor, the Company can offer unrestricted access to the entire universe of publicly-available investments. The Company also offers a product for smaller plans with an array of hundreds of investment choices from more than 40 investment management companies.
The mutual fund wholesaling group is split into two teams, one that concentrates on retail advisors and one that focuses on institutional and platform opportunities. In total, I&R has a team of more than 400 sales and business development professionals who are focused on distributing Transamerica products.
State Insurance Regulation Aegon USA’s largest insurance companies are domiciled in the State of Iowa, and the Iowa Insurance Division exercises principal regulatory jurisdiction over those companies.
to EUR 195 million compared with 2013. The positive impact of growth of the business and an employee benefit reserve release resulting from legislation changes of EUR 14 million was more than offset by lower investment income, mostly due to a reduced mortgage allocation to the investment portfolio.
For the majority of company and industry customers, Aegon the Netherlands provides a full range of pension products and services. In addition, TKP Pensioen specializes in pension administration for company and industry pension funds, and also provides defined contribution plans to corporate and institutional clients. Aegon offers defined contribution plans for small and medium-sized companies, and Stichting CAPPITAL
Aegon the Netherlands offers general insurance products in retail markets. These include house, inventory, car, fire and travel insurance. In the Netherlands, Aegon has completed a thorough business review and will restructure its non-life business to focus exclusively on the retail and SME segments of the market, which includes property & casualty and disability insurance. Aegon will exit the proxy channel entirely and is considering strategic options for its commercial lines business. These actions are expected to result in improved non-life returns in the future.
Aegon the Netherlands' non-life market share is around 4.2%3, measured by premium income.
In the run up to Solvency II, all Dutch insurance companies were required to produce an Own Risk and Solvency Assessment
Solvency II position of the activities of Aegon the Netherlands on December 31, 2015, is estimated to be ~150%.
The implementation of Solvency II on January 1, 2016 has implications for Asset Liability Management. The majority of
For property insurance, an 'excess of loss' contract is in place with a retention level of EUR 3 million for each separate risk, and
position of the activities of Aegon UK on December 31, 2015, is estimated to be ~140%.
These free assets are partly invested in equity puts and fixed interest swaps/swaptions to protect against adverse market movements. Aegon UK has an exposure only once these free assets are exhausted. The risk of exposure has been assessed by
Aegon UK uses a range of reinsurers across the reinsurance market. Reinsurance is currently in place with Hannover, Munich
(France) which was divested by Aegon in 2015. Excluding this divestment, earnings increased driven by growth of Aegon’s joint ventures with Santander.
New premium production from accident & health and general insurance business increased by 29% in 2015 compared with 2014 to EUR 102 million. This was mainly driven by strong health and general insurance sales in Spain, and higher general insurance sales in CEE.
Results 2014 New Markets Net income in 2014 decreased to EUR 89 million compared with 2013 as the increase in realized gains was more than offset by higher impairments. Lower underlying earnings before tax in 2014 compared with 2013 were mainly the result of a charge from model updates in Asia in 2014, which more than offset the increase in underlying earnings before tax in Aegon Asset Management in 2014.
Central & Eastern Europe. These include tied agents, insurance brokers, call centers, online channels and – particularly in
The mortgage loan business has been affected by several legislative changes in recent years. According to laws enacted in 2014, financial institutions were required to retrospectively apply exchange rates of the Central Bank of Hungary (MNB), instead of the exchange rates they applied in the past, to foreign currency denominated loans.
Competition In 2015, Aegon was the third largest life insurance provider in
Square Re, for property, catastrophe, general third-party liability and motor third-party liability risks. In the first phase, Blue
By December 2015, Aegon Sony Life had entered into distribution partnerships with two 'mega banks' and 22 regional banks, in addition to Sony Life's Life Planner distribution channel, which has over 4,000 professionals. The primary focus of
Overview of sales and distribution In China and India, Aegon THTF and Aegon Life offer products through multiple distribution channels, from agents, independent brokers and banks, to direct marketing, group and e-sales.
Aegon Life offers a number of term plans, traditional individual participating products, traditional pension participating products and unit-linked plans.
Liberbank, S.A. Aegon Administracion y Servicos A.I.E., a separate legal entity, provides administration and operations services to all
International group, signed an agreement to distribute a number of insurance products. This became fully operational in January 2015, following regulatory approval. The agreement concerns the distribution of pure life risk and general insurance products
1 Source: Investigación Cooperativa entre Entidades Aseguradoras y Fondos de Pensiones (ICEA).
In Germany, Aegon Ireland offers variable annuities and employs a direct sales and customer service team in its Frankfurt branch office. The key distribution channel is financial advisors.
Offshore investment bonds Offshore investment bond products are open-ended unit-linked life insurance products. They offer a wide variety of investment choices, making it possible to invest in a broad range of external assets, such as collective investment schemes, unit trusts, and open-ended investment companies (OEICs), together with internal unit-linked funds managed by Aegon Ireland, and cash deposits.
Offshore bond products enable customers to make regular withdrawals from their policy, provided there is sufficient value in the underlying fund. The death benefit is typically 100.1% of the surrender value of the policy on the death of the last life assured. Offshore bond products do not have explicit guarantees.
In Germany, several competitors offer variable annuity type products, but they are generally not essential to their overall offering. The main competitors for variable annuity business are
In addition, Aegon Asset Management operates two key strategic partnerships: �� In China, Aegon Asset Management owns 49% of Aegon
Lines of defense Aegon’s risk management structure is organized along three
compliant. Given the magnitude of the Solvency II process, a specific program management structure supported the regular risk governance bodies.
Aegon believes these guiding principles together strengthen the Company's ability to withstand adverse market conditions, enhance its financial flexibility and serve the long-term interests of both the Company and its stakeholders.
Capital adequacy and quality Capital adequacy and quality are managed within the organization at a Company, country and business unit, and legal entity level.
December 31, 2015 compared with 208% at the end of 2014.
To support its commercial paper programs and need for Letters of Credit (LOCs), and to enhance its liquidity position, Aegon maintains backup credit and LOC facilities with international lenders. The Company's principal arrangement is a EUR 2 billion syndicated revolving credit facility maturing in 2019, and
At the holding company Aegon N.V., liquidity is sourced from internal dividends from business units and through the capital markets. The main sources and uses of liquidity at the holding company Aegon N.V. are dividends from subsidiaries, movements in debt, net expenses (including interest), funding operations, capital returns to shareholders and the balance of acquisitions and divestitures. The ability of Aegon’s insurance subsidiaries to transfer funds to the holding company is constrained by the need for these subsidiaries to remain adequately capitalized at the levels set by local insurance regulations, and as administered by local insurance regulatory authorities.
The Netherlands2) 100% Solvency I ~240% Solvency I ~EUR 2.7 bln
Act (Wet op het financieel toezicht), the Executive Board confirms that, to the best of its knowledge, the financial statements prepared in accordance with applicable accounting standards give a true and fair view of the assets, liabilities, financial condition and profit or loss of the Company and the undertakings included in the consolidation as a whole; and that the Report of the Executive Board includes a fair view of the development and performance of the business during the financial year, the position at balance sheet date of the Company and the undertakings included in the consolidation as a whole, together with a description of the principal risks and uncertainties that the Company faces.
The strategic focus for all Business Units was discussed, in particular the strategies for the Americas, the Netherlands, UK,
Acquisitions and divestments were discussed in the context of the strategy. The Supervisory Board supported the active management of the business portfolio with add-on acquisitions, the sale of underperforming businesses and disposals of entities that are no longer consistent with the strategy. While acquisitions and divestments of EUR 50 million or more require Supervisory
Jones and acquired Mercer’s U.S. defined contribution record keeping business. The divestitures of Aegon’s 35% equity stake in La Mondiale Participations in France, Clark Consulting in the US, and Aegon’s Canadian life insurance business were also completed in 2015. In December of 2015, the Supervisory Board visited Denver, US, for an in-depth review of the Americas’ strategy.
Board. These provide an overview of the responsibilities and activities of the committees.
Head Regulatory Compliance on operational risk. In addition, the Committee reviewed quarterly legal updates.
Annual General Meeting of Shareholders. The Supervisory Board recommends the shareholders to adopt the Annual Accounts.
Groep Nederland B.V. (not listed). Furthermore, he was advisor to the President and Chief Executive Officer of Aon Corporation, and is Chairman of the Benelux Advisory Board of Leonardo & Co. B.V.
Central Bank), and the 2015 Act on the Remuneration Policy of Financial Undertakings (Wet beloningsbeleid financiële ondernemingen, Wbfo 2015 stb 2015, 45).
The Wbfo has a provision that makes it possible to apply for a variable compensation maximum that is aligned with the European CRD IV compensation ratio (100% of fixed compensation at maximum level). This has been specifically created for all people working for the corporate office of companies with a strong international nature. In 2015, Aegon met the applicable criteria. Although the regular maximum levels of variable compensation apply in the Netherlands, Aegon has offered selected senior staff at its corporate office a maximum variable compensation opportunity in line with CRD IV
1 In accordance with the Dutch Decree on Sound Remuneration Policy, the most recent annual disclosure of Identified Staff remuneration can be found on Aegon’s corporate website:
Meeting of Shareholders on May 12, 2011. The Policy will remain in force until such time as the Supervisory Board proposes changes or amendments. Any material changes in the Executive
The Supervisory Board conducts regular scenario analyses to determine the long-term effect on the level and structure of compensation granted to members of the Executive Board. The
1 Based on VWAP December 15, 2014 – January 15, 2015.
Members of the Executive Board may terminate their engagement agreement with a notice period of three months. The Company must give six months' notice if it wishes to terminate the agreement of a member of its Executive Board.
Aegon’s aims and developing the strategy and its associated risk profile, in addition to overseeing any relevant sustainability issues
Each common share carries one vote. There are no restrictions on the exercise of voting rights by holders of common shares, be it regarding the number of votes or the time period in which they may be exercised.
All common shares B are held by Vereniging Aegon, the Company’s largest shareholder. The nominal value of the common shares B is equal to the nominal par value of a common share. This means that common shares B also carry one vote per share. However, the voting rights attached to common shares B are subject to restrictions as laid down in the Voting Rights Agreement, under which Vereniging Aegon may cast one vote for every 40 common shares B it holds in the absence of a Special Cause.
Cox International Stock Fund holds 130,337,763 common shares, which represents 4.8% of the issued capital as at
A member of the Executive Board may also be suspended by the Supervisory Board, although the General Meeting of
Aegon’s position on Code IV.1.1 Aegon’s Articles of Association provide for a larger majority and a higher quorum than those advocated by the Code. Given that the Company has no specific anti-takeover measures, the current system is deemed appropriate within the context of the 1983
(regardless of the contractual basis of their employment) and the employees of all Aegon companies. This includes members of the Executive Board, the Management Board and the Supervisory
a. Investment contracts with discretionary participation features Some investment contracts have participation features whereby the policyholder has the right to receive potentially significant additional benefits which are based on the performance of a specified pool of investment contracts, specific investments held by the Group or on the issuer’s net income. If the Group has discretion over the amount or timing of the distribution of the returns to policyholders, the investment contract liability is measured based on the accounting principles that apply to insurance contracts with similar features.
Onerous contracts With the exception of insurance contracts and investment contracts with discretionary participation features for which potential future losses are already considered in establishing the liability, a provision is recognized for onerous contracts in which the unavoidable costs of meeting the resulting obligations exceed the expected future economic benefits. The unavoidable costs under a contract reflect the least net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from failure to fulfill it.
2.29 Policyholder claims and benefits Policyholder claims and benefits consist of claims and benefits paid to policyholders, including benefits in excess of account value for products for which deposit accounting is applied and the change in the valuation of liabilities for insurance and investment contracts. It includes internal and external claims handling costs that are directly related to the processing and settlement of claims. Amounts receivable in respect of salvage and subrogation are also considered.
During 2015, Aegon implemented actuarial assumption and model updates resulting in a net EUR 181 million charge to income before tax (2014: EUR 352 million). Assumption updates resulted in a net EUR 24 million gain to income before tax. Model updates had an adverse impact on income before tax of EUR 205 million. Refer to note 5 Segment information for further details.
the table below: Net income Americas (in USD) (273) 784 540
Increase by 15% of GBP currencies relative to the euro 42 771
Increase by 15% of other non-euro currencies relative to the euro 116 3,143
Association of Insurance Commissioners (NAIC). The rating used is the lower of the external rating and the internal rating.
Aegon does not consider the underlying investments to be impaired as of December 31, 2015.
The fair values of Aegon USA’s CMBS instruments (AFS and FVTPL) were determined as follows: Level II Level III Total 2015 Level II Level III Total 2014
(December 31, 2014 : EUR 2,300 million) by Aegon the Netherlands and EUR 1,639 million (December 31, 2014 EUR 2,124 million)
Aegon’s available-for-sale debt securities for Teck Resources Limited have a fair value of EUR 28 million as of December 31, 2015.
The low natural gas price environment has generally been beneficial for regulated utilities because it has had the effect of decreasing the fuel component on customer’s bills. Lower all in cost to the customer generally enables increases in other operating costs to be passed through with less regulatory lag. Unregulated merchant power generators operating in the United States have been negatively
To manage the liquidity risk arising from financial liabilities, Aegon holds liquid assets comprising cash and cash equivalents and investment grade investment securities for which there is an active and liquid market. These assets can be readily sold to meet liquidity requirements. For this reason, Aegon believes that it is not necessary to disclose a maturity analysis in respect of these assets to enable users to evaluate the nature and extent of liquidity risk.
Investment contracts for account of policyholders 1) 29,911 3,427 - - 114 33,453 1 Excluding investment contracts with discretionary participating features.
expenses, partially offset by the expected gross premiums, fees and charges relating to the existing business in force. Estimated cash benefit payments are based on mortality, morbidity and lapse assumptions based on Aegon’s historical experience, modified for recently observed trends. Actual payment obligations may differ if experience varies from these assumptions. The cash benefit payments are presented on an undiscounted basis and are before deduction of tax and before reinsurance.
5 Segment information Aegon conducted its operations through five primary reporting segments in 2015: �� Aegon Americas: covers business units in the United States, Canada (until July 31, 2015), Brazil and Mexico, including any of the units’ activities located outside these countries; �� Aegon the Netherlands: covers businesses operating in the Netherlands; �� Aegon UK: covers businesses operating in the United Kingdom; �� New Markets: covers businesses operating in Central & Eastern Europe; Asia, Spain and Portugal, as well as Aegon’s variable annuities activities in Europe and Aegon Asset Management that are aggregated as one reportable segment due to their respective size; �� Holding and other activities: includes financing, employee and other administrative expenses of holding companies.
The impact of this change in measurement on 2014 would have been an increase in Aegon Group consolidated underlying earnings before tax of EUR 82 million and a decrease in ‘Other income/(charges)’ for the same amount for segment reporting purposes. The impact is split between the Americas (EUR 57 million) and New Markets (EUR 26 million). The presentation of the items in the IFRS
Ineffective portion of hedge transactions for which hedge accounting is applied 10 (14) 43 9
Of which Aegon’s share of employees in joint ventures and associates 568 - - 1,046 - 1,614
Fair value change on hedged items in a fair value hedge (66) 724 (215)
Net fair value change on for account of policyholder financial assets at fair value through profit or loss comprise: 2015 2014 2013
Profit appropriated to policyholders 29 15 24 14 Commissions and expenses
Deferred tax 43 Origination / (reversal) of temporary differences 66 245 (231)
Total income tax related to components of other comprehensive income 706 (1,685) 1,094
Net income / (loss) attributable to equity holders 619 1,186 854
(2014: 5%) and pre-tax risk adjusted discount rate of 17% (2014: 17%).
Other includes the impact of the conversion of the mortgage loans in Hungary, which were formerly denominated in a foreign currency, into HUF denominated loans as required by Hungarian law. As a result of the changed conditions, the former mortgage loans were derecognized and the new mortgage loans have been subsequently recognized at fair value.
Rental income of EUR 72 million (2014: EUR 70 million; 2013: EUR 59 million) is reported as part of investment income in the income statement. Direct operating expenses relating to investments in real estate for account of policyholder amounted to EUR 7 million in 2015 (2014: EUR 6 million, 2013: EUR 8 million). There are no restrictions on the realizability of investment property or the remittance of income and proceeds of disposal.
Derivatives for general account Derivatives not designated in a hedge 8,982 24,958 9,626 23,960
EUR 12 billion, becomes in the money if - in 2032 - realized mortality rates are more than 7.5% lower than pre-defined mortality tables. To further protect the longevity position of Aegon the Netherlands and combining this with protection for catastrophe mortality in the US, Aegon bought an additional longevity index derivative. This derivative will pay out in 2035 if some combination of higher than expected mortality rates in the United States and/or lower than expected mortality rates in the Netherlands persists over the next 20 years from 2013 and, at that time, is expected to continue to do so.
This first tranche covers 40% of the best estimate value of liabilities of EUR 15 billion.
Movement in foreign currency translation and net foreign investment hedging reserves 1,681 (181) - 1,500
The sensitivities represent an increase or decrease of mortality (net of longevity) and morbidity rates over best estimate. Increases in mortality rates lead to an increase in the level of benefits and claims. The impact on net income and shareholders’ equity of sales transactions of investments required to meet the higher cash outflow is reflected in the sensitivities. A change in actual experience with mortality or morbidity rates may not lead to a change in the assumptions underlying the measurement of the insurance liabilities as management may recognize that the change is temporary. Life insurers are also exposed to longevity risk. Increased life expectation above Aegon’s assumed life expectation at the time of underwriting negatively impacts its results.
Aegon offers guarantees on variable annuities sold through its joint venture in Japan. Variable annuities allow a customer to provide for the future on a tax-deferred basis and to participate in equity or bond market performance. Variable annuities allow a customer to select payout options designed to help meet the customer’s need for income upon maturity, including lump sum payment or income for life or for a period of time. This benefit guarantees that a policyholder can withdraw a certain percentage of the account value, starting at a certain age or duration, for either a fixed period or during the life of the policyholder.
The main drivers of this gain before tax are positive results related to decreases in risk free rates of EUR 543 million (2014: EUR 4,927 million loss) and DPAC offset and other contributed a gain of EUR 493 million (2014: EUR 248 million gain) partly offset by hedges related to the guarantee reserves contributed fair value loss of EUR 670 million to income before tax (2014: EUR 4,346 million gain), a loss of EUR 202 million related to decreasing own credit spread (2014: EUR 428 million loss), a loss of EUR 114 million related to a decrease in equity markets (2014: EUR 583 million gain) and a loss of EUR 11 million related to increases in equity volatilities
EUR 842 million "SAECURE 9" RMBS Note 1), 7) Floating Quarterly 2010 / 16 564 624
EUR 1,365 million "SAECURE 12" RMBS Note 1), 8) Floating Quarterly 2012 / 17 1,140 1,233
EUR 1,443 million "SAECURE 15" RMBS Note 1), 11) Floating Quarterly 2014 / 20 1,376 1,440
4 The maturity date is 1 December 2020; the extended due for payment date is 2052. 5 The first optional redemption date is July 2015; the legal maturity date is July 2092. Notes are fully collateralized by mortgage loans which are part of Aegon’s general account investments.
Net interest on the net defined benefit liability (asset) 124 9 134
Remeasurements of the defined benefit obligations: - Actuarial gains and losses arising from changes in demographic assumptions (12) 210 - Actuarial gains and losses arising from changes in financial assumptions (315) 1,146
January 1, 2015. The defined benefit obligation as at December 31, 2014 was remeasured including these adjustments, which resulted in an increase in profit or loss of EUR 45 million before tax in 2014.
Financial actuarial assumptions 100 basis points increase in discount rate (442) (526)
The weighted average duration of the defined benefit obligation is 23.0 years (2014: 24.0 years).
Financial actuarial assumptions 100 basis points increase in discount rate (341) (333)
Aegon did not recognize deferred corporate income tax assets in respect of deductible temporary differences relating to Financial assets and Other items for the amount of gross EUR 46 million; tax EUR 9 million (2014: gross EUR 32 million; tax EUR 6 million).
Borrowings – held at amortized cost 11,829 1,735 706 9,753 12,194
Derivatives with positive values not designated as hedges 9,885 - 25,789 -
Share of contingent liabilities incurred in relation to interests in joint ventures 27 18
Company, to the extent that the assets in the captive (TRRI) are not sufficient to cover reinsurance obligations. As of
EUR 3,750 million (2014: EUR 2,403 million); as of that date no amounts had been drawn, or were due under these facilities.
Legal and arbitration proceedings, regulatory investigations and actions Aegon is involved in litigation in the ordinary course of business, including litigation where compensatory or punitive damages and mass or class relief are sought. Current and former customers, both institutional as well as individual, and groups representing customers, initiate litigation. Also, certain groups encourage others to bring lawsuits in respect of products. Aegon has established litigation policies to deal with claims, defending when the claim is without merit and seeking to settle in certain circumstances. There can be no assurances that Aegon will be able to resolve existing litigation in the manner it expects or that existing or future litigation will not result in unexpected liability.
On December 31, 2015, Aegon completed the acquisition after obtaining regulatory approval. The total purchase price amounted to EUR 70 million (USD 78 million), consisting of EUR 64 million (USD 71 million) cash and EUR 6 million (USD 7 million)
On December 7, 2015 Aegon announced that it has increased its investment in Aegon Religare Life Insurance Company ARLI from 26 percent to 49 percent. The company has been renamed as Aegon Life Insurance Company Ltd.
On February 8, 2013, Aegon closed the acquisition of 100% of Fidem Life, a life insurance company in Ukraine. Fidem Life was rebranded ‘Aegon Ukraine’ and is integrated into the governance and management structure of Aegon CEE.
On January 1, 2015, Vereniging Aegon exercised its options rights to purchase in aggregate 9,680 common shares B at fair value of a common share B (being 1/40th of the market value of a common share in the capital of the Company at the time of issuance) to mitigate dilution caused by issuance of shares on January 1, 2015, in connection with the Long Term Incentive Plans for senior management.
The total remuneration for the members of the Executive Board over 2015 was EUR 6.0 million (2014: EUR 6.1 million; 2013: EUR 5.4 million). Total expenses recognized under IFRS accounting treatment in the income statement for Mr. Wynaendts related to 2015 was EUR 4,167 (2014: EUR 3,214; 2013: EUR 3,360), for Mr. Button EUR 2,946 (2014: EUR 2,750; 2013: EUR 1,939)
At the balance sheet date, Mr. Wynaendts had mortgage loans with Aegon totaling EUR 249,158 (2014: EUR 735,292) with an interest rate of 4.4%. In 2015 Mr. Wynaendts made repayments totaling to EUR 486,134 relating to his mortgage loans. No other outstanding balances such as loans, guarantees or advanced payments exist.
Notes to the financial statements 1 General information 296 2 Summary of significant accounting policies 296 3 Shares in group companies 299 4 Loans to group companies 299 5 Other investments 299 7 Other assets 300 8 Share capital 300 9 Shareholders’ equity 302 10 Other equity instruments 304 11 Subordinated borrowings 306 12 Long-term borrowings 306 13 Other liabilities 307 14 Number of employees 307 15 Accountants remuneration 307 16 Events after the balance sheet date 308
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 Company after deducting all of its liabilities and the Company has an unconditional right to avoid delivering cash or another financial asset to settle its contractual obligation. In addition to common shares and preferred shares, the Company has issued perpetual securities. Perpetual securities have no final maturity date, repayment is at the discretion of Aegon and for junior perpetual capital securities Aegon has the option to defer coupon payments at its discretion. The perpetual capital securities are classified as equity rather than debt, are measured at par and those that are denominated in US dollars are translated into euro using historical exchange rates.
USD 250 million floating LIBOR rate 1) Quarterly, December 15 2016 212 212
The Company has encountered claims and litigations in this respect. Depending on the actual legal position and expectations from management, claims, including litigation related, are either provided for as a liability or reflected as contingent liabilities in the notes to the financial statements. The Company uses external legal experts where applicable to evaluate its legal positions.
For the Group, the Company is adopting an accounting change to better reflect the nature of certain reinsurance transactions which are used as a means to fully divest of certain product lines or businesses. Upon adoption, the Company will write off the capitalized assets related to the cost of reinsurance for certain historical reinsurance transactions in the Americas.
Responsibilities of the Management and the Supervisory Board The management is responsible for: �� the preparation and fair presentation of the financial statements in accordance with EU-IFRS and with Part 9 of Book 2 of the
(being 1/40th of the market value of a common share in the capital of the Company at the time of issuance) to mitigate dilution caused by a correction to Aegon’s issuance of shares on May 21, 2015, in connection with the Long Term Incentive Plans for senior management
Accordingly, at December 31, 2015, the voting power of Vereniging Aegon under normal circumstances amounted to approximately 14.5%, based on the number of outstanding and voting shares (excluding issued common shares held in treasury by Aegon N.V.). In the event of a Special Cause, Vereniging Aegon’s voting rights will increase, currently to 32.6%, for up to six months.
Capital contributions of EUR 0.1 billion were paid to Aegon’s businesses in New Markets.
The sensitivity of Aegon’s net income and shareholders' equity to changes in various underwriting risks is provided in Note 36 Insurance contracts to the consolidated financial statements.
Changes in existing laws and regulations may affect the way in which Aegon conducts its businesses, profitability of its businesses
The Financial Stability Board (FSB) has endorsed the methodology and these policy measures. The policy measures include recovery and resolution planning requirements, liquidity and systemic risk management planning and enhanced group-wide supervision, including direct powers over holding companies and higher loss absorbency requirements (HLA). The HLA builds on the IAIS Basic Capital
The development of the ICS will be informed by the work on the BCR. When finalized, the ICS will replace the BCR as foundation of the HLA. The IAIS indicates that, because of the interlinkage between the BCR and HLA, the calibration may be modified depending on the HLA requirements. The IAIS currently expects that the HLA will initially be based on the BCR, but will be later based on the ICS.
Other initiatives, such as by the International Association of Insurance Supervisors, may create regulations that would increase capital needs and other requirements that would not be applicable to all carriers and create an uneven competitive playing field.
The United Kingdom (UK) leaving the European Union (‘Brexit’) may affect Aegon’s results and financial condition.
Aegon has devoted significant resources to the implementation and maintenance of a comprehensive enterprise risk management framework in all aspects of the business. Notwithstanding, our risk measurements do make use of historic and public data that may be inaccurate or may not predict future exposures. Further, operational and legal risks involve high volumes of transactions and are affected by frequent changes in our businesses and their environments, and the risk management framework may not evolve at the same pace. As a result, there is a chance that risks present in our business strategies and initiatives may not be fully identified, monitored and managed.
Pacific Re and XL Re. The non-life reinsurance for Aegon the Netherlands is diversified across several providers including Lloyds market syndicates. The major reinsurers of Aegon Hungary for non-life are Swiss Re, Munich Re and Hannover Re and for life insurance Munich
Operational risk is inherent in Aegon’s businesses and may manifest itself in many ways, including business interruption, poor vendor performance, information systems malfunctions or failures, regulatory breaches, processing errors, modelling errors, and/or internal and external fraud. These events may result in financial loss, harm Aegon’s reputation, or hinder Aegon’s operational effectiveness.
Aegon’s management maintains a well-controlled environment and sound policies and practices to control these risks and keep operational risk at appropriate levels. Notwithstanding these control measures, however, operational risk is part of the business environment in which Aegon operates, and is inherent in Aegon’s size and complexity, as well as Aegon’s geographic diversity, and the scope of the businesses Aegon operates. Aegon’s risk management activities cannot anticipate every circumstance, and economic and financial outcome, or the specifics and timing of such outcomes. Furthermore, if the contractual arrangements put in place with any third-party service providers are terminated, including contractual arrangements with providers of information technology, administrative or investment management services, Aegon may not be able to find an alternative provider on a timely basis or on equivalent terms. Aegon may incur significant losses due to these types of risks.
As of December 31, 2015, there were 2,147,036,826 common shares and 585,022,160 common shares B issued. Of these, Vereniging
Taxation i Certain Netherlands tax consequences for holders of shares The following section outlines certain material Netherlands tax consequences of the acquisition, holding, redemption and disposal of
Europe and the legislation applicable in that part of the Kingdom.
If a holder of Aegon common shares is a resident or deemed to be a resident of the Netherlands for Netherlands corporate income tax purposes and is fully subject to Netherlands corporate income tax or is only subject to Netherlands corporate income tax in respect of an enterprise to which Aegon common shares are attributable, income derived from Aegon common shares and gains realized upon the redemption or disposal of Aegon common shares are generally taxable in the Netherlands (at up to a maximum rate of 25%) under the Netherlands corporate income tax act 1969 (Wet op de vennootschapsbelasting 1969).
Distributions paid in currency other than US dollars (a 'foreign currency'), including the amount of any withholding tax thereon, must be included in the gross income of a US holder in an amount equal to the US dollar value of the foreign currency calculated by reference to the exchange rate in effect on the date of receipt. This is the case regardless of whether the foreign currency is converted into US dollars.
If a US holder receives foreign currency upon a sale or exchange of common shares, gain or loss, if any, recognized on the subsequent sale, conversion or disposition of such foreign currency will be ordinary income or loss, and will generally be income or loss from sources within the United States for foreign tax credit limitation purposes. However, if such foreign currency is converted into
Cautionary note regarding non-IFRS measures This document includes the following non-IFRS financial measures: underlying earnings before tax, income tax and income before tax.
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; and
Further details of potential risks and uncertainties affecting Aegon are described in its filings with the Netherlands Authority for the Financial Markets and the US Securities and Exchange Commission, including the Annual Report. These forward-looking statements speak only as of the date of this document. Except as required by any applicable law or regulation, Aegon expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Aegon’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.