Joseph B.M. Streppel (Dutch), 53, started his career in 1973 at one of AEGON’s predecessors in several treasury and investment positions. In 1986 he became CFO of FGH Bank and in 1987 he joined the Executive Board of FGH Bank. In 1991 he became CEO and Chairman of Labouchere and in 1995 also of FGH Bank. In 1998 he became CFO of AEGON N.V.
Board decides on nominations, resignations and the compensation of Executive Board members, the quarterly and annual accounts, including accounting principles, dividends, funding, internal control procedures and risk management, and corporate strategy. We carried out our responsibilities in 2002 in close cooperation with the Executive Board, holding five regular and two extra meetings. All Board members attended the Annual General Meeting of Shareholders (AGM)
Supervisory Board following Mr. Posthumus’ retirement as a member of the Board in 2003.
The acquisition during 2001 by AEGON Canada of Money Concepts, a financial planning organization with 400 advisors, added a new distribution channel and a mutual fund dealership. In 2002, the dealership was rebranded as AEGON Dealer Services and made available to other AEGON Canada distribution channels. The launch in June 2002 of AEGON Fund Management and its imaxx™ mutual funds leveraged the segregated funds infrastructure to create a broader retail investment product offering. In Spain, various activities are being developed to double the number of specialized life insurance agents within a period of three years; in Hungary the network for life sales was strengthened by improving the independent agency channel and intensifying our cooperation with brokers.
Taiwan, distribution was expanded beyond the captive agency network to include independent broker outlets as well as the bank channel. In early 2002, the acquisition of AXA’s branch in Taiwan was successfully completed.
A COMPREHENSIVE ACCOUNT OF AEGON’S PERFORMANCE AND ACHIEVEMENTS DURING 2002 AND OUR PRIORITIES FOR THE FUTURE.
By leveraging economies of scale across the larger organization, primarily with the AFP realignment, AEGON USA
Belgium continued to operate independently. For Italy it was decided to end these activities because of direct sales results lagging behind expectations. In France and Japan we are considering whether Moneymaxx can operate in collaboration with local partners.
AEGON UK made important strides with its policy of building and buying distribution capability in the intermediary sector where IFAs are the primary channel. During the year AEGON
Hungary took a number of steps, including the transformation of its customer call center and the upgrading of ICT systems designed to enhance web access for agents. These measures are also expected to provide better cost control while speeding claims settlement and other forms of customer service. They will also enable AEGON Hungary to consolidate further its leading position in a market expected to grow significantly thanks to the forthcoming entry to the European Union.
13 million from the prior year, due to the October storm claims and lower investment returns. Banking activities were
However, more recently most segments of the financial markets have experienced unfavorable conditions, which have affected our earnings and our capital.
Dutch government bond yields for the period from 1998 through 2002.
2 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 January 1. Movements of other currencies have a negligible influence on both net income and shareholders’ equity.
For products where AEGON offers explicit benefit guarantees to its clients, product pricing reflects these guarantees.
Effect on net earnings of lowering long-term equity assumptions by 1% -110 million
Effect on net earnings of eliminating the higher short-term equity growth rate assumptions -230 million
In 2002, AEGON only accessed the term debt markets through the issuance of approximately EUR 600 million in notes in several small tranches under its USD 6 billion Medium Term
AEGON's mission of helping customers, business partners, shareholders and employees to ‘create better futures’ through protection against loss and increasing wealth through prudent investment requires a long-term vision, a sound strategy, staying power and a responsible ethic, underpinned by a sustainable business. AEGON has embarked on a company-wide effort to codify the disciplines and opportunities of corporate responsibility.
• Strong financial position; highly rated companies • Decentralized decision-making, supported by streamlined, low cost operations
• Earnings growth within an acceptable risk profile • Vigorously pursue cost savings initiatives • Continue broadening distribution • Enhance competitive position with product and service delivery
• Distribution diversification • Market share strength • Low cost producer • Strong financial management
• Rationalize investment options on existing products • Reduce operating expenses in investment products • Significantly improve distributor/advisor satisfaction • Improve fund performance on investment products • Launch ‘next generation’ life and investment products
NOTES TO THE CONSOLIDATED BALANCE SHEETS Amounts in EUR millions 60 AEGON GROUP
Debentures related to reinsurance contracts that are not at free disposal. Market value amounts to EUR 33 million (2001: EUR 30 million).
Depreciation –67 –33 –100 Disposals and other changes –2 –25 –27
Cash on hand and balances with banks 1,146 357 Short-term investments 441 511
TOTAL PERPETUAL CUMULATIVE SUBORDINATED LOANS 1,517 1,517 1 Year of first call.
PROFIT SHARING AND REBATES 285 304 1 Including reallocation from the technical provisions policyholders account amounting to EUR 1,278 million relating to the liabilities of the pension business of Diversified Investment Advisors due to the final settlement of the acquisition.
Balance at January 1 15,264 13,459 Deferred during the year 2,486 2,256 Amortization charged to the income statement1 –1,520 –1,203 Other changes2 –2,141 752
Net balance at December 31: — current year 768 520 — prior years 1,072 1,392
Investment income allocated to the non-technical account –14 –4 –2 –1 –2 –2 –1 –26
AEGON has non contributory defined benefit plans and defined contribution plans covering substantially all AEGON employees. In a number of countries, including the Netherlands and the United Kingdom, retirement benefits are insured with our life insurance companies based on the appropriate actuarial formulas and assumptions. In the remaining countries, including the United States, the provisions for pension obligations are vested in separate legal entities, not forming part of AEGON.
Since their acquisition, AEGON accounted for the non-insurance businesses of Transamerica (Transamerica Finance Corporation) 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
Mutual funds/Collective Trusts and other managed assets 6,646 6,400 4 7,020 7,148 –2
Mutual funds/Collective Trusts and other managed assets 186 62 — — — —
M. Tabaksblat D.J. Shepard H. de Ruiter P. van de Geijn D.G. Eustace J.B.M. Streppel O.J. Olcay J.G. van der Werf K.M.H. Peijs G.A. Posthumus T. Rembe W.F.C. Stevens K.J. Storm F.J. de Wit
2. From the net profit, first of all the holders of preferred shares shall receive a dividend on the paid in capital the percentage of which, on an annual basis, is equal to the rate for basic refinancing transactions determined by the ‘European Central Bank’, applying to the first trading day on the Amsterdam Exchanges in the financial year the dividend is related to, increased by 1.75 percentage-points.
In accordance with article 24, paragraph 3 of the Articles of Incorporation, a dividend equal to 5% of the paid-up amount of the preferred stock will be distributed in cash.
Vereniging AEGON has an Executive Committee consisting of eight members, half of whom, including the chairman and the vicechairman, 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.
AEGON N.V. AEGONplein 50 P.O. Box 202 2501 CE The Hague The Netherlands
March 7 Full year 2001 net income increases 16% to EUR 2,397 million Full year net income per share increases 12% to EUR 1.76 A 12% higher dividend proposed of EUR 0.83 per share
Netherlands, the United Kingdom and emerging markets; ● changes in laws and regulations, particularly those affecting our operations, the products we sell and the attractiveness of certain products to our consumers; ● regulatory changes relating to the insurance industry in the jurisdictions in which we operate; ● acts of God, acts of terrorism and acts of war; ● changes in the policies of central banks and/or foreign governments; ● customer responsiveness to both new products and distribution channels; ● competitive, legal, regulatory, or tax changes that affect the distribution cost of or demand for our products; and ● our failure to achieve anticipated levels of earnings or operational efficiencies as well as other cost saving initiatives.