Reinsured share in commissions and expenses —95 —89 —89 —94 —109 —94 —107 —135 —116 —299 —463
Pre-tax Profit Margin (%) Insurance Activities3 1.7 1.7 1.6 1.4 1.2 1.3 1.4 1.5 1.5 1.4 1.5
He was appointed in 1990; his current term expires in 2001. He is chairman of the Compensation and Nominating Committees and a member of the Audit Committee, respectively.
3 D.G. EUSTACE (BRITISH) Chairman of Smith+Nephew plc (London, UK) and former Vice-chairman of Royal Philips Electronics N.V.
He was appointed in1995; his current term will end in 2003. He is a member of the Compensation Committee.
5 O.J. OLCAY (AMERICAN) Vice-chairman and Managing Director of Fischer, Francis, Trees & Watts, Inc. (New York, USA)
More specifically, our Board is the body authorized to appoint or discharge members of the Executive Board and to adopt the annual accounts. Our proposals are submitted to the shareholders of AEGON for their approval. As supervisors and advisors, we meet both formally and informally with the
Dutch proposals such as those of the Peters Committee, chaired by our colleague and former AEGON Chairman Jaap
Our product strategy is not based on predicting the future, but on anticipating changes and being ready for whatever it holds.
continues to place great importance on cost-control and productivity. We want to be the low-cost producer in each of our markets, and in many cases we are. Our success in controlling costs is an important driver in continuing our various activities in the creation of value.
AMONG DUTCH CONSUMERS. THE RETAIL BUSINESS UNITS FOCUSING ON THIS SEGMENT
The growing volumes of individual business oriented towards equity investment has led
For 2001 AEGON UK will actively seek entry to the individual protection and stakeholder pension market and further develop its position in the institutional markets. The delivery of technology based solutions to improve efficiency and accessibility of services will remain a top priority.
CONTINUED STRONG GAINS IN THE LIFE SECTOR, COUPLED WITH EFFECTIVE REDRESS
The growth in life insurance activities was strong as revenues increased 23%. From a negligible base, life now accounts for nearly 50% of AEGON Spain’s revenues and is expected to represent some two thirds of the total within the next three years. Powering the growth in life is the increasing popularity of unit-linked products, a product sector where AEGON Spain is particularly well positioned. Also, the effectiveness of a multichannel distribution strategy relying on agents, direct sales, partnerships with financial institutions and growing use of the internet achieve national market coverage.
During the second half of 2000, the Chinese authorities expressed their intention to grant the AEGON Group a life insurance license. In anticipation of this license, AEGON is making preparations for an entry into the market. As applies to all foreign insurance companies, AEGON plans to establish a joint venture with a Chinese company.
Respectful Workplace Program, emphasizing the importance of maintaining a work environment that is comfortable for everyone. The theme of the 2000 program was ‘Everyone is a Customer’
AEGON’s earnings. This complements the additional disclosure on new production, which AEGON started to publish on a quarterly basis at the end of the third quarter of 2000.
Interest charges on US dollar and pound sterling denominated debt rose as a result of the increased currency exchange rate of the US dollar and the pound sterling against the euro and due to the accounting changes related to the
AEGON UK net income, including full year earnings from the acquired Guardian businesses, increased by 38% in pounds sterling to GBP 160 million. Income before tax rose 40% to
Based on Dutch Accounting Principles, total net income for the full year 2000 amounted to USD 141 million compared to USD 189 million for the same period of 1999 (of which
4 The effect of movements in equity and real estate markets is reflected as a one-time increase or decrease of worldwide equity and real estate markets on 1 January 2001.
The financial statements have been drawn up in euro, with joined figures in Dutch guilders for the current year.
The notes to capital and reserves have been moved from the notes to the consolidated balance sheet to the parent only section.
On March 1, 2000, AEGON announced its intention to make opportunistic divestments of the non-insurance businesses comprising Transamerica Finance Corporation. Sales of several segments took place after that date. However, general weakness within the commercial finance market has precluded other credible bids from being made. Therefore AEGON decided to continue developing these businesses as operating units of the group. Since their acquisition, AEGON has been accounting for the non-insurance businesses at cost. In the income statement for the first six months of this year dividends have offset the financing costs related to these operations, resulting in a neutral effect on earnings.
The provision for doubtful debts for these investments amounts to EUR 184 million (1999: EUR 166 million).
Interest rate 73/4%, coupon date December 15 2005 300 136 136
Interest rate 75/8%, coupon date July 10 2008 250 114 114
Amortization charged to the income statement –2,519 –1,143 –774 1Mainly caused by currency exchange rate differences.
The deferred tax assets included in the balance sheet at December 31, 2000 are immaterial, except for a EUR 628 million tax asset on deferred acquisition costs in the USA.
Mutual funds/collective trusts and 13,316 580 Total production off balance sheet 14,419 1,451 952 64 — — 16,886
INCOME STATEMENTS OF AEGON N.V. and the appropriation of profit Amounts in millions
Senior executives of AEGON companies as well as other AEGON employees have been offered the possibility to acquire AEGON stock options in 2000. In previous years similar possibilities were offered. The options have been granted at an exercise price equal to the market price of the shares at the date of the grant. The options granted in 2000 can only be exercised three years after being granted and then during a period of two years, as was the case in the 1997, the 1998 and the 1999 stock option plans. Stock options plans can only be established after the prior consent of the Annual General Meeting. If subsequently the Executive Board decides to implement stock option plans, that decision has to be approved by the Supervisory Board. Options granted in earlier years can generally be exercised during a period of five years. Options granted on behalf of the purchase agreement with Providian have various expiration dates. The subsequently granted options to senior executives of former Providian business units fully vest in three years and the exercise period is up to ten years, the latest ending in August 2008.
Lapsed –148,018 21.75 1Adjusted for the stock split and including bonus rights
The legal reserve for currency differences on foreign subsidiaries refers to accumulated translation differences amounting to EUR 1,217 million (1999: EUR 652 million) and is included in the other surplus fund.
Other movements include EUR 574 million book profit from the sale of Labouchere
3 From the net profit, if it is sufficient to this end after a part of the profit has been set aside for augmenting or forming surplus funds according to paragraph 1, first of all the holders of preferred shares shall receive, on the nominal value paid in on their preferred shares, a dividend the percentage of which, on an annual basis, is equal to the rate for basic refinancing transactions applied by the ‘European Central Bank’, increased by 1.75 percentage-points, applying to the first trading day on Amsterdam Exchanges in the financial year the dividend is related to. Apart from this no additional dividend is to be paid on the preferred shares.
10 The Executive Board may decide, subject to the approval of the Supervisory Board that the payment of a dividend or an interim dividend in cash on registered common shares for which certificates of share have been issued and the dealing in which on an exchange or a similar institution in another country than the Netherlands is permitted with the cooperation of the Company, shall take place in the currency of that country unless this is not possible for the Company owing to government measures or other circumstances beyond its control. If, in accordance with the provisions of the preceding sentence, a dividend or an interim dividend is distributed in a foreign currency, it shall to this end be converted at the exchange rate current on the exchange at Amsterdam on a day to be fixed and announced by the Executive Board which does not fall before the day on which the distribution is resolved upon, nor after the day fixed for the shares in question in accordance with the provisions of paragraph 6.
The Nominating Committee, active since 1993, also held two meetings, attended also by the Executive Board’s Chairman. The Committee discussed the appointment of Mr. Streppel as the successor for Mr. Van Wijk, Mr. Herringer’s resignation as a member of the Executive Board, the composition of the Executive Board and the reappointment of Supervisory Board members. The Supervisory Board’s current Chairman and Vice-Chairman and Ms. Peijs and Mr. Olcay are members of this Committee.
J.F.M. Peters, 69 (Dutch), is a retired Chairman of the Executive Board of AEGON N.V. He was appointed in 1993; his current term will end in 2001, when he will reach the statutory retirement age. He is also a member of the Audit Committee. He is a member of the Supervisory Boards of eight Dutch companies, among which Randstad Holding and Samas Groep, and of the Boards of Pharmacia (New York, USA) and Dresdner Endowment Policy Trust Plc. (London, UK) and further holds, among others, memberships of Trust offices on behalf of a number of Dutch companies.
H. de Ruiter, 67 (Dutch), Vice-Chairman, is a retired Managing Director of Royal Dutch Petroleum Company and Group Managing Director of Royal Dutch/Shell Group of Companies. He was appointed in 1993; his current term will end in 2004. He is a member of the Audit, Compensation and Nominating Committees, respectively. He is also a member of the Executive Committee of Vereniging AEGON and of Trust offices on behalf of some Dutch companies of the Supervisory Board. He is a member of the Supervisory Boards of six Dutch companies, among which Royal Dutch Petroleum Company, Royal Ahold and Royal Vopak and a Board member of Corus Group.