2H19 Results Alex Wynaendts CEO Matt Rider CFO February 13, 2020 Helping people achieve a lifetime of financial security
Continued focus on growth and capital in 2019 Low interest rates impacted return on equity. Outflows in US retirement and annuity businesses Commercial momentum improved. Increase in life and accident & health sales, gross deposits Strong normalized capital generation; dividend increased by 7% Releasing capital from mature businesses; capturing opportunities in fast-growing markets Successfully optimizing our portfolio 2
Progress on 2019 – 2021 targets Target delivery in 2019 Targets 2019 - 2021 Results FY 2019 EUR 4.1 billion EUR 1.6 billion Normalized capital generation 1 cumulative for 2019 – 2021 +12% vs 2018 Dividend pay-out ratio 41% 45 – 55 % Of normalized capital generation 1, 2 DPS up 7% vs. 2018 Return on equity 9.5% > 10 % Annualized -0.7%-pts. vs. 2018 EUR 1.4 billion 3 EUR 1.5 billion Gross remittances to the Holding EUR 1.5 billion including sale guidance for 2019 of stake in Japanese JVs 4 1. Capital generation excluding market impact and one-time items after holding funding & operation expenses 2. Assuming markets move in line with management’s best estimate, no material regulatory changes and no material one -time items other than already announced restructuring programs 3 3. Excludes EUR 100 million remittances by Aegon the Netherlands to the Group in February 2020 4. Sale of Japanese JVs was announced on May 17 th , 2019 and closed on January 29 th , 2020 with EUR 153 million proceeds
Dividend increases by 7% Normalized capital generation increased in 2019 • Full year dividend for 2019 increased by 2 cents to EUR 0.31 per common share - Dividend decisions take into account normalized capital, capital position and holding excess cash • Strong normalized capital generation in 2019 reflecting positive experience variance in the Netherlands and higher release of required capital Increasing dividends Normalized capital generation +7% 1.6 (EUR per share) (EUR in billions) 0.31 1.4 0.29 0.27 0.26 0.25 0.23 0,9 0,16 0,15 0.9 0,8 0,14 0,13 0.8 0,13 0,12 0,5 0,4 0,15 0,7 0,14 0,13 0,13 0,6 0,12 0,11 0,4 0,4 2014 2015 2016 2017 2018 2019 2016 2017 2018 2019 1H 2H 4 Note: Proposed final dividend is subject to approval at the Annual General Meeting of Shareholders on May 15, 2020
Significant progress in all parts of the portfolio Portfolio actions 2H19 by strategic category Underlying earnings before tax (in EUR million, 2H19) Manage for Value Drive for Growth • • NL Life: Completed a longevity AM: Eighth consecutive full year of positive external reinsurance deal for approximately a third-party net inflows quarter of longevity exposure • US: Continued focus on customer-centricity has led • to improvements in early indicators for future growth NL Life: New own employee pension 359 plan protects capital position and 608 • UK Digital Solutions: Realized targeted expense reduces volatility savings from Cofunds integration 126 Scale-up for Future • China: New partnership with a large e-commerce player in China, driving sales growth • Japan: Completed divestment of variable annuity JVs in January 2020; EUR 153 million in proceeds 1 • NL Services: Growth in mortgage being serviced to EUR 49 billion of which EUR 21 billion fee-based mortgages 2 • Spain & Portugal: Expanded partnership with Banco Santander; further expense savings own business Spain 1. To be included in 2020 gross remittances 5 2. Based on amortized costs. Amounts shown are gross of savings related to the mortgages
Higher gross deposits, net outflows in the US Deposits Gross deposits Net deposits (in EUR billion) (in EUR billion) 79 (13) 66 4 65 64 57 11 47 (22) 8 (3) 33 37 32 (9) 27 4 3 3 3 (1) (2) (7) (3) 10 12 13 (8) 12 13 (26) (27) 22 20 19 18 16 2H17 1H18 2H18 1H19 2H19 2H17 1H18 2H18 1H19 2H19 • • AM : Increased inflows in money market funds and the launch US : Contract discontinuances in Retirement Plans; outflows in of two new equity funds in Chinese JV annuities businesses • • US : Strong gross deposits growth in Variable Annuities and Europe : Improved retention in the UK, growing momentum at Fixed Indexed Annuities Knab • • Europe : Continued momentum at Knab and new-style DC AM : Continued net inflows driven by Chinese JV and strong pension solutions (so-called PPI products) in the Netherlands performance of Dutch mortgage and ABS funds 6 Americas Europe Asia Asset Management Run-off business
Life and protection sales gaining momentum Insurance sales development New life sales New business in A&H and P&C (APE, in EUR million) (New premium production, in EUR million) 354 456 427 422 4 404 398 64 68 273 65 70 52 67 4 173 81 141 140 182 138 177 137 155 5 4 3 282 90 87 76 188 221 219 212 208 200 87 87 76 2H17 1H18 2H18 1H19 2H19 2H17 1H18 2H18 1H19 2H19 • • Europe: Increase in sales resulting from a pension buy-out as Americas: Slight increase in overall sales driven by a large well as purchase of pension indexation by existing customer short-term disability contract onboarding, partially offset by strategic product exits • Asia : Strong production in China from a partnership with a • large e-commerce partner, macro-economic uncertainty Europe : Higher sales in Spain following the launch of a new slowing sales in HNW business accidental death and disability product as well as a successful marketing campaign for health products. Increased disability • Americas: Sales growth in Brazil, slightly lower life sales in sales in the Netherlands the US. Momentum is building in term life 7 Americas Europe Asia
Improved commercial momentum while investing in customer services US Workplace Solutions Customer centricity Commercial momentum 5,6 Retirement Plan tNPS scores Advice Center assets 53 (USD billion) 49 4,2 3,8 3,3 2,1 23 17 Workplace 1H18 2H18 1H19 2H19 2015 2016 2017 2018 2019 • • Maintained strong tNPS scores in 2H19, Growing asset retention and consolidation , which are show commitment to customer including IRA rollovers from Retirement Plans Stand out with centricity via the Advice Center integrated • • 50% fewer RFP requests from current plan In addition, there is continued growth in solutions sponsors compared to 2018 and increased Managed Advice participation along with retention among current plan sponsors strong growth in AuM with RFP requests • Passage of the SECURE Act expands access to multiple employer plans , which offers opportunities for Transmaerica 8
Improved commercial momentum while investing in customer services US Individual Solutions Customer centricity Commercial momentum in strategic products Market shares 1 • Investing in wholesale relationships and launching new products through the TCS platform in 2020 6.3% 6.0% • 2H18 Fixed Indexed Annuity availability 3.8% 1H19 3.1% extended into California, a key geographic 2H19e market, driving opportunities 0.6% 0.4% • Continued customer satisfaction while Individual making progress towards implementing Indexed Variable Fixed Index Universal Life Annuities Annuities LTCG as a partner for the administration of LTC book Invest in growth • with focus on Stable Indexed Universal Life sales , with innovative slight decrease in market share products • Growing market share in Fixed and Variable Annuities • Successfully expanded distribution reach for enhanced fixed indexed annuity product 1. Market share data from LIMRA. Second half of 2019 based on company estimate 9
Successfully leveraging technology across Aegon 1 2 3 Automation Simplification Cloud Adoption Increase throughput and productivity Cost optimization and leverage scale Scale, speed and future readiness Asset Management and UK Procurement Shared IT services Leveraged robotics Are designed flexibly to Technology-related € 40m 70 automate and increase 25% meet demand compared to procurement savings in the speed of the software the previous 24/7 fixed 2019 FTE Reduction Savings of cloud testing process service services Aegon NL Shared IT services Shared IT services Deployed a web-based Continuous learning customer assistant robot By shifting resources in € 7m programs have resulted in 75% >5,000 in 2019, (over 560,000) Budapest, a 34% increase 13% of employees now while improving NPS on 2018 Resolved customer Savings Hours spent in hold formal cloud interactions scores training qualifications 10
Taking our responsibility as investor and asset manager € 147 billion General ESG at the heart of our account asset management business Exclusions 1 EUR 9 billion Companies that expand coal-related operations Coal or exceed revenue threshold 2 ESG and impact investments AuM as of year end 2019 Tobacco companies Companies that exceed revenue threshold 3 564 Companies that exceed production threshold 4 Oil or tar sands or operate pipelines Engagements with companies in 2019 Controversial weapons All companies 1. For more details refer to the Aegon N.V. Responsible Investment Policy 11 2. Threshold is currently 30% of revenues from exploration, mining, and refining of thermal coal; threshold will be decline over time to 5% in 2029 3. Threshold is currently 5% of revenues from tobacco production 4. Threshold is currently 30% of total oil equivalent production from oil sands
2H19 Financials 12
Recommend
More recommend
