Accelerate, connect, deliver Deutsche Bank Insurance Capital Forum London – July 5, 2018 Helping people achieve a lifetime of financial security
2 Aegon at a glance Aegon at a glance Focus Sales Life insurance, pensions & Total sales of Asia asset management for over € 16bn 2% 26 million customers (FY 2017) Europe 32% Americas History Employees 60% Our roots date back to the Over 28,000 employees 6% first half of the 19 th century (December 31, 2017) AAM Earnings Paid out Underlying earnings Investments before tax of € 2,140m Revenue-generating in claims and (FY 2017) investments € 817bn benefits € 48bn (December 31, 2017) (2017)
3 Aegon at a glance Successful execution on strategy Significant improvement in Solvency II ratio and strong capital generation Administration of US life & annuity businesses outsourced Exceeded target to reduce capital allocated to run-off businesses Transformation continues with increased focus on digitization Continued strong gross deposits
4 Aegon at a glance Key trends are shaping our industry • Low interest rates combined with changing demographics Shift away from • New prudential regulation and increased capital requirements guaranteed life products • Rising demand for transparent products • Reduced social benefits and fiscal incentives Focus on • Increased awareness to save for retirement individual responsibility • Workplace channel increasingly important • Changing customer behavior in researching and purchasing products Increased importance • New technology creates increased transparency digital channels • More effective and efficient ways to advise and serve mass affluent customers
5 Aegon at a glance Serving customers throughout their lives …to trusted provider of retail solutions …through guidance and advice… From worksite relationship… At & after retirement Retirees looking for Situation income and wealth transfer Wealth accumulation Increasingly focusing Situation Advice and asset Primary on retirement Working life management relationships Developing career and Situation Asset management Primary starting a family Aegon’s focus Offer guaranteed income and advice relationships and solutions to manage wealth Pension administration Primary Aegon’s focus Increase customer and protection relationships engagement and provide investment solutions Aegon’s focus Grow scale in administration and selectively offer protection products
6 Aegon at a glance Transformation continues with increased focus on digitization • Established Center of Excellence to accelerate digitization Accelerate innovation • Roll-out of digital training programs to targeted groups of employees • Organized internal Hackathons resulting in potential new concept developments • Turn data into meaningful insights for our customers • Move closer to personalized and granular pricing Usage of data lakes and big data • Usage of BlockChain and AI technology allows for reduction in claims and frauds • Standardization of cloud services for global use Leverage cloud technology • Use of cloud services could save up to 90% of time to set up environment across platforms • New technologies and algorithms lead to greater customer satisfaction Enhancing customer experience and a significant uplift in converting customer leads to sales • Average saving of 10%-20% for each process supported by robotics
7 Aegon at a glance Aegon’s strategic priorities • • Offer solutions throughout the lifecycle EUR 350 million expense reduction program in US, NL and holding • Provide omni-channel distribution • Simplifying our business by digitizing • Expand guidance and advice processes and increasing capabilities self-service • Engage directly and connect digitally • Grow scale in asset management, with our customers administration and advisory services • • Allocate capital to businesses that Increase digital capabilities and create value and cash flow growth expertise to support growth • • Enhance value of backbooks Focus leadership on advocating ownership, agility and customer- • Achieve scale in New Markets centricity • Divest non-core businesses
8 Aegon at a glance Clear focus for each unit Complete transformation UK Optimize Transamerica Capture synergies EU US Achieve scale or divest EM LA Continue to grow AAM Accelerate growth Creating a balanced portfolio of businesses with predictable cash flows
9 Achievements and priorities Achievements and priorities Helping people achieve a lifetime of financial security Helping people achieve a lifetime of financial security
10 Achievements and priorities Changed company profile as a result of execution of strategy While growing our fee business Optimized value Generated average annual of backbook sales growth of 15% from Addressed 2010 to 2017 Realized material cost legacy issues savings in established Invested in digital business markets models Divested over EUR ~5 billion Significantly reduced size of non-core activities at >0.8x Created highly successful run-off portfolio P/B on average (2011-2017) asset manager Freed up capital from legacy Improved quality of our Secured distribution deals annuity businesses financial modeling and JVs with strong partners Optimized hedging of Addressed several Grew our pension customer financial market and long-dated disputes base from 6 to 11 million underwriting risks
11 Achievements and priorities On track for delivery on Optimized Portfolio commitments Optimized Portfolio Divest non-core business Enhance backbook value Optimize capital allocation ✔ ✔ ✔ • • • Divested UK annuity book Continued run-off of closed Reduced capital allocated Completed VA block to run-off businesses ✔ • Divested NL commercial ✔ ✔ • • Acquired BlackRock’s DC line non-life business Exited certain US Accident ✔ & Health portfolios business and Cofunds • Divested US pay-out ✔ • annuities and BOLI/COLI Discontinuance of Aegon business Insights’ outbound ✔ • telemarketing business Divested UMG ✔ • Divested half of remaining On track • • Operationally separated Achieve scale in emerging US life reinsurance block ✔ UK backbook from platform markets • Divested Aegon Ireland business
12 Achievements and priorities Exceeded target to reduce capital allocated to run-off businesses • Reduced IFRS capital allocated to run-off businesses by nearly USD 5 billion since 2009 • Exceeded USD 1 billion 2018 target to reduce IFRS capital allocated to run-off a year early • Effectively eliminates run-off businesses and the associated drag on return on equity Reduction in run-off businesses (Remaining capital in USD billions) 2009 5.1 2015 1Q 2017 2016 1.7 Restructured spread 2Q 2017 FHLB loans 4Q 2017 1.5 BOLI/COLI & Payout Half of remaining life annuities divested 1.3 reinsurance divested 0.5 0.4
Achievements and priorities 13 Administration of US life & annuity businesses outsourced • Retirement plans • Life • IRAs • • Annuity >10 million policies to be serviced & Service & • Advice center administered by TCS and new business • Supplemental health administration • Mutual funds going forward • Voluntary benefit • SVS • ~2,100 employees to transfer to TCS • USD 70 million of annual expense savings • Underwriting • Digitization initially, growing to USD 100 million • Product development • • Process improvement USD 280 million of transition and Strengths • Distribution network conversion charges over 3 years • Automation • Customer relationship Enhancing customer experience and delivering significant cost synergies
14 Achievements and priorities Significant shift to fee businesses Development of fee-based balances and earnings (Balances in EUR billion; underlying earnings in %) • 900 60% Strong growth in fee-based earnings; 817 percentage tripled to 45% since 2010 750 • Organic growth supplemented with 45% acquisitions to enhance growth; fee- 600 based balances more than doubled to over EUR 680 billion 413 450 30% • Main focus on fee and protection 300 businesses 15% 150 0 0% 2010 2011 2012 2013 2014 2015 2016 2017 Fee-based balances (LH) Other balances (LH) Fee-based earnings (RH)
15 Achievements and priorities Clear 5 part plan to improve US performance Maximizing the value of our business In-force management Starting with Life & Health • Monthly deduction rate increases on Universal Life in progress • New business & revenue Good progress on approvals of LTC rate increases Strategic overhaul of product • Deliver integrated worksite strategy to capture growth offerings & channel positioning 1 • Simplification of product portfolio in progress 2 Optimizing the portfolio – Announced exit of Affinity, Direct Mail and Direct TV 3 Disposition of non-core assets • Announced first phase of location rationalization with closure of 4 Los Angeles, Folsom and West Chester offices 5 Location strategy • Acceleration of expense savings program with focus on Reduced US geographical modernization, digitization and sourcing footprint Efficient organization Focused and disciplined expense management
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