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Introduction to Aegon - February 2018

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Presentation of Aegon's business, including history, markets, performance, sustainability and more.

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Introduction to Aegon - February 2018

  1. 1. Helping people achieve a lifetime of financial security An introduction to Aegon
  2. 2. 2 Aegon at a glance Key facts & figures 3 Our strategy Helping people achieve a lifetime of financial security 5 Our value chain Creating a positive impact 8 International presence Businesses in more than 20 countries 17 Americas Serving the pre- and post-retirement markets 20 Europe One of the leading brands in the financial services industry 22 Asia A key long-term growth market 27 Aegon Asset Management A global investment manager 29 An introduction to Aegon Content
  3. 3. 3Overview Aegon at a glance 6% 61% 31% 2% Focus Life insurance, pensions & asset management for over 26 million customers History Our roots date back to the first half of the 19th century Employees Over 28,000 employees (December 31, 2017) Earnings Underlying earnings before tax of € 2.1 billion (Full year2017) Investments Revenue-generating investments € 817 billion (December 31, 2017) Paid out in claims and benefits € 48.1 billion (2017) Americas Europe AAM Sales Total sales of € 16.2 billion1) (Full year 2017) Asia 1) Sales represents new life sales + accident & health premiums + general insurance premiums + 1/10 of gross deposits
  4. 4. 4Aegon at a glance For more than 170 years Customers at the heart of everything we do <1900 Aegon’s roots date back to the first half of the 19th century 1983: Joining forces Merger of Dutch insurers Ago and Ennia; Aegon established >1983 International expansion to over 20 markets in the Americas, Europe and Asia Recent history Executing our ambitious customer- centric Transform Tomorrow strategy
  5. 5. 5Our strategy Key trends are shaping our industry Our operating environment Shift away from guaranteed life products Focus on individual responsibility • Changing customer behavior in researching and purchasing products • New technology creates increased transparency • More effective and efficient ways to advise and serve mass affluent customers • Reduced social benefits and fiscal incentives • Increased awareness to save for retirement • Workplace channel increasingly important • Low interest rates combined with changing demographics • New prudential regulation and increased capital requirements • Rising demand for transparent products Increased importance digital channels
  6. 6. 6Our strategy To continue for the next 170 years and beyond A clear and steady strategy Purpose Ambition Commitment Values To help people achieve a lifetime of financial security To be a trusted partner for financial solutions at every stage of life To act responsibly and to create positive impact for all our stakeholders • Working together • Exceeding expectations • Bringing clarity Our four strategic objectives support our ambition to be a trusted partner for financial solutions at every stage of life Loyal customers Operational excellence Optimize portfolio Empowered employees
  7. 7. 7 From working life …through guidance and advice… …to trusted provider of retail solutions Our strategy To help people achieve a lifetime of financial security Living up to our purpose Protection We protect what’s important to our customers, their families, their health and their homes Accumulation We help our customers save and invest for the future At & after retirement We provide our customers with a stable income in retirement, helping to meet costs of care and securing their families’ future
  8. 8. 8 Output Benefits €48.1 billion in 2017 Salaries* €2.3 billion in salaries and additional benefits Returns* €1.17 billion total return to investors Revenues* €4.3 billion in commissions and payments for goods & services Community investment* €759 million in local taxes and community investment Stakeholders Customers Employees Investors Business partners Society Input Premiums & deposits Talent and time Capital Distribution Our value chain How we create a positive impact at every stage of our business Our value chain Asset mgt Advice & guidance To help people achieve a lifetime of financial security Protection & guarantees Product administration * Full year 2016 numbers: source Aegon 2016 Review
  9. 9. 9 Customers Sales & distribution Pay-in phase Pay-out phase • We develop products and services, and seek to build a lifelong relationship with our customers. • We price our products and services by assessing risks such as movements in financial markets, and changes in mortality and morbidity. • We offer our products directly to our customers or through brokers, banks and other intermediaries who receive a fee or commission from us or our customers. • As an insurer, we underwrite our products and services to ensure we can assess and manage risk, and meet our obligations. • Customers make deposits or pay premiums on our products, which we then invest to pay benefits when the time comes. • As the money we receive is often spread over a number of years, whereas most marketing and sales costs are immediate, these costs are included on our balance sheet and gradually reduced (amortized) over time. • Products such as pensions and annuities mature and enter a pay-out phase. • With life insurance, this happens when a claim is made. Beneficiaries receive either a lump sum or a series of regular payments over a specified period of time. Our value chain Putting the customer at the heart of everything we do Aegon’s business model
  10. 10. 10 • By ensuring that customer-centricity is part of our DNA • By being accessible online • By providing optimal products and services • Through innovative new platforms Our value chain …for our customers How we create and share value… Serving over 26million customers globally 96% of Aegon businesses offer products & services online €48.1billion paid out in policyholder claims and benefits in 2017
  11. 11. 11 • 86,000 people surveyed since 2012 - In 15 countries • ARRI assesses how well workers view their level of retirement preparedness • ARRI increased slightly from 5.8 in 2016 to 5.9 in 2017 - Still at a level that indicates that people are not doing enough to prepare for retirement Our value chain Source: The Aegon Retirement Readiness Survey Note: The ARRI ranks retirement readiness on a scale from 0 to 10. A high index score is considered to be between 8 and 10, a medium score between 6 and 7.9, and, a low score being less than 6. For more information about the ARRI please click here. Research shows that preparedness for retirement is still low Aegon Retirement Readiness Index (ARRI) 5.2 4.9 5.8 5.9 5.8 5.9 2012 2013 2014 2015 2016 2017 Aegon Retirement Readiness Index (Global score by year)
  12. 12. 12 • By providing worthwhile employment • By embracing diversity • By enabling professional development • By helping colleagues with their own financial futures Our value chain …for our employees How we create and share value… 97%of our workforce take part in standardized performance appraisals1) Over €600per employee spent on training in 2016 23,353hours granted to employees for volunteer activities in 2016 Source: Aegon 2016 Review 1) Senior management – 97%; middle management – 97%; other grades – 100%
  13. 13. 13 • Through shareholder engagement • By returning capital to our shareholders • By addressing underperformance • By developing long-term value Our value chain …for our investors How we create and share value €24.4 billion Total capitalization at the end of fourth quarter 2017 AA-financial strength rating by Standard & Poor’s International shareholder base; traded in Amsterdam & New York
  14. 14. 14 • Through our joint ventures and strategic partners • Through customer insight • With our distribution partners • Through our investments in start-ups Our value chain …for our business partners How we create and share value… Strong & complementary joint venture partners “Omni-channel” approach towards our customers Investments in 18unique start-ups by our dedicated investment fund Transamerica Ventures at June 30, 2017
  15. 15. 15 • By supporting local communities - Providing support through community investments to vulnerable people • By encouraging our employees to add value via volunteer work • By our sport sponsorships - We are promoting a healthy lifestyle Our value chain …in our local communities How we create and share value… 95%of our businesses offer inclusive insurance products €8.8million donations made to charities and other good causes in 2016 €1.03million is value of voluntary work undertaken by our employees in 2016
  16. 16. 16Our value chain In brief How we create and share value 4,800 1,600 119 309 14.4 213 43.3 106 57.4 Affordable housing International dev. banks Green bonds Renewable energy Sustainable timber Care homes elderly Micro-finance Social Green RMBS €7.2 billion impact investments EUR millions, 2016 49% 20% 10% 15% 6% Americas NL UK Rest of Europe Rest of the world Our shareholder base February 2018 In 2016, the value of voluntary work undertaken by employees was EUR 1.03 million 6.3 6.1 8.6 8.8 2013 2014 2015 2016 Supporting our local communities EUR millions
  17. 17. 17 Aegon’s international presence International presence
  18. 18. 18International presence In more than 20 countries A strong international presence Aegon businesses or Aegon Insights Joint ventures
  19. 19. 19International presence Our global reporting structure United Kingdom & Ireland  Life  Pensions Europe Spain & Portugal  Strategic partnerships with Banco Santander and Liberbank (Spain) The Netherlands  Life & Savings  Pensions  Non-life  Distribution Central & Eastern Europe  Czech Republic  Hungary  Poland  Romania  Slovakia  Turkey Americas United States  Life  Accident & health  Retirement plans  Mutual funds  Variable annuities  Fixed annuities  Stable Value Solutions Latin America  Strategic partnerships (Brazil, Mexico) Aegon Asset Management  Americas  Netherlands  United Kingdom  Rest of the world  Strategic partnerships (China, France) Asia  In Hong Kong and Singapore: high net worth businesses  Aegon Insights  Strategic partnerships (China, India & Japan)
  20. 20. 20Americas 1) Sales represents new life sales + accident & health premiums + general insurance premiums + 1/10 of gross deposits A few key indicators The Americas at a glance 251 284 31554 410 145 99 1 Life Accident & health Retirement plans Mutual funds Variable annuities Fixed annuities Stable Value Solutions Latin America $ 1.6 billion Full year 2017 5.8 6 5.7 2015 2016 2017 $ 5.7 billion Full year 2017 $ 467 billion December 31, 2017 Underlying earnings before tax By line of business Sales1) Revenue-generating investments
  21. 21. 21Americas Transamerica is Aegon’s main brand in the US The Americas at a glance Operations in the United States, Brazil & Mexico In the US, among the top 10 largest providers of variable annuities, universal life and term life Almost 11,000 employees December 31, 2017 Diverse & targeted distribution to better align with its 13 million customers in the US1) Primary sponsor of US professional golfer Zach Johnson 1) Source 2016 Review
  22. 22. 22Europe A few key indicators Europe at a glance 1) Sales represents new life sales + accident & health premiums + general insurance premiums + 1/10 of gross deposits 391236 64 17 Life Pensions Non-life Other € 707 million Full year 2017 1.6 1.7 4.9 2015 2016 2017 € 4.9 billion Full year 2017 € 277 billion December 31, 2017 Underlying earnings before tax By line of business Sales1) Revenue-generating investments
  23. 23. 23Europe One of the leading brands in the Dutch financial sector Europe at a glance Primary sponsor of Dutch Rowing Association Headquartered in The Hague; offices in Leeuwarden and Groningen Over 3,000 employees December 31, 2017 In the Netherlands, Aegon is the #2 provider of group pensions and the #5 in individual life Using a variety of distribution channels to help customers access products and services as best suits their needs
  24. 24. 24Europe Aegon UK enables customers to create the tomorrow they want Europe at a glance Aegon UK’s main offices are in Edinburgh and London Approximately 3,400 employees December 31, 2017 In the UK, Aegon focuses on retirement, workplace savings and protection Leading position for award-winning retirement platform with GBP 117 billion1) in assets under administration Various partnerships with organizations that make a social impact, such as the Breakfast Club & Princes’ Trust 1) December 31, 2017
  25. 25. 25Europe Growth potential in Central & Eastern Europe Europe at a glance Present in Czech Republic, Hungary, Poland, Romania, Slovakia & Turkey Over 2,300 employees December 31, 2017 #1 In household insurance in Hungary Successful Aegon Direct portal for non- life in Hungary Aegon Czech Republic is sponsor of ice speed skater Martina Sáblíková
  26. 26. 26Europe Spain & Portugal – key markets with strong partnerships Europe at a glance Over 600 employees December 31, 2017 In Spain, Aegon has established a reputation as a preferred provider of protection products Online distribution is increasingly important in order to connect with customers in Spain & Portugal Distribution through strong partnerships with banks: Banco Santander & Liberbank
  27. 27. 27Asia A few key indicators Asia at a glance 1) Sales represents new life sales + accident & health premiums + general insurance premiums + 1/10 of gross deposits 67 10 -21 High net worth businesses Aegon Insights Strategic partnerships $ 55 million Full year 2017 269 194 209 2015 2016 2017 $ 209 million Full year 2017 $ 9.7 billion December 31, 2017 Underlying earnings before tax By line of business Sales1) Revenue-generating investments
  28. 28. 28Asia A key long-term growth market for Aegon Asia at a glance Active with TLB, Aegon Insights, and joint ventures in China, India, Japan, serving more than 650,000 customers in 20161) Approximately 1,500 employees December 31, 2017 (Excluding agents) Leading position in India with online insurance Aegon’s digital business GoBear, Asia's only impartial metasearch engine for financial products, is one of Asia's fastest-growing fintech startups Aegon’s regional office in Hong Kong oversees and supports operations throughout the region 1) Source 2016 Review
  29. 29. 29Aegon Asset Management A few key indicators Aegon Asset Management at a glance 59 1516 -7 53 Americas Netherlands UK Rest of the world Strategic partnerships € 136 million Full year 2017 3.4 4.6 6.1 2015 2016 2017 € 6.1 billion Full year 2016 € 318 billion December 31, 2017 Underlying earnings before tax By line of business Sales1) Assets under management
  30. 30. 30Aegon Asset Management A global investment manager for institutional, wholesale and retail clients Aegon Asset Management at a glance Businesses and partnerships in US, the Netherlands, UK, France, Central & Eastern Europe and Asia Approximately 250 dedicated investment professionals worldwide December 31, 2017 A robust investment performance track record underlined by numerous industry awards, including various Morningstar awards Global platform of solutions & strategies, including fixed income, equities, real estate and multi asset solutions Operating under five brands catering for distinctive customer value propositions
  31. 31. 31Appendix – Management Board Note: Executive Board consists of CEO and CFO. Aegon’s Management Board Alex Wynaendts CEO Matt Rider CFO Allegra van Hövell-Patrizi CRO Mark Mullin CEO Americas Marco Keim CEO Continental Europe Adrian Grace CEO UK Sarah Russell CEO Asset Management Mark Bloom CTO Carla Mahieu Global Head HR Onno van Klinken General Counsel
  32. 32. 32Appendix – strategy support Conduct research, educate the public and lead a global dialogue on retirement security Committed to financial education Publication of original research regarding: retirement, longevity, population aging, healthcare coverage and health & wellness Established centers for longevity and retirement in the Netherlands, the US and Brazil The Centers for longevity and retirement are a collaboration of experts from Aegon’s businesses in Europe, the Americas and Asia Partnering up Building relationships with respected partners in the field of longevity, retirement and health International presence Leveraging expertiseResearch publication Helping people achieve a lifetime of financial security

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