Aegon reports fourth quarter 2021 results

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The Hague, February 9, 2022 - Solid progress against strategic and financial objectives

Net result doubles compared with the fourth quarter of 2020 to EUR 526 million. Full-year 2021 net result of EUR 1,701 million, compared with EUR 55 million in 2020
Operating result decreases by 2% compared with the fourth quarter of 2020 to EUR 470 million, as adverse claims experience in the US and exceptional expenses more than offset increased fees from higher equity markets and the positive contribution from business growth. Full-year 2021 operating result of EUR 1,906 million, an increase of 11% from EUR 1,710 million in 2020
Cash Capital at Holding increases from EUR 961 million to EUR 1,279 million, mainly from EUR 417 million of free cash flow. Full-year free cash flow increases from EUR 530 million in 2020 to EUR 729 million in 2021
The capital ratios of all three main units remain above their respective operating levels; Group Solvency II ratio increases to 211%, reflecting the benefit from reinsuring part of the longevity exposure in the Netherlands
Proposed final 2021 dividend of EUR 0.09 per common share, which brings the full-year dividend to EUR 0.17 per common share or EUR 348 million

Statement of Lard Friese, CEO“Our fourth quarter 2021 results demonstrate our progress in achieving our financial and strategic objectives. Our operating result for the quarter decreased only slightly – despite adverse claims experience mainly due to COVID-19 – as it was supported by increased fees from higher equity markets and a positive contribution from business growth. We continued to invest in the expansion of our distribution network, while simultaneously improving the digital experience for customers, advisers, and employers. This resulted in solid growth in our US Life business, record-high asset balances in our Dutch mortgage and defined contribution businesses, and UK platform net deposits turning positive. In Asset Management, we recorded our tenth consecutive year of positive third-party net deposits. However, there is still more work to be done, for example, in attracting more customers to our US Retirement Plan business.

In the fourth quarter, we again released capital on attractive terms through the extension of the lump-sum buy-out program for certain variable annuities in the United States and the reinsurance of longevity risk in the Netherlands. We have also continued to improve our risk profile through a series of actions – including a reinsurance agreement – designed to reduce the volatility of mortality claims on a block of universal life policies in the United States.

Following our announced commitment to net-zero carbon emissions for our general account investment portfolio, we updated our exclusion criteria in early 2022 to further align our investments with this commitment. We will continue to do this regularly to further reflect the latest scientific findings on climate change in our investment approach.

The measures that we have taken to improve our operational performance and reduce our risk profile, together with support from favorable markets, resulted in free cash flow coming in well ahead of our earlier guidance. The sustainable growth in free cash flow allows us to grow our dividend. We will propose a final dividend for 2021 of 9 eurocents per common share at our 2022 Annual General Meeting, bringing the full-year dividend to 17 eurocents per common share.

I want to thank our employees who throughout 2021 have worked hard progressing towards our goals. Looking ahead to 2022, we will continue to make progress on delivering on our strategic objectives and our 2023 financial targets. We will continue the rigorous execution of our performance improvement plan and remain on track to reach our target of EUR 400 million expense savings by 2023, building on the EUR 244 million achieved so far. The actions we have taken to improve our performance provide us with confidence that we will deliver around EUR 1.2 billion operating capital generation from our units in 2022, barring unforeseen circumstances. These actions allow us to increase our expectation for 2022 free cash flow by EUR 100 million to EUR 550 to 600 million. Finally, we expect more linear growth in our dividend in 2022 versus the muted near-term growth outlook provided at the Capital Markets Day. This shows that we are on the right path to our 2023 target of around 25 eurocents dividend per share.”

Note: All comparisons in this release are against 4Q 2020, unless stated otherwise. See page 8 of the full press release for key performance indicators.

Media relations	Investor relations	Conference call including Q&A (9:00 a.m. CET)
Dick Schiethart	Jan Willem Weidema	Audio webcast on aegon.com
+31 (0) 70 344 8821gcc@aegon.com	+31 (0) 70 344 8028ir@aegon.com	United States: +1 720 452 7989United Kingdom: +44 330 336 9601The Netherlands: +31 20 703 8218
		Passcode: 3665580

Additional information

PresentationThe conference call presentation is available on aegon.com as of 7.30 a.m. CET.

SupplementsAegon’s 4Q 2021 Financial Supplement and other supplementary documents are available on aegon.com.

Conference call including Q&A

The conference call starts at 9:00 a.m. CET, with an audio webcast on aegon.com. Two hours after the conference call, a replay will be available on aegon.com.

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Dial-in numbers for conference callUnited States: +1 720 452 7989United Kingdom: +44 (0)330 336 9601The Netherlands: +31 (0) 20 703 8218

Passcode: 3665580

Financial calendar 2022First quarter 2022 results – May 12Annual General Meeting – May 31Ex-dividend date final dividend 2021 – June 2Publication stock fraction final dividend 2021 – June 29Payment date final dividend 2021 – July 6 Second quarter 2022 results – August 11Ex-dividend date interim dividend 2022 – August 23Payment date interim dividend 2022 – September 21Third quarter 2022 results – November 10

About Aegon

Aegon is an integrated, diversified, international financial services group. The company offers investment, protection, and retirement solutions, with a strategic focus on three core markets (the United States, the United Kingdom, and the Netherlands), three growth markets (Spain & Portugal, Brazil, and China), and one global asset manager.

Aegon's purpose of Helping people live their best lives runs through all its activities. As a leading global investor and employer, the company seeks to have a positive impact by addressing critical environmental and societal issues, with a focus on climate change and inclusion & diversity.

Aegon is headquartered in The Hague, the Netherlands, and listed on Euronext Amsterdam and the New York Stock Exchange. More information can be found at aegon.com.

Cautionary note regarding non-IFRS-EU measuresThis document includes the following non-IFRS-EU financial measures: operating result, income tax, result before tax, market consistent value of new business, return on equity and addressable expenses. These non-IFRS-EU measures, except for addressable expenses, are calculated by consolidating on a proportionate basis Aegon’s joint ventures and associated companies. The reconciliation of these measures, except for market consistent value of new business and return on equity, to the most comparable IFRS-EU measure is provided in the notes to this press release. Market consistent value of new business is not based on IFRS-EU, which are used to report Aegon’s primary financial statements and should not be viewed as a substitute for IFRS-EU financial measures. Aegon may define and calculate market consistent value of new business differently than other companies. Return on equity is a ratio using a non-IFRS-EU measure and is calculated by dividing the operating result after tax less cost of leverage by the average shareholders’ equity excluding the revaluation reserve. Operating expenses are all expenses associated with selling and administrative activities (excluding commissions) after reallocation of claim handling expenses to benefits paid. This includes certain expenses recorded in other charges, including restructuring charges. Addressable expenses are expenses reflected in the operating result, excluding deferrable acquisition expenses, expenses in joint ventures and associates and expenses related to operations in CEE countries. Aegon believes that these non-IFRS-EU measures, together with the IFRS-EU information, provide meaningful supplemental information about the operating results of Aegon’s business including insight into the financial measures that senior management uses in managing the business.

Local currencies and constant currency exchange ratesThis document contains certain information about Aegon’s results, financial condition and revenue generating investments presented in USD for the Americas and in GBP for the United Kingdom, because those businesses operate and are managed primarily in those currencies. Certain comparative information presented on a constant currency basis eliminates the effects of changes in currency exchange rates. None of this information is a substitute for or superior to financial information about Aegon presented in EUR, which is the currency of Aegon’s primary financial statements.

Forward-looking statementsThe statements contained in this document that are not historical facts are forward-looking statements as defined in the US Private Securities Litigation Reform Act of 1995. The following are words that identify such forward-looking statements: aim, believe, estimate, target, intend, may, expect, anticipate, predict, project, counting on, plan, continue, want, forecast, goal, should, would, could, is confident, will, and similar expressions as they relate to Aegon. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Aegon undertakes no obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which merely reflect company expectations at the time of writing. Actual results may differ materially from expectations conveyed in forward-looking statements due to changes caused by various risks and uncertainties. Such risks and uncertainties include but are not limited to the following:

Changes in general economic and/or governmental conditions, particularly in the United States, the Netherlands and the United Kingdom;
Changes in the performance of financial markets, including emerging markets, such as with regard to:
- The frequency and severity of defaults by issuers in Aegon’s fixed income investment portfolios;
- The effects of corporate bankruptcies and/or accounting restatements on the financial markets and the resulting decline in the value of equity and debt securities Aegon holds; and
- The effects of declining creditworthiness of certain public sector securities and the resulting decline in the value of government exposure that Aegon holds;
Changes in the performance of Aegon’s investment portfolio and decline in ratings of Aegon’s counterparties;
Lowering of one or more of Aegon’s debt ratings issued by recognized rating organizations and the adverse impact such action may have on Aegon’s ability to raise capital and on its liquidity and financial condition;
Lowering of one or more of insurer financial strength ratings of Aegon’s insurance subsidiaries and the adverse impact such action may have on the written premium, policy retention, profitability and liquidity of its insurance subsidiaries;
The effect of the European Union’s Solvency II requirements and other regulations in other jurisdictions affecting the capital Aegon is required to maintain;
Changes affecting interest rate levels and continuing low or rapidly changing interest rate levels;
Changes affecting currency exchange rates, in particular the EUR/USD and EUR/GBP exchange rates;
Changes in the availability of, and costs associated with, liquidity sources such as bank and capital markets funding, as well as conditions in the credit markets in general such as changes in borrower and counterparty creditworthiness;
Increasing levels of competition in the United States, the Netherlands, the United Kingdom and emerging markets;
Catastrophic events, either manmade or by nature, including by way of example acts of God, acts of terrorism, acts of war and pandemics, could result in material losses and significantly interrupt Aegon’s business;
The frequency and severity of insured loss events;
Changes affecting longevity, mortality, morbidity, persistence and other factors that may impact the profitability of Aegon’s insurance products;
Aegon’s projected results are highly sensitive to complex mathematical models of financial markets, mortality, longevity, and other dynamic systems subject to shocks and unpredictable volatility. Should assumptions to these models later prove incorrect, or should errors in those models escape the controls in place to detect them, future performance will vary from projected results;
Reinsurers to whom Aegon has ceded significant underwriting risks may fail to meet their obligations;
Changes in customer behavior and public opinion in general related to, among other things, the type of products Aegon sells, including legal, regulatory or commercial necessity to meet changing customer expectations;
Customer responsiveness to both new products and distribution channels;
As Aegon’s operations support complex transactions and are highly dependent on the proper functioning of information technology, operational risks such as system disruptions or failures, security or data privacy breaches, cyberattacks, human error, failure to safeguard personally identifiable information, changes in operational practices or inadequate controls including with respect to third parties with which we do business may disrupt Aegon’s business, damage its reputation and adversely affect its results of operations, financial condition and cash flows;
The impact of acquisitions and divestitures, restructurings, product withdrawals and other unusual items, including Aegon’s ability to integrate acquisitions and to obtain the anticipated results and synergies from acquisitions;
Aegon’s failure to achieve anticipated levels of earnings or operational efficiencies, as well as other management initiatives related to cost savings, cash capital at Holding, gross financial leverage and free cash flow;
Changes in the policies of central banks and/or governments;
Litigation or regulatory action that could require Aegon to pay significant damages or change the way Aegon does business;
Competitive, legal, regulatory, or tax changes that affect profitability, the distribution cost of or demand for Aegon’s products;
Consequences of an actual or potential break-up of the European monetary union in whole or in part, or the exit of the United Kingdom from the European Union and potential consequences if other European Union countries leave the European Union;
Changes in laws and regulations, particularly those affecting Aegon’s operations’ ability to hire and retain key personnel, taxation of Aegon companies, the products Aegon sells, and the attractiveness of certain products to its consumers;
Regulatory changes relating to the pensions, investment, and insurance industries in the jurisdictions in which Aegon operates;
Standard setting initiatives of supranational standard setting bodies such as the Financial Stability Board and the International Association of Insurance Supervisors or changes to such standards that may have an impact on regional (such as EU), national or US federal or state level financial regulation or the application thereof to Aegon, including the designation of Aegon by the Financial Stability Board as a Global Systemically Important Insurer (G-SII); and
Changes in accounting regulations and policies or a change by Aegon in applying such regulations and policies, voluntarily or otherwise, which may affect Aegon’s reported results, shareholders’ equity or regulatory capital adequacy levels.

This document contains information that qualifies, or may qualify, as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation (596/2014). Further details of potential risks and uncertainties affecting Aegon are described in its filings with the Netherlands Authority for the Financial Markets and the US Securities and Exchange Commission, including the Annual Report. These forward-looking statements speak only as of the date of this document. Except as required by any applicable law or regulation, Aegon expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Aegon’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

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