THE HAGUE, February 25, 2010 /PRNewswire-FirstCall/ -- - Strong
Increase in Underlying Earnings and Net Income - Underlying
Earnings Before Tax of EUR 427 Million - Net Income of EUR 393
Million, due to Improved Earnings, Realized Gains on Investments
and Lower Impairments - Impairments of EUR 209 million, the Lowest
Level in Six Quarters - Cost Reduction Measures of EUR 250 Million
Realized in 2009, Exceeding Target of EUR 150 Million - Robust
sales demonstrating solid franchise - New Life Sales of EUR 549
Million, Driven by Strong Sales in Most Businesses - Net Deposits,
Excluding Institutional Guaranteed Products, of EUR 1.5 Billion,
due to Strong Sales of Pensions and Retail Mutual Funds -
Profitable Sales With Value of New Business of EUR 216 Million and
an Internal Rate of Return of 17.6% - Continued Strong Capital
Position - EUR 0.8 Billion in Capital Freed-Up in Q4, Totaling EUR
3.3 Billion in 2009 - Excess Capital of EUR 3.7 Billion by end
December - Insurance Group Directive a) Capital Surplus of EUR 6.7
Billion, Equivalent to Solvency Ratio of 204% - No Dividend on
Common Shares Statement of Alex Wynaendts, CEO "Clearly, the steps
we have taken over the past year have delivered solid results - a
return to profit, reduced expenses, and continued customer
confidence, resulting in increased sales in all country units.
AEGON today is in a stronger financial position, which enabled us
to repay one-third of the capital we obtained from the Dutch
government. Given the uncertain environment, we believe that it
continues to be prudent to maintain a substantial capital buffer,
as reflected in our strong capital position. Although impairments
improved during the quarter, they remained at elevated levels for
the year, which led to lower cash flows from our operating units.
Consequently, AEGON will not declare a dividend to common
shareholders. Looking ahead, we are confident that our strategy
will continue to reinforce AEGON's strong position in the gradually
improving economic environment." KEY PERFORMANCE INDICATORS amounts
in EUR Notes Q4 Q3 % Q4 2008 % FY 2009 FY 2008 % millions 2009 2009
Underlying earnings before tax 1 427 351 22 (181) - 1,160 1,573
(26) Net income 2 393 145 171 (1,182) - 204 (1,082) - New life
sales 3 549 484 13 598 (8) 2,045 2,631 (22) Gross deposits
excluding Institutional Guaranteed Products 4 5,932 5,978 (1) 5,970
(1) 23,628 22,371 6 Value of new business (VNB) 216 169 28 233 (7)
767 837 (8) Return on equity 5 8.9% 8.4% 6 (8.7%) - 5.9% 6.6% (11)
For footnotes see page 23. Supplements: AEGON's Q4 2009 Financial
Supplement and Condensed Consolidated Interim Financial Statements
are available on http://www.aegon.com/ STRATEGIC HIGHLIGHTS AEGON
continued to deliver on its strategic priorities: - To reallocate
capital toward business with higher growth and return prospects -
To improve growth and returns from existing businesses - To reduce
financial markets risk - To manage AEGON as an international
company. Portfolio review AEGON continues to assess its businesses
to ensure they meet requirements in terms of earnings growth, cash
flow and return on capital. As part of this review, AEGON sold its
funeral insurance business in the Netherlands in January 2010 for
EUR 212 million. The sale will have a positive effect on AEGON's
excess capital position and is expected to result in a modest book
gain in the first half of 2010. Cost measures During 2009, AEGON
realized cost reduction measures of EUR 250 million, significantly
above the company's target for the year of EUR 150 million.
Excluding the impact of restructuring charges, increased employee
benefit expenses in the United States and currency movements,
operating costs decreased in 2009 by 5% on a comparable basis.
AEGON's total workforce, excluding agent employees, declined by 7%
during the year to just over 25,000 employees. The decline was due
mainly to restructuring in the United States and the United
Kingdom, as well as the sale of real estate brokerage activities in
the Netherlands and the sale of the company's life insurance
operations in Taiwan. Capital & risk management Capital
preservation During the fourth quarter of 2009, a further EUR 0.8
billion of capital was released from AEGON's businesses, bringing
the total for 2009 as a whole to EUR 3.3 billion. Excess capital -
Excess capital above S&P AA capital adequacy requirements
amounted to EUR 3.7 billion at the end of the fourth quarter 2009,
down from EUR 4.8 billion at the end of third quarter of 2009. The
decline was due primarily to repayment of one-third of the EUR 3
billion in core capital provided by the Dutch State at the end of
2008. The repayment, including interest and premium for repayment,
totaled EUR 1.15 billion. - De-risking and capital efficiency
measures added EUR 0.8 billion to excess capital but were offset by
other items, mainly related to higher regulatory and rating agency
capital requirements for longevity and default provisioning.
Statutory earnings of EUR 0.3 billion were partly offset by
impairments of EUR 0.2 billion. - Under current uncertain
circumstances, AEGON aims to maintain a substantial capital buffer.
Core capital - At year-end 2009, core capital, excluding the
revaluation reserves, amounted to EUR 15.9 billion or 75% of the
total capital base, well above AEGON's self-imposed minimum target
of 70%6,7. - Core capital, including the revaluation reserves,
totaled EUR 14.2 billion, comprising EUR 12.2 billion in
shareholders' equity and a further EUR 2 billion in convertible
core capital securities. - Shareholders' equity per common share of
EUR 5.88. - The revaluation reserves amounted to a negative EUR 1.7
billion, a marginal improvement from the third quarter of 2009 as
the positive effects of tightening credit spreads were almost
entirely offset by the impact of rising risk-free interest rates
and realized gains. - At the end of December 31, 2009, the
Insurance Group Directive (IGD) capital surplus totaled EUR 6.7
billion, equivalent to a solvency ratio of 204%. Improved risk
profile As announced in February last year, AEGON is running off
its institutional spread-based business in the United States. The
run-off will significantly reduce AEGON's exposure to credit risk
and help lessen overall sensitivity to fluctuations in financial
markets. During the course of 2009, as planned, account balances of
this business were reduced by USD 11.5 billion to USD 21.3 billion.
During 2010, these balances are expected to be reduced by a further
USD 8.5 billion. In order to fund these outflows, assets from the
institutional spread-based business have been transferred
internally to other businesses in the United States in exchange for
cash. As a result, the institutional spread-based business realized
a negative spread on these assets which adversely impacted
underlying earnings. Dividend AEGON's dividend policy remains
unchanged and is based on its capital position and cash flows.
Although the capital position is strong, cash flows were impacted
by higher than average impairments in 2009. Therefore, AEGON will
not declare a dividend to common shareholders over the fiscal year
2009. Manage AEGON as an international company At the end of the
fourth quarter, AEGON launched a variable annuity product in the
Netherlands, part of a broader effort to use existing knowledge and
expertise in the United States to expand the company's variable
annuities business in Europe and Japan. Currently, variable annuity
products are being sold in the United Kingdom, the Netherlands and
France. In addition, toward the end of 2009, AEGON's joint venture
with Sony Life launched its first variable annuity product in the
Japanese market. The product is beingdistributed through Sony
Life's Lifeplanner channel and several banks, including megabank
Sumitomo Mitsui Banking Corp. Sales will be reported starting in
the first quarter of 2010. New reporting structure From the first
quarter of 2010, AEGON will adjust its segment reporting structure
to reflect recent structural changes in its organization.
Comparable full year 2008 and quarterly 2009 numbers will be
published on April 12, 2010. The day after, on April 13, AEGON will
host a meeting in London to provide a further explanation to
analysts and investors. FINANCIAL HIGHLIGHTS FINANCIAL OVERVIEW EUR
millions Q4 Q3 % Q4 2008 % FY 2009 FY 2008 % 2009 2009 Underlying
earnings before tax by line of business Life and protection 267 280
(5) 121 121 1,052 911 15 Individual savings and retirement products
78 79 (1) (433) - (94) (146) 36 Pensions and asset management 105
29 - 179 (41) 259 508 (49) Institutional products (5) 5 - 100 - 118
405 (71) Life reinsurance 16 15 7 (114) - 21 (63) - Distribution
(9) (1) - (19) 53 (3) 1 - General insurance 18 7 157 (3) - 36 45
(20) Interest charges and other (48) (69) 30 (17) (182) (252) (112)
(125) Share in net results of associates 5 6 (17) 5 - 23 24 (4)
Underlying earnings before tax 427 351 22 (181) - 1,160 1,573 (26)
Over/(under) performance of fair value items (174) (58) (200) (770)
77 (460) (1,619) 72 Operating earnings before tax 253 293 (14)
(951) - 700 (46) - Operating earnings before tax by line of
business Life and protection 250 289 (13) 104 140 988 795 24
Individual savings and retirement products (36) (61) 41 (902) 96
(315) (922) 66 Pensions and asset management 79 69 14 224 (65) 48
251 (81) Institutional products (20) 37 - (54) 63 161 8 - Life
reinsurance 40 43 (7) (319) - 203 (361) - Distribution (9) (1) -
(19) 53 (3) 1 - General insurance 18 7 157 (3) - 36 45 (20)
Interest charges and other (74) (96) 23 13 - (441) 113 - Share in
net results of associates 5 6 (17) 5 - 23 24 (4) Operating earnings
before tax 253 293 (14) (951) - 700 (46) - Gains/(losses) on
investments 324 (100) - 136 138 432 35 - Impairment charges (209)
(285) 27 (501) 58 (1,273) (1,038) (23) Other income/(charges) 5 48
(90) 38 (87) (323) (12) - Income before tax 373 (44) - (1,278) -
(464) (1,061) 56 Income tax 20 189 (89) 96 (79) 668 (21) - Net
income 393 145 171 (1,182) - 204 (1,082) - Net underlying earnings
373 309 21 (69) - 1,025 1,234 (17) Net operating earnings 278 272 2
(623) - 718 69 - Underlying earnings geographically Americas 304
289 5 (234) - 805 1,073 (25) The Netherlands 95 102 (7) 75 27 398
378 5 United Kingdom 34 (13) - 13 162 48 141 (66) Other countries
42 42 - (17) - 161 93 73 Holding and other (48) (69) 30 (18) (167)
(252) (112) (125) Underlying earnings before tax 427 351 22 (181) -
1,160 1,573 (26) Operating earnings geographically Americas 201 213
(6) (1,167) - 775 (587) - The Netherlands 52 141 (63) 227 (77) 151
213 (29) United Kingdom 34 (6) - (6) - 54 122 (56) Other countries
40 41 (2) (17) - 161 93 73 Holding and other (74) (96) 23 12 -
(441) 113 - Operating earnings before tax 253 293 (14) (951) - 700
(46) - Commissions and expenses 1,388 1,473 (6) 1,863 (25) 5,983
6,109 (2) of which operating expenses 830 776 7 928 (11) 3,262
3,272 - OPERATIONAL HIGHLIGHTS Underlying earnings before tax
AEGON's underlying earnings before tax amounted to EUR 427 million
for the fourth quarter. Financial markets had a positive effect
particularly compared with the same quarter last year, when the
company's earnings were severely impacted by the turmoil in world
financial markets. In the Americas, underlying earnings totaled USD
446 million compared with a loss of USD 412 million a year earlier.
The improvement was due mainly to the recovery in financial
markets, which had a positive effect on both technical results and
fee income. These more than offset lower investment income as a
result of increased cash balances in relation to the run-off of
AEGON's institutional spread-based business in the United States.
Underlying earnings in the Netherlands increased to EUR 95 million,
up from EUR 75 million in the fourth quarter last year. This
increase was mainly the result of improved technical results
including several provision releases. Investment income was lower,
primarily because the fourth quarter of 2008 included substantial
non-recurring dividend income. In the United Kingdom, underlying
earnings amounted to GBP 30 million, a sharp increase from the
fourth quarter of 2008, as significantly higher fee income from
improved equity and bond markets offset lower earnings from life
and protection and losses from distribution companies. Underlying
earnings from Other Countries totaled EUR 42 million in the fourth
quarter, driven mainly by further growth in Central & Eastern
Europe and Spain. Earnings for the same quarter last year included
a sizeable one-time charge in Taiwan. AEGON's Taiwanese life
insurance operations were sold during 2009 and its results are no
longer included in the company's income statements. Excluding
Taiwan, underlying earnings before tax increased 24%. Expenses for
the holding company amounted to EUR 48 million in the fourth
quarter of 2009, compared with EUR 17 million last year, primarily
a result of higher funding costs. Fair value items Fair value items
include the over- or underperformance on certain assets held at
fair value through profit or loss. In the fourth quarter, these
showed an underperformance of EUR 174 million, a significant
improvement compared with an underperformance of EUR 770 million in
the fourth quarter of 2008. In the Americas, the underperformance
of EUR 103 million was primarily attributable to losses on a macro
equity hedge and negative revaluation of real estate related
assets. Underperformance of fair value items in the Netherlands of
EUR 43 million was due mainly to the impact of movements in the
fair value of guarantees and related hedges. In addition, the
further narrowing of AEGON's own credit spread resulted in a loss
of EUR 26 million for the holding company. Gains on investments
Gains on investments amounted to EUR 324 million in the fourth
quarter, a result primarily of trading in AEGON's bond portfolios.
In the Netherlands, investment gains were mainly the result of
adjustments in the bond portfolio, in part driven by asset and
liability management. Impairment charges Impairment charges
decreased sharply compared with the fourth quarter of 2008 to EUR
209 million, the lowest level in six quarters, though they remained
above AEGON's long-term average expectations. Impairments on US
housing related assets totaled EUR 92 million, while the remainder
was related mostly to hybrid securities issued by Irish and UK
banks. Income tax Income tax in the fourth quarter amounted to EUR
20 million and included a tax benefit of EUR 20 million related to
cross border intercompany reinsurance transactions between Ireland
and the United States. Tax gains related to these internal
transactions totaled EUR 419 million in 2009, and are a partial
reversal of the EUR 490 million in tax charges incurred during
2008. Net income AEGON's net income increased to EUR 393 million
compared with a loss in the fourth quarter of 2008. The improvement
was the result of higher underlying earnings, as well as a
significant improvement in the performance of fair value items,
gains on investments, a sharp decline in the level of impairments
and taxes. Commissions & expenses Total commissions and
expenses declined by 25% compared with Q4 2008 to EUR 1.4 billion,
a result primarily of accelerated amortization of deferred policy
acquisition costs in the Americas in the fourth quarter of 2008
related to last year's lower equity markets. Operating expenses
decreased by 11% to EUR 830 million as a result of significant cost
savings and weakening of the US dollar. SALES EUR millions Q4 2009
Q3 2009 % Q4 % FY 2009 FY % 2008 2008 New life sales Life single
premiums 2,161 1,732 25 2,327 (7) 7,422 10,532 (30) Life recurring
premiums annualized 333 311 7 366 (9) 1,303 1,578 (17) Total
recurring plus 1/10 single 549 484 13 598 (8) 2,045 2,631 (22) New
premium production accident and health insurance 126 125 1 161 (22)
561 614 (9) New premium production general insurance 21 12 75 17 24
56 68 (18) Gross deposits (on and off balance) by line of business
Fixed annuities 387 434 (11) 1,676 (77) 3,377 4,057 (17) Variable
annuities 699 693 1 590 18 3,055 2,636 16 Saving deposits 1,017 978
4 590 72 3,032 2,473 23 Retail mutual funds 855 949 (10) 501 71
3,117 2,698 16 Pensions and asset management 2,973 2,924 2 2,613 14
11,045 10,505 5 Institutional guaranteed products 598 764 (22)
5,963 (90) 4,325 18,380 (76) Life reinsurance 1 - - - - 2 2 - Total
gross deposits 6,530 6,742 (3) 11,933 (45) 27,953 40,751 (31) Total
gross deposits excl. institutional guaranteed products 5,932 5,978
(1) 5,970 (1) 23,628 22,371 6 Net deposits (on and off balance) by
line of business Fixed annuities (226) (225) - 593 - 382 71 -
Variable annuities 12 149 (92) (114) - 651 (441) - Saving deposits
454 440 3 (535) - 870 (699) - Retail mutual funds 304 255 19 (182)
- 484 590 (18) Pensions and asset management 997 1,373 (27) 257 -
3,122 1,769 76 Institutional guaranteed products (7,153) (3,473)
(106) 1,679 - (14,412) 2,185 - Life reinsurance (11) (12) 8 (19) 42
(51) (61) 16 Total net deposits (5,623) (1,493) - 1,679 - (8,954)
3,414 - Total net deposits excl. institutional guaranteed products
1,530 1,980 (23) - - 5,458 1,229 - REVENUE GENERATING INVESTMENTS
Dec. 31, Sept. 30, 2009 2009 % Revenue generating investments
(total) 361,018 354,033 2 Investments general account 134,205
132,617 1 Investments for account of policyholders 125,845 119,647
5 Off balance sheet investments third parties 100,968 101,769 (1)
New life sales New life sales totaled EUR 549 million, up 13%
compared with the third quarter. Most businesses reported increased
sales for the quarter. In the Netherlands and the United Kingdom,
sales increased primarily as a result of a rise in demand for
AEGON's pension products. In Spain and Asia, sales increased as
AEGON's businesses continued to expand, while in Central &
Eastern Europe sales were unchanged from the third quarter.
Deposits Gross deposits, excluding institutional guaranteed
products, totaled EUR 5.9 billion in the fourth quarter. Pension
deposits, saving deposits and variable annuities were all strong.
However, as anticipated, fixed annuity deposits were lower, and
will continue to be managed toward a lower level. Net deposits,
excluding institutional guaranteed products, remained strong at EUR
1.5 billion. Value of new business Value of new business showed a
substantial improvement across almost all countries compared with
the third quarter and amounted to EUR 216 million. In the Americas,
the increase was due mainly to higher margins for variable
annuities and life reinsurance, while in the Netherlands higher
spreads on mortgages was the main driver. Higher sales volumes were
the main reason for an increase in value of new business in Spain.
Revenue-generating investments Revenue-generating investments rose
to EUR 361 billion at the end of December 2009, up 2% from the
third quarter. The increase was mainly the result of a further rise
in equity markets and a stronger US dollar at the end of the fourth
quarter of 2009. APPENDIX I -- Americas --The Netherlands --United
Kingdom --Other Countries FINANCIAL OVERVIEW, Q4 2009
GEOGRAPHICALLY amounts in million EUR (unless otherwise stated)
United Americas Kingdom USD GBP Underlying earnings before tax by
line of business 269 10 Life and protection 136 - Individual
savings and retirement products 22 28 Pensions and asset management
(2) - Institutional products 22 - Life reinsurance - (8)
Distribution - - General insurance - - Interest charges and other
(1) - Share in net results of associates 446 30 Underlying earnings
before tax (143) - Over/(under) performance of fair value items 303
30 Operating earnings before tax Operating earnings before tax by
line of business 266 10 Life and protection (25) - Individual
savings and retirement products 23 28 Pensions and asset management
(22) - Institutional products 62 - Life reinsurance - (8)
Distribution - - General insurance - - Interest charges and other
(1) - Share in net results of associates 303 30 Operating earnings
before tax 74 30 Gains/(losses) on investments (231) (49)
Impairment charges - 8 Other income/(charges) 146 19 Income before
tax 120 (4) Income tax 266 15 Net income 403 30 Net underlying
earnings 345 30 Net operating earnings (continued) amounts in
million EUR (unless otherwise stated) Holding, other The United
Other activities & Total Americas Netherlands Kingdom countries
eliminations EUR Underlying earnings before tax by line of business
Life and 178 62 12 15 - 267 protection Individual 101 (27) - 4 - 78
savings and retirement products Pensions and 15 53 32 5 - 105 asset
management Institutional (5) - - - - (5) products Life reinsurance
16 - - - - 16 Distribution - 1 (10) - - (9) General - 8 - 10 - 18
insurance Interest charges - - - - (48) (48) and other Share in net
(1) (2) - 8 - 5 results of associates Underlying 304 95 34 42 (48)
427 earnings before tax Over/(under) (103) (43) - (2) (26) (174)
performance of fair value items Operating 201 52 34 40 (74) 253
earnings before tax Operating earnings before tax by line of
business Life and 177 46 12 15 - 250 protection Individual (11)
(27) - 2 - (36) savings and retirement products Pensions and 16 26
32 5 - 79 asset management Institutional (20) - - - - (20) products
Life reinsurance 40 - - - - 40 Distribution - 1 (10) - - (9)
General - 8 - 10 - 18 insurance Interest charges - - - - (74) (74)
and other Share in net (1) (2) - 8 - 5 results of associates
Operating 201 52 34 40 (74) 253 earnings before tax Gains/(losses)
54 190 33 (1) 48 324 on investments Impairment (145) 7 (54) (17) -
(209) charges Other - - 8 (4) 1 5 income/(charges) Income before
110 249 21 18 (25) 373 tax Income tax 71 (45) (5) - (1) 20 Net
income 181 204 16 18 (26) 393 Net underlying 275 73 33 33 (41) 373
earnings Net operating 232 41 34 31 (60) 278 earnings FINANCIAL
OVERVIEW, FY 2009 YEAR-TO-DATE GEOGRAPHICALLY amounts in million
EUR (unless otherwise stated) United Americas Kingdom USD GBP
Underlying earnings before tax by line of business 967 38 Life and
protection (84) - Individual savings and retirement products 59 21
Pensions and asset management 166 - Institutional products 29 -
Life reinsurance - (16) Distribution - - General insurance - -
Interest charges and other (5) - Share in net results of associates
1,132 43 Underlying earnings before tax (42) 5 Over/(under)
performance of fair value items 1,090 48 Operating earnings before
tax Operating earnings before tax by line of business 933 38 Life
and protection (394) - Individual savings and retirement products
45 26 Pensions and asset management 226 - Institutional products
285 - Life reinsurance - (16) Distribution - - General insurance -
- Interest charges and other (5) - Share in net results of
associates 1,090 48 Operating earnings before tax 8 90
Gains/(losses) on investments (1,337) (163) Impairment charges (4)
59 Other income/(charges) (243) 34 Income before tax 940 (29)
Income tax 697 5 Net income 1,048 56 Net underlying earnings 1,055
59 Net operating earnings (continued) amounts in million EUR
(unless otherwise stated) Holding, other The United Other
activities & Total Americas Netherlands Kingdom countries
eliminations EUR Underlying earnings before tax by line of business
Life and 687 262 43 60 - 1,052 protection Individual (59) (54) - 19
- (94) savings and retirement products Pensions and 42 174 24 19 -
259 asset management Institutional 118 - - - - 118 products Life
reinsurance 21 - - - - 21 Distribution - 16 (19) - - (3) General -
1 - 35 - 36 insurance Interest charges - - - - (252) (252) and
other Share in net (4) (1) - 28 - 23 results of associates
Underlying 805 398 48 161 (252) 1,160 earnings before tax
Over/(under) (30) (247) 6 - (189) (460) performance of fair value
items Operating 775 151 54 161 (441) 700 earnings before tax
Operating earnings before tax by line of business Life and 663 222
43 60 - 988 protection Individual (280) (54) - 19 - (315) savings
and retirement products Pensions and 32 (33) 30 19 - 48 asset
management Institutional 161 - - - - 161 products Life reinsurance
203 - - - - 203 Distribution - 16 (19) - - (3) General - 1 - 35 -
36 insurance Interest charges - - - - (441) (441) and other Share
in net (4) (1) - 28 - 23 results of associates Operating 775 151 54
161 (441) 700 earnings before tax Gains/(losses) 6 224 101 7 94 432
on investments Impairment (951) (111) (183) (23) (5) (1,273)
charges Other (3) - 66 (387) 1 (323) income/(charges) Income before
(173) 264 38 (242) (351) (464) tax Income tax 669 (23) (33) (43) 98
668 Net income 496 241 5 (285) (253) 204 Net underlying 745 299 62
112 (193) 1,025 earnings Net operating 750 114 67 112 (325) 718
earnings AMERICAS - Underlying earnings before tax increase to USD
446 million - New life sales up 3% from previous quarter to USD 208
million - Net deposits excluding IGP* total USD 1.4 billion, driven
by strong pension sales - Value of new business rises to USD 128
million as a result of higher margins Underlying earnings before
tax Underlying earnings before tax for the fourth quarter of 2009
amounted to USD 446 million. - Earnings from Life & Protection
were strong in the fourth quarter and totaled USD 269 million. -
Individual Savings & Retirement earnings amounted to USD 136
million. Within variable annuities, a write-down of intangible
assets related to the Merrill Lynch Life company acquisition of USD
22 million was offset by a positive unlocking of deferred policy
acquisition costs. - Pensions & Asset Management earnings were
in line with the same quarter last year as higher fees from higher
asset balances were offset by increased employee benefit plan
expenses. - Institutional guaranteed products spreads declined
significantly due to an accumulation of cash necessary to run-off
the business as well as the amortization of unrealized losses on
assets transferred to other portfolios in exchange for cash. -
Earnings from Life Reinsurance totaled USD 22 million. Net reserve
strengthening was partly offset by favorable mortality experience
during the quarter. Net income Net income amounted to USD 266
million, a strong improvement from the loss in Q4 2008. The
improvement was the result of higher underlying earnings, the
improved performance of fair value items, gains on investments and
substantially lower impairment charges. The underperformance of
fair value items of USD 143 million was attributable to macro
equity hedge losses (USD 72 million), negative revaluations of real
estate related assets partly offset by strong private equity and
hedge fund returns (USD 36 million), and fair value annuity losses
(USD 35 million) driven by a tightening in credit spreads and
policyholder behavior assumption changes. *IGP= institutional
guaranteed products Gains on investments totaled USD 74 million,
primarily the result of profits realized by trading in the bond
portfolio. Impairments, though still above AEGON's long-term
expectations, continued to trend down from the high levels
experienced during the second half of 2008. During the fourth
quarter, impairments amounted to USD 231 million. Net income
included a tax gain of USD 42 million related to cross border
intercompany reinsurance treaties. Tax gains from these internal
transactions totaled USD 590 million in 2009 and are a partial
reversal of tax charges of USD 718 million during 2008. Commissions
and expenses Total commissions and expenses decreased 21% to USD
1.1 billion. The fourth quarter last year included substantial
accelerated deferred policy acquisition costs amortization
following lower equity markets. Operating expenses increased 4% to
USD 549 million as significant expense reductions were more than
offset by an increase in employee benefit plan expenses. Sales and
deposits Total new life sales increased 3% compared with Q3 2009.
New premium production for accident and health products increased
3% compared with Q3 2009 as new initiatives more than offset the
run-off of the automotive credit business in the United States.
Total gross deposits, excluding IGP*, increased 13% compared with
Q3 2009. As a result of active management of the fixed annuity
book, deposits declined to USD 648 million in Q4 2009, while
variable annuity deposits continued to develop favorably and
amounted to USD 965 million. Mutual fund deposits increased by 18%
to USD 862 million as a result of improved market conditions.
Pension deposits increased 22% in the quarter to USD 3.3 billion.
Net pension deposits remained very strong at USD 1.6 billion for
the fourth quarter. Value of new business Value of new business
improved to USD 128 million due primarily to higher margins in the
variable annuity and life reinsurance businesses. The internal rate
of return increased to 14.7%, mainly as a result of improved
margins on variable annuities. Revenue-generating investments
Revenue-generating investments declined by 1% in the fourth quarter
to USD 307 billion at the end of December 2009 as outflows related
to the run-off of the institutional spread-based business were
partly offset by strong net inflows from pension and retail
businesses. AMERICAS - EARNINGS USD millions Q4 2009 Q3 2009 % Q4
2008 % FY 2009 FY 2008 % Underlying earnings before tax by line of
business Life 189 193 (2) 159 19 653 769 (15) Accident and health
80 67 19 68 18 314 363 (13) Life and protection 269 260 3 227 19
967 1,132 (15) Fixed annuities 103 62 66 86 20 311 368 (15)
Variable annuities 45 50 (10) (709) - (356) (587) 39 Retail mutual
funds (12) (8) (50) - - (39) 8 - Individual savings and retirement
products 136 104 31 (623) - (84) (211) 60 Pensions and asset
management 22 10 120 23 (4) 59 150 (61) Institutional guaranteed
products (17) 1 - 127 - 119 544 (78) BOLI/COLI 15 9 67 4 - 47 50
(6) Institutional products (2) 10 - 131 - 166 594 (72) Life
reinsurance 22 20 10 (170) - 29 (93) - Share in net results of
associates (1) (1) - - - (5) 1 - Underlying earnings before tax 446
403 11 (412) - 1,132 1,573 (28) Over/(under) performance of fair
value items (143) (97) (47) (1,330) 89 (42) (2,434) 98 Operating
earnings before tax 303 306 (1) (1,742) - 1,090 (861) - Operating
earnings before tax by line of business Life 187 197 (5) 70 167 636
593 7 Accident and health 79 66 20 43 84 297 321 (7) Life and
protection 266 263 1 113 135 933 914 2 Fixed annuities 106 87 22
(110) - 315 (68) - Variable annuities (119) (164) 27 (1,185) 90
(670) (1,289) 48 Retail mutual funds (12) (8) (50) - - (39) 8 -
Individual savings and retirement products (25) (85) 71 (1,295) 98
(394) (1,349) 71 Pensions and asset management 23 10 130 (11) - 45
91 (51) Institutional guaranteed products (36) 47 - (76) 53 185
(15) - BOLI/COLI 14 9 56 (8) - 41 26 58 Institutional products (22)
56 - (84) 74 226 11 - Life reinsurance 62 63 (2) (465) - 285 (529)
- Share in net results of associates (1) (1) - - - (5) 1 -
Operating earnings before tax 303 306 (1) (1,742) - 1,090 (861) -
Gains/(losses) on investments 74 (98) - (10) - 8 (103) - Impairment
charges (231) (287) 20 (499) 54 (1,337) (1,138) (17) Other
income/(charges) - (5) - (1) - (4) 6 - Income before 146 (84) -
(2,252) - (243) (2,096) 88 tax Income tax 120 316 (62) 393 (69) 940
74 - Net income 266 232 15 (1,859) - 697 (2,022) - Net underlying
earnings 403 359 12 (279) - 1,048 1,143 (8) Net operating earnings
345 295 17 (1,136) - 1,055 (491) - - Commissions and expenses 1,141
1,295 (12) 1,451 (21) 5,009 4,961 1 of which operating expenses 549
539 2 527 4 2,227 2,167 3 For the amounts in euro see the Financial
Supplement. AMERICAS - SALES USD millions Q4 2009 Q3 2009 % Q4 2008
% FY 2009 FY 2008 % New life sales Life single premiums 184 193 (5)
262 (30) 606 931 (35) Life recurring premiums annualized 189 183 3
179 6 715 852 (16) Total recurring plus 1/10 single 208 202 3 205 1
776 945 (18) Life 149 152 (2) 138 8 566 669 (15) BOLI/COLI 1 1 - 15
(93) 4 36 (89) Life reinsurance 58 49 18 52 12 206 240 (14) Total
recurring plus 1/10 single 208 202 3 205 1 776 945 (18) New premium
production accident and health insurance 184 178 3 205 (10) 758 870
(13) Gross deposits (on and off balance) by line of business Fixed
annuities 648 691 (6) 2,328 (72) 4,751 5,947 (20) Variable
annuities 965 912 6 747 29 3,728 3,680 1 Retail mutual funds 862
732 18 396 118 2,414 2,813 (14) Pensions and asset management 3,394
2,841 19 2,771 22 12,027 12,987 (7) Institutional guaranteed
products 972 1,158 (16) 8,075 (88) 6,085 26,945 (77) Life
reinsurance - 1 - 1 - 2 4 (50) Total gross deposits 6,841 6,335 8
14,318 (52) 29,007 52,376 (45) Total gross deposits excl.
institutional guaranteed products 5,869 5,177 13 6,243 (6) 22,922
25,431 (10) Net deposits (on and off balance) by line of business
Fixed annuities (296) (278) (6) 896 - 538 103 - Variable annuities
(51) 153 - (150) 66 415 (811) - Retail mutual funds 383 236 62
(219) - 467 778 (40) Pensions and asset management 1,361 839 62 24
- 3,584 2,660 35 Institutional guaranteed products (10,320) (4,906)
(110) 2,433 - (20,280) 3,203 - Life reinsurance (17) (17) - (25) 32
(72) (89) 19 Total net deposits (8,940) (3,973) (125) 2,959 -
(15,348) 5,844 - Total net deposits excl. institutional guaranteed
products 1,380 933 48 526 162 4,932 2,641 87 REVENUE GENERATING
INVESTMENTS Dec. 31, Sept. 30, 2009 2009 % Revenue 307,375 310,483
(1) generating investments (total) Investments 123,560 125,712 (2)
general account Investments for 71,915 68,927 4 account of
policyholders Off balance 111,900 115,844 (3) sheet investments
third parties For the amounts in euro see the Financial Supplement.
THE NETHERLANDS - Underlying earnings increase 27% to EUR 95
million - Net income improves 65% to EUR 204 million - Strong
demand for pensions leads to new life sales of EUR 93 million -
Value of new business rises to EUR 66 million on higher margins and
volumes Underlying earnings before tax Underlying earnings before
tax amounted to EUR 95 million. Several separate provision releases
totaling EUR 36 million more than offset charges of EUR 22 million
related to a reorganization of the sales operations and EUR 9
million for the deposit guarantee scheme in the Netherlands
following the failures of two banks, Icesave and DSB. - Earnings
from Life & Protection increased to EUR 62 million. Life
results improved mainly as a result of higher investment income,
higher earnings from mortgages and lower costs, partly offset by
charges related to a reorganization of the sales operations.
Earnings also included several releases of provisions. - For
Savings, improved margins were more than offset by charges related
to a reorganization of the sales operations and the failures of
Icesave and DSB, which led to an underlying loss of EUR 27 million.
- Pensions & Asset Management earnings declined compared with
last year to EUR 53 million. Q4 2008 included a one-off dividend of
EUR 75 million and exceptional technical results of EUR 37 million.
Current quarter results included a release of provisions. -
Earnings from Distribution amounted to EUR 1 million. Lower volumes
in the Dutch insurance market continue to have repercussions for
the earnings of this business. - General insurance earnings
increased to EUR 8 million and included a charge related to the
reorganization of the Dutch sales operations. Net income Net income
increased by two-thirds compared with Q4 2008 to EUR 204 million.
The improvement was a result of higher underlying earnings, lower
impairment charges and increased gains on investments partly offset
by an underperformance on fair value items. Gains on investments
totaled EUR 190 million, mainly the result of adjustments in the
bond portfolio, in part driven by asset and liability management.
Fair value items underperformed by EUR 43 million mainly because of
the impact of fair value movements of guarantees and related
hedges. Impairments amounted to a positive EUR 7 million as a
result of the recovery of previously impaired securities.
Commissions and expenses Commissions and expenses decreased by 15%
compared with Q4 2008 to EUR 321 million. As a result of
significant cost savings, operating costs declined by 13% to EUR
258 million. Sales and deposits As a result of improved service and
customer satisfaction, evidenced by recent surveys, demand for
AEGON's group pension products increased. This resulted in pension
sales of EUR 72 million. Meanwhile, life sales rose to EUR 21
million as a result of an increase in recurring premium production
related to mortgages. In total, new life sales amounted to EUR 93
million. Value of new business Higher volumes and margins in the
mortgage business resulted in an increase in the value of new
business to EUR 66 million. The internal rate of return for AEGON's
Dutch activities continues to be high at 14.9%, driven mainly by
the mortgage business. Revenue-generating investments
Revenue-generating investments rose to EUR 70.9 billion at the end
of December 2009, up 2% compared with the previous quarter,
primarily the result of continued net inflows. THE NETHERLANDS -
EARNINGS EUR millions Q4 Q3 % Q4 % FY FY % 2009 2009 2008 2009 2008
Underlying earnings before tax by line of business Life 61 61 -
(34) - 234 43 - Accident and health 1 9 (89) (3) - 28 23 22 Life
and protection 62 70 (11) (37) - 262 66 - Saving products (27) (8)
- (20) (35) (54) (14) - Individual savings and retirement products
(27) (8) - (20) (35) (54) (14) - Pensions and asset management 53
38 39 169 (69) 174 308 (44) Distribution 1 3 (67) (22) - 16 3 -
General insurance 8 (2) - (15) - 1 8 (88) Share in net results of
associates (2) 1 - - - (1) 7 - Underlying earnings before tax 95
102 (7) 75 27 398 378 5 Over/(under) performance of fair value
items (43) 39 - 152 - (247) (165) (50) Operating earnings before
tax 52 141 (63) 227 (77) 151 213 (29) Operating earnings before tax
by line of business Life 45 67 (33) 29 55 194 75 159 Accident and
health 1 9 (89) (3) - 28 23 22 Life and protection 46 76 (39) 26 77
222 98 127 Saving products (27) (8) - (20) (35) (54) (14) -
Individual savings and retirement products (27) (8) - (20) (35)
(54) (14) - Pensions and asset management 26 71 (63) 258 (90) (33)
111 - Distribution 1 3 (67) (22) - 16 3 - General insurance 8 (2) -
(15) - 1 8 (88) Share in net results of associates (2) 1 - - - (1)
7 - Operating earnings before tax 52 141 (63) 227 (77) 151 213 (29)
Gains/(losses) on investments 190 (34) - 84 126 224 20 - Impairment
charges 7 (12) - (68) - (111) (138) 20 Income before tax 249 95 162
243 2 264 95 178 Income tax (45) (21) (114) (119) 62 (23) (1) - Net
income 204 74 176 124 65 241 94 156 Net underlying earnings 73 78
(6) 80 (9) 299 326 (8) Net operating earnings 41 106 (61) 129 (68)
114 139 (18) Commissions and expenses 321 279 15 376 (15) 1,181
1,269 (7) of which operating expenses 258 206 25 297 (13) 873 934
(7) THE NETHERLANDS - SALES EUR millions Q4 Q3 % Q4 % FY FY % 2009
2009 2008 2009 2008 New life sales Life single premiums 638 329 94
225 184 1,503 1,324 14 Life recurring premiums annualized 29 20 45
18 61 89 86 3 Total recurring plus 1/10 single 93 52 79 41 127 239
219 9 Life 21 19 11 20 5 82 97 (15) Pensions 72 33 118 21 - 157 122
29 Total recurring plus 1/10 single 93 52 79 41 127 239 219 9 New
premium production accident and health insurance 4 3 33 4 - 17 15
13 New premium production general insurance 7 6 17 7 - 26 28 (7)
Gross deposits (on and off balance) by line of business Saving
deposits 1,017 978 4 590 72 3,032 2,473 23 Pensions and asset
management 166 173 (4) 83 100 412 228 81 Total gross deposits 1,183
1,151 3 673 76 3,444 2,701 28 Net deposits (on and off balance) by
line of business Saving deposits 454 440 3 (535) - 870 (699) -
Pensions and asset management (123) 210 - 14 - (99) (38) (161)
Total net deposits 331 650 (49) (521) - 771 (737) - REVENUE
GENERATING INVESTMENTS Dec. Sept. 31, 30, 2009 2009 % Revenue
generating 70,861 69,656 2 investments (total) Investments general
36,144 35,496 2 account Investments for account 21,749 21,044 3 of
policyholders Off balance sheet 12,968 13,116 (1) investments third
parties UNITED KINGDOM - Underlying earnings before tax increase to
GBP 30 million - New life sales up 9% compared with Q3 2009 to GBP
237 million - Higher sales lead to value of new business of GBP 32
million, up 10% compared with Q3 2009 Underlying earnings before
tax Underlying earnings before tax increased to GBP 30 million in
the fourth quarter, mainly as a result of a strong recovery in
financial markets and business growth. - Earnings from Life &
Protection amounted to GBP 10 million. Earnings in the fourth
quarter last year had included a one-off benefit. - Pensions &
Asset Management earnings increased to GBP 28 million, due to a
strong recovery in financial markets. - Distribution recorded a
loss of GBP 8 million as a result of lower income due to adverse
market conditions and costs associated with adapting the business
to the new environment. Net income Net income amounted to GBP 15
million in Q4 2009 as the result of higher underlying earnings, an
improved performance of fair value items and gains on investments,
partly offset by an increase in impairments. Gains on investments
totaled GBP 30 million, mainly from bond trading. Impairments
increased in the fourth quarter to GBP 49 million, mostly related
to hybrid securities issued by Irish and UK banks. Commissions and
expenses Total commissions and expenses were up 8% compared with Q4
2008 to GBP 186 million, mainly as a result of a lower deferral of
expenses and the release of employee benefit reserves in the fourth
quarter last year. Operating expenses decreased by 1%, as cost
savings measures led to lower expenses. Sales and deposits New life
sales increased by 9% compared with Q3 2009 to GBP 237 million.
Sales of group and individual pensions increased, though annuity
production was lower, as planned following repricing. Gross
deposits declined to GBP 270 million, compared with a very strong
third quarter. Value of new business Value of new business
increased compared with Q3 2009, in line with higher pension sales,
to GBP 32 million. The internal rate of return on new business
remained stable at 13.5%. Revenue-generating investments As a
result of a further recovery in financial markets and net inflows,
revenue-generating investments increased to GBP 55.8 billion at the
end of December 2009. UNITED KINGDOM - EARNINGS GBP millions Notes
Q4 Q3 % Q4 % FY FY % 2009 2009 2008 2009 2008 Underlying earnings
before tax by line of business Life 10 10 - 18 (44) 38 46 (17) Life
and protection 10 10 - 18 (44) 38 46 (17) Pensions and asset
management 28 (18) - (8) - 21 68 (69) Distribution (8) (3) (167) 3
- (16) (1) - Underlying earnings before tax 30 (11) - 13 131 43 113
(62) Over/(under) performance of fair value items - 6 - (15) - 5
(15) - Operating earnings before tax 30 (5) - (2) - 48 98 (51)
Operating earnings before tax by line of business Life 10 10 - 18
(44) 38 46 (17) Life and protection 10 10 - 18 (44) 38 46 (17)
Pensions and asset management 28 (12) - (23) - 26 53 (51)
Distribution (8) (3) (167) 3 - (16) (1) - Operating earnings before
tax 30 (5) - (2) - 48 98 (51) Gains/(losses) on investments 30 26
15 (16) - 90 (17) - Impairment charges (49) (70) 30 2 - (163) (18)
- Other income/(charges) 8 8 43 (81) 28 (71) 59 (14) - Income
before tax 19 (6) - 12 58 34 49 (31) Income tax attributable to
policyholder return (8) (43) 81 (28) 71 (59) 14 - Income before
income tax on shareholders return 11 (49) - (16) - (25) 63 - Income
tax on shareholders return 4 16 (75) 8 (50) 30 1 - Net income 15
(33) - (8) - 5 64 (92) Net underlying earnings 30 (5) - 17 76 56
104 (46) Net operating earnings 30 (1) - 2 - 59 89 (34) Commissions
and expenses 186 167 11 173 8 687 662 4 of which operating expenses
113 109 4 114 (1) 428 414 3 For the amounts in euro see the
Financial Supplement. UNITED KINGDOM - SALES GBP millions Notes Q4
Q3 % Q4 % FY FY % 2009 2009 2008 2009 2008 New life sales 9 Life
single premiums 1,171 1,066 10 1,548 (24) 4,571 6,470 (29) Life
recurring premiums annualized 120 111 8 134 (10) 486 575 (15) Total
recurring plus 1/10 single 237 218 9 289 (18) 943 1,222 (23) Life
31 40 (23) 66 (53) 183 251 (27) Pensions 206 178 16 223 (8) 760 971
(22) Total recurring plus 1/10 single 237 218 9 289 (18) 943 1,222
(23) Gross deposits (on and off balance) by line of business
Pensions and asset management 270 491 (45) 152 78 1,076 542 99
Total gross deposits 270 491 (45) 152 78 1,076 542 99 Net deposits
(on and off balance) by line of business Pensions and asset
management 98 402 (76) 11 - 269 (322) - Total net deposits 98 402
(76) 11 - 269 (322) - REVENUE GENERATING INVESTMENTS Dec. Sept. 31,
30, 2009 2009 % Revenue generating 55,774 54,224 3 investments
(total) Investments general 7,031 6,779 4 account Investments for
45,975 44,795 3 account of policyholders Off balance sheet 2,768
2,650 4 investments third parties For the amounts in euro see the
Financial Supplement. OTHER COUNTRIES - Underlying earnings before
tax increase to EUR 42 million - New life sales increase 39% to EUR
57 million compared with Q3 2009, primarily driven by higher sales
in Spain - Value of new business rises to EUR 30 million, due
mainly to growth in sales Underlying earnings before tax Underlying
earnings before tax totaled EUR 42 million, driven mainly by
further growth in Central & Eastern Europe (CEE) and Spain.
Earnings for the same quarter last year had included a sizeable
one-off charge associated with the company's Taiwanese operations.
The sale of these operations was completed in August 2009, and
results are no longer included in AEGON's earnings. - Earnings from
Life & Protection increased to EUR 15 million, mainly as a
result of growth in CEE - particularly in Slovakia and the Czech
Republic - as well as improved results from AEGON's joint ventures
in Spain. Results last year were impacted by an accelerated
amortization of deferred acquisition costs in Taiwan of EUR 43
million. - Individual Savings & Retirement earnings improved to
EUR 4 million as AEGON's Chinese asset management joint venture
increased its asset balances on the back of a strong recovery in
the Chinese equity market. - Earnings from Pensions & Asset
Management rose to EUR 5 million as a result of higher asset
balances and cost efficiencies in CEE. - General Insurance earnings
remained high at EUR 10 million, while the fourth quarter last year
had included a reserve release of EUR 2 million. Net income Net
income from Other Countries increased to EUR 18 million as a result
of higher underlying earnings, lower losses on investments and
lower impairments. Net income for the fourth quarter last year had
included an equity impairment in Taiwan of EUR 45 million.
Commissions and expenses Commissions and expenses, excluding
Taiwan, were unchanged compared with the fourth quarter last year.
Operating expenses, also excluding Taiwan, were also stable,
despite continued growth in the business. Sales and deposits As a
result of strong growth in both single and recurring premium
production, total new life sales increased 39% from the third
quarter to EUR 57 million. - In Spain, new life sales increased to
EUR 30 million as a result of the introduction of new products and
successful sales campaigns. Sales for the partnership with regional
savings bank CAM, which are not consolidated in the company's
accounts, amounted to EUR 26 million on a 100% basis; - In CEE, new
life sales remained unchanged at EUR 21 million, while new premium
production for non-life increased to EUR 14 million as a result of
a greater focus on sales of household insurance; - In Asia, new
life sales in China increased to EUR 6 million, as a result of
higher recurring premium production in most distribution channels.
AEGON's joint venture in India, which is not consolidated, recorded
new life sales for the quarter of EUR 7 million on a 100% basis.
Gross deposits decreased compared with the third quarter to EUR 591
million primarily as a result of the introduction of new retail
mutual funds in China resulted in high inflows during the third
quarter. Value of new business Value of new business increased 43%
compared with the previous quarter to EUR 30 million, mainly as a
result of improved sales in both Spain and Hungary. The internal
rate of return remained at a high level. Revenue-generating
investments Revenue-generating investments increased 6% during the
quarter to EUR 12.3 billion at the end of December 2009. The
increase was due mainly to market appreciation and net inflows.
OTHER COUNTRIES - EARNINGS EUR millions Q4 Q3 % Q4 % FY FY % 2009
2009 2008 2009 2008 Underlying earnings before tax by line of
business Life 15 19 (21) (41) - 58 11 - Accident and health - - - 1
- 2 5 (60) Life and protection 15 19 (21) (40) - 60 16 - Variable
annuities (1) (1) - - - - (1) - Saving products - - - - - 1 - -
Retail mutual funds 5 5 - 3 67 18 13 38 Individual savings and
retirement products 4 4 - 3 33 19 12 58 Pensions and asset
management 5 4 25 2 150 19 12 58 General insurance 10 9 11 12 (17)
35 37 (5) Share in net results of associates 8 6 33 6 33 28 16 75
Underlying earnings before tax 42 42 - (17) - 161 93 73
Over/(under) performance of fair value items (2) (1) (100) - - - -
- Operating earnings before tax 40 41 (2) (17) - 161 93 73
Operating earnings before tax by line of business Life 15 19 (21)
(41) - 58 11 - Accident and health - - - 1 - 2 5 (60) Life and
protection 15 19 (21) (40) - 60 16 - Variable annuities (3) (2)
(50) - - - (1) - Saving products - - - - - 1 - - Retail mutual
funds 5 5 - 3 67 18 13 38 Individual savings and retirement
products 2 3 (33) 3 (33) 19 12 58 Pensions and asset management 5 4
25 2 150 19 12 58 General insurance 10 9 11 12 (17) 35 37 (5) Share
in net results of associates 8 6 33 6 33 28 16 75 Operating
earnings before tax 40 41 (2) (17) - 161 93 73 Gains/(losses) on
investments (1) 2 - (10) 90 7 (10) - Impairment charges (17) (1) -
(49) 65 (23) (68) 66 Other income/(charges) (4) 2 - 1 - (387) 1 -
Income before tax 18 44 (59) (75) - (242) 16 - Income tax - (13) -
9 - (43) (25) (72) Net income 18 31 (42) (66) - (285) (9) - Net
underlying earnings 33 32 3 (10) - 112 64 75 Net operating earnings
31 31 - (10) - 112 64 75 Commissions and expenses 88 81 9 175 (50)
340 494 (31) of which operating expenses 54 47 15 66 (18) 195 211
(8) OTHER COUNTRIES - SALES EUR millions Q4 Q3 % Q4 % FY FY % 2009
2009 2008 2009 2008 New life sales Life single premiums 103 44 134
69 49 353 445 (21) Life recurring premiums annualized 47 37 27 52
(10) 160 189 (15) Total recurring plus 1/10 single 57 41 39 58 (2)
195 233 (16) Life 57 41 39 58 (2) 195 232 (16) Saving products - -
- - - - 1 - Total recurring plus 1/10 single 57 41 39 58 (2) 195
233 (16) New premium production accident and health insurance 1 1 -
2 (50) 5 6 (17) New premium production general insurance 14 6 133
10 40 30 40 (25) Gross deposits (on and off balance) Variable
annuities 64 65 (2) 10 - 406 126 - Retail mutual funds 271 433 (37)
173 57 1,402 779 80 Pensions and asset management 256 238 8 211 21
878 737 19 Total gross deposits 591 736 (20) 394 50 2,686 1,642 64
Net deposits (on and off balance) Variable annuities 56 44 27 5 -
356 113 - Retail mutual funds 33 80 (59) (56) - 152 59 158 Pensions
and asset management 85 127 (33) 141 (40) 372 397 (6) Total net
deposits 174 251 (31) 90 93 880 569 55 REVENUE GENERATING
INVESTMENTS Dec. Sept. 31, 30, 2009 2009 % Revenue generating
12,327 11,667 6 investments (total) Investments general 2,706 2,765
(2) account Investments for account 2,413 2,275 6 of policyholders
Off balance sheet 7,208 6,627 9 investments third parties APPENDIX
II --Tables NET UNDERLYING EARNINGS GEOGRAPHICALLY EUR millions
Notes Q4 Q3 % Q4 2008 % FY FY 2008 % 2009 2009 2009 1 Americas 275
255 8 (155) - 745 780 (4) The Netherlands 73 78 (6) 80 (9) 299 326
(8) United Kingdom 33 (6) - 19 74 62 131 (53) Other countries 33 32
3 (10) - 112 64 75 Holding and other (41) (50) 18 (3) - (193) (67)
(188) Net underlying earnings 373 309 21 (69) - 1,025 1,234 (17)
OVER/UNDER PERFORMANCE OF FAIR VALUE ITEMS EUR millions Operating
earnings before tax 253 293 (14) (951) - 700 (46) - (Over)/under
performance of fair value items - Americas 103 76 36 933 (89) 30
1,660 (98) (Over)/under performance of fair value items - The
Netherlands 43 (39) - (152) - 247 165 50 (Over)/under performance
of fair value items - United Kingdom - (7) - 19 - (6) 19 -
(Over)/under performance of fair value items - Other countries 2 1
100 - - - - - (Over)/under performance of fair value items -
Holding and other 26 27 (4) (30) - 189 (225) - Underlying earnings
before tax 427 351 22 (181) - 1,160 1,573 (26) Net underlying
earnings 373 309 21 (69) - 1,025 1,234 (17) AMERICAS - OVER/UNDER
PERFORMANCE OF FAIR VALUE ITEMS USD millions Over/(under)
performance of fair value items by line of business Life and
protection (3) 3 - (114) 97 (34) (218) 84 Individual savings and
retirement products (161) (189) 15 (672) 76 (310) (1,138) 73
Pensions and asset management 1 - - (34) - (14) (59) 76
Institutional products (20) 46 - (215) 91 60 (583) - Life
reinsurance 40 43 (7) (295) - 256 (436) - Total over/(under)
performance of fair value items (143) (97) (47) (1,330) 89 (42)
(2,434) 98 Total over/(under) performance of fair value items in
EUR (103) (76) (36) (933) 89 (30) (1,660) 98 THE NETHERLANDS -
OVER/UNDER PERFORMANCE OF FAIR VALUE ITEMS EUR millions
Over/(under) performance of fair value items by line of business
Life and protection (16) 6 - 63 - (40) 32 - Pensions and asset
management (27) 33 - 89 - (207) (197) (5) Total over/(under)
performance of fair value items (43) 39 - 152 - (247) (165) (50)
UNITED KINGDOM - OVER/UNDER PERFORMANCE OF FAIR VALUE ITEMS GBP
millions Over/(under) performance of fair value items by line of
business Pensions and asset management - 6 - (15) - 5 (15) - Total
over/(under) performance of fair value items - 6 - (15) - 5 (15) -
OTHER COUNTRIES - OVER/UNDER PERFORMANCE OF FAIR VALUE ITEMS EUR
millions Over/(under) performance of fair value items by line of
business Variable annuities (2) (1) (100) - - - - - Total
over/(under) performance of fair value items (2) (1) (100) - - - -
- SALES EUR millions Q4 2009 Q3 2009 % Q4 % FY 2009 FY % 2008 2008
New life sales 549 484 13 598 (8) 2,045 2,631 (22) Gross deposits
(on and off balance) 6,530 6,742 (3) 11,933 (45) 27,953 40,751 (31)
New life sales Life single premiums 2,161 1,732 25 2,327 (7) 7,422
10,532 (30) Life recurring premiums annualized 333 311 7 366 (9)
1,303 1,578 (17) Total recurring plus 1/10 single 549 484 13 598
(8) 2,045 2,631 (22) Life 211 212 - 265 (20) 885 1,101 (20) Saving
products - - - - - - 1 - Pensions 299 238 26 283 6 1,011 1,341 (25)
BOLI/COLI 1 - - 11 (91) 3 25 (88) Life reinsurance 38 34 12 39 (3)
146 163 (10) Total recurring plus 1/10 single 549 484 13 598 (8)
2,045 2,631 (22) New premium production accident and health
insurance 126 125 1 161 (22) 561 614 (9) New premium production
general insurance 21 12 75 17 24 56 68 (18) Gross deposits (on and
off balance) Fixed annuities 387 434 (11) 1,676 (77) 3,377 4,057
(17) Variable annuities 699 693 1 590 18 3,055 2,636 16 Saving
products 1,017 978 4 590 72 3,032 2,473 23 Retail mutual funds 855
949 (10) 501 71 3,117 2,698 16 Pensions and asset management 2,973
2,924 2 2,613 14 11,045 10,505 5 Institutional guaranteed products
598 764 (22) 5,963 (90) 4,325 18,380 (76) Life reinsurance 1 - - -
- 2 2 - Total gross deposits 6,530 6,742 (3) 11,933 (45) 27,953
40,751 (31) Total gross deposits excl. institutional guaranteed
products 5,932 5,978 (1) 5,970 (1) 23,628 22,371 6 Net deposits (on
and off balance) by line of business Fixed annuities (226) (225) -
593 - 382 71 - Variable annuities 12 149 (92) (114) - 651 (441) -
Saving deposits 454 440 3 (535) - 870 (699) - Retail mutual funds
304 255 19 (182) - 484 590 (18) Pensions and asset management 997
1,373 (27) 257 - 3,122 1,769 76 Institutional guaranteed
products(7,153) (3,473) (106) 1,679 - (14,412) 2,185 - Life
reinsurance (11) (12) 8 (19) 42 (51) (61) 16 Total net deposits
(5,623) (1,493) - 1,679 - (8,954) 3,414 - Total net deposits excl.
institutional guaranteed products 1,530 1,980 (23) - - 5,458 1,229
- EMPLOYEE NUMBERS At At Dec. Dec. 31, 31, 2009 2008 Number of
employees 28,382 31,425 Agents 3,292 4,446 Number of employees
25,090 26,979 excl. agents VALUE OF NEW BUSINESS AND IRR VNB VNB
VNB VNB VNB EUR Q4 Q3 2009 % Q4 % FY FY 2008 % millions, 2009 2008
2009 after tax Americas 85 63 35 124 (31) 293 412 (29) The 66 51 29
13 - 184 43 - Netherlands United 35 34 3 60 (42) 170 234 (27)
Kingdom Other 30 21 43 35 (14) 120 148 (19) Countries Total 216 169
28 233 (7) 767 837 (8) IRR % IRR% IRR% EUR Q4 Q3 2009 Q4 millions,
2009 2008 after tax Americas 14.7 12.1 12.4 The 14.9 21.8 10.8
Netherlands United 13.5 13.4 14.0 Kingdom Other 36.2 37.6 37.2
Countries Total 17.6 18.5 16.5 MODELED NEW BUSINESS, APE AND
DEPOSITS Premium business Premium business APE APE EUR Notes Q4 Q3
2009 % Q4 % FY FY 2008 % millions 2009 2008 2009 10 Americas 235
251 (6) 279 (16) 997 1,097 (9) The 120 87 38 75 60 328 300 9
Netherlands United 250 247 1 341 (27) 1,070 1,514 (29) Kingdom
Other 79 60 32 113 (30) 357 409 (13) Countries Total 684 645 6 809
(15) 2,753 3,321 (17) Deposit business Deposit business Deposits
Deposits EUR Q4 Q3 2009 % Q4 % FY FY 2008 % millions 2009 2008 2009
Americas 3,022 4,367 (31) 8,718 (65) 17,753 30,151 (41) Other 108
95 14 23 - 525 98 - Countries Total 3,130 4,462 (30) 8,742 (64)
18,278 30,249 (40) VNB/PVNBP SUMMARY Premium business Premium
business VNB PVNBP VNB/ VNB/ APE VNB PVNBP VNB/ VNB/ APE PVNBP
PVNBP EUR Notes Q4 % % FY % % millions 2009 2009 11 Americas 44
1,195 3.7 18.7 142 4,690 3.0 14.2 The 66 1,210 5.4 55.1 184 2,763
6.7 56.0 Netherlands United 35 1,650 2.1 13.8 170 6,938 2.5 15.9
Kingdom Other 26 556 4.6 32.4 115 2,690 4.3 32.2 Countries Total
170 4,611 3.7 24.9 611 17,080 3.6 22.2 Deposit business Deposit
business VNB PVNBP VNB/ VNB/ VNB PVNBP VNB/ VNB/ PVNBP Deposits
PVNBP Deposits EUR Notes Q4 % % FY % % millions 2009 2009 11
Americas 41 3,736 1.1 1.4 151 23,589 0.6 0.9 Other 5 307 1.5 4.2 5
1,230 0.4 0.9 Countries Total 46 4,043 1.1 1.5 156 24,819 0.6 0.9
Notes: 1) Certain assets held by AEGON Americas, AEGON The
Netherlands and AEGON UK are carried at fair value, and managed on
a total return basis, with no offsetting changes in the valuation
of related liabilities. These include assets such as hedge funds,
private equities, real estate limited partnerships, convertible
bonds and structured products. Underlying earnings exclude any
over- or underperformance compared to management's long-term
expected return on these assets. Based on current holdings and
asset class returns, the long-term expected return on an annual
basis is 8-10%, depending on the asset class, including cash income
and market value changes. The expected earnings from these asset
classes are net of DPAC where applicable. In addition, certain
products offered by AEGON Americas contain guarantees and are
reported on a fair value basis, including the segregated funds
offered by AEGON Canada and the total return annuities and
guarantees on variable annuities of AEGON USA. The earnings on
these products are impacted by movements in equity markets and risk
free interest rates. Short-term developments in the financial
markets may therefore cause volatility in earnings. Included in
underlying earnings is a long-term expected return on these
products, and any over- or underperformance compared to
management's expected return is excluded from underlying earnings.
The fair value movements of certain guarantees and the fair value
change of derivatives that hedge certain risks on these guarantees
of AEGON the Netherlands and Variable Annuities Europe (included in
Other countries) are excluded from underlying earnings. The Holding
includes certain issued bonds that are held at fair value through
profit or loss. The interest rate risk on these bonds is hedged
using swaps. The change in AEGON's credit spread resulted in a loss
of EUR 26 mln in Q4 2009 on the fair value movement on these bonds.
2) Net income refers to net income attributable to equity holders
of AEGON N.V. 3) New life sales is defined as new recurring
premiums + 1/10 of single premiums. 4) Deposits on and off balance
sheet. In the previous quarters of 2009 gross saving deposits of
AEGON The Netherlands were overstated by EUR 130 million, EUR 192
million and EUR 817 million in Q1, Q2 and Q3, respectively. Net
deposits were not impacted. Comparative figures have been restated.
5) Return on equity is calculated by dividing the net underlying
earnings after cost of leverage by the average shareholders' equity
excluding the preferred shares and the revaluation reserve. 6)
Capital securities that are denominated in foreign currencies are,
for purposes of calculating the capital base ratio, revalued to the
period-end exchange rate. 7) All ratios exclude AEGON's revaluation
reserve. 8) Included in other non-operating income/(charges) are
charges made to policyholders with respect to income tax. 9) There
is an equal and opposite tax charge which is reported in the line
Income tax attributable to policyholder return. Includes production
on investment contracts without a discretionary participation
feature of which the proceeds are not recognized as revenues but
are directly added to our investment contract liabilities. 10) APE
= recurring premium + 1/10 single premium. 11) PVNBP: Present Value
New Business Premium. a) a) The calculation of the IGD (Insurance
Group Directive) capital surplus and ratio are based on Solvency I
capital requirements on IFRS for entities within the EU (Pillar I
for AEGON UK), and local regulatory solvency measurements for
non-EU entities. Specifically, required capital for the life
insurance companies in the US is calculated as two times the upper
end of the Company Action Level range (200%) as applied by the
National Association of Insurance Commissioners in the US. The
calculation of the IGD ratio excludes the available and required
capital of the UK With-Profit funds. In the UK solvency surplus
calculation the local regulator only allows the available capital
number of the With-Profits funds included in overall local
available capital to be equal to the amount of With-Profits funds'
required capital. b) The results in this release are unaudited.
Currencies Income statement items: average rate 1 EUR = USD 1.4071
(2008:USD 1.4660) Income statement items: average rate 1 EUR = GBP
0.8903 (2008:GBP 0.7961) Balance sheet items: closing rate 1 EUR =
USD 1.4406 (2008: USD 1.3917) Balance sheet items: closing rate 1
EUR = GBP 0.8881 (2008: GBP 0.9525) ADDITIONAL INFORMATION Press
conference 9:00 am CET Audio webcast on http://www.aegon.com/
Analyst & investor presentation / conference call 15:00 am CET
Audio webcast on http://www.aegon.com/ Call-in numbers (listen
only): USA: +1-480-629-9822 UK: +44-208-515-2301 NL:
+31-20-796-5332 Supplements AEGON's Q4 2009 Financial Supplement
and Condensed Consolidated Interim Financial Statements are
available on http://www.aegon.com/. Record date AGM The record date
for attending and voting at the Annual General Meeting of
Shareholders of AEGON N.V. is March 30, 2010. The agenda will be
available on AEGON's website from March 29, 2010. About AEGON As an
international life insurance, pension and investment company based
in The Hague, AEGON has businesses in over twenty markets in the
Americas, Europe and Asia. AEGON companies employ approximately
28,000 people and have more than 40 million customers across the
globe. Full year Full year Key figures - EUR 2009 2008 Underlying
earnings before tax 1.2 billion 1.6 billion New life sales 2.0
billion 2.6 billion Gross deposits (excl. inst. guar. prod.) 23.6
billion 22.4 billion Revenue generating investments (end of period)
361 billion 332 billion Cautionary note regarding non-GAAP measures
This press release includes certain non-GAAP financial measures:
net operating earnings, operating earnings before tax, underlying
earnings before tax, net underlying earnings and value of new
business. The reconciliation of underlying earnings before tax and
operating earnings before tax to the most comparable IFRS measures
is provided on pages 7 and 8. A reconciliation of (net) underlying
earnings to operating earnings before tax is provided on page 23.
Value of new business is not based on IFRS, which are used to
report AEGON's quarterly statements and should not be viewed as a
substitute for IFRS financial measures. AEGON believes that these
non-GAAP measures, together with the IFRS information, provide a
meaningful measure for the investment community to evaluate AEGON's
business relative to the businesses of our peers. Local currencies
and constant currency exchange rates This press release contains
certain information about our results and financial condition in
USD for the Americas and 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 us presented in EUR, which is the
currency of our primary financial statements. Forward-looking
statements The statements contained in this press release 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, is confident, will, and similar expressions as
they relate to our company. These statements are not guarantees of
future performance and involve risks, uncertainties and assumptions
that are difficult to predict. We undertake 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 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 our
fixed income investment portfolios; and - 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 we hold; - The frequency and severity of insured loss
events; - Changes affecting mortality, morbidity and other factors
that may impact the profitability of our insurance products; -
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; - Increasing levels of competition in the United States, the
Netherlands, the United Kingdom and emerging markets; - Changes in
laws and regulations, particularly those affecting our operations,
the products we sell, and the attractiveness of certain products to
our consumers; - Regulatory changes relating to the insurance
industry in the jurisdictions in which we operate; - Acts of God,
acts of terrorism, acts of war and pandemics; - Effects of
deliberations of the European Commission regarding the aid we
received from the Dutch State in December 2008; - Changes in the
policies of central banks and/or governments; - Lowering of one or
more of our debt ratings issued by recognized rating organizations
and the adverse impact such action may have on our ability to raise
capital and on our liquidity and financial condition; - Lowering of
one or more of insurer financial strength ratings of our insurance
subsidiaries and the adverse impact such action may have on the
premium writings, policy retention, profitability of its insurance
subsidiaries and liquidity; - Litigation or regulatory action that
could require us to pay significant damages or change the way we do
business; - Customer responsiveness to both new products and
distribution channels; - Competitive, legal, regulatory, or tax
changes that affect the distribution cost of or demand for our
products; - The impact of acquisitions and divestitures,
restructurings, product withdrawals and other unusual items,
including our ability to integrate acquisitions and to obtain the
anticipated results and synergies from acquisitions; - Our failure
to achieve anticipated levels of earnings or operational
efficiencies as well as other cost saving initiatives; and - The
impact our adoption of the International Financial Reporting
Standards may have on our reported financial results and financial
condition. Further details of potential risks and uncertainties
affecting the company are described in the company's filings with
Euronext Amsterdam and the US Securities and Exchange Commission,
including the Annual Report on Form 20-F. These forward-looking
statements speak only as of the date of this document. Except as
required by any applicable law or regulation, the company 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 the company's expectations with
regard thereto or any change in events, conditions or circumstances
on which any such statement is based. Contact information Media
relations: Greg Tucker +31(0)70-344-8956 Investor relations:
Gerbrand Nijman +31-(0)70-344-8305 877-548-9668 - toll free USA
only http://www.aegon.com/ DATASOURCE: AEGON N.V. CONTACT: Contact
information: Media relations: Greg Tucker, +31(0)70-344-8956, .
Investor relations: Gerbrand Nijman, +31-(0)70-344-8305,
877-548-9668 - toll free USA only,
Copyright