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TheStreet Open House

AEGON Delivers Strong Underlying Earnings And Sales Growth; Capital Position Further Strengthened

In the Netherlands, AEGON is on track with reorganizing its business to be more agile and better positioned to respond to changing conditions and opportunities in the Dutch market. The reorganization program and other initiatives will result in reducing the cost base for AEGON The Netherlands by EUR 100 million, compared to the cost base for 2010. The cost savings aim to offset pressure on underlying earnings from increased longevity provisioning and a declining life insurance back-book. The majority of the cost savings is expected to be achieved in 2012. To date, AEGON has implemented costs savings of EUR 62 million.

In June, AEGON joined approximately 30 leading insurance companies as a signatory and founding member of the Principles of Sustainable Insurance (PSI). The PSI is a framework that helps companies incorporate environmental, social and governance (ESG) factors into their decision-making. The principles - a United Nations initiative - are aimed at positioning the world insurance industry as a lever for green industry and sustainable development. AEGON believes the PSI will help the company identify and manage both risks and opportunities associated with ESG issues.

Enhance customer loyalty

Recently, AEGON Asset Management published its first annual responsible investment report. The report details AEGON's approach to responsible investment and its engagement with companies in which it invests on issues such as corporate governance, the environment, health & safety, remuneration and human rights. Last year, AEGON introduced a new Responsible Investment Policy, aimed at integrating ESG criteria into the company's investment decisions and asset ownership. AEGON believes a responsible approach to investment may help to reduce risk and improve returns for customers.

 

    
    FINANCIAL OVERVIEW [c)]
 
                                              
    EUR millions                  Notes  Q2 2012 Q1 2012 % Q2 2011 % YTD 2012 YTD 2011 %
 
    Underlying earnings before tax
    Americas                              339     292   16   314   8    631    650   (3)
    The Netherlands                        71      79  (10)   74  (4)   150    155   (3)
    United Kingdom                         25      29  (14)   10 150     54     22  145
    New markets                            64      88  (27)   70  (9)   152    138   10
    Holding and other                     (56)    (63)  11   (67)  1   (119)  (150)  21
    Underlying earnings before tax        443     425    4   401  10    868    815    7
 
    Fair value items                      101     156  (35)  (23)  -    257   (108)   -
    Realized gains / (losses)              85      45   89   204  (58)  130    295  (56)
     on investments
    Impairment charges                    (42)    (41)  (2) (100)  5    (83)  (162)  49
    Other income / (charges)             (254)    (17)   -   (16)  -   (271)   (19)   -
    Run-off businesses                      6     (2)    -    10 (40)     4     32  (88)
    Income before tax                     339     566  (40)  476 (29)   905    853    6
    Income tax                            (85)    (45) (89)  (72)(18)  (130)  (122)  (7)
    Net income                            254     521 (51)   404 (37)   775    731    6
 
    Net income / (loss) attributable to:
    Equity holders of AEGON N.V.          254     521 (51)   403 (37)   775    730    6
    Non-controlling interests               -       -   -      1   -      -      1    -
 
    Net underlying earnings               337     328   3    339  (1)   665    672   (1)
 
    Commissions and expenses            1,570   1,399  12  1,500   5  2,969  3,013   (1)
    of which operating expenses   11      814     781   4    847  (4) 1,595  1,684   (5)
 
    New life sales
    Life single premiums                1,068   1,160  (8) 1,189 (10) 2,228  2,915  (24)
    Life recurring premiums annualized    321     329  (2)   312   3    650    640    2
    Total recurring plus 1/10 single      428     445  (4)   431  (1)   873    932   (6)
 
    New life sales
    Americas                      12      126     120   5    101  25    246    206   19
    The Netherlands                        23      32 (28)    40 (43)    55    105  (48)
    United Kingdom                        211     213  (1)   217  (3)   424    464   (9)
    New markets                   12       68      80 (15)    73  (7)   148    157   (6)
    Total recurring plus 1/10 single      428     445  (4)   431  (1)   873    932   (6)
 
    New premium production accident       187     195  (4)   145  29    382    304   26
     and health insurance
    New premium production general         13      14  (7)    14  (7)    27     27    -
     insurance
 
    Gross deposits (on and off balance)
    Americas                      12    6,644   7,392 (10) 5,014  33 14,036 10,643   32
    The Netherlands                       367     560 (34)   442 (17)   927    904    3
    United Kingdom                          9       8  13     17 (47)    17     36  (53)
    New markets                   12    2,737   3,083 (11) 1,242 120  5,820  2,509  132
    Total gross deposits                9,757  11,043 (12) 6,715  45 20,800 14,092   48
 
    Net deposits (on and off balance)
    Americas                      12      738   1,061 (30)   426  73  1,799    193    -
    The Netherlands                       (66)   (185) 64   (113) 42   (251)  (228) (10)
    United Kingdom                         (1)     (1)  -     14   -     (2)    16    -
    New markets                   12      619   1,364 (55) (2,487) -  1,983 (4,206)   -
    Total net deposits excluding        1,290   2,239 (42) (2,160) -  3,529 (4,225)   -
     run-off businesses
    Run-off businesses                   (479) (1,160) 59    (527) 9 (1,639)(1,407) (16)
    Total net deposits                    811   1,079 (25) (2,687) -  1,890 (5,632)   -

 

    
    REVENUE-GENERATING INVESTMENTS
 
                                                    June 30, Mar. 31,
                                                       2012     2012   %
    Revenue-generating investments (total)          451,988  436,753   3
    Investments general account                     147,065  140,770   4
    Investments for account of policyholders        151,633  149,501   1
    Off balance sheet investments third parties     153,290  146,482   5

 

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