THE HAGUE, August 13, 2015 /PRNewswire/ --
- Solid underlying earnings
- Underlying earnings increase to EUR 549 million as fee business growth and the stronger US dollar were partly offset by lower US life & protection results, including adverse mortality of EUR 17 million
- Equity and interest rate hedging programs main drivers of fair value losses of EUR 293 million
- Net income amounts to EUR 350 million
- Return on equity of 8.2% and 8.9% excluding capital allocated to run-off businesses
- Continued strong profitable sales
- US retirement plans and asset management main drivers behind gross deposits of EUR 16.8 billion
and net deposits of EUR 3.2 billion
- New life insurance sales level at EUR 518 million
- Accident & health and general insurance sales stable at EUR 248 million
- Market consistent value of new business of EUR 183 million impacted by low interest rates
- Increase in interim dividend supported by strong cash flows
- Operational free cash flows excluding market impacts and one-time items of EUR 388 million
- Holding excess capital of EUR 1.5 billion and gross leverage ratio improves to 27.7%
- Interim dividend increases to EUR 0.12 per share; dilutive effect of stock dividend to be neutralized
- More clarity obtained on Solvency II; ratio expected to be in the range of 140 - 170%
Statement of Alex Wynaendts, CEO
"Aegon's businesses delivered solid results this quarter, despite adverse mortality experience in the United States and the negative impact from our hedging programs on net income. At the same time, we are pleased with the high level of sales as we continue to secure new distribution agreements and reach many new customers in all our markets.
"Executing on our strategy to ensure our businesses support our long-term growth ambitions, we sold our Canadian operations as well as Clark Consulting in the US. In addition, we have further improved our risk profile by hedging EUR 6 billion of longevity reserves in the Netherlands and by reducing balances of our legacy variable annuity products in the US.
"While uncertainties on Solvency II remain, we have obtained clarity on a number of items - including treatment of the US - which allows us to tighten the range of expected outcomes. Furthermore, we have applied for the use of our internal model and are currently awaiting regulatory approval.
"I am also pleased to announce that our strong capital position and growing cash flows enable us to raise
the interim dividend to 12 eurocents."
Key performance indicators Q2 Q1 Q2 YTD YTD amounts in EUR millions b) Notes 2015 2015 % 2014 % 2015 2014 % Underlying earnings before tax 1 549 469 17 514 7 1,018 1,012 1 Net income 350 316 11 343 2 666 735 (9) Sales 2 2,442 2,750 (11) 2,066 18 5,192 4,152 25 Market consistent value of new business 3 183 140 30 221 (17) 323 444 (27) Return on equity 4 8.2% 6.6% 25 8.7% (5) 7.5% 8.6% (12)
- Additional longevity hedging in the Netherlands further reduces exposure
- Sale of Canadian operations completed
- Expanded partnerships with Edward Jones and Merrill Lynch in the US
- Guaranteed drawdown product launched on UK platform
Aegon's aim to be a leader in all of its chosen markets is supported by four strategic objectives embedded in all Aegon businesses: Optimize portfolio, Deliver operational excellence, Enhance customer loyalty, and Empower employees. These provide the strategic framework for the company's ambition to become the most-recommended life insurance and pension provider by customers and business partners, as well as the most-preferred employer in the sector.
As part of Aegon's strategy to enhance its risk-return profile and to improve capital efficiency, Aegon completed a third longevity transaction in the Netherlands on July 15, 2015. The transaction builds on previous longevity deals and underlines Aegon's leadership in the Dutch pension market. The hedge, covering close to EUR 6 billion of underlying reserves, provides protection for a period of 50 years against longevity improvements. A significant number of younger pension customers are covered - evidence that the longevity risk transfer market continues to develop. The company will continue to explore further opportunities to manage its Dutch longevity risk efficiently.
On July 10, 2015, Aegon reached an agreement with Greenspoint Capital and the Newport Group to sell Clark Consulting, its Bank-Owned Life Insurance (BOLI) distribution and servicing unit in the US, for USD 177.5 million (EUR 160 million). Clark Consulting is a distinct entity within the BOLI/COLI insurance business that is currently in run-off. The impact on net income from the sale of Clark Consulting is expected to be immaterial as tax benefits from the recognition of a tax loss largely offset the loss on the sale.
On July 31, 2015, Aegon completed the CAD 600 million sale of its Canadian life insurance business to Wilton Re following regulatory approval. As indicated earlier, the transaction will result in a book loss of CAD 1.2 billion (EUR 0.8 billion), which will be booked in the third quarter of 2015. Aegon has earmarked the proceeds of this transaction for the redemption of the USD 500 million 4.625% senior bond, due in December 2015. The combination of the divestment and the redemption of the bond will improve Aegon's return on equity by approximately 40 basis points, while reducing net underlying earnings by less than 1%. It will also improve Aegon's leverage ratio by approximately 40 basis points on a pro forma basis, while the fixed charge cover ratio will improve by 0.5.
Deliver operational excellence
In the United States, Aegon launched its customized Transamerica retirement solutions with Merrill Lynch. This new program is the first time that Transamerica has offered a 403(b) retirement plan program for not-for-profit organizations, including higher education and healthcare institutions, with Merrill Lynch. In addition, Transamerica will be launching a mutual fund based corporate retirement plan program, primarily to companies with 401(k) plans up to USD 100 million. Transamerica and Merrill Lynch have also developed a workplace retirement program that will have a powerful and direct impact in helping more employees retire with confidence. Enhancing distribution relationships with strong partners such as Merrill Lynch is at the core of Aegon's strategy to further expand the reach into its chosen markets.
Additionally, Transamerica expanded its distribution partnership with Edward Jones, by offering corporate retirement plans and long term care products. Edward Jones provides financial services for individual investors and small businesses throughout the United States. By joining forces with Edward Jones and expanding the distribution, many more Americans will gain access to retirement plan and long-term care solutions to prepare for their financial future.
In the Netherlands, Aegon is a leading provider of insured pension solutions, defined contribution arrangements and pension administration. Recognizing opportunities and trends in the Dutch market, Aegon is now the first to set up a 'general pension fund', or Algemeen Pensioen Fonds (APF). An APF allows for multiple pension plans to be combined within a single scheme, overseen by a single independent board, while ring-fencing assets. This new pension vehicle is particularly attractive for those funds that wish to maintain their own identity while also enjoying the benefits of economies of scale and higher quality through shared services.
In response to increasing customer demand and the recent regulatory changes in the market, Aegon launched a new pension product on its UK platform. The product, Secure Retirement Income, gives retirees access to drawdown with a guaranteed level of income. This offers customers an attractive alternative to an annuity or flexible access drawdown product, both of which have their limitations. This new option therefore enables people to keep their money invested, but with a guaranteed level of minimum income - thereby meeting the twin demands of flexibility and certainty.
Demonstrating Aegon's efforts of becoming more digital, the company won several awards. In the United States, Transamerica won two prestigious Hermes Creative Awards in recognition of the company's creativity and innovation; and in the Netherlands, Aegon was rated by ITDS Consultancy as the best insurer on social media thanks to its integrated online approach.
Enhance customer loyalty
Aegon opened an innovative new Customer Experience Center, or 'cXcenter', in the Netherlands. This center is enabling Aegon to better evaluate the accessibility and user-friendliness of its services. The new cXcenter allows Aegon to conduct in-depth interviews, client panels and eye tracking studies in order to enhance customer experience on Aegon.nl and the Mijn Aegon ('My Aegon') app.
In line with its commitment to help customers take responsibility for their financial future, Aegon has established a Research Center for Longevity and Retirement, leveraging the reputation and success of the Transamerica Institute in the United States. Its mission is to conduct research, educate the public, and inform a global dialogue on trends issues, and opportunities surrounding longevity, population aging, and retirement security. The Aegon Center brings together experts from across Aegon's businesses in Europe, the Americas and Asia in addition to external parties. It will be a focal point for Aegon's research on people's attitudes toward aging and retirement.
Financial overview Q2 Q1 Q2 YTD YTD EUR millions Notes 2015 2015 % 2014 % 2015 2014 % Underlying earnings before tax Americas 358 290 23 331 8 648 633 2 The Netherlands 136 131 4 131 4 267 259 3 United Kingdom 34 38 (10) 32 9 72 58 24 New Markets 62 51 22 62 - 113 123 (8) Holding and other (41) (42) 1 (41) - (83) (62) (34) Underlying earnings before tax 549 469 17 514 7 1,018 1,012 1 Fair value items (293) (159) (84) (263) (11) (451) (379) (19) Realized gains / (losses) on investments 134 119 13 198 (32) 252 308 (18) Net impairments 7 (11) - (3) - (4) (11) 65 Other income / (charges) (11) (1) - (14) 24 (11) (20) 43 Run-off businesses 3 8 (65) (1) - 11 13 (20) Income before tax 389 425 (9) 432 (10) 814 924 (12) Income tax (39) (109) 64 (88) 56 (148) (189) 22 Net income 350 316 11 343 2 666 735 (9) Net income / (loss) attributable to: Equity holders of Aegon N.V. 350 316 11 343 2 666 735 (9) Net underlying earnings 433 344 26 382 13 777 752 3 Commissions and expenses 1,761 1,713 3 1,471 20 3,474 2,898 20 of which operating expenses 9 923 902 2 810 14 1,825 1,589 15 New life sales Life single premiums 1,062 1,421 (25) 1,247 (15) 2,483 2,309 8 Life recurring premiums annualized 411 409 1 386 7 820 739 11 Total recurring plus 1/10 single 518 551 (6) 511 1 1,068 970 10 New life sales Americas 10 158 141 12 125 26 298 241 24 The Netherlands 25 38 (34) 37 (34) 62 69 (10) United Kingdom 263 268 (2) 278 (5) 531 527 1 New Markets 10 72 105 (31) 71 2 177 133 33 Total recurring plus 1/10 single 518 551 (6) 511 1 1,068 970 10 New premium production accident and health insurance 228 307 (26) 235 (3) 535 497 8 New premium production general insurance 20 22 (11) 17 15 42 35 21 Gross deposits (on and off balance) Americas 10 9,069 11,550 (21) 8,524 6 20,619 17,032 21 The Netherlands 1,116 1,563 (29) 591 89 2,678 1,077 149 United Kingdom 88 80 11 70 25 168 124 36 New Markets 10 6,496 5,499 18 3,844 69 11,994 8,272 45 Total gross deposits 16,769 18,692 (10) 13,029 29 35,460 26,504 34 Net deposits (on and off balance) Americas 10 1,913 4,404 (57) 3,237 (41) 6,317 5,215 21 The Netherlands 355 796 (55) 271 31 1,150 309 - United Kingdom 54 42 27 38 42 96 66 47 New Markets 10 975 2,276 (57) 2,687 (64) 3,250 (240) - Total net deposits excluding run-off businesses 3,296 7,518 (56) 6,233 (47) 10,814 5,350 102 Run-off businesses (111) (213) 48 (163) 32 (324) (782) 59 Total net deposits / (outflows) 3,185 7,305 (56) 6,070 (48) 10,490 4,568 130 Revenue-generating investments Jun. 30, Mar. 31, Dec. 31, 2015 2015 % 2014 % Revenue-generating investments (total) 645,017 637,599 1 558,328 16 Investments general account 158,956 172,504 (8) 153,653 3 Investments for account of policyholders 205,903 215,291 (4) 191,467 8 Off balance sheet investments third parties 280,158 249,804 12 213,208 31
Underlying earnings before tax
Aegon's underlying earnings before tax in the second quarter of 2015 increased by 7% to
EUR 549 million. Favorable currency movements (EUR 86 million), growth in variable annuity and pension balances in the United States and asset management balances (EUR 34 million) more than offset the reduction in recurring earnings resulting from the assumption changes and model updates implemented in the United States in the third quarter of 2014 (EUR 25 million), lower earnings from fixed annuities (EUR 13 million) and divestments (EUR 14 million).
Underlying earnings from the Americas were up by 8% to EUR 358 million. In US dollars, underlying earnings decreased by 13%. The positive impact on earnings from growth in variable annuity and pension balances was more than offset by the recurring earnings reduction from the assumption changes and model updates implemented in the third quarter of 2014, lower earnings from fixed annuities and the divestment of Canada. The quarter included adverse mortality of EUR 17 million.
In the Netherlands, underlying earnings increased by 4% to EUR 136 million, as favorable mortality and one-time items were partly offset by higher non-life claims and lower investment income.
Underlying earnings from Aegon's operations in the United Kingdom were up 9% to EUR 34 million in the second quarter of 2015, mainly as a result of favorable currency movements.
Underlying earnings from New Markets were stable at EUR 62 million. Higher asset management and performance fees offset lower earnings in other markets and the divestment of Aegon's stake in
La Mondiale Participations.
Total holding costs remained flat at EUR 41 million.
Net income slightly increased to EUR 350 million. Higher underlying earnings and lower taxes were offset by a higher loss on fair value items and lower realized gains.
Fair value items
The loss from fair value items amounted to EUR 293 million. This loss was mainly driven by hedging programs in the United States and the Netherlands and alternative investments, which more than offset a gain on interest rate swaps on perpetuals at the holding of EUR 118 million as a result of higher interest rates. The loss in the Netherlands was driven by hedge ineffectiveness, which was only partly offset by the benefit from higher interest rates and credit spreads.
Realized gains on investments
Realized gains on investments amounted to EUR 134 million. These were primarily related to portfolio rebalancing in the Netherlands in a low rate environment.
Gross impairments remained low as a result of the favorable credit environment. This, in combination with net recoveries, led to a positive result of EUR 7 million in the second quarter of 2015.
Other charges amounted to EUR 11 million, the result of charges for policyholder taxes in the United Kingdom which were offset by an equal amount in the income tax line.
The result from run-off businesses improved to EUR 3 million.
Income tax amounted to EUR 39 million in the second quarter, driven by tax benefits in the United States and the United Kingdom. The effective tax rate on underlying earnings was 21%, impacted favorably by tax credits related to solar energy investments in the United States.
Return on equity
Return on equity was 8.2% in the second quarter of 2015, lower than prior year due to higher shareholders' equity. Return on equity for Aegon's ongoing businesses, excluding the capital allocated to the run-off businesses, amounted to 8.9% over the same period.
In the second quarter, operating expenses increased by 14% to EUR 923 million, driven by a stronger US dollar, higher investments in technology-related initiatives and project related expenses. At constant currencies, the increase was 2%.
Aegon's total sales were up 18% to EUR 2.4 billion in the second quarter of 2015, the result of a stronger US dollar, higher asset management deposits and increased indexed universal life sales. Gross deposits increased by 29%, driven by higher deposits in Aegon Asset Management and strong growth in bank deposits in the Netherlands. Net deposits, excluding run-off businesses, declined to EUR 3.3 billion. This was due to lower net inflows in Aegon Asset Management and lower net inflows in variable annuities, as a result of the successful enhanced alternative lump sum offer for the legacy GMIB block. New life sales were up 1% to EUR 518 million, as higher indexed universal life sales in the United States and favorable currency movements more than offset lower sales in the Netherlands and United Kingdom. New premium production for accident & health and general insurance was down slightly to EUR 248 million, as the effect of a stronger US dollar was more than offset by lower portfolio takeovers in the United States.
Market consistent value of new business
The market consistent value of new business amounted to EUR 183 million. The positive effect of currency movements and product adjustments in the United States was more than offset by the negative impact of lower interest rates.
Revenue-generating investments increased by 1% during the second quarter of 2015 to
EUR 645 billion. This increase was driven by the acquisition of the 25% stake in La Banque Postale Asset Management and net inflows, which more than offset the unfavorable effect of market movements resulting from higher interest rates on the fixed income portfolio.
Shareholders' equity declined EUR 2.4 billion compared with the end of the first quarter of 2015 to
EUR 25.0 billion on June 30, 2015. This was mainly caused by higher interest rates, which resulted in lower revaluation reserves on fixed income portfolios. The revaluation reserves were down by EUR 2.7 billion to EUR 7.2 billion. Aegon's shareholders' equity, excluding revaluation reserves and defined benefit plan remeasurements, declined to EUR 19.3 billion - or EUR 9.09 per common share - at the end of the second quarter. This was driven by unfavorable currency movements and the payment of the final dividend for 2014, which more than offset net income generated during the quarter.
The gross leverage ratio further improved to 27.7% in the second quarter, well within the target range of 26-30%, driven by earnings generated in the quarter, net of the payment of the final dividend. Excess capital in the holding increased to EUR 1.5 billion. Dividends of EUR 0.6 billion paid to the holding by the United States were largely offset by the payment of the final dividend for 2014, the investment in La Banque Postale Asset Management, interest payments, the effect of currency hedges and operating expenses.
Aegon's Insurance Group Directive (IGD) solvency ratio declined to 206% in the second quarter, mainly driven by negative market impacts. The capital in excess of the S&P AA threshold in the United States declined to USD 1.0 billion, due to dividends paid to the holding and negative market impacts. In the Netherlands, the IGD ratio, excluding Aegon Bank, declined to ~225%, driven by adverse market impacts. The Pillar I ratio in the United Kingdom, including the with-profit fund, remained stable at ~135%.
Aegon has obtained more clarity from the regulator on a number of items regarding Solvency II, which include amongst others volatility adjuster modelling in the Netherlands, use of matching adjustment in the United Kingdom and calibration of the US RBC ratio conversion at 250%. As a result, the company expects its Solvency II ratio to be in a tightened range of 140% to 170%, as there are still uncertainties remaining. Furthermore, Aegon has applied for the use of its internal model and is currently awaiting regulatory approval.
Operational free cash flows
Operational free cash flows excluding market impacts and one-time items amounted to EUR 388 million in the second quarter of 2015. The one-time items of EUR 256 million were primarily related to tax benefits arising from the re-domestication of a block of variable annuity business to the United States. Negative market impacts amounted to EUR 677 million and were mainly the result of interest rate mismatches and hedge losses in the Netherlands and the United States. Operational free cash flows including market impacts and one-time items amounted to a negative EUR 34 million for the quarter.
Aegon aims to pay out a sustainable, growing dividend, in line with the growth of its cash flows. This policy is reflected in the increase of the 2015 interim dividend to EUR 0.12 per common share. The interim dividend will be paid in cash or stock at the election of the shareholder. The value of the stock dividend will be approximately equal to the cash dividend. Aegon will neutralize the dilutive effect of the stock dividend on earnings per share.
Aegon's Euronext-listed shares will be quoted ex-dividend on August 21, 2015, whereas its NYSE-listed shares will be quoted ex-dividend on August 20, 2015. The record date is August 24, 2015. The election period for shareholders will run from August 26 up to and including September 11, 2015. The stock fraction will be based on the average share price on Euronext Amsterdam from September 7 through September 11, 2015. The stock dividend ratio will be announced on September 15, 2015 and the dividend will be payable as of September 18, 2015.
Financial overview, Q2 2015 geographically Holding, other The United New activities & EUR millions Americas Netherlands Kingdom Markets eliminations Total Underlying earnings before tax by line of business Life 110 80 28 9 - 227 Individual savings and retirement products 157 - - (3) - 154 Pensions 88 51 6 3 - 148 Non-life - (1) - 8 - 8 Asset Management - - - 46 - 47 Other - 3 - - (41) (38) Share in underlying earnings before tax of associates 2 2 - (1) - 4 Underlying earnings before tax 358 136 34 62 (41) 549 Fair value items (288) (117) (7) (3) 123 (293) Realized gains / (losses) on investments (25) 101 54 4 - 134 Net impairments 9 (3) - 1 - 7 Other income / (charges) - - (11) - - (11) Run-off businesses 3 - - - - 3 Income before tax 55 117 70 63 82 389 Income tax 26 (26) 5 (24) (20) (39) Net income 82 91 75 39 63 350 Net underlying earnings 278 106 38 38 (28) 433 Employee numbers Jun. 30, 2015 Mar. 31, 2015 Dec. 31, 2014 Employees 28,241 27,824 28,602 of which agents 5,207 5,020 5,713 of which Aegon's share of employees in joint ventures and associates 1,694 1,628 1,614
Full version press release
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The conference call presentation is available on aegon.com as of 7.30 a.m. CET.
Aegon's Q2 2015 Financial Supplement and Condensed Consolidated Interim Financial Statements
are available on aegon.com.
Conference call including Q&A
9:00 a.m. CET
Audio webcast on aegon.com
United States: +1-646-254-3362
United Kingdom: +44-203-427-1919
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Aegon’s roots go back 170 years – to the first half of the nineteenth century. Since then, Aegon has grown into an international company, with businesses in more than 20 countries in the Americas, Europe and Asia. Today, Aegon is one of the world’s leading financial services organizations, providing life insurance, pensions and asset management. Aegon’s purpose is to help people take responsibility for their financial future. More information: aegon.com.
Cautionary note regarding non-IFRS measures
This document includes the following non-IFRS financial measures: underlying earnings before tax, income tax, income before tax and market consistent value of new business. These non-IFRS measures 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, to the most comparable IFRS measure is provided in note 3 'Segment information' of Aegon's Condensed Consolidated Interim Financial Statements. Market consistent value of new business is not based on IFRS, which are used to report Aegon's primary financial statements and should not be viewed as a substitute for IFRS financial measures. Aegon may define and calculate market consistent value of new business differently than other companies. Aegon believes that these non-IFRS measures, together with the IFRS information, provide meaningful information about the underlying operating results of Aegon's business including insight into the financial measures that senior management uses in managing the business. In addition, return on equity is a ratio using a non-GAAP measure and is calculated by dividing the net underlying earnings after cost of leverage by the average shareholders' equity excluding the preferred shares, the revaluation reserve and the reserves related to defined benefit plans.
Local currencies and constant currency exchange rates
This document contains certain information about Aegon's results, financial condition and revenue generating investments presented 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 Aegon presented in EUR, which is the currency of Aegon's primary financial statements.
The 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, 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 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 private sector securities and the resulting decline in the value of sovereign exposure that Aegon holds;
- Changes in the performance of Aegon's investment portfolio and decline in ratings of Aegon's counterparties;
- Consequences of a potential (partial) break-up of the euro;
- 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;
- Reinsurers to whom Aegon has ceded significant underwriting risks may fail to meet their obligations;
- 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;
- Changes in laws and regulations, particularly those affecting Aegon's operations, ability to hire and retain key personnel, the products Aegon sells, and the attractiveness of certain products to its consumers;
- Regulatory changes relating to the insurance industry in the jurisdictions in which Aegon operates;
- Changes in customer behavior and public opinion in general related to, among other things, the type of products also Aegon sells, including legal, regulatory or commercial necessity to meet changing customer expectations;
- Acts of God, acts of terrorism, acts of war and pandemics;
- Changes in the policies of central banks and/or governments;
- 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 premium writings, 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;
- Litigation or regulatory action that could require Aegon to pay significant damages or change the way Aegon does business;
- As Aegon's operations support complex transactions and are highly dependent on the proper functioning of information technology, a computer system failure or security breach may disrupt Aegon's business, damage its reputation and adversely affect its results of operations, financial condition and cash flows;
- Customer responsiveness to both new products and distribution channels;
- Competitive, legal, regulatory, or tax changes that affect profitability, the distribution cost of or demand for Aegon's products;
- Changes in accounting regulations and policies or a change by Aegon in applying such regulations and policies, voluntarily or otherwise, may affect Aegon's reported results and shareholders' equity;
- 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;
- Catastrophic events, either manmade or by nature, could result in material losses and significantly interrupt Aegon's business; and
- Aegon's failure to achieve anticipated levels of earnings or operational efficiencies as well as other cost saving and excess capital and leverage ratio management initiatives.
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.
All comparisons in this release are against the second quarter of 2014, unless stated otherwise.
Willem van den Berg
SOURCE Aegon N.V.