Aegon’s trading update for the first quarter 2023

Please click here to access all 1Q 2023 trading update related documents 

The Hague, May 17, 2023 - Consistent delivery on strategic and financial objectives in a volatile market

• Operating capital generation before holding funding and operating expenses increases by 5% compared with the first quarter of 2022 to EUR 292 million. This reflects business growth, an improvement in claims experience, and lower expenses
• The capital ratios of all three main units remain above their respective operating levels; Group Solvency II ratio increases to 210%
• As a result of the repurchase of shares related to the ongoing EUR 200 million share buyback program, Cash Capital at Holding decreases to EUR 1.4 billion, which is in the upper half of the operating range
• Continued progress on transformation agenda; on track for the closing of the transaction to combine Aegon’s Dutch businesses with a.s.r. in the second half of 2023
• Strong sales growth in US Strategic Assets, UK Workplace business, and life insurance businesses in China and Brazil. Sales momentum in Asset Management and UK Retail businesses affected by challenging market conditions
  
  

As previously announced, Aegon has adjusted its reporting format to trading updates for the first and third quarters with a focus on selected key performance metrics, including operating capital generation, capital positions, and sales metrics. Aegon will report IFRS results for the first half-year and second half-year to align with a.s.r.’s reporting cycle.

Statement of Lard Friese, CEO

“Aegon has had a good start to the year. We delivered strong commercial growth and advanced our strategic priorities in the first quarter. I am pleased with the headway we are making despite persistent volatility in the financial markets.

We have made good progress with preparations for the closing of the transaction to combine Aegon’s Dutch businesses with a.s.r. Thanks to the commitment and hard work of our colleagues, we remain on course to close the transaction in the second half of this year.

During the first quarter, we continued to reallocate capital to those businesses where we can build leading positions
and generate attractive returns. We sold our Protection business in the UK and divested a legacy block of direct marketing business in Asia. At the same time, we strengthened our asset management capabilities through the acquisition of NIBC’s European Collateralized Loan Obligation activities.

We delivered strong sales growth in all of our US Strategic Assets, and in our life insurance businesses in China and Brazil. In the UK Workplace business, we are also gaining traction as a growing number of new customers are entrusting their retirement savings to us. However, commercial momentum in our asset management and UK Retail businesses was affected by reduced investor confidence as a result of the challenging market conditions.

Against a backdrop of persistent volatility in the financial markets, we maintained a strong balance sheet with EUR 1.4 billion Cash Capital at the Holding. The capital positions of all main units remained above their respective operating levels, benefiting from the actions we have taken in the past few years to improve our risk profile. Given our capital strength and our improved operational performance – as underscored by the growth in our operating capital generation – I am confident that we will deliver on our strategic commitments and on our 2023 financial guidance. I look forward to providing an update on our strategic plans and medium-term financial objectives at our Capital Markets Day on June 22, 2023.”

Additional information

Presentation
The conference call presentation is available on aegon.com as of 7.00 a.m. CET.

Supplements
Aegon’s 1Q 2023 Trading update Supplement and other supplementary documents are available on aegon.com.

Conference call including Q&A
The conference call starts at 9:00 am CET, with an audio webcast on aegon.com. To join the conference call and/or participate in the Q&A, you will need to register via the following registration link. Directly after registration you will see your personal pin in the confirmation screen and additionally you will receive an email with the call details and again your personal pin to enter the conference call. To avoid any unforeseen connection issues, it’s recommended to make use of the ‘call me’ option.

Two hours after the conference call, a replay will be available on aegon.com.

Click to join
With ‘Call me,’ there’s no need to dial-in. Simply click the following registration link and select the option ‘Call me’.
Enter your information and you will be called back to directly join the conference. The link becomes active 15 minutes prior to the scheduled start time. Should you wish not to use the ‘click to join’ function, dial-in numbers are also available.

Dial-in numbers for conference call
United States: +1 864 991 4103 (local)
United Kingdom: +44 808 175 1536 (toll-free)

The Netherlands: +31 800 745 8377 (toll-free)

Passcode: you will receive a personal pin upon registration.

Financial calendar 2023
Annual General Meeting – May 25, 2023
Capital Markets Day – June 22, 2023
First half 2023 results – August 17, 2023
Trading update third quarter 2023 – November 16, 2023

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

Aegon's purpose of Helping people live their best lives runs through all its activities. As a leading global investor and employer, the company seeks to have a positive impact by addressing critical environmental and societal issues, with a focus on climate change and inclusion & diversity. Aegon is headquartered in The Hague, the Netherlands, and listed on Euronext Amsterdam and the New York Stock Exchange. More information can be found at aegon.com.

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 in GBP for the United Kingdom, because those businesses operate and are managed primarily in those currencies. Certain comparative information presented on a constant currency basis eliminates the effects of changes in currency exchange rates. None of this information is a substitute for or superior to financial information about Aegon presented in EUR, which is the currency of Aegon’s primary financial statements.
Forward-looking 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, could, is confident, will, and similar expressions as they relate to Aegon. These statements may contain information about financial prospects, economic conditions and trends and involve risks and uncertainties. In addition, any statements that refer to sustainability, environmental and social targets, commitments, goals, efforts and expectations and other events or circumstances that are partially dependent on future events are forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Aegon undertakes no obligation, and expressly disclaims any duty, 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 and adversely 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:

• Unexpected delays, difficulties, and expenses in executing against our environmental, climate, diversity and inclusion or other “ESG” targets, goals and commitments, and changes in laws or regulations affecting us, such as changes in data privacy, environmental, safety and health laws;
• Changes in general economic and/or governmental conditions, particularly in the United States, the Netherlands and the United Kingdom;
• Civil unrest, (geo-) political tensions, military action or other instability in a country or geographic region;
• 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;
  • The effects of declining creditworthiness of certain public sector securities and the resulting decline in the value of government exposure that Aegon holds;
  • The impact from volatility in credit, equity, and interest rates;
• Changes in the performance of Aegon’s investment portfolio and decline in ratings of Aegon’s counterparties;
• Lowering of one or more of Aegon’s debt ratings issued by recognized rating organizations and the adverse impact such action may have on Aegon’s ability to raise capital and on its liquidity and financial condition;
• Lowering of one or more of insurer financial strength ratings of Aegon’s insurance subsidiaries and the adverse impact such action may have on the written premium, policy retention, profitability and liquidity of its insurance subsidiaries;
• The effect of the European Union’s Solvency II requirements and other regulations in other jurisdictions affecting the capital Aegon is required to maintain;
• Changes affecting interest rate levels and low or rapidly changing interest rate levels;
• Changes affecting currency exchange rates, in particular the EUR/USD and EUR/GBP exchange rates;
• Changes affecting inflation levels, particularly in the United States, the Netherlands and the United Kingdom;
• 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, particularly in the United States, the Netherlands, the United Kingdom and emerging markets;
• Catastrophic events, either manmade or by nature, including by way of example acts of God, acts of terrorism, acts of war and pandemics, could result in material losses and significantly interrupt Aegon’s business;
• The frequency and severity of insured loss events;
• Changes affecting longevity, mortality, morbidity, persistence and other factors that may impact the profitability of Aegon’s insurance products;
• Aegon’s projected results are highly sensitive to complex mathematical models of financial markets, mortality, longevity, and other dynamic systems subject to shocks and unpredictable volatility. Should assumptions to these models later prove incorrect, or should errors in those models escape the controls in place to detect them, future performance will vary from projected results;
• Reinsurers to whom Aegon has ceded significant underwriting risks may fail to meet their obligations;
• Changes in customer behavior and public opinion in general related to, among other things, the type of products Aegon sells, including legal, regulatory or commercial necessity to meet changing customer expectations;
• Customer responsiveness to both new products and distribution channels;
• As Aegon’s operations support complex transactions and are highly dependent on the proper functioning of information technology, operational risks such as system disruptions or failures, security or data privacy breaches, cyberattacks, human error, failure to safeguard personally identifiable information, changes in operational practices or inadequate controls including with respect to third parties with which we do business may disrupt Aegon’s business, damage its reputation and adversely affect its results of operations, financial condition and cash flows;
• The impact of acquisitions and divestitures, restructurings, product withdrawals and other unusual items, including Aegon’s ability to complete, or obtain regulatory approval for, acquisitions and divestitures, integrate acquisitions, and realize anticipated results, and its ability to separate businesses as part of divestitures;
• Aegon’s failure to achieve anticipated levels of earnings or operational efficiencies, as well as other management initiatives related to cost savings, Cash Capital at Holding, gross financial leverage and free cash flow;
• Changes in the policies of central banks and/or governments;
• Litigation or regulatory action that could require Aegon to pay significant damages or change the way Aegon does business;
• Competitive, legal, regulatory, or tax changes that affect profitability, the distribution cost of or demand for Aegon’s products;
• Consequences of an actual or potential break-up of the European monetary union in whole or in part, or the exit of the United Kingdom from the European Union and potential consequences if other European Union countries leave the European Union;
• Changes in laws and regulations, particularly those affecting Aegon’s operations’ ability to hire and retain key personnel, taxation of Aegon companies, the products Aegon sells, and the attractiveness of certain products to its consumers;
• Regulatory changes relating to the pensions, investment, and insurance industries in the jurisdictions in which Aegon operates;
• Standard setting initiatives of supranational standard setting bodies such as the Financial Stability Board and the International Association of Insurance Supervisors or changes to such standards that may have an impact on regional (such as EU), national or US federal or state level financial regulation or the application thereof to Aegon, including the designation of Aegon by the Financial Stability Board as a Global Systemically Important Insurer (G-SII);
• Changes in accounting regulations and policies or a change by Aegon in applying such regulations and policies, voluntarily or otherwise, which may affect Aegon’s reported results, shareholders’ equity or regulatory capital adequacy levels;
• Changes in ESG standards and requirements, or Aegon’s ability to meet its sustainability and ESG-related goals, or related public expectations; and
• We may also rely on third-party information in certain of our disclosures, which may change over time as methodologies and data availability and quality continue to evolve. These factors, as well as any inaccuracies in third-party information we use, including in estimates or assumptions, may cause results to differ materially and adversely from statements, estimates, and beliefs made by us or third-parties. Moreover, our disclosures based on any standards may change due to revisions in framework requirements, availability of information, changes in our business or applicable governmental policies, or other factors, some of which may be beyond our control. Additionally, we may provide information that is not necessarily material for SEC reporting purposes but that is informed by various ESG standards and frameworks (including standards for the measurement of underlying data), internal controls, and assumptions or third-party information that are still evolving and subject to change.
  
  

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

Attachment

• 20230517_PR_Aegon's trading update first quarter 2023