The financial crisis has led to an increased near-term focus on capital, but AEGON’s longer-term strategy – the company’s commitment to increase returns and grow its businesses – remains in place.
‘Unlocking the Global Potential’ is aimed at delivering sustainable, profitable growth for AEGON and its investors over the next several years.
Despite the financial crisis, we have made important progress with the specific measures outlined in the plan. AEGON senior management is planning to update investors at the company’s regular Analyst & Investor Conference scheduled for June 2009 in London.
Improving growth and returns from existing businesses
A crucial part of ‘Unlocking the Global Potential’ is ensuring that our existing businesses perform as efficiently as they can. We have already announced a reshaping of our operations in Canada to reduce capital use and ensure profitable growth by focusing on a select range of products. In the Netherlands, meanwhile, we have introduced a new strategic plan, aimed at increasing profitability, expanding the company’s distribution network and improving the return on capital.
Managing AEGON more as an international company
We want to make the most of our expanding international resources. We are setting up a global asset management organization, bringing together existing businesses in the United States, the United Kingdom, the Netherlands and elsewhere. In addition, we will use its existing strength and expertise in the United States to develop new markets for its variable annuities and life reinsurance businesses in Europe and Asia.
Reallocate capital
Measures to reduce risk and free up capital released EUR 1.7 billion in the second half of 2008. But, because of the financial crisis, investment in new businesses has been reduced. Even so, over the past year, AEGON has opened new businesses in India and Turkey, signed a new joint venture with one of Brazil’s largest independent insurers, expanded its bank distribution network in Spain and invested in the company’s growing pension business in Central & Eastern Europe.
By 2012, AEGON expects over 50% of its capital will be allocated to businesses outside the United States – an approach that will give the company a more balanced international presence.