We have made significant progress in improving the quality of our products and services, in line with our customers’ needs across the various stages of their life cycle.
We aim to deliver excellent service to customers at competitive cost levels and are doing this by increasing scale and using technology to improve the quality, efficiency and accuracy of processes.
Expenses have been reduced and investments made in new digital business models such as Knab in the Netherlands, GoBear in Asia, Retiready – our retirement platform – in the UK, and the single US retirement plan administrative system in Transamerica.
It was our ambition to reduce annual operating expenses by €200 million by 2018, primarily in the US and the Netherlands. In 2017, we accelerated our cost savings, with a revised goal of €350 million. Going forward, we will focus on reducing complexity, eliminating duplication, improving accuracy, and increasing automation to achieve cost efficiencies.
We also improved the quality of our financial modelling and addressed several longstanding disputes, while achieving cost savings in established markets, freeing up capital from legacy annuity businesses, and continuing to improve hedging.
What steps are we taking to improve operational excellence?
- Digitize processes and increase self-service to create room to invest
- Implement efficient operating models
- Increase economies of scale in asset management and administration
What steps have we already taken?
- At group level, we have been focusing on investing in both the digital capabilities and expertise of our workforce, and the digital innovation of the products and services we offer. An important step for us was the launch of our Center of Excellence for Digital, which will help us to become more agile and more effective, and to achieve a higher level of service and a better customer experience. The Center will promote international collaboration in the digital domain, particularly in Asia and continental Europe.
- Nationally, we've launched numerous online financial solutions over the last three years. Examples include Kroodle, Onna Onna and Knab in the Netherlands, Active Transamerica in the US, and Simply Life and Secure Retirement Income in the UK.
- And we're investing in innovation with Transamerica Ventures, our venture fund with a budget of $135 million to invest in start-ups that are developing new technologies for the financial sector.
- Together with four other insurance companies, Aegon launched the Blockchain insurance industry initiative B3i. This project will explore the potential for distributed ledger technologies to increase efficiency.
- In the US, Transamerica announced three new variable annuity investment options that invest in Blackrock's iShares smart investment funds. These funds help reduce risk, generate income and enhance returns by taking advantage of systematic biases or inefficiencies in the market.
- Aegon's joint venture GoBear is Asia's only impartial meta-search engine for insurance and financial products. Just one year after launch, Go-Bear recorded double digit month- on-month growth rates, attracting increasing numbers of users that are looking for an un-biased comparison of different financial products and services. In 2016, more than 7.7 million users visited our website while close to one million users used our site to click through to the site of a provider or broker.
- The Americas region is aiming for cost savings of $300 million by 2018. In addition, our operations in the Netherlands intend to realize cost savings of €50 million, and the holding €10 million by 2018.
What performance indicators do we use?
- Ratio of costs to assets
- Ratio of costs to earnings
How did we perform in 2016? (2015 performance)
- Reduction in operating expenses of €110 million
- Ratio costs: assets: 0.47% (0.54%)
- Ratio costs: earnings: 64.2% (62.9%)