Read CEO Lard Friese's letter published in Aegon's Integrated Annual Report 2022.
2022 will be remembered as a pivotal year for Aegon and its stakeholders. We made significant progress in the implementation of our strategy and delivered on several of our operational and financial targets ahead of schedule. As a result, we have laid the foundations for the next chapter of our transformation journey.
At the same time, we remained focused on helping our customers navigate a highly volatile economic and geopolitical landscape. Increasing inflation, rising energy prices, and higher interest rates all brought new financial challenges for individuals and businesses across our markets. It was a testing time for investors, too, given the volatility in equity and bond markets and the uncertainty around inflation expectations.
Guided by our purpose of Helping people live their best lives, we continued to provide the support and peace of mind that people have come to expect from Aegon over the years. I was pleased to see my colleagues respond to the war in Ukraine in the same spirit, as we moved quickly to support global humanitarian efforts for Ukraine’s citizens through our donation to the Red Cross. Aegon has also exited its investment positions in Russia wherever possible.
A new chapter for Aegon
Against this challenging backdrop, we moved forward with executing the strategy first announced at our Capital Markets Day in late 2020. Building on the hard work and progress of the previous year, we took steps to improve the company’s operating performance and financial resilience, by further strengthening our balance sheet and reducing our risk profile.
Moreover, we made important progress with our operational improvement plan aimed at improving our performance through a combination of expense savings and growth initiatives. At the end of 2022, we exceeded the targeted improvement of our operating result a year earlier than expected. Similarly, we realized our free cash flow target for the 2021–2023 period a year earlier than expected. In addition, we finalized the divestment of our businesses in Hungary and Turkey, enabling us to buy back EUR 300 million worth of shares and realize our deleveraging target.
Building on this foundation, our ambition remains to be a high-performance company that will be a leader in its chosen markets. In October 2022, we took a pivotal step in this direction, with the decision to combine the company's Dutch pension, life and non-life insurance, banking, and mortgage origination activities with those of a.s.r. to create a leading Dutch insurance company. I see this transaction as marking the end of the first stage of our transformation. While the next chapter will bring significant changes for many Aegon colleagues, it also comes with new opportunities, and I feel assured that all those involved can look forward to a bright future in a strong combined business.
Investing in our markets
Meanwhile, we took further steps on our path to create leading businesses in other markets. In the United States, we continued to invest in building on Transamerica’s advantageous position in pension plans offered through employers, and in individual life insurance. For our US Individual Solutions business, this resulted in a 20% increase in new life sales, as targeted management actions led to strong growth in the World Financial Group distribution channel.
We maintained our momentum in the United Kingdom, where we continued to focus on sustaining profitable growth in the retail and workplace channels of our platform. Unfavorable market developments led to third-party net outflows in our global asset manager as customers in the Global Platforms channel freed up liquidity in a rising interest rate environment which was not fully offset by continued net deposits in our Strategic Partnerships. In addition, we identified new opportunities to develop our business in our growth markets of Brazil, China, and Spain & Portugal, with the latter achieving sales growth of 18% in its bancassurance channel.
Despite the clear headway made this past year, there is still much work to be done to complete the next stages of our transformation. Aegon’s priority across each of its markets remains to deliver value to all stakeholders, including the environment and society at large. This sentiment, already embodied by our purpose and strengthened sustainability commitments, is further evidenced by the launch of Aegon's Sustainability Roadmap 2025, a process led by our newly established Global Sustainability Board. The roadmap will help to embed sustainability more strongly and consistently within our organization, to help Aegon become a more sustainable business by 2025.
I am especially pleased to see our priority themes of climate change and inclusion and diversity reflected increasingly in our day-to-day activities. In 2022, we took the first steps in our commitment to transitioning our general account investment portfolio to net-zero greenhouse gas emissions by 2050, and we are well on track to meet our 2025 target of a 25% reduction in the carbon intensity of our corporate fixed income and listed equity assets. In addition, we introduced further measures to become a more inclusive and diverse organization, including by appointing a Global Head of Inclusion and Diversity.
Indebted to our employees
That we have made progress on so many fronts, and performed well in such challenging circumstances, speaks not only to the strength of our strategy, but equally to the resilience and hard work of our people around the world. Building a strong, future-proof organization is very much a team effort, and with the easing of the COVID-19 pandemic, I am very pleased to see our employees returning to our offices, supported by our new hybrid way of working.
Thanks to these talented and dedicated colleagues, as well as our strong balance sheet and focused strategy, I feel confident about the future, and the opportunities that lie ahead for our company and its stakeholders. That said, we must never lose sight of our purpose as we navigate new challenges in an increasingly uncertain world. I would like to thank all our stakeholders for their continued contributions and commitment as we continue this journey together in 2023 and beyond.
The Hague, the Netherlands, March 15, 2023
CEO of Aegon