Our businesses

Our main operations are in the US, the Netherlands and the UK. We also have significant businesses in Southern & Eastern Europe, Asia and Latin America.

Our purpose

As a company, our purpose is to help people achieve a lifetime of financial security. This purpose is particularly relevant in today's world, as people live longer, healthier lives, new technologies are transforming the way we work, and it's clear that in many countries, states and company pensions are no longer enough to maintain living standards.

Our products and services

Aegon's businesses offer a range of financial products and services to help customers throughout their working lives and into retirement. These include life insurance, accident & health cover, pensions and retirement plans, annuities, savings products and investments. In some countries, we also offer mortgages, home and car insurance. We insure customers' lives, protect their families and help them save for education and retirement. We help them buy a new home, and manage their long-term investments. When they retire, we provide a stable income. We many parts of the world – and ensure, that when they're gone, their families' future is secure. In retirement particularly, we see a connection between health and long-term financial security.

Our markets

We have four main reporting segments: Americas, Europe¹, Asia and Asset Management. Of these, the Americas is by far the largest, accounting for more than half of our annual earnings. Our holding company, Aegon N.V., receives regular dividends from the group's subsidiaries. Aegon N.V. is headquartered in The Hague, the Netherlands.

Our businesses operate locally through two main brands: Aegon (mainly in Europe and Asia) and Transamerica (mainly in the US). In addition, we have global businesses: these include Aegon Asset Management and Blue Square Re, our internal reinsurance company. Aegon Asset Management manages assets of behalf of third parties and Aegon's own businesses, covering all major asset classes, including fixed income, equity and real estate.

In many countries, we have joint ventures; these give us access to local markets and expertise. In Spain and Portugal, for example, we offer products through Banco Santander's more than 3,000 bank branches. We also have significant joint ventures in China, India, Japan, France, the Netherlands, Brazil and Mexico. 

For further details on our businesses, see our Business Overview on pages 345-377 of the Integrated Annual Report.

With businesses across the Americas, Europe and Asia, we have the advantages of a global group. We can share talent, knowledge, processes and technologies. We are also more efficient with our capital: alone, our businesses would not be able to diversify risk, and as a result would need to hold significantly more capital. Size can also be important in the investment industry – our global presence is the basis for our growing asset management business.

Distribution

In many markets, to distribute our products, we work with intermediaries. These include brokers, agents, banks, employee benefit consultants and independent financial advisors. This multi-channel approach allows us to reach more customers. Increasingly, our products and services are sold direct to customers and companies, including via online platforms. 

We now have nearly 7.7 million 'digitally connected' customers. Aegon also owns distribution businesses; these include Origen Financial Services in the UK and World Financial Group, which operates in the US and Canada.

We operate in a highly regulated industry and this regulation has become increasingly complex over the past decade. Much of this new regulation was influenced by the 2008-2009 financial crisis.

Since the crisis, regulators have emphasized the need for more effective consumer protection. As a result, we have seen tighter controls on product design, distribution and reporting. The biggest change was the introduction of new capital rules in 2016 under Solvency II; an insurer's Solvency II ratio has now become an important measure of its financial strength.

Data privacy

At the same time, we have seen new rules on data privacy – both in Europe with the EU's General Data Protection Regulation (GDPR) and with new cyber security legislation in New York and California. Meanwhile, PSD2 (the new EU Payment Services Directive) will bring in more open banking, allowing consumers to share their personal financial data electronically. We are also seeing further efforts to open up Europe's financial services market, via MiFID II, as well as changes in financial reporting rules with IFRS 17 on accounting for insurance contracts (due for introduction in 2022).

Changes in regulation can have a profound effect not only on the way we manage our business, but also on our profitability and the products and services we offer. 

Our products and services per region

^{Table notes}

^{1 Bermuda relates to Transamerica Life Bermuda.
2 Asia includes locations of our joint venture GoBear. Financial results of GoBear are reported under Holding and other activities.
3 Akaan Aegon operates under the brand name Akaan Transamerica.}

Global group

With businesses across the Americas, Europe and Asia, we have the advantages of a global group. We can share talent, knowledge, processes and technologies. We are also more efficient with our capital: alone, our businesses would not be able to diversify risk, and as a result would need to hold significantly more capital. Size can also be important in the investment industry – our global presence is also the basis for our growing asset management business.

Distribution

We work with intermediaries to distribute our products in many markets. These intermediaries include brokers, agents, banks, employee benefit consultants and independent financial advisors. This 'multi-channel' approach allows us to reach more customers.

Increasingly, our products are sold direct to customers, companies and intermediaries, including via online platforms. We now have over 7.7 million 'digitally connected' customers. Aegon also owns distribution businesses; these include Origen Financial Services in the UK and World Financial Group, which operates in the US and Canada. We sold our main Dutch distribution business, Unirobe Meeús Groep (UMG), in 2017.

Regulation

We operate in a highly regulated industry. Over the past decade, regulation has become increasingly complex. Much of this new regulation was influenced by the 2008-2009 financial crisis. Since the crisis, regulators have emphasized the need for more effective consumer protection. As a result, we have seen tighter controls on product design, distribution and reporting. The biggest change was the introduction of new capital rules in 2016 under Solvency II; an insurer's Solvency II ratio has now become an important measure of its financial strength.

At the same time, we have seen new rules on data privacy, with the EU's General Data Protection Regulation (GDPR). Meanwhile, PSD2 (the new EU Payment Services Directive) will bring in more open banking, allowing consumers to share their personalfinancial data electronically. We are also seeing further efforts to open up Europe's financial services market, via MiFID II, as well as changes in financial reporting rules with IFRS 17 on accounting for insurance contracts (due for introduction in 2022).

Changes in regulation can have a profound effect not only the way we manage our business, but also on our profitability and the products and services we offer. 

Sources of revenue and earnings

Most of our revenues comes from three sources: premiums from customers, investment income and fees and commissions. Our earnings come from fees, spreads, and technical profits. 

• Earnings from spreads come from the difference between investment income earned and interest credited to customers.
• Technical earnings derive mainly from the difference between risk premiums received from and claims paid to customers.
• Earnings from fees come from charges to customers relating to deposits and assets under management, or from services provided by Aegon (net of fees paid by the Company to third party asset managers or service providers).

In recent years, we have concentrated more on fee-based business, and less on spread-based business. This is mainly in response to low interest rates and increased capital requirements. This shift makes the source of our earnings more balanced and diverse, and makes our capital base more predictable and less at risk from fluctuations in world financial markets. There is no material seasonality to our sales or income, though we usually experience an increase in mortality claims in the first quarter (which is winter in our main markets). 

Aegon's basic business model has four steps: product development and pricing, distribution, investment, and payment of claims and benefits. This model drives value creation for our customers, employees, business partners and investors, as well as for the wider community.

1. Product development and pricing

We begin with customers. We assess their needs, and develop products and services that meet those needs. Next we estimate and price the risk involved for us as a financial services company. Our products and services are then branded, marketed and sold.

2. Distribution
We offer products and services via intermediaries, like brokers, banks or financial advisors. We also sell directly to our customers.

3. Investment
In exchange for products and services, customers pay fees or premiums. On certain pension products, savings and investments, customers make deposits. By investing this money, we make returns for our customers.

4. Claims and benefits
From premiums and investment returns, we pay customer claims and benefits, cover our expenses, and make profits for our shareholders. Customers also make regular withdrawals from pensions and savings products.

Ownership

Aegon N.V. shares are listed in both Amsterdam (Euronext) and New York (NYSE). More than three-quarters of our shareholders are located in our three main markets: the US, the Netherlands and UK. Shareholders meet at least once a year at our offices in The Hague. Aegon's largest shareholder is Vereniging Aegon, an association whose purpose is to protect the long-term interests of both Aegon and its stakeholders. Vereniging Aegon currently holds 32.64% of voting rights in the Company. However, in the absence of a Special Cause, Vereniging Aegon may only cast one vote for every 40 common shares B it holds.