Furthermore, Aegon will implement several reporting changes to better align reporting with its management of the business. The reporting changes will be applied from the first quarter 2014 results to be released on Thursday May 15, 2014.
Amended accounting policies
Aegon's first quarter 2014 results will be based on its amended accounting policies. Comparative quarterly 2013 data reflecting the amended accounting policies are available in Aegon's updated financial supplement, published today.
For technical reasons, Aegon also filed a Supplemental Annual Report on Form 6-K with the United States Securities and Exchange Commission (SEC) reflecting the voluntary change in accounting policies. The audited and officially reported results for 2011, 2012 and 2013 remain unchanged.
Sales
Consistent with Aegon's focus in the United Kingdom to drive business from pre-Retail Distribution Review propositions to its platform, the company will start reporting platform assets under administration on a quarterly basis. There will be no change to the reporting of sales. As at December 31, 2013, the assets under administration on the platform totaled GBP 1.3 billion.
Aegon's Stable Value Solutions business in the Americas is managed to maintain the current level of assets, and not for new sales. Therefore, Stable Value Solutions' deposits will no longer be included in Aegon's sales and MCVNB reporting going forward. In 2013, Stable Value Solutions recorded USD 3.0 billion in deposits and USD 23 million in MCVNB.
Market consistent value of new business
Aegon will prospectively implement a number of changes to the calculation of MCVNB to further align reported MCVNB with new business pricing. These include adjustments to the cost of capital for underwriting and operational risk, the inclusion of expenses charged by the Corporate Center to the operating units, and incorporation of the ultimate forward rate in the methodology to construct the risk free curve. The combined negative impact of these changes on MCVNB is approximately 30% compared with the previous methodology used until 2013.
Operating expenses
Aegon Americas' variable annuity wholesalers are primarily rewarded based on the level of sales. Their variable compensation resembles commission and will, therefore, be retrospectively reclassified as commission from operating expenses. In 2013, variable compensation for Aegon Americas' variable annuity wholesalers totaled USD 74 million. This reporting change has no impact on underlying earnings.
