Ambitious new plan for growth

May 29, 2008

Aegon has unveiled an ambitious new growth plan designed to increase earnings, improve returns over the next few years and make better use of the Group’s expanding global resources.

Aegon Chief Executive Officer, Alex WynaendtsAs part of the plan, Aegon has set itself two new financial targets: to increase its return on equity to a minimum of 15% by 2012 and deliver average earnings growth of at least 10% a year over the period 2007 – 2012.

In recent years, Aegon has made significant progress, expanding its international presence and strengthening its distribution network. But, announcing the new growth plan, Alex Wynaendts, who took over as CEO last April, said he believes the Group can do better with the resources it has available.

“Today’s global environment requires us to think and act differently,” he said. “It’s clear we can and will do better with Aegon’s significant resources.

“We will make better use of our capital, improve our financial performance and organize the management of Aegon to focus on the global opportunities for our businesses,” he promised.

Mr. Wynaendts and his senior management team are due to set out the details of the new plan at Aegon’s Analyst & Investor Conference in London on June 2 and 3.

As part of the plan – entitled ‘Unlocking the Global Potential’ – Aegon will target more of its financial resources on businesses that have strong growth prospects and are likely to deliver higher returns. By 2012, more than 50% of Aegon’s capital will be directed toward high-growth markets outside the United States.

The plan could also mean some tough decisions: improving the Group’s business mix may involve selling structurally underperforming assets to release money for new growth, as well as making acquisitions in emerging markets in Central and Eastern Europe, Asia and Latin America.

Speaking in London, Mr. Wynaendts will also announce plans to improve the financial performance of Aegon’s existing businesses and a shift to a more international approach to managing a group that now has operations in over twenty countries around the world.

As part of that, Aegon will set up a single, global organization for its asset management companies, and start to manage both life reinsurance and variable annuities as international businesses.

“Our local businesses must work more together to help us realize the full potential of Aegon as an international group,” Mr. Wynaendts said. He added that there would be “significant changes to how we organize and manage our portfolio of businesses going forward”.

As well as the new financial targets, Aegon has also reiterated its 2010 value of new business target of EUR 1.25 billion.

Taken together, Mr. Wynaendts said Aegon’s financial targets will “provide a balanced set of objectives” and ensure the Group is managing growth and profitability both short-term and long-term.

Aegon’s new CEO said the growth plan would help “solidify the Group’s leading position, deliver sustainable, profitable growth for our investors and help millions of our customers around the world secure their long-term financial futures”.