Strong underlying performance (up 9%); net income affected by market conditions

• Strong business performance results in a 9% rise in underlying earnings before tax 
• Operating earnings and net income affected by recent turmoil in world financial markets
• Aegon reports no significant impairments, reflecting high quality of investment portfolio
• Aegon confident it will meet 2010 value of new business target despite decline in first quarter

Chairman’s Statement

Aegon’s Chairman of the Executive Board and CEO Alexander Wynaendts stated:

"Aegon’s businesses continued to demonstrate strong underlying performance, despite the turbulent environment. Retail sales progressed well during the quarter, in particular in the US and the Netherlands. The downturn in financial markets and a weak US dollar resulted in Aegon reporting considerably lower operating earnings and net income for the first quarter. Since the end of the quarter we have seen a reversal of the widening of credit spreads, which would have reduced significantly the negative impact of fair value assets on Aegon's operating earnings and net income. The quality of our investment portfolio is again demonstrated by the fact that Aegon experienced no material impairments in the first quarter. In addition, our capital position and cash flows remain strong. We also remain confident in our progress toward our 2010 VNB target. Finally, in line with our international growth strategy, we successfully continued our international expansion in Central and Eastern Europe and Turkey.”

Strategic developments

Aegon has a focused strategy, aimed at creating long-term value for all its stakeholders. The Group's objectives are to expand its international presence, further strengthen its distribution networks and invest in its growing pension businesses. Aegon took a number of specific steps to meet these objectives:

• Aegon strengthened its position in the developing pension and asset management markets in Central and Eastern Europe (CEE) by signing an agreement to acquire the UNIQA Asset Management Company and the Heller-Saldo 2000 Pension Fund Management Company in Hungary, with a total number of pension fund members of 140,000. Following the acquisition, Aegon Hungary's pension revenue generating investments will amount to EUR 1.9 billion. 
• As part of its ongoing efforts to expand in rapidly developing markets, Aegon also announced the acquisition of Turkish life and pension company Ankara Emeklilik. Turkey, with its population of 74 million people, has a low life insurance penetration and the private pensions market has significant growth potential. In addition, Ankara Emeklilik has a well-established presence in the Turkish life insurance and private pensions market, with more than 54,000 pension fund members and EUR 35 million in revenue generating investments. Ankara Emeklilik sells through a variety of different channels and has an agreement with Şekerbank to distribute products and services through a nationwide network of 236 branches.
• In April, Aegon and Industrial Securities, one of China's leading securities firms, announced the establishment of a new asset management joint venture following final approval from the country's regulatory authorities. The joint venture will be named Aegon Industrial Fund Management Company. Under the agreement, Aegon will acquire a 49% interest in Industrial Fund Management Company (IFMC), a subsidiary of Industrial Securities. IFMC is a Chinese mutual fund manager with approximately EUR 3 billion in revenue generating investments. Industrial Securities will retain the remaining 51% of IFMC.

Aegon's value of new business (VNB) decreased to EUR 186 million. The decline was due primarily to the impact of a weaker US dollar and British pound and a lower contribution from the Group's life reinsurance and institutional businesses in the Americas. There was a decline in VNB from both Taiwan and the Netherlands, because of a recent change in business mix and the effect of markets on unit-linked sales in Taiwan, while in Spain new business volumes were also lower. Aegon's operations in CEE again reported strong growth in VNB, helped by the launch of a new mandatory pension fund in Romania at the start of 2008.

Internal rates of return, meanwhile, improved, rising to 18.4% as the Group continued to focus on writing profitable new business.

See related documents for the full version of the press release.