Aegon is a global financial service company that helps people achieve a lifetime of financial security.
Aegon can trace its roots back to the first half of the 19th century. Nearly 175 years later, we have businesses in more than 20 countries, serving 28.5 million customers worldwide as of the end of 2018.
Here are three reasons why Aegon is a sound long-term investment:
Our services have never been more necessary than they are today. According to the World Health Organization, over 2 billion people will be over 60 years of age by 2050 – almost a quarter of the world's population. This demographic change poses far-reaching challenges for society, governments, businesses and Aegon. One of the key shifts will be who provides financial security during retirement. That responsibility is shifting fast from governments and employers to individuals, though many people are neither equipped with the knowledge nor the resources to protect their financial futures. It is our responsibility to help customers make the right choices.
Aegon offers financial products and services to support its customers through every stage of their lives. From life and accident & health insurance during their working lives, to saving for retirement, and (guaranteed) income products after retirement. By offering great service and the products they need, we develop loyal customers who stay with us throughout their lives.
International footprint
Aegon is active in over 20 countries around the world, including the Netherlands, the United Kingdom and the United States. In some countries, such as India and China, we operate with joint venture partners in order to utilize their local expertise and existing distribution channels.
Our geographic, product and business-line spread means that we benefit from diversification, as recognized by the rating agencies that cover us.
Our global presence and strong purpose gives us access to a huge range of potential employees. In particular, this allows us to recruit employees with the essential and scarce (digital) capabilities to support our transformation.
Investing in innovation
An increasing number of customers want to manage their finances online, with personalized offerings, and access to advisors or customer services, how and when they choose by phone, face-to-face, and through social media. Our global presence allows us to share our expertise between markets to deliver cost-effective, accurate and quality solutions through technology. We invested in this area early on and today we have a very strong and capable team.
We use analytics throughout the business; from assessing investment opportunities and market trends to customer engagement, underwriting and claims, and administrative processes, and to develop new pricing models. Analytics gives us a decided edge and delivers real commercial benefits.
We were also one of the first insurers to establish a venture fund, Transamerica Ventures, which scans the globe for FinTech and InsureTech startups that offer technology or services that can help our businesses.
For more, see the article: Changing Aegon's future one data set at a time
Scale
With more than 28 million customers, around 25,000 employees and over EUR 800 billion (year-end 2018) invested on behalf of our customers, we benefit from significant economies of scale. Our size means we can invest in strong global platforms and back-office systems, and are able to spread costs across our large customer base. And our strong capital position guarantees our ability to meet our financial obligations to our stakeholders.
Global asset manager
As a global group we have been able to build a strong asset management business. The insights we gain into market, regulatory, customer and product trends from operating across different geographies enables us to use our expertise from one market and apply it to others. Sharing insights and experience saves us time and money and helps us deliver market-leading capabilities for our customers.
Overall, we are positioned to benefit from the growth opportunities across our expanded customer universe, the broader range of services and solutions we can provide them, and the focus on doing this in more capital efficient and targeted ways. (For more, visit the Aegon Asset Management website.)
Business model
To make an informed decision about investing in Aegon, it's also important to understand how we add value. Click here to find out more about our business model
For 2019 – 2021 Aegon's operations are targeted to generate EUR 4.1 billion of capital cumulatively. This excludes market impacts and one-time items, and is after holding funding and operating expenses. It is our intention to pay-out 45 – 55% of this capital generation* to shareholders over the period 2019 – 2021 in the form of dividends. In addition, Aegon is targeting a return on shareholders' equity of more than 10% on an annual basis.
Capital generation is backed by a proactive approach to manage the portfolio of businesses, which are grouped into three distinct categories – 'Manage for Value', 'Drive for Growth', and 'Scale up for Future' businesses. The first category consists of at-scale businesses, which are mostly spread-based, and are managed for value in a sustainable way. The vast majority of investments will be directed to 'Drive for Growth' businesses which are at the core of Aegon's strategy as they drive future capital generation. Finally, the third part of the portfolio – 'Scale up for Future businesses' – is aiming at capturing meaningful new opportunities.
Dividends
Aegon aims to deliver shareholder value by growing its business, increasing capital generation and paying out dividends to its shareholders.
Aegon's operations are expected to generate EUR 4.1 billion of capital cumulatively for 2019 – 2021*. It is Aegon's intention to pay-out 45 – 55% of this capital generation** to shareholders over the period 2019 – 2021 in the form of dividends.
Between 2012 and 2018 Aegon paid out a stable, growing dividend to shareholders.
Further information
- Read our latest press releases
- Gain a deeper understanding of our strategy (presentations)
- View our dividend history
- Delve deeper into our performance (half-year figures)
* Excluding market impacts and one-time items, and after holding funding and operating expenses
** Assuming markets move in line with management's best estimate, no material regulatory changes, and no material one-time items other than already announced restructuring programs.
Aegon is dedicated to meeting its long-term commitments to shareholders by delivering sustainable financial results and maintaining a strong and stable balance sheet.
Return on Investment
Going forward, the focus remains on growing profitably, and creating value for all stakeholders including customers and shareholders. In this way, Aegon will fulfill its purpose of helping people achieve a lifetime of financial security.
Multi-dimensional framework
Since January 2016, European insurance companies have been required to comply with the new capital adequacy framework, Solvency II, which was introduced to protect policyholders. The framework ensures that insurers and supervisors identify risks to capital levels at an earlier stage and take action where needed.
Under the new framework, the level of funds an insurer has to cover its level of risk is expressed as a Solvency II ratio. This means that insurers with higher-risk investments, such as equities, must hold more capital than those investing in lower-risk assets, such as government bonds.
The statutory supervisory standard under Solvency II is 100%, which means that an insurer's capital is such that it would still be able to meet its obligations in the event of a severe shock expected to occur only once every 200 years.
Aegon's Group target range is 150 – 200%.
For the most recent ratios, see our latest half-year results press release.
Holding excess cash
Aegon targets a holding excess cash position within the target zone of EUR 1.0 to 1.5 billion.
Gross financial leverage ratio
Aegon targets a gross financial leverage ratio between 26% and 30%.
AA- financial rating
Aegon wants to maintain a capitalization required for a financial strength AA- rating.
Further information
- Detailed financial ratings
- Introduction to Solvency II infographic (pdf)
- FAQs about Aegon & Solvency II
* Assuming markets move in line with management's best estimate, no material regulatory changes and no material one-time items other than previously announced restructuring programs.
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