Aegon is a global financial service company that is undergoing a transformation to better help people achieve a lifetime of financial security, amid rising life expectancy and more time spent in retirement.
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, and with EUR 316 billion in assets under management at the end of 2018.
Here are three reasons why Aegon is a sound long-term investment:
More people than ever are living longer in retirement. By 2050, nearly 1.5 billion people worldwide will be over the age of 65. Of this total, over a quarter will be over 80. At the same time, the market for pensions is also growing as employers and individuals are increasingly expected to take over responsibility for retirement planning.
Aegon is active in over 20 countries around the world, including the Netherlands, United Kingdom and United States. In some instances, such as India and China we operate with joint venture partners, in order to utilize their local expertise and existing distribution channels.
An increasing number of customers want to manage their finances online, with personalized offerings, and access to advisors or customers services, how — by phone, face-to-face, social media etc — and when they choose. Our global presence allows us to share our expertise between markets to deliver cost-effective, accurate and quality solutions through technology.
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.
With more than 29 million customers, around 25,000 employees and over EUR 825 billion (June 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.
Aegon offers financial products to support its customers through every stage of their life. From life and accident & health insurance during their working life, to saving for retirement, and (guaranteed) income products after retirement. We paid out over EUR 48 billion in claims and benefits in 2017 to help our customers' meet their financial security needs. By offering great service and the products they need, we develop loyal customers who stay with us throughout their lives.
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.
Aegon paid out a stable, growing dividend to shareholders between 2012 and 2018.
- Read our latest analyst & investor updates
- 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 meet 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 to grow profitably, and to create value for all stakeholders, including customers and shareholders. In this way, Aegon will fulfill the purpose to help people achieve a lifetime of financial security.
Aegon’s operations are targeted to generate EUR 4.1 billion of capital cumulatively for 2019 – 2021. This excludes market impacts and one-time items, and is after holding funding and operating expenses. It is our intention to payout 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' – is aiming at capturing meaningful new opportunities.
Solid capital position
European insurance companies are required to comply with the new capital adequacy framework, Solvency II, which was introduced to protect policyholders in January 2016. The framework guarantees insurers and supervisors identify risks to capital levels at an earlier stage and take corrective action where needed.
Under the new framework, the volume of funds an insurer requires to 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 of the type anticipated 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 billion to EUR 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.
- 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 already announced restructuring programs.