Aegon rapporteert resultaten over tweede halfjaar 2018
2H 2018 Results | AEX:AGN | NYSE:AEG
Nettowinst daalt tot EUR 253 miljoen door ongunstige marktbewegingen en overige lasten
- Onderliggend resultaat daalt met 8% tot EUR 1.010 miljoen, doordat lagere resultaten bij de pensioenactiviteiten in de VS, de bedrijfsgroei en hogere marges in Europa en kostenbesparingen teniet doen.
- Verliezen uit fair vale items van EUR 257 miljoen, met name door ongunstige marktbewegingen in de VS. Deze negatieve effecten zijn gedeeltelijk gecompenseerd door positieve herwaarderingen op vastgoed en winsten op risicoafdekking in Nederland en het VK.
- Overige lasten van EUR 581 miljoen, met name door de eerder aangekondigde juridische schikking in de VS en een boekverlies op de verkoop van het laatste deel van de Amerikaanse levensherverzekeringsactiviteiten, alsmede model & assumption veranderingen in Nederland en reorganisatiekosten.
- Rendement op eigen vermogen neemt toe tot 10,2% door lagere belastingen, gedeeltelijk het gevolg van belastinghervormingen in de VS. Interne definitie van aangepast eigen vermogen gewijzigd, meer in lijn met die van andere verzekeraars en rating agencies.
Lagere netto-stortingen en verkoop nieuwe levensverzekeringen; opnieuw toename in 2018 bij vermogensbeheer voor derden
- Netto-uitstroom van EUR 8,5 miljard, met name door uitstroom bij de pensioenactiviteiten in de VS. Aegon Asset Management realiseerde over het gehele jaar 2018 opnieuw een netto-instroom voor derden.
- Verkoop nieuwe levensverzekeringen daalde tot EUR 398 miljoen, beïnvloed door lagere verkoop van levensverzekeringen en overlijdensrisicoverzekeringen in de VS. Verkoop nieuwe levensverzekeringen in Azië gedaald als gevolg van hogere korte termijn rentes.
- Verkoop ongevallen-, ziektekosten- en schadeverzekeringen daalt met 56% tot EUR 155 miljoen, met name door eerder aangekondigde strategische beslissing om te stoppen met reis- en stop-loss verzekeringen in de VS.
Verhoging dividend aan aandeelhouders op basis van sterke kapitaalpositie en kapitaalgeneratie
- Voorgesteld slotdividend voor 2018 van EUR 0,15 per aandeel; totaaldividend neemt met 2 eurocent toe ten opzichte van 2017.
- Solvency II ratio van 211%, ruim boven de beoogde bandbreedte, ondanks ongunstige marktbewegingen. Solvabiliteitsratio's van de belangrijkste bedrijfsonderdelen blijven ruim binnen of boven beoogde bandbreedtes.
- Kapitaalgeneratie door de bedrijfsonderdelen bedroeg EUR 39 miljoen, inclusief negatieve marktinvloeden van EUR 1.040 miljoen en positieve eenmalige items van EUR 106 miljoen.
- Kapitaaloverschot in de holding bedraagt EUR 1,3 miljard, binnen de beoogde bandbreedte.
- Brutoschuldratio is in tweede helft van 2018 gestegen met 160 basispunten tot 29,2% door schuldreducties van EUR 700 miljoen, en gebaseerd op een conservatievere interne definitie van het aangepaste eigen vermogen.
Toelichting van Alex Wynaendts, voorzitter Raad van Bestuur
"Het tweede halfjaar van 2018 is uitdagend geweest doordat de markten tegen het eind van het jaar flink omlaag gingen. Dit had invloed op het beleggingsrendement van onze klanten en daarmee ook op de resultaten van onze dienstverleningsactiviteiten. We hebben de nodige initiatieven ontplooid om aanvullende diensten aan te bieden en de omzetgroei te stimuleren om zodoende deze resultaten te verbeteren. De nettowinst is ook beïnvloed door eerder aangekondigde transacties, zoals de verkoop van Amerikaanse levensherverzekeringsactiviteiten.
"Tegelijkertijd gaan we door met het vereenvoudigen van onze organisatie, het versterken van onze relaties met klanten en adviseurs en het optimaliseren van onze serviceniveaus. De eerder aangekondigde uitbreiding van onze samenwerking met Atos in het VK en de nieuwe samenwerking met TCS in de VS stellen ons in staat om onze administratieve processen te moderniseren en dienstverlening aan onze klanten te verbeteren. Ik ben ook verheugd dat de dienstverlening op ons platform in het VK door genomen maatregelen is teruggebracht op het gewenste niveau. Door dergelijke maatregelen kunnen wij onze belofte nakomen om mensen te helpen in alle fasen van hun leven financiële zekerheid te bereiken en zijn we goed
gepositioneerd om verder te groeien.
In het tweede halfjaar van 2018 hebben we onze sterke kapitaalpositie kunnen behouden ondanks negatieve marktbewegingen en de invloed van een eerder aangekondigde juridische schikking in de VS. Bovendien hebben we er vertrouwen in dat we onze kapitaalgeneratie op een duurzame manier kunnen laten groeien. Daardoor zijn we in staat om het totaaldividend per aandeel met 2 eurocent, ofwel 7%, te verhogen ten opzichte van 2017."
"The second half of 2018 was challenging, as we experienced a significant decline in the markets towards the end of the year. This impacted the value of our customers' investments, and thereby the results of our administration and services businesses. We have broad initiatives in place to provide additional, value-added services and drive sales growth in order to increase these results. Net income was also affected by previously announced transactions such as the divestment of the last block of life reinsurance in the United States.
"At the same time, we continue to simplify the organization, strengthen relationships with our customers and advisors, and enhance our service levels. This year's extension of our partnership with Atos in the UK and the new partnership with TCS in the US allow us to modernize our administration systems, and provide faster and better propositions to our customers. I am also pleased that the service levels in our UK platform business returned to target levels following the actions we have taken. These are the actions that allow us to fulfil our purpose to help many more people achieve a lifetime of financial security, and puts us in a strong position to grow our business.
"In the second half of 2018, we successfully maintained a strong capital position despite adverse market movements and the impact of the previously announced settlement in the United States. Together with our confidence in our ability to grow capital generation in a sustainable way, this allows us to raise our full year dividend per share by 2 cents, an increase of 7% compared with 2017."
- Aegon Americas is well-positioned for growth as highlighted at the Analyst & Investor conference
- Aegon Americas eliminates Variable Annuity captive leading to significant benefits to its capital position
- Aegon extends partnership with Atos in the UK for administration services
- Aegon and Banco Santander expand their successful partnership in Portugal
- Seventh consecutive full year of external third-party net inflows at Aegon Asset Management
Aegon's purpose – to help people achieve a lifetime of financial security – forms the basis of the company's strategy. The central focus of the strategy is to further transform Aegon from a product-based to a customer needs-driven company. This means serving diverse and evolving needs across the customer life cycle; being a trusted partner for financial solutions that are relevant, simple, rewarding, and convenient; and developing long-term customer relationships by providing guidance and advice, and identifying additional financial security needs at every stage of customers' lives.
Aegon is focused on reducing complexity, eliminating duplication and increasing automation in order to realize cost efficiencies, thereby enabling it to invest and become a more digitally enabled and customer-centric company. Furthermore, the company is dedicated to driving scale and establishing strong positions in its current markets, adhering to strict standards to ensure the efficient use of capital by all of its businesses. Four key strategic objectives that enable the company to execute its strategy are embedded in all of Aegon's businesses: Optimized portfolio, Operational excellence, Customer loyalty and Empowered employees.
On December 6, 2018 Aegon hosted an Analyst & Investor conference specifically focused on the US business. During the conference, the management team of Aegon Americas highlighted to analysts and investors how the organization is well-positioned to capture market opportunities in the United States, and detailed broad actions to accelerate organic growth. These actions include improving the company's competitive position, attracting new customers, strengthening existing customer relationships and increasing customer retention.
As part of Aegon's ongoing process to simplify the legal structure of its business, Aegon eliminated its Variable Annuity captive in the US in the second half of 2018. The rationale behind setting up the Variable Annuity captive in 2015 was the need to manage the volatility of the US RBC ratio as a consequence of misalignment between reserve movements and hedging within the existing variable annuity capital framework. Recently, the National Association of Insurance Commissioners (NAIC) proposed improvements to the existing variable annuity capital framework. These reduce the non-economic volatility of the RBC ratio, and for this reason the use of a variable annuity captive was no longer required. As a result of the merger of two legal entities, Aegon realized a one-time benefit to capital generation of approximately USD 1 billion in the second half of 2018. This benefit was offset by the impact of tax reform on the RBC ratio in the second half of 2018.
On September 11, 2018, Aegon closed the acquisition of Robidus, a leading Dutch income protection service provider. This transaction fits the company's strategic objective to grow its fee-based businesses. Aegon acquired approximately 95% of the company with the remainder being retained by Robidus' management team. Robidus continues to operate on a standalone basis under its own brand name. The acquisition was financed from holding excess cash.
In the United Kingdom, Aegon's platform offering and omni-channel distribution strategy have established Aegon as the leading platform provider in the market with a personal and workplace pension, investment, and protection offering. In the second half of 2018, assets across Aegon UK's platform business reached GBP 128 billion. The first half of 2018 saw the migration of two portfolios of the Cofunds business by moving GBP 57 billion of institutional assets to Aegon technology in March, followed by GBP 28 billion of retail assets in May. A program was established to address service issues associated with the retail migration. Core trading and service levels have now returned to target levels. The focus now is to continually improve the platform, further increasing functionality and ease of use.
The final phase of the Cofunds integration will take place in the first half of 2019 with the migration of assets related to Nationwide. To date, Aegon has realized GBP 40 million annualized expense savings from integrating the Cofunds business, a figure which will rise to GBP 60 million following the Nationwide integration.
The digitization of Aegon's protection business in the United Kingdom in the first half of 2018 has made it simpler and quicker for advisers to apply for cover for their clients and has led to a significant uptick in business, with new protection customer numbers up 36% in 2018 compared with the previous year.
Aegon announced on November 20, 2018, that it had strengthened its existing partnership with Atos, signing a 15-year contract to service and administer its Existing Business (non-platform customers) in the United Kingdom. The extension of the partnership will further improve customer service for 1.4 million customers. Since 2016, Atos has successfully serviced and administered Aegon's 500,000 protection customers in the UK, and has an excellent understanding of Aegon's business, culture and ways of working. The agreement, to be effective as of mid-2019, is initially expected to lead to annual run-rate expense savings for Aegon of approximately GBP 10 million, growing to approximately GBP 30 million over time. Total transition and conversion charges are estimated to amount to approximately GBP 130 million, and are expected to be recorded over the first three years of the agreement.
Consistent with Aegon's strategic objective to optimize its portfolio and capital allocation across its businesses, Aegon has successfully completed the sale of its businesses in the Czech Republic and Slovakia for EUR 155 million on January 8, 2019. This is a further step in rationalizing Aegon's geographical footprint and focusing resources on Aegon's key markets.
On December 21, 2018, Aegon expanded its partnership with Banco Santander in Portugal. The transaction with Banco Santander in Portugal comprises the life and non-life in-force books owned by Banco Popular within the scope of the partnership and generated by the Banco Popular franchise as well as other channels (mainly agents and brokers). In addition, it includes the life and non-life new business within the scope of business of the partnership distributed through the former Banco Popular franchise, which Banco Santander acquired in 2017. Aegon has paid an upfront consideration for the expansion of the partnership in Portugal of EUR 14 million and will pay an additional amount of up to EUR 6 million, depending on the performance of the partnership.
In India, Aegon Life launched a new guaranteed return insurance plan, called POS GRIP (Point of Sale Guaranteed Return Insurance Plan). The product is in line with Aegon's philosophy of launching simple, easy to understand products. POS GRIP provides dual benefits of protection and savings. The benefit which a customer will receive at the end of the policy term is guaranteed and is stated up-front when buying the policy. The guaranteed additions accrue at the end of every year throughout the policy term and include a one-off loyalty booster payable at the end of the policy term.
In China, Aegon THTF launched an upgrade of its award-winning platform for agents that was unveiled in October last year. The platform features professional marketing, smart recruitment, and differentiated service, serving as the smart personal assistant to agents. Aegon THTF has been increasing investments into digitalization in pursuit of its digital development strategy.
Growing external third-party assets is an important element of the growth strategy of Aegon Asset Management. 2018 was the seventh consecutive full year of positive external third-party net inflows. This reflects Aegon Asset Management's competitive performance, together with management's ability to leverage scale and capabilities from the general account and third-party affiliate businesses.
The continued strong commercial momentum in the Netherlands was underlined by strong inflows into the Dutch Mortgage Funds, which grew to EUR 16 billion of assets under management in the second half of 2018.
Underlying earnings before tax
Aegon's underlying earnings before tax decreased by 8% compared with the second half of 2017 to EUR 1,010 million. Expense savings in all regions and higher earnings in Spain & Portugal, the Netherlands and the UK platform business from business growth and higher margins were more than offset by the divestment of UMG in the Netherlands, and lower Retirement Plans earnings and adverse claims experience in the United States. Underlying earnings from the Americas decreased by 16% to EUR 614 million driven by lower Retirement Plans earnings and adverse claims experience, which more than offset expense savings. The second half year of 2018 included EUR 14 million unfavorable claims experience compared with EUR 62 million favorable claims experience over the same period last year. Unfavorable mortality experience in Life and Retirement Plans was partly offset by favorable claims experience in Accident & Health. Retirement Plans earnings decreased significantly, which was mainly driven by lower fee income from lower asset balances, a lower investment margin, and investments in operations and technology.
Underlying earnings before tax from Aegon's operations in Europe increased by 12% to EUR 404 million. This was the result of growth in all regions, most notably in Spain & Portugal driven by better underwriting results, and expense savings. Furthermore, earnings growth was supported by a higher investment margin in the Netherlands from the shift to higher-yielding assets, lower funding costs for the bank and growth of the bank's balance sheet, as well as growth of the Digital Solutions business in the United Kingdom. This was partly offset by the divestment of UMG in the Netherlands.
Aegon's underlying earnings in Asia decreased by EUR 3 million to EUR 23 million driven by lower earnings from the joint-venture in China, as a result of investments in growth, and lower earnings from the direct marketing business, which is in run-off.
Underlying earnings before tax from Aegon Asset Management were up by 3% to EUR 69 million in the second half of 2018. This increase was a result of higher earnings in the Americas and in Europe driven by an increase in management fees and lower expenses, which were partly offset by lower performance fees from Aegon's Chinese asset management joint venture Aegon Industrial Fund Management Company (AIFMC).
The result from the Holding declined by EUR 17 million to a loss of EUR 100 million, as a result of interest expenses on USD 800 million Tier 2 securities issued in April 2018 to replace perpetual securities. Interest expenses for these Tier 2 securities are taken through the P&L, while the interest expenses for the perpetuals were recognized directly through equity.
Net income declined to EUR 253 million in the second half of 2018, and mainly reflects fair value losses as a result of market movements, and an increase in Other charges.
Fair value items
The loss from fair value items amounted to EUR 257 million. Gains from fair value items in Europe, Asia and at the Holding totaled EUR 281 million, and mainly resulted from hedging gains in addition to real estate revaluations in the Netherlands. These were more than offset by losses in the United States of EUR 538 million largely from underperformance of alternative investments and the impact of declining equity markets on reserve movements net of hedging. The loss was higher than expected, mainly due to lower than anticipated gains as a result of the lack of
implied volatility movements during the equity market decline.2H2018
Realized losses on investments
Realized losses on investments totaled EUR 10 million, as losses from the sale of US treasuries more than offset gains as a result of portfolio optimization in the United Kingdom.
Net impairments remained low at EUR 19 million and were driven by the impairment of corporate bonds resulting from a bankruptcy filing in the US.
Other charges of EUR 581 million were mainly driven by a provision related to the earlier announced settlement of class action litigation with universal life policyholders and a book loss on the sale of life reinsurance business in the United States; model & assumption changes in the Netherlands; and restructuring expenses in the United Kingdom and United States.
In the United States, Other charges of EUR 310 million were largely the result of a provision of EUR 147 million related to the earlier announced settlement of class action litigation with universal life policyholders, a EUR 94 million book loss on the divestment of the last remaining substantial block of life reinsurance, transition and conversion charges of EUR 27 million related to the TCS partnership, and a EUR 26 million addition to a provision for unclaimed property. In January 2019, a court approved the aforementioned settlement with universal life policyholders. Over 99% of affected policyholders participated in the settlement. While less than 1% of policyholders opted out of the settlement, they represented approximately 43% of the value of the settlement fund. The settlement fund was reduced proportionally for opt outs, although Aegon continues to hold a provision for these policyholders.
In Europe, Other charges of EUR 230 million were caused by EUR 138 million charges from updated mortality and lapse assumptions in the Netherlands, EUR 35 million integration expenses for Cofunds and BlackRock's defined contribution business, and EUR 19 million transition and conversion charges related to the agreement with Atos for administration services related to the Existing Business, both in the United Kingdom. Other charges at the Holding amounted to EUR 36 million and were driven by IFRS 9 / 17 implementation expenses for the group.
The result from run-off businesses amounted to a loss of EUR 7 million, which was in line with expectations following the divestment of the majority of the remainder of these businesses in 2017.
Income tax amounted to a benefit of EUR 117 million, while income before tax amounted to EUR 136 million. The income tax included one-time tax benefits of declining US and Dutch corporate income tax rates of EUR 84 million next to the regular tax exempt income items and tax credits. The effective tax rate on underlying earnings declined from 26% in the second half of 2017 to 12% in the second half of 2018, reflecting the reduction of the nominal corporate tax rate in the United States from 35% to 21%. The effective tax rate on underlying earnings is below the nominal tax rate as a result of tax exempt income and other tax benefits.
Return on equity
To align closer to definitions used by peers and rating agencies, Aegon has retrospectively changed its internal definition of adjusted shareholders' equity used in calculating return on equity for the group, return on capital for its units, and the gross financial leverage ratio. As of the second half of 2018, shareholders' equity will no longer be adjusted for the remeasurement of defined benefit plans. All figures in this press release, including comparatives, are based on the new definition, unless stated otherwise.
Return on equity increased by 50 basis points compared with the same period last year to 10.2% in the second half of 2018 under the current definition. Under the previous definition, return on equity would have been 9.3%. Lower underlying earnings were more than offset by a lower effective tax rate.
Operating expenses increased by 2% to EUR 1,923 million as expense savings and the divestments of UMG and Aegon Ireland were more than offset by investments in growth in Banking and the Service business in the Netherlands, the acquisition of Robidus, restructuring charges, and IFRS 9 / 17 implementation expenses.
Aegon achieved its target to deliver EUR 350 million in annual run-rate expense savings by year-end 2018 as part of its plans to improve return on equity. Initiatives to reduce expenses have led to annual run-rate expense savings of EUR 355 million since the beginning of 2016. Transamerica achieved expense savings of USD 270 million over the last three years, which was below the USD 300 million target. A significant contributor to these savings was the partnership entered into with TCS earlier in 2018, which generated approximately one third of the total benefit achieved. However, investments within Retirement Plans drove staffing levels and related expenses higher than planned in the second half of 2018, as Transamerica aims to improve the Workplace experience and positions the business to accelerate growth. At a group level, that was compensated by additional expense savings in Dutch life and non-life insurance entities. Digitization of the business, automation of processes and efficiencies in the marketing and sales organization delivered EUR 79 million run-rate expense savings compared with the EUR 50 million targeted for the Netherlands. Expense savings at the Holding totaled EUR 19 million versus a target of EUR 15 million.
The abovementioned run-rate expense savings exclude the synergies from the Cofunds integration, which are expected to total GBP 60 million once completed, and the anticipated GBP 30 million savings from the extension of the partnership with Atos to administer the Existing Business in the United Kingdom.
Deposits and sales
Gross deposits decreased by 13% to EUR 58 billion driven by lower deposits on the platform in the United Kingdom and in Asset Management, while the prior period included EUR 6 billion of inflows from a single large mandate won by Aegon's strategic partner La Banque Postale Asset Management (LBPAM). Gross deposits in the Americas increased by EUR 2 billion.
Net outflows amounted to EUR 8.5 billion for the second half, mainly driven by outflows in the United States of EUR 7.6 billion caused by contract discontinuances in Retirement Plans. These were caused by a limited number of large contract losses.
New life sales declined by 7% to EUR 398 million, as a result of lower term life and indexed universal life sales in the United States and lower sales in the Asian High-Net-Worth (HNW) businesses. The latter was impacted by higher cost of premium financing for customers as short-term interest rates rose.
New premium production for accident & health insurance decreased by 69% to EUR 95 million. This was predominantly driven by lower sales in the travel insurance, affinity and stop loss segments in the United States, and resulted from the previously announced strategic decision to exit these segments. New premium production for property & casualty insurance increased by 15% to EUR 60 million, driven by higher sales in Hungary.
Market consistent value of new business
Market consistent value of new business (MCVNB) increased by 37% to EUR 236 million driven by the Americas and Europe. The increase in MCVNB in the Americas mainly resulted from tax reform. In Europe, MCVNB almost doubled, driven by an enhanced sales mix in Spain & Portugal and improved margins on pension products on the UK platform.
Revenue-generating investments decreased by 2% during the second half of 2018 to EUR 804 billion. Net outflows and the impact of unfavorable equity market movements more than offset the inclusion of EUR 18 billion assets related to the acquisition of BlackRock's defined contribution business in the United Kingdom.
Shareholders' equity decreased by EUR 0.9 billion to EUR 19.5 billion on December 31, 2018, primarily driven by a lower revaluation reserve as a result of widening credit spreads in the United States. Shareholders' equity excluding revaluation reserves decreased by EUR 0.4 billion to EUR 16.1 billion – or EUR 7.84 per common share – at the end of the second half 2018. This decrease was largely driven by the strengthening of the US dollar and net income, which were more than offset by dividends paid to shareholders and the impact of adverse market movements on defined benefit obligations.
Gross financial leverage ratio
As of the second half of 2018, Aegon retrospectively changed the definition of shareholders' equity used in calculating the gross financial leverage ratio. The company will no longer adjust shareholders' equity for the remeasurement of defined benefit plans to align its definition closer with those used by peers and rating agencies. Based on this more conservative calculation, the gross financial leverage ratio decreased by 160 basis points to 29.2% in the second half of 2018, which is within the 26 – 30% target range. This resulted from the redemption of EUR 200 million grandfathered Tier 1 securities in July 2018 and the maturity of EUR 500 million senior debt in August 2018. Under the previous definition, the gross financial leverage ratio would have been 27.0%.
Holding excess cash
Holding excess cash decreased from EUR 1,923 million to EUR 1,274 million during the second half of the year driven by EUR 700 million leverage reduction.
The group received EUR 786 million in remittances from subsidiaries, of which EUR 518 million from the United States, EUR 215 million from Europe, EUR 21 million from Asia and EUR 29 million from Asset Management. Capital injections of EUR 57 million in Asset Management, Central & Eastern Europe, Spain & Portugal and Asia were primarily related to investments in business growth.
The acquisition of Robidus led to a cash outflow of EUR 97 million. Furthermore, EUR 410 million cash was deployed for capital return to shareholders in the form of the cash portion of the interim 2018 dividend and the share buybacks to neutralize the final 2017 and interim 2018 stock dividends. The remaining cash outflows of EUR 171 million mainly related to holding funding and operating expenses.
Capital generation of the operating units amounted to EUR 39 million for the second half of 2018. Adverse market movements totaled EUR 1,040 million and favorable one-time items EUR 106 million, bringing normalized capital generation to EUR 973 million. Market impacts were mainly driven by the unfavorable equity market in the United States and the impact of adverse credit spread movements in the Netherlands.
One-time items were mainly driven by model & assumption changes in the Netherlands, which more than offset the impact of tax changes in the Netherlands and the acquisition of Robidus in the Netherlands. In the United States, several items, including the adverse impact of US tax reform on required capital and the benefit from the elimination of a variable annuity captive, largely offset each other.
Solvency II ratio
Aegon's Solvency II ratio decreased from 215% to 211% during the second half of 2018 as normalized capital generation, favorable one-time items and other items were more than offset by payment of the interim 2018 dividend, adverse market impacts, and the Part VII transfer related to BlackRock's defined contribution business in the United Kingdom.
The estimated RBC ratio in the United States decreased to 465% on December 31, 2018, from 490% on June 30, 2018. This decrease was mainly driven by the unfavorable impact from markets which was partly driven by lower than expected gains from implied volatility movements during the equity market decline. Furthermore, market movements included a negative impact of 10%-points from equity market movements on Transamerica Advisors Life Insurance Company (TALIC), which is planned to merge with Transamerica Life Insurance Company (TLIC) in 2019. One-time items largely offset each other and included the impact of US tax reform, the elimination of a variable annuity captive, the settlement of class action litigation with universal life policyholders, and the release of capital as a result of the previously announced strategic decision to exit the travel insurance, affinity and stop loss insurance segments.
The estimated Solvency II ratio in the Netherlands decreased to 181% on December 31, 2018, from 190% on June 30, 2018. The net positive impact of model & assumption changes was offset by adverse market impacts and the impact of tax changes in the Netherlands. At the end of 2018, Aegon updated its modeling of the dynamic volatility adjustment to align with the guidance from the European Insurance and Occupational Pensions Authority (EIOPA). This model change results in a change in credit sensitivities and increased 1-in-10 year combined sensitivities for the Netherlands, and as a result the company is reviewing the target zones for Aegon The Netherlands. Aegon is considering increasing the mid-point of the target zone by 5%-points to 10%-points. The positive impact from a change in modeling of the dynamic volatility adjustment.
ent more than offset other model & assumption changes, including changes to the assumptions regarding mortgages, mortality rates and lapses for individual life policies. For mortgages, Aegon changed a number of assumptions including reflecting changes to market conditions. Adverse market movements were the result of lower interest rates and the adverse impact of credit spread movements on the dynamic volatility adjustment before the aforementioned update to the model.
The estimated Solvency II ratio in the United Kingdom decreased to 184% on December 31, 2018, from 197% on June 30, 2018. The decrease was mainly driven by the completion of the Part VII transfer related to BlackRock's defined contribution business, unfavorable interest rate movements, and the effect from changes in the equity hedging program, which led to an increase in required capital. Assumption changes were on balance positive, mainly as a result of lower expected future expenses resulting from the extended partnership with Atos for administration services related to the Existing Business as well as the favorable impact from mortality updates.
Final 2018 dividend
Aegon aims to pay out a sustainable dividend to allow equity investors to share in Aegon's performance, which can grow over time if Aegon's performance so allows. At the Annual General Meeting of Shareholders on May 17, 2019, the Supervisory Board will, in the absence of unforeseen circumstances, propose a final dividend for 2018 of EUR 0.15 per common share. If approved, and in combination with the interim dividend of EUR 0.14 per share paid over the first half of 2018, Aegon's total dividend over 2018 will amount to EUR 0.29 per common share. This is an increase of EUR 0.02 per share or over 7% compared with the 2017 dividend. The final dividend will be paid in cash or stock at the election of the shareholder. The value of the stock dividend will be approximately equal to the cash dividend. Aegon intends to neutralize the dilutive effect of the final 2018 stock dividend on earnings per share in the third quarter of 2019, barring unforeseen circumstances.
If the proposed dividend is approved by shareholders, Aegon shares will be quoted ex-dividend on May 21, 2019. The record date for the dividend will be May 22, 2019. The election period for shareholders will run from May 28 up to and including June 14, 2019. The stock fraction will be based on the average share price on Euronext Amsterdam from June 10 until June 14, 2019. The stock dividend ratio will be announced on June 19, 2019, and the dividend will be payable as of June 21, 2019.
Autem conventio damnum populus singularis vel. Aptent cogo nunc quae roto secundum usitas virtus vulpes. Duis eros paulatim ulciscor. Exputo jus loquor premo quae scisco velit vulpes. Appellatio facilisi jumentum quibus tego ut. Ad comis gilvus luptatum pertineo sino sit vel.
Esse ibidem nulla persto proprius quidne. Aptent caecus erat haero huic sed suscipit voco. Conventio huic iaceo tamen tego. Adipiscing cui decet defui feugiat immitto luptatum paulatim. Elit in natu occuro premo quae voco. Abigo abluo conventio esca ludus secundum sit. Camur imputo lucidus te. Caecus nulla qui velit verto. Acsi ideo magna minim pagus utinam volutpat.
Dignissim illum jugis lucidus. Odio pala paratus roto. Accumsan ea exputo iaceo iusto singularis volutpat. Augue illum incassum nunc os suscipere veniam. Causa facilisi iriure macto quidem refoveo ut.
Aliquam antehabeo consequat esca fere gemino. Dolus enim interdico letalis metuo minim tincidunt utinam vulputate. Hos tincidunt typicus. Amet antehabeo ea eros letalis magna mos nibh sino turpis. Accumsan lobortis luctus molior neo quidne rusticus similis.
Dignissim loquor neque utinam. Acsi hendrerit luptatum paulatim populus ullamcorper. Huic lenis torqueo. Comis exputo usitas utinam uxor. Importunus quae vicis. Ad consequat iusto oppeto pneum refoveo sed ulciscor. Cui esse loquor minim neque nulla populus rusticus velit vereor. Dolor nunc wisi. Blandit esca eu nulla persto refoveo usitas volutpat. Jugis rusticus scisco. Et exerci huic iaceo ludus. Accumsan adipiscing esca euismod eum feugiat lucidus nunc proprius ulciscor.
Adipiscing defui iriure metuo nulla saluto. Fere illum occuro pagus pneum quadrum tation ullamcorper valetudo. Acsi exerci neque occuro validus virtus. Ad elit huic natu nibh saepius uxor vulputate. Abbas aliquip distineo importunus inhibeo odio quadrum quidem turpis.
Adipiscing eum melior utinam utrum volutpat. Incassum odio sudo. Augue jus lobortis olim saepius uxor velit. Abigo camur ideo iusto metuo quae quibus roto utinam. At diam enim lenis paulatim. Elit gilvus gravis rusticus singularis tum valde vero.
Hendrerit turpis ulciscor. Augue capto neo vicis vulputate. Defui ideo importunus ludus odio quia si. Aliquip appellatio duis ea eum gemino iaceo jumentum loquor utrum. Comis dolor haero laoreet quia. Distineo ex huic illum iusto praemitto sagaciter secundum suscipit. Brevitas caecus eligo ex hos nimis pala qui utinam. Commoveo lenis luctus magna os pneum sino tincidunt.
Esse euismod lenis macto ratis tation torqueo valetudo vel vereor. Camur ut valde. Amet comis defui facilisi jugis minim nunc valetudo veniam. Dolus enim ex minim ut uxor. Cogo dolore exerci genitus pala verto volutpat. Appellatio duis elit iusto minim obruo populus quibus vel. Jumentum lucidus macto minim plaga quadrum.
Abbas humo jus lucidus sudo validus virtus. Diam eligo esse facilisis iustum luptatum macto odio pecus. Abdo conventio dignissim gemino illum letalis minim.
Gemino hos in praesent sagaciter zelus. Aliquam defui exerci pala valetudo. Abico gilvus hendrerit illum neque nulla olim pecus tum velit. Defui haero iaceo tego. Causa facilisis oppeto persto proprius sit.
Cogo commoveo interdico patria persto refero volutpat. Decet olim paratus tego tincidunt vindico. Aliquam dolus duis erat gemino gilvus rusticus valetudo. Consectetuer dolor imputo luctus os quibus typicus utrum veniam. Elit esca eu qui typicus ut. Consequat eu exerci humo in luctus neque pecus torqueo. Capto esse gravis oppeto.
Adipiscing dolore volutpat. Praemitto probo quis saepius secundum similis uxor valde. Appellatio eu euismod jugis nobis pecus pneum usitas. Duis euismod illum lobortis pecus quis refoveo tego volutpat. Aliquip defui ille minim. Amet erat luctus patria utrum virtus. Appellatio commodo tamen. Camur magna nobis qui saluto vulpes. Abico luctus mauris occuro quibus tincidunt torqueo. Melior pagus refoveo.
Accumsan caecus euismod ex quia vero. Aptent commoveo dignissim eum iaceo minim probo tamen tum. Facilisi nibh nisl sudo. At consequat dolor lucidus pneum sino tum. Interdico nimis proprius quadrum usitas vicis wisi. Abdo capto enim exerci hos patria probo sit. Autem diam nutus torqueo ullamcorper ut vel verto.
Hendrerit natu quadrum. Cui exputo feugiat humo interdico vel. Commoveo esse odio te. Ad appellatio aptent conventio facilisis gemino jumentum secundum valetudo vindico. Et feugiat plaga pneum populus. Brevitas exputo lobortis metuo sudo vulputate. Blandit ille magna populus roto.
Abdo amet dolore nulla nutus pagus sagaciter scisco. Abigo consequat dolore huic immitto jugis lucidus praemitto sagaciter ullamcorper. Camur molior nostrud. Eum paratus valde vulpes. Caecus dolore feugiat ibidem interdico nobis olim pertineo ratis. At cogo diam erat importunus nulla paratus turpis utrum zelus. Abbas interdico jumentum macto molior probo sagaciter vulpes. Diam inhibeo quidne tum. Causa ibidem ludus odio os plaga saepius turpis usitas ut.
Ad hendrerit lucidus tum usitas utrum. Abluo decet elit scisco venio vicis voco. Aliquam causa premo quibus. Nulla oppeto refoveo rusticus sagaciter vulputate ymo zelus. Caecus eu gemino mos refero similis te. Brevitas gemino jus neque quidne typicus. Haero patria suscipit turpis ymo. Consequat ea facilisis hos lobortis quadrum secundum sino vereor. Aliquam comis gemino quidem usitas.
Eros ideo jus neque nostrud odio patria quadrum tincidunt usitas. Autem nulla pecus si. Aliquam at comis exputo facilisi illum iusto mauris saepius usitas. Iustum metuo nimis nunc plaga probo velit.
Capto eros esse ibidem roto ullamcorper. Abluo cui distineo esse iaceo in usitas vero. Abbas jus luptatum neque paulatim veniam. Eu facilisi nisl sed sudo utinam vero.
Commodo consectetuer enim feugiat hos lucidus qui quibus vero. Antehabeo capto genitus laoreet populus roto velit vindico vulputate. Aptent commodo enim ex facilisis laoreet nobis nostrud refoveo tego. Laoreet ullamcorper voco vulputate.
Damnum diam esse imputo roto singularis sit suscipit tamen veniam. Bene et minim neque pagus plaga quadrum vereor vicis. Damnum ex inhibeo odio quia sudo turpis vereor. Acsi adipiscing iriure plaga quibus sino. Abbas aptent esca exputo gilvus suscipere typicus velit.
Defui diam ratis sagaciter. Acsi aliquam augue duis euismod lenis quidem tation ulciscor. Commodo distineo ea exerci importunus imputo obruo os quia quidne. Abbas metuo si.
Amet duis paratus paulatim tincidunt. Abluo distineo eu natu neo sudo tincidunt vulpes. Acsi adipiscing caecus. Caecus gravis iaceo ibidem obruo pagus rusticus wisi. Distineo laoreet nimis persto premo quibus utrum.
Caecus commodo feugiat iaceo imputo lenis melior nibh nostrud quibus. Enim huic patria tamen. Accumsan ad autem exputo gravis melior mos obruo vicis. Antehabeo humo vereor. Abigo cui luctus. Ad haero iustum jugis mos neo.
Causa distineo melior os premo sed singularis uxor vicis. Enim loquor natu tincidunt vindico. Cui duis inhibeo nibh olim similis tation te tum. Adipiscing capto commoveo damnum ibidem magna neque nimis quadrum quidne. Abbas caecus hendrerit modo nunc odio usitas. Aptent laoreet metuo nostrud paratus singularis.
Eros immitto incassum ludus metuo mos nostrud quis secundum singularis. Damnum decet elit iriure occuro proprius tamen tincidunt typicus validus. Capto quia vereor voco wisi. Blandit damnum eum jus pala quadrum. Autem bene ludus mauris pecus praemitto probo tincidunt typicus vereor.
Lucidus pala patria plaga sagaciter. Eros neque sino. Sino tego ullamcorper. Abigo autem jumentum magna quidem sino. Abluo capto feugiat vulputate. Abluo eum hendrerit natu secundum sed.
Eligo iaceo jumentum macto odio praemitto praesent tum typicus. Abbas commoveo exputo ut. Esse inhibeo premo probo. Euismod iaceo illum importunus nimis occuro premo saepius sed. Lenis nimis quae suscipere. Cui erat eum hos huic illum nutus quae saepius vulputate.
Abbas laoreet molior virtus. Amet augue immitto. Bene dolore exerci haero iaceo paulatim ratis rusticus ullamcorper virtus. Abbas erat in ludus metuo pagus. Dignissim distineo euismod genitus gravis praesent quia similis typicus.
Aptent consequat enim gemino. Dolor feugiat iustum nulla sagaciter te. Antehabeo cogo ibidem importunus luptatum odio sed verto volutpat. Causa haero iusto laoreet lobortis roto. Abdo capto ea eros jumentum meus pertineo quidem sudo. Acsi at imputo iustum lucidus neo scisco. Persto utinam venio. Iaceo odio pneum quadrum qui quidem refero.
Amet dolor occuro pala torqueo. Humo illum paratus probo quadrum voco ymo. Abigo defui dolus ea ille importunus metuo valetudo. Consequat gravis huic immitto torqueo typicus valetudo vel. Abdo abluo ea eum gravis jumentum lenis populus voco. Abbas ideo plaga. Huic humo neque pecus saluto tego ut vindico ymo. Acsi at camur defui eros iustum quidne suscipit tation vulputate.
Diam mauris quadrum saepius zelus. Brevitas cogo diam illum quadrum si vindico. Distineo dolus ea facilisis laoreet premo vicis virtus. Amet esse uxor. Amet appellatio caecus jugis nisl quis venio. At autem conventio humo immitto iustum metuo proprius similis. Camur diam eros magna wisi. Erat esse neo sino valetudo verto. Abdo at capto eros nimis patria utrum.
Blandit capto eu vereor. Aliquam appellatio autem fere iusto pecus proprius singularis vindico. Diam letalis vero. Appellatio autem blandit facilisi neque nibh occuro oppeto plaga.
Commoveo huic occuro vindico zelus. Amet hendrerit hos ibidem typicus. Camur iusto qui quidne saluto velit. Bene damnum diam facilisi haero immitto jugis lenis saepius te. Aliquam eros veniam. Autem cui secundum uxor. Consectetuer letalis nibh si ut. Abico brevitas distineo eligo gravis iriure ludus premo si.
Appellatio ex ille. Bene distineo erat hendrerit natu occuro. Abbas capto facilisis ratis tation utinam. Comis commoveo elit ibidem inhibeo metuo pneum singularis. Ad adipiscing aliquam caecus jugis scisco velit. Abdo commoveo genitus humo ille luptatum nibh sudo venio.
Abluo cui feugiat hos veniam. Jumentum lobortis melior quae saepius sudo turpis zelus. Modo refero ymo. Ad appellatio blandit minim suscipere tamen. Bene haero hos typicus vindico. Commodo duis in utrum. Abigo ad eu exerci rusticus sed vero virtus zelus.
Abluo ad antehabeo defui humo neque praemitto sudo tation zelus. Ea eros roto te. Ad commodo commoveo decet eu premo quae ulciscor vindico. Blandit esca exerci gravis magna ulciscor. Eu genitus imputo odio. Blandit decet ea elit iustum roto si similis tincidunt verto.
Eum ille utinam. Facilisi luctus olim populus. Augue elit facilisi huic iriure plaga praemitto quidne similis. Cui esse ex ideo nibh premo quibus refoveo. Decet elit ulciscor. At caecus decet enim facilisi torqueo valde. At commoveo nimis usitas.
Adipiscing interdico jumentum rusticus te. Commodo plaga quia. Aliquam aptent capto eligo humo imputo laoreet nobis suscipit vel. Accumsan caecus commoveo ea minim pagus paulatim premo veniam. Feugiat olim suscipere.
Decet distineo in olim quis sudo tamen torqueo ut. Abbas aliquip blandit interdico luctus melior persto praemitto premo velit. Brevitas facilisi ullamcorper uxor. Comis commoveo duis ibidem nulla refero uxor validus verto.
Ea ludus scisco sudo. Abbas ex exerci humo lenis luctus neo tincidunt veniam. Autem duis pecus si tincidunt. Immitto melior paratus scisco ymo. Abdo at ille jumentum melior vicis. Eu exerci ideo oppeto utinam. Et imputo occuro olim tum typicus utrum. Meus odio quibus roto. Inhibeo te venio.
Gravis iaceo suscipere volutpat. Enim iustum natu occuro pala tego ullamcorper utinam vicis. Et haero mauris quadrum torqueo vel venio. Cui jugis meus os praesent valde venio. Antehabeo aptent augue autem brevitas dolore os ratis tation. Abluo caecus loquor tation. Amet capto et quia sagaciter sino wisi. Bene esse ex hendrerit ideo nostrud oppeto quis tincidunt wisi.
Molior pagus refoveo rusticus. Aptent brevitas letalis paulatim qui utrum vulputate. Feugiat probo similis turpis velit venio. Abbas aptent molior paratus premo quibus rusticus ymo.
Abigo antehabeo at euismod interdico iriure nimis nobis oppeto velit. Appellatio hendrerit iustum quis te volutpat. Consequat euismod ludus neque refero suscipit. Causa mos persto scisco singularis tation voco. Appellatio esse gemino minim nimis nutus saepius ut venio wisi. Aliquip autem conventio decet hendrerit lucidus singularis te. Aliquam conventio iriure si typicus velit vindico. Augue damnum facilisis obruo turpis.
Huic luctus metuo patria. Plaga ratis venio. Commodo euismod nisl pala plaga quadrum roto similis turpis vulputate. Illum neque quidne turpis vulputate. Acsi antehabeo camur euismod plaga qui suscipere. Caecus mos nutus. Abdo consectetuer et facilisi facilisis huic lucidus olim utrum voco. Appellatio et metuo neque saepius sagaciter si typicus.
Metuo nunc sit. Abico blandit suscipere. Antehabeo eu ille lobortis proprius sudo vicis. Autem ex sit valetudo. Cui defui dolus meus quadrum refero sed usitas valetudo. Feugiat metuo nisl praesent refero sudo suscipit torqueo.
Acsi importunus interdico natu sagaciter ymo. Abdo abluo dolore ex exerci incassum. Abigo consequat distineo hos neque nunc ymo zelus. Ad esca haero qui. Aliquip antehabeo appellatio comis gravis imputo olim pala refoveo singularis.
Lucidus mauris pecus te valde volutpat. Gilvus huic luptatum. Acsi hos lobortis proprius turpis valde velit ymo. Ibidem occuro patria quidne ratis tation ulciscor utinam vindico. Ratis usitas virtus. Neque patria vicis. Abico causa esse illum iusto meus quae turpis.