annual general meeting of shareholders aegon n.v ......2 welcome to the annual general meeting of...
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The Hague, May 20, 2015
Annual General Meeting of Shareholders Aegon N.V. Jaarlijkse Algemene Vergadering van Aandeelhouders Aegon N.V.
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Welcome to the Annual General Meeting
of Shareholders
In order to hear a simultaneous translation
into English, please choose channel 11
Welkom op de jaarlijkse Algemene Vergadering van Aandeelhouders
Voor het beluisteren van een simultaanvertaling
in het Nederlands kiest u kanaal 10
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Rob Routs
Picture Chairman Supervisory
Board
Voorzitter Raad van
Commissarissen
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Opening
Agenda item 1 / Agendapunt 1
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Presentation on the course of business
in 2014
Presentatie over de gang van zaken
in 2014
Agenda item 2 / Agendapunt 2
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Strong foundations for growth
Alex Wynaendts CEO & Chairman of the Executive Board
The Hague – May 20, 2015
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Aegon’s purpose is to help people take responsibility for their financial future
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Our products and services have never been more needed
Our expertise
Protection Accumulation At & after retirement
Changing demographics
New digital
technologies
Low interest
rates
Increased regulation
Changing capital
requirements
Trends
We support people throughout their working lives and into retirement
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Global aging and changing demographics
Global Retirement Readiness
Score 5.8
Aegon Retirement Readiness Index (ARRI)
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Japan 4.6
Netherlands 5.7
United Kingdom 6.0
United States 6.2
India 7.0
Hungary: 4.9 Spain: 5.0 Poland: 5.1 Turkey: 5.4 Sweden: 5.4 France: 5.4 Canada: 6.0 Germany: 6.1 China: 6.2 Brazil: 6.8
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Growing importance of technology
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7%
6%
3%
2%
4%
5%
1%
Persistently low interest rates
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
10-year government bond yields US NL
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Regulatory changes with a significant impact on our industry
Regulators seeking to strengthen consumer protection
New laws on tax and data privacy
Unprecedented reforms in some of our markets
End of commissions to brokers in the UK and the Netherlands
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Regulators will set the bar high
New capital requirements to enhance risk management and governance
Implementation of Solvency II in 2016
Aimed at enhancing consumer protection
Capital requirements linked to risks insurers take on
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A clear framework to address global trends and developing customers’ needs
Purpose
Strategic Objectives
Leader in all of our chosen markets
Help people take responsibility for their financial future
Working together
Bringing Clarity
Exceeding Expectations Company values
Ambition
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Making the right choices
Optimize our portfolio
Divestments Expanding distribution with strong local partners
Canada
Partnership with La Mondiale (France)
Joint venture with Caja Badajoz (Spain)
Santander Totta (Portugal)
La Banque Postale (France)
BANCOOB (Brazil)
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Towards a more efficient and responsive company
Pursue operational excellence
Adjusted product offerings to continued low interest rates
Launched new products to meet customers’ needs
Established global IT framework
Cost savings create room to invest in Aegon’s businesses
Improved efficiency OpEx / (OpEx + UEBT)
63% 63%
59% 59% 58%
2010 2011 2012 2013 2014*
* Adjusted for model and assumption updates. Without these adjustments, our cost: earnings ratio for 2014 would have totaled 61%.
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Becoming a more customer-centric company
Customer loyalty
Online offerings in nearly all Aegon’s markets
Further enhancement of online platforms & tools
Launched Venture Fund to respond quicker to changing markets
Enhancing services of customer service centers
► Through launch of specialized software
Customer loyalty measured with
Net Promoter Score
► Aiming for top quartile in all our chosen markets
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Empowered employees to help people take responsibility for their financial future
Empower our employees
Broadening talent mix
► Attracting talented people from a range of different industries
Talent Review Process
► Succession planning and talent identification well established
Promoting workforce diversity
► Joined Workplace Pride
Staff performance metrics
High performing norm 2015 Financial services norm 2015
63 67 69
73
2011 2013 2014 2015
73
66
Engagement
64 67
70 74
2011 2013 2014 2015
71
67
Enablement
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Organizational changes to take advantage of opportunities
Better connecting with our customers
Enhancing distribution
Introducing new investment solutions
3,300 I&R employees with a national footprint
Actively serving 25,000+ plan sponsors
5.4 million customers New deposits of USD 42 billion in 2014 and revenue generating investments of USD 296 billion
Servicing US customers through a single investment & retirement division
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Integrated solution to and through retirement in the UK
At-retirement
Capabilities for adviser market
Workplace savings
‘Gated’ solutions for employees
Non-advised
Self service
Single investment & trading platform – offering a compelling solution to advisers, employers and their employees
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Leadership positions in the Netherlands offer strong foundations for growth
1.9 2.3 2.5 2.8
4.4
Pensionfund
Insurer Pensionfund
Aegon Pensionfund
In millions of customers
Aegon PPI
Cappital
* Gross written premiums pensions in 2013 (Source: DNB) ** Per January 1, 2015. Premium Pension Institution (PPI) is a specific type of defined contribution contract
Pension administrator
#2 PPI provider with 0.6 billion euro in
Assets under Management**
#1
Aegon Peer 1Peer 2 Peer 3Peer 4 Peer 5Others
Pensions insurer*
#1
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New Markets’ strategy driving continued growth
Focus on protection
► Leadership in risk/rider products in key CEE markets
► Strong growth in high-net-worth segments in Hong Kong and Singapore
Expanded distribution
► Newly developed professional advisory channel in Spain
► Continued growth of tied agent networks in CEE
Direct propositions
► New online propositions in Asia, CEE, Spain and Brazil
► Leader in Indian online term life insurance market
Strong growth of assets under management
Expanding our third-party business Asset
Management
Asia
Central & Eastern Europe
Latin America
Spain
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Our strategy is delivering results
Customer focused
Strong performance
Solid underlying earnings before tax in 2014
EUR 1.9 billion
Expanding digital capabilities
Enhancing distribution
Getting closer to our customers
Very strong ratings
AA-
Continued strong sales in 2014
EUR 8.6 billion
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0.20* 0.21
0.22 0.23
2011 2012 2013 2014
Proposed final 2014 dividend of EUR 0.12 per share; total 2014 dividend of EUR 0.23 per share
Continue to neutralize stock dividends to avoid dilution
Future dividend growth dependent on strong capital position and cash flows
Sustainable dividend growth
* Final 2011 dividend of EUR 0.10 per share annualized for comparative purposes
Increasing dividends (EUR per share)
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Creating value for all our stakeholders
€ Profits
Benefits
Society
Protection
Capital Trust
Customers
Talent
Investors Employees
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Presentation on the course of business
in 2014
Presentatie over de gang van zaken
in 2014
Agenda item 2 / Agendapunt 2
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Annual Report 2014
Jaarverslag 2014
Agenda item 3.1 / Agendapunt 3.1
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Darryl Button CFO & Member of the Executive Board
The Hague – May 20, 2015
Creating and sharing value in 2014
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Aegon performed strongly in 2014
Key figures
Sales
+ 20%
EUR 8.6 billion
Underlying earnings
- 5%
EUR 1.9 billion
Net income
+38%
EUR 1.2 billion
Operational expenses
+1%
EUR 3.3 billion
Revenue-generating investments
+17%
EUR 558 billion
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Strong underlying trends masked by assumption changes and model updates
1,775 1,982 1,968 1,865
2011 2012 2013 2014
936
1,672
857
1,186
2011 2012 2013 2014
Underlying earnings before tax (EUR million)
Net income (EUR million)
Underlying earnings impacted by assumption changes and model updates
Note: 2011 as reported
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Strong gross deposits mainly driven by US pensions and variable annuities
Stronger universal life production in US and Asia; higher pension production in the Netherlands
Accident & health and general insurance sales exceed EUR 1 billion for the first time
Total sales growth of 20% driven by continued strong deposits
44 55
FY 2013 FY 2014
0.8 1.0
FY 2013 FY 2014
Note: Total sales consists of new life sales plus 1/10th of gross deposits plus new premiums for accident & health and general insurance
+25% +7% +26%
Gross & net deposits (EUR billion)
A&H and general insurance (EUR billion)
New life sales (EUR billion)
1.9 2.0
FY 2013 FY 2014
8 9
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Continued strong capital position and cash flows
1.2 1.6
1.3 1.2
2011 2012 2013 2014
8.6% 6.7%
8.6% 7.8%
2011 2012 2013 2014
1.2 2.0 2.2
1.2
2011 2012 2013 2014
195% 228% 212% 208%
2011 2012 2013 2014
Operational free cash flows (Excl. market impacts and one-time items, EUR bln)
Return on equity (%)
Excess capital at the holding (EUR billion)
Solvency ratio (Insurance Group Directive, %)
Note: 2011 and 2012 return on equity as reported
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Operational free cash flows of EUR 1.2 billion excluding market impacts and one-time items ► Positive market impacts and one-time items largely offset by negative impacts from model updates
and assumption changes
Increase in free cash flows driven by reduction in holding expenses
Operational free cash flows and holding excess capital
2013 2014 Operational free cash flow 1,547 902
Market impacts & one-time items 212 (334)
Normalized OFCF 1,335 1,237
Holding funding & operating expenses (460) (326)
Free cash flow 875 911
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Holding excess capital declined following EUR 1.0 billion of senior debt redemptions
Excess capital development
2013 2014 Starting position 2.0 2.2 Net dividend from units 1.0 0.9
Acquisitions & divestments 0.6 (0.0)
Common dividends (0.4) (0.4)
Funding & operating expenses (0.4) (0.4)
Debt issuances/redemptions (0.4) (1.0)
Other (0.1) (0.1)
Ending position 2.2 1.2
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Funding costs (EUR million, fixed charge coverage)
Gross financial leverage target range of 26-30%
► Leverage cut by ~25% since 2011
Leverage and fixed charge coverage targets achieved in 2014
9.2 8.7 7.7 7.1
34.0% 32.0%
33.3%
28.7%
2011 2012 2013 2014
520 444 403
303 3.8x
4.8x 5.2x
6.5x
2011 2012 2013 2014 Note: Gross leverage and fixed charge coverage ratios as reported
Fixed charge coverage target range of 6-8x
► Fixed charges reduced by more than 40%
► Positioning capital structure for Solvency II
► Taking advantage of low interest rates through proactive refinancing
Gross leverage (EUR billion, %)
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Underlying earnings impacted by adverse claims experience and low interest rates in the US
Sales growth across the group; new business remains profitable despite low interest rates
Strong operational free cash flows and solid excess capital position
Q1 2015 earnings impacted by adverse claims experience
Note: Earnings = underlying earnings before tax; Cash flows = operational free cash flows excluding market impact and one-time items
+32% compared with Q1 2014
€ 2.8bn
Sales
+11% compared with Q1 2014
€ 339m
Cash flows
-6% compared with Q1 2014
€ 469m
Earnings
7.2% excluding run-off businesses
6.6%
Return on Equity
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Expected group Solvency II ratio remains in the range of 150% to 200% Uncertainties still to be resolved throughout 2015
► Internal model approval process and calibration ► US equivalence and deduction & aggregation methodology (including US RBC conversion ratio) ► Assessment of Transferability and Fungibility ► Specifications for use of Matching Adjustment ► Loss absorbing capacity of taxes
Solvency II range confirmed; uncertainties remain
US life RBC ratio conversion
Non-regulated and other entities
Non-EEA
Netherlands (IM) United Kingdom (IM) Spain (SF) CEE (SF) Diversification benefit
EEA
Senior leverage net of excess capital
Required capital
Holding
Cash flows driven by local ratios
Updated capital policy January 2016
Group
+ – =
Note: EEA = European Economic Area; IM = Internal Model, SF = Standard Formula; CAL = Company Action Level
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Persistently low interest rates
Increased regulation of financial services
Changing capital requirements
Continued execution of our strategy
Well-positioned to capture growth opportunities
Looking ahead
2015
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Annual Report 2014
Jaarverslag 2014
Agenda item 3.1 / Agendapunt 3.1
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Remuneration Report 2014
Remuneratierapport 2014
Agenda item 3.2 / Agendapunt 3.2
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2014 No changes to Executive Board Remuneration Policy since 2011
Executive Board policy aligned with Global Remuneration Framework
Vesting according to sustained performance (ex-ante / ex-post) 2015 New type of contract for Alex Wynaendts, in connection with re-appointment
Clauses in contract reflect revised governance requirements
Main points from Aegon’s Executive Board Remuneration Policy
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Remuneration in 2014 ► Fixed compensation CEO increased with 10% compared to 2013
(After increase, Executive Board total compensation still below 25th percentile of peer groups) ► Deferred variable compensation from 2011 and 2012 paid out / vested ► Upfront variable compensation regarding performance year 2013 paid out / vested ► 3 year holding periods apply to all vested shares
Conditional variable compensation allocated over 2014 ► Alex Wynaendts: 79,13% of fixed compensation (2013: 98,33%) ► Darryl Button: 79,76% of fixed compensation (2013: 98,50%) ► 40% of variable compensation to be paid in 2015 60% deferred
2014 Executive Board remuneration
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Financial and non-financial Group targets (75% maximum) ► Underlying earnings after tax (15%) ► Return on equity (15%) ► Market consistent value of new business (18.75%) ► Return on economic required capital (11.25%) ► Strategy/sustainability (15%):
Personal targets (25% maximum) ► Strategy execution – business model, portfolio management, customer-centricity ► HR and sustainability topics – employee engagement, succession planning ► Large projects/issues – cash flow development, Solvency II
Executive Board remuneration – variable compensation indicators and results
23.75% Alex Wynaendts 24.38% Darryl Button
Outcome 2014
55.38%
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New contract Alex Wynaendts is a services agreement
Clauses from previous employment contract that are no longer fitting or otherwise need updating will be amended
New clauses will be included ► Severance payment in case of early termination limited to a maximum of one year annual
salary in cash ► Retirement age will be brought forward from 62 to 60
2015 Executive Board remuneration – new contract for Alex Wynaendts
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Aegon’s policy takes into account both national and international circumstances and conditions
Legislation and regulations impact remuneration policies ► Dutch government introduced maximum variable compensation in financial sector ► Limits on sign-on- , retention- and severance payments ► Fiscal treatment of pension accrual in the Netherlands further limited
Worldwide, Aegon’s compensation policies (and competitive landscape) are impacted
Aegon’s Remuneration Policy in general – going forward
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Prior to 2015, some selected senior staff were eligible for variable compensation exceeding the new maximums
Starting performance year 2015, variable compensation levels for these roles have been adjusted downwards to match applicable new maximums ► Aegon the Netherlands: 20% maximum on average for senior management
► Holding of the Group in NL (N.V.) and Aegon companies in Europe: maximum variable compensation has become 100%
► Outside Europe: maximum variable compensation has become 200%
Variable compensation at Aegon Group and the new maximums
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Annual Report 2014
Jaarverslag 2014
Agenda item 3.1 / Agendapunt 3.1
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Annual Accounts 2014: Proposal to adopt the
Annual Accounts 2014
Jaarrekening 2014: Voorstel tot
vaststelling van de Jaarrekening 2014
Agenda item 3.3 / Agendapunt 3.3
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Vóór de stemming Plaats kaart met chip naar voren Naam verschijnt in venster
Tijdens de stemming Stemkeuzes verschijnen in venster Maak uw keuze:
1 = Vóór 2 = Tegen 3 = Onthouding
Keuze verschijnt in venster Tijdens stemming kunt u uw
keuze wijzigen Laatste keuze geldt
Prior to the voting Insert card with chip facing you Name appears on display
During the voting Voting options appear in display Press button:
1 = For 2 = Against 3 = Abstain
Choice appears in display During voting you can change
your choice Last choice counts
Voting procedure / Stemprocedure
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Annual Accounts 2014: Proposal to adopt the
Annual Accounts 2014
Jaarrekening 2014: Voorstel tot
vaststelling van de Jaarrekening 2014
Voting on agenda item 3.3 / Stemming over agendapunt 3.3
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Proposal to approve the final dividend 2014
Voorstel tot goedkeuring van het slotdividend over het boekjaar
2014
Agenda item 4 / Agendapunt 4
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Cash flows upstreamed to the holding are available to execute our strategy, to fund operating expenses and to pay dividends to shareholders
Aegon aims to pay a sustainable dividend to shareholders, which can grow over time if performance of the company allows so ► Balance prudence versus offering an attractive dividend
In normal circumstances, Aegon expects to declare an interim dividend
and propose a final dividend for approval at the AGM
Aegon’s dividend policy
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Proposed final dividend for 2014: EUR 0.12 per common share
► Results in total dividend for 2014 of EUR 0.23 per common share
To be paid in cash or stock
Value of stock dividend approximately
equal to cash dividend
Aegon’s dividend proposal
0.11
0.12
2013 2014
Dividend (EUR)
0.22 0.23
Final dividend Interim dividend
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Proposal to approve the final dividend 2014
Voorstel tot goedkeuring van het slotdividend over het boekjaar
2014
Agenda item 4 / Agendapunt 4
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55
Proposal to approve the final dividend 2014
Voorstel tot goedkeuring van het slotdividend over het boekjaar
2014
Voting on agenda item 4 / Stemming over agendapunt 4
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Proposal to release the members of the
Executive Board from liability for their
duties
Voorstel tot het verlenen van kwijting aan de
leden van de Raad van Bestuur
Agenda item 5 / Agendapunt 5
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57
Proposal to release the members of the
Executive Board from liability for their
duties
Voorstel tot het verlenen van kwijting aan de
leden van de Raad van Bestuur
Voting on agenda item 5 / Stemming over agendapunt 5
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Proposal to release the members of the
Supervisory Board from liability for their
duties
Voorstel tot het verlenen van kwijting aan de
leden van de Raad van Commissarissen
Agenda item 6 / Agendapunt 6
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59
Proposal to release the members of the
Supervisory Board from liability for their
duties
Voorstel tot het verlenen van kwijting aan de
leden van de Raad van Commissarissen
Voting on agenda item 6 / Stemming over agendapunt 6
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Proposal to reappoint Mr. Alex R. Wynaendts
to the Executive Board
Voorstel tot herbenoeming van de heer
Alex R. Wynaendts als lid van de
Raad van Bestuur
Agenda item 7 / Agendapunt 7
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Alex Wynaendts
Age 54
Nationality Dutch
Profession/ Functie
Chairman Executive Board and CEO of Aegon N.V.
Memberships other boards/ Andere bestuursfuncties* None
Shares in Aegon N.V./ Aantal aandelen in Aegon N.V.
295,734 common shares
* Qualifying under Act Management and Supervision/Conform Wet bestuur en toezicht
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Proposal to reappoint Mr. Alex R. Wynaendts
to the Executive Board
Voorstel tot herbenoeming van de heer
Alex R. Wynaendts als lid van de
Raad van Bestuur
Agenda item 7 / Agendapunt 7
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63
Proposal to reappoint Mr. Alex R. Wynaendts
to the Executive Board
Voorstel tot herbenoeming van de heer
Alex R. Wynaendts als lid van de
Raad van Bestuur
Voting on agenda item 7 / Stemming over agendapunt 7
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64
Proposal to appoint Mr. Ben J. Noteboom
to the Supervisory Board
Voorstel tot benoeming van de heer
Ben J. Noteboom als lid van de
Raad van Commissarissen
Agenda item 8 / Agendapunt 8
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Age 56
Nationality Dutch
Profession/ Functie
Non-Executive Director
Former occupation/ Vroegere functie:
CEO Randstad Holding N.V.
Memberships other boards/ Andere bestuursfuncties*
Supervisory Board member Ahold N.V. and Wolters Kluwer
Shares in Aegon N.V./ Aantal aandelen in Aegon N.V.
23,500 common shares
Ben Noteboom
* Qualifying under Act Management and Supervision/Conform Wet bestuur en toezicht
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“Aegon plays a hugely important role not only in terms of providing financial security to millions of
people, but also in the wider economy. The company has made exciting improvements to
become more customer-centric. I hope to make a positive contribution by drawing on my own
experience in this area.”
Ben. J. Noteboom
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Proposal to appoint Mr. Ben J. Noteboom
to the Supervisory Board
Voorstel tot benoeming van de heer
Ben J. Noteboom als lid van de
Raad van Commissarissen
Agenda item 8 / Agendapunt 8
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68
Proposal to appoint Mr. Ben J. Noteboom
to the Supervisory Board
Voorstel tot benoeming van de heer
Ben J. Noteboom als lid van de
Raad van Commissarissen
Voting on agenda item 8 / Stemming over agendapunt 8
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Proposal to authorize the Executive Board to
issue common shares
Voorstel tot machtiging van de Raad van
Bestuur tot uitgifte van gewone aandelen
Agenda item 9 / Agendapunt 9
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70
Proposal to authorize the Executive Board to
issue common shares
Voorstel tot machtiging van de Raad van
Bestuur tot uitgifte van gewone aandelen
Voting on agenda item 9 / Stemming over agendapunt 9
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71
Proposal to authorize the Executive Board to restrict or exclude pre-emptive rights
upon issuing common shares
Voorstel tot machtiging van de Raad van
Bestuur tot beperking of uitsluiting van
voorkeursrechten bij de uitgifte van gewone
aandelen
Agenda item 10 / Agendapunt 10
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72
Proposal to authorize the Executive Board to restrict or exclude pre-emptive rights
upon issuing common shares
Voorstel tot machtiging van de Raad van
Bestuur tot beperking of uitsluiting van
voorkeursrechten bij de uitgifte van gewone
aandelen
Voting on agenda item 10 / Stemming over agendapunt 10
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73
Proposal to authorize the Executive Board to issue common shares
under incentive plans
Voorstel tot machtiging van de Raad van
Bestuur tot uitgifte van gewone aandelen in het
kader van incentiveplannen
Agenda item 11 / Agendapunt 11
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74
Proposal to authorize the Executive Board to issue common shares
under incentive plans
Voorstel tot machtiging van de Raad van
Bestuur tot uitgifte van gewone aandelen in het
kader van incentiveplannen
Voting on agenda item 11 / Stemming over agendapunt 11
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75
Proposal to authorize the Executive Board to
acquire shares in the Company
Voorstel tot machtiging van de Raad van
Bestuur tot verkrijging van eigen aandelen
Agenda item 12 / Agendapunt 12
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76
Proposal to authorize the Executive Board to
acquire shares in the Company
Voorstel tot machtiging van de Raad van
Bestuur tot verkrijging van eigen aandelen
Voting on agenda item 12 / Stemming over agendapunt 12
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Any other business
Wat verder ter tafel komt
Agenda item 13 / Agendapunt 13
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Close of the meeting
Sluiting van de vergadering
Agenda item 14 / Agendapunt 14
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Thank you – Dank u wel
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Please return your voting device and voting
card before departing
Wilt u voor uw vertrek uw stemkastje en stempas inleveren