Aegon Grows Earnings, Sales and Cash Flows in Q2 2013

THE HAGUE, The Netherlands, August 8, 2013 /PRNewswire/ --



• Strong underlying earnings; net income impacted by fair value items
• Underlying earnings increase to EUR 478 million; positive effects of business growth and favorable equity markets partly offset by restructuring in Spain and unfavorable currency exchange rates
• Net income of EUR 243 million impacted by fair value losses mainly due to higher equity markets, increased equity market volatility and rising interest rates
• Return on equity amounts to 6.7%, or 7.4% excluding run-off businesses

• Positive sales trend in accumulation and at-retirement products continues
• New life sales increase 21% to EUR 520 million; particularly strong pension sales in the UK and NL
• Accident and health and general insurance sales decrease 7% to EUR 187 million due to the termination of certain distribution partnerships
• Deposits up 30% to EUR 12.7 billion; significant increases in asset management, variable annuity, retail mutual fund and pension deposits partly offset by lower stable value deposits
• Market consistent value of new business increases significantly to EUR 202 million, the result of increased sales volumes, higher interest rates and management actions to improve margins

• Continued strong capital position and cash flows
• IGD^a) solvency ratio at 220%, reflecting strong operating unit capital positions
• Excess capital at holding increases to EUR 1.9 billion
• Operational free cash flow of EUR 674 million; market impact and one-time items of EUR 308 million
• Interim dividend increases to EUR 0.11 per share; dilutive effect of stock dividend to be neutralized

Statement of Alex Wynaendts, CEO

"The growth of our underlying earnings and sales during the quarter demonstrates that Aegon continues to benefit from its strategic transformation. Particularly strong performance in pensions and variable annuities in our key markets shows ongoing customer demand for our core retirement products.

"We continued to execute our strategy with a series of high-quality partnerships that strengthen Aegon's distribution networks, expanding our reach and positioning us for further sales growth in the Americas, UK and Spain. These agreements are a unique opportunity to create long-term relationships with a large number of potential customers, as all of us at Aegon continue working to help people secure their financial future.

"Our strong capital position and operational free cash flows enable us to increase our interim dividend, a sign of our confidence in the company. With the business positioned to benefit from rising interest rates, recent developments in the US and elsewhere allow us to create further long-term value for both our customers and our shareholders.

"I am pleased to say that our solid performance this quarter shows that the decisions we have taken are the right ones, and supports future strategic actions that we feel are necessary to achieve a leadership position in each of our chosen markets."

Key performance indicators Q2 Q1 Q2 YTD YTD amounts in EUR millions b) Notes 2013 2013 % 2012 % 2013 2012 % Underlying earnings before tax 1 478 445 7 457 5 923 896 3 Net income 2 243 204 19 249 (2) 447 774 (42) Sales 3 1,975 1,738 14 1,604 23 3,713 3,362 10 Market consistent value of new business 4 202 232 (13) 117 73 434 242 79 Return on equity 5 6.7% 6.3% 6 7.1% (6) 6.3% 7.0% (10)

STRATEGIC HIGHLIGHTS

• Progress on execution of strategy highlighted at recent investor day
• New distribution agreements to drive new business growth
• Further signs that the company's customer-centric strategy is delivering results

Strategic update
Aegon continues to make solid progress on its strategic transformation as highlighted by management at Aegon's Analyst & Investor Conference in London. At the conference, Aegon's CEO, Alex Wynaendts, emphasized the need to leverage Aegon's strength in the At-Retirement market, while remaining focused on creating a truly customer-centric culture, particularly through on-going investment in technology and innovation. Aegon's newly appointed CFO, Darryl Button, provided the trajectory toward the company's 2015 financial targets, discussed Aegon's capital management policy and announced a three-year capital deployment strategy.

Aegon is on track to achieve its target to double the proportion of earnings generated from fee-based businesses to 30-35%, as well as its aim to achieve operational free cash flows of between EUR 1.3 and 1.6 billion by 2015. Supported by new business growth at attractive returns, Aegon is on a clear path toward higher earnings and return on equity (RoE) growth. In an environment of low interest rates, however, the company recognizes that its underlying earnings and RoE have been impacted negatively, in line with previously provided sensitivities. Aegon is currently on a trajectory to deliver an increase in underlying earnings before tax of 7-10% from 2012 to 2015. With regard to its return on equity target, Aegon is currently on a path to achieve an RoE of between 8-10%, assuming current reinvestment yields until 2015, and taking into account the recent preferred share transaction and further capital deleveraging. Management, however, affirms its ambition to achieve an RoE of 10-12% and recognizes that additional actions are required to do so.

Aegon outlined its disciplined capital management policy to promote sustainable cash flows and support its strategic transformation. The company's business unit capitalization between its self-imposed target and buffer levels enables it to satisfy local regulatory and rating agency requirements while facilitating stable dividends to the holding. Holding excess capital allows Aegon to service debt, pay a sustainable dividend to shareholders and execute its strategy. Management also introduced a three-year capital deployment strategy, supported by the strong capitalization levels in most of Aegon's business units and at the holding. This balanced strategy includes commitments to reduce leverage, maintain a sustainable cash dividend and execute strategic priorities.

Aegon continues to pursue its strategic aim to be a leader in all of its chosen markets, supported by four strategic objectives embedded in all Aegon businesses: Optimize portfolio; Enhance customer loyalty; Deliver operational excellence; and Empower employees. These provide the strategic framework for the company's ambition to become the most-recommended life insurance and pension provider by customers and business partners, as well as the most-preferred employer in the sector.

Optimize portfolio
Continued success in developing new distribution agreements has been a key driver of new business growth, allowing Aegon to expand its market presence and further strengthen its market position. In the Americas, approximately 20% of Transamerica's new Life & Protection business is from distribution that did not exist five years ago. Variable annuity sales growth in the Americas has also been supported by new distribution agreements. These include the launch of a private label variable annuity with Voya, announced earlier this year, and the recently-announced agreement with leading brokerage firm Edward Jones. In the United Kingdom, Aegon was selected by Mercer as one of their three large defined-contribution provider partners, and as the sole partner for their SME business. This important agreement highlights the relevance and growing success of Aegon's new pension platform, and builds on the distribution agreement with Barclays Bank announced earlier this year.

In Spain, Aegon began distributing insurance products through its expanded network, created as a result of a significant new partnership with Banco Santander, Spain's leading bank.

Aegon identified further opportunities to optimize its portfolio to achieve its ambition. In the United Kingdom, Aegon announced the sale of its distribution business, Positive Solutions, allowing the company to focus fully on its life and pension businesses and the success of its new platform business. Aegon will continue to review all of its businesses for strategic fit and return prospects. In Spain, Aegon's previously announced exits of its joint ventures with Unnim and Caja de Ahorros del Mediterráneo (CAM) closed on May 7, 2013 and July 19, 2013 respectively.

Deliver operational excellence
Strict pricing discipline has led to increased profitability, despite lower interest rates, and will be a driver of earnings growth and RoE expansion. Aegon's strict market consistent pricing standards encourage products that are less sensitive to financial markets. It has also led to product adjustments, including real-time pricing of universal life products and re-priced long-term care and variable annuities in the US, and re-priced disability products in the Netherlands.

Aegon's continued focus on cost efficiency is evident with recently-announced changes to its distribution structure in the United Kingdom, including the closure of six regional sales offices. These cost savings are in addition to significant reductions already realized in the United Kingdom. Cost discipline extends to all parts of the organization. The Dutch business is on track to achieve its cost reduction targets. In the Americas, the aim is to keep operating expenses flat while growing the business faster than the industry. However, sales and employee related expenses incurred due to the exceptionally strong growth levels put upward pressure on cost levels. At the holding, a reduction of operating expenses and lower funding costs through deleveraging have been realized.

Enhance customer loyalty

Aegon believes that creating a customer-centric culture will enable it to further grow by responding to changing markets and customer behaviors. A key element of Aegon's strategy is to get closer to its customers by increased deployment of technology at all levels of the organization. In the US, Transamerica released the Retirement Outlook Estimator, a new mobile app designed to help users understand and plan for a healthy financial future by projecting a personalized retirement outlook against their retirement goals. In India, Aegon Religare won the E-Business leader award for innovative online life insurance products iTerm and iHealth. These simple online products, the first of their kind available in India, were commended for improving digital distribution to the customer.

For the fourth year in a row, Aegon won the prestigious Pension Provider of the Year award at the European Pensions Awards. The award recognizes the work of multinational companies and their advisors to develop and implement effective pension solutions. It reflects Aegon's expertise in and dedication to cross-border European pension solutions, and validates Aegon's client-focused approach to pensions.

Empower employees
Aegon continues to implement initiatives to help employees better understand Aegon's goals and how they contribute individually to the company's success. In an effort to develop a truly customer-centric culture, Aegon recently rolled out its Customer License Program, encouraging employees to focus on solutions to customer issues in which they have particular interest. Employees in this program spend time at one of the company's customer service call centers, with one of its intermediaries or in another capacity that provides them with direct customer interaction. Aegon believes this initiative, and others similar to it, will help its employees better relate to customers, ultimately translating into a stronger market position with increased customer brand loyalty.

Financial overview c) Q2 Q2 EUR millions Notes 2013 Q1 2013 % 2012 % YTD 2013 YTD 2012 % Underlying earnings before tax Americas 360 312 15 349 3 672 652 3 The Netherlands 74 85 (13) 74 - 159 155 3 United Kingdom 27 24 13 26 4 51 56 (9) New markets 52 62 (16) 64 (19) 114 152 (25) Holding and other (35) (38) 8 (56) 38 (73) (119) 39 Underlying earnings before tax 478 445 7 457 5 923 896 3 Fair value items (270) (286) 6 82 - (556) 230 - Realized gains / (losses) on investments 82 113 (27) 85 (4) 195 130 50 Impairment charges (57) (17) - (42) (36) (74) (83) 11 Other income / (charges) 27 (4) - (254) - 23 (271) - Run-off businesses 13 (14) - 7 86 (1) 5 - Income before tax 273 237 15 335 (19) 510 907 (44) Income tax (30) (33) 9 (86) 65 (63) (133) 53 Net income 243 204 19 249 (2) 447 774 (42) Net income / (loss) attributable to: Equity holders of Aegon N.V. 242 204 19 249 (3) 446 774 (42) Non-controlling interests 1 - - - - 1 - - Net underlying earnings 361 323 12 346 4 684 684 - Commissions and expenses 1,491 1,417 5 1,555 (4) 2,908 2,939 (1) of which operating expenses 11 844 804 5 799 6 1,648 1,565 5 New life sales Life single premiums 1,652 1,491 11 1,068 55 3,143 2,228 41 Life recurring premiums annualized 355 350 1 321 11 705 650 8 Total recurring plus 1/10 single 520 499 4 428 21 1,019 873 17 New life sales Americas 12 124 110 13 126 (2) 234 246 (5) The Netherlands 48 40 20 23 109 88 55 60 United Kingdom 292 286 2 211 38 578 424 36 New markets 12 56 63 (11) 68 (18) 119 148 (20) Total recurring plus 1/10 single 520 499 4 428 21 1,019 873 17 New premium production accident and health insurance 173 225 (23) 187 (7) 398 382 4 New premium production general insurance 14 14 - 13 8 28 27 4 Gross deposits (on and off balance) Americas 12 6,417 6,988 (8) 6,644 (3) 13,405 14,036 (4) The Netherlands 327 404 (19) 367 (11) 731 927 (21) United Kingdom 73 49 49 9 - 122 17 - New markets 12 5,855 2,563 128 2,737 114 8,418 5,820 45 Total gross deposits 12,672 10,004 27 9,757 30 22,676 20,800 9 Net deposits (on and off balance) Americas 12 1,185 1,613 (27) 738 61 2,798 1,799 56 The Netherlands 85 (134) - (66) - (49) (251) 80 United Kingdom 56 40 40 (1) - 96 (2) - New markets 12 2,233 145 - 619 - 2,378 1,983 20 Total net deposits excluding run-off businesses 3,559 1,664 114 1,290 176 5,223 3,529 48 Run-off businesses (644) (1,073) 40 (479) (34) (1,717) (1,639) (5) Total net deposits 2,915 591 - 811 - 3,506 1,890 86

Revenue-generating investments Jun. 30, Dec. 31, 2013 2012 % Revenue-generating investments (total) 465,772 459,077 1 Investments general account 140,388 145,021 (3) Investments for account of policyholders 155,893 152,968 2 Off balance sheet investments third parties 169,491 161,088 5

OPERATIONAL HIGHLIGHTS

Underlying earnings before tax
Aegon's underlying earnings before tax increased 5% to EUR 478 million compared to the second quarter of 2012. Business growth and the positive effects of favorable equity markets more than offset the loss of earnings due to the sale of Prisma in the fourth quarter of 2012 and the company's interests in partnerships in Spain (EUR 11 million), as well as the impact of unfavorable currency exchange rates (EUR 12 million).

Underlying earnings from the Americas increased to EUR 360 million. The 3% increase on the second quarter of 2012 is mainly the result of growth in Variable Annuities and Pensions, partly offset by higher sales and employee related expenses.

In the Netherlands, underlying earnings were stable at EUR 74 million as higher earnings in Life & Savings were partly offset by lower Pension earnings due to adverse underwriting results. Earnings from non-life did not increase compared to the second quarter of 2012, as improved earnings from disability were offset by adverse claim experience in general insurance.

Underlying earnings from Aegon's operations in the United Kingdom of EUR 27 million were up 4% compared to the second quarter of 2012. Earnings were negatively impacted by adverse persistency (EUR 9 million) following the implementation of the Retail Distribution Review. It is expected that
the effects of adverse persistency will start to wear off in the second half of 2013. These effects were more than made up for by favorable equity market movements, improved mortality and favorable claims experience.

Underlying earnings from New Markets decreased 19% to EUR 52 million. Higher earnings from Aegon Asset Management were more than offset by lower underlying earnings from Central & Eastern Europe and Spain. Results in Spain were impacted by EUR 8 million as a result of the divestments of the joint ventures with Banca Cívica and Unnim, while earnings from Central & Eastern Europe were impacted by unfavorable claims experience and included a charge of EUR 2 million related to the recently introduced insurance tax in Hungary.

Total holding costs decreased 38% to EUR 35 million, mainly as a result of lower net interest expenses following debt redemptions and lower operating expenses at the holding.

Net income
Net income decreased 2% to EUR 243 million as higher underlying earnings and higher other income were more than offset by losses from fair value items.

Fair value items
The results from fair value items amounted to a loss of EUR 270 million. This was primarily caused
by the loss on fair value hedges without an accounting match under IFRS, which amounted to
EUR 152 million in the second quarter of 2013. The main drivers were rising equity markets, increased equity market volatility, but also higher interest rates.

Fair value hedging with an accounting match, which include the hedges on Aegon's GMWB variable annuities block and the guarantees on general account products in the Netherlands, contributed
EUR 20 million to earnings. Fair value investments underperformed by EUR 75 million during the second quarter of 2013, mainly driven by alternative investments in the Americas and the residential rental real estate portfolio in the Netherlands.

The loss on other fair value items amounted to EUR 63 million, mainly driven by lower credit spreads impacting outstanding medium term notes, foreign currency movements and rising interest rates.

Realized gains on investments
In the second quarter, realized gains on investments amounted to EUR 82 million and were the result of asset liability management and normal trading activity in the investment portfolio.

Impairment charges
Impairments were up modestly compared to last year to EUR 57 million. These were largely related to impairments on structured assets in the Americas and a single corporate exposure in the UK, as well as residential mortgage loans in the Netherlands.

Other income
Other income amounted to EUR 27 million and related mostly to the gain of EUR 102 million on the sale of the joint venture with Unnim, offset by charges in the United Kingdom related to business transformation costs (EUR 32 million) and the divestment of Positive Solutions (EUR 22 million), and a provision of EUR 25 million in the Netherlands following the KoersPlan court verdict in June.

On June 14, 2013, the Supreme Court denied Aegon's appeal and confirmed the ruling of the Court of Appeal from 2011 in the KoersPlan case. Aegon will compensate the approximately 35,000 policyholders of KoersPlan-products who were plaintiffs in the litigation. To cover for this liability, Aegon set up a provision of EUR 25 million in the second quarter of 2013. For policyholders of KoersPlan-products not plaintiffs in the litigation, the company is establishing whether any adjustment of the premium is appropriate.

Run-off businesses
The results of run-off businesses increased to EUR 13 million, mainly due to improved results in the life reinsurance business in the Americas.

Income tax
Income tax amounted to EUR 30 million in the second quarter. The effective tax rate on underlying earnings for the second quarter of 2013 was 24%. The effective tax rate on total income was 11%, driven by the combined effects of negative fair value items taxed at nominal rates, tax credits and tax exempt items including the gain on the sale of the Unnim joint venture.

Return on equity
Return on equity decreased to 6.7% for the second quarter of 2013 as higher net underlying earnings were outweighed by higher preferred dividend payments and the increase in shareholders' equity resulting from the conversion of the preferred shares into common shares. Return on equity for Aegon's ongoing businesses, excluding the run-off businesses, amounted to 7.4% over the same period.

Operating expenses
In the second quarter, operating expenses increased 6% to EUR 844 million mainly as a result of higher sales and employee related expenses in the United States and business transformation costs in the United Kingdom.

Sales
Compared to the second quarter of 2012, Aegon's total sales increased 23% to EUR 2.0 billion. New life sales were up by 21%, driven mainly by higher pension production as a result of strong market propositions in the Netherlands and the United Kingdom. In the Americas, new life sales were flat on a US dollar basis, primarily driven by lower universal life sales due to product withdrawals and product redesign, resulting from the focus on value creation. Gross deposits remained strong particularly in both the variable annuity and retail mutual fund businesses in the United States and Aegon Asset Management. Net deposits, excluding run-off businesses, amounted to EUR 3.6 billion and were driven primarily by variable annuity and retirement deposits in the United States and third party inflow at Aegon Asset Management.

Market consistent value of new business
The market consistent value of new business increased strongly to EUR 202 million mainly as a result of strong sales growth and higher margins in the United States, as well as a higher contribution from mortgages and increased pension production in the Netherlands.

Revenue-generating investments
Revenue-generating investments declined 2% during the second quarter of 2013 to EUR 466 billion, as the negative impact of rising interest rates more than offset continued net inflows.

Capital management
Shareholders' equity decreased EUR 2.5 billion compared to the end of the first quarter of 2013 to EUR 21.1 billion at June 30, 2013, as higher interest rates resulted in lower revaluation reserves. The revaluation reserves declined by EUR 2.0 billion to EUR 3.7 billion. Aegon's shareholders' equity, excluding revaluation reserves and defined benefit plan remeasurements, amounted to EUR 18.3 billion. The gross financial leverage ratio improved to 30.5% in the second quarter, as a USD 750 million senior bond which matured in June was not refinanced.

Excess capital in the holding increased to EUR 1.9 billion, as distributions to the holding and the proceeds on the sale of the joint venture with Unnim more than offset the cash used for the conversion of the preferred shares, the investment in the new joint venture with Banco Santander, dividend and interest payments and operating expenses. During the second quarter of 2013, Aegon received EUR 0.6 billion net cash distributions from its operating units. The Americas contributed EUR 0.4 billion and the Netherlands EUR 0.3 billion.

Shareholders' equity per common share, excluding revaluation reserves and defined benefit plan remeasurements, amounted to EUR 8.69 at June 30, 2013.

At June 30, 2013, Aegon's Insurance Group Directive (IGD) ratio slightly declined to 220%, including a 6% negative impact from the conversion of the preferred shares. Measured on a local solvency basis, the Risk Based Capital (RBC) ratio in the United States decreased to ~465% as net income for the quarter was offset by the USD 0.6 billion distributions to the holding. On a S&P basis, the surplus above the level required for a AA rating slightly declined to approximately USD 0.8 billion. The Pillar I ratio in the United Kingdom was ~170% at the end of the second quarter of 2013, reflecting favorable movements of interest rates. The IGD ratio excluding the benefit from the introduction of the ultimate forward rate and Aegon Bank in the Netherlands increased to ~235%, driven by the net income for the quarter and rising interest rates.

Cash flows
Operational free cash flows were EUR 674 million in the second quarter of 2013. Excluding one-time items of EUR (16) million and market impacts of EUR 324 million, operational free cash flows amounted to EUR 366 million. The impact of market movements during the second quarter resulted mainly from the benefit of rising interest rates in the Americas and in the Netherlands.

Interim dividend
The 2013 interim dividend amounts to EUR 0.11 per common share. The interim 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 will neutralize the dilutive effect of the stock dividend on earnings per share.

Aegon's shares will be quoted ex-dividend on August 15, 2013. The record date is August 19, 2013. The election period for shareholders will run from August 21 up to and including September 6, 2013. The stock fraction will be based on the average share price on Euronext Amsterdam from September 2 through September 6, 2013. The stock dividend ratio will be announced on September 6, 2013 after closing of Euronext Amsterdam. The dividend will be payable as of September 13, 2013.

ADDITIONAL INFORMATION

The Hague - August 8, 2013

Media conference call

7:45 a.m. CET
Podcast available after the call on aegon.com

Analyst & investor conference call

09:00 a.m. CET
Audio webcast on aegon.com

Dial-in numbers

United States: +1 480 629 9673
United Kingdom: +44 207 153 2027
The Netherlands: +31 45 631 6902

Two hours after the conference call, a replay will be available on aegon.com.

Presentations

Presentations will be available on aegon.com at 7:35 a.m. CET

Supplements

Aegon's Q2 2013 Financial Supplement and Condensed Consolidated Interim Financial Statements are available on aegon.com.

Full version press release

Use this link for the full version of the press release: http://www.aegon.com/en/Home/Investors/News-presentations/Press-Releases/2013/Aegon-grows-earnings-sales-and-cash-flows-in-Q2-2013-/

DISCLAIMERS

Cautionary note regarding non-GAAP measures

This document includes certain non-GAAP financial measures: underlying earnings before tax and market consistent value of new business. The reconciliation of underlying earnings before tax to the most comparable IFRS measure is provided in Note 3 "Segment information" of Aegon's Condensed consolidated interim financial statements. Market consistent value of new business is not based on IFRS, which are used to report Aegon's primary financial statements and should not be viewed as a substitute for IFRS financial measures. Aegon may define and calculate market consistent value of new business differently than other companies. Aegon believes that these non-GAAP measures, together with the IFRS information, provide meaningful supplemental information that Aegon's management uses to run its business as well as useful information for the investment community to evaluate Aegon's business relative to the businesses of its peers.

Local currencies and constant currency exchange rates

This document contains certain information about Aegon's results, financial condition and revenue generating investments presented in USD for the Americas and GBP for the United Kingdom, because those businesses operate and are managed primarily in those currencies. Certain comparative information presented on a constant currency basis eliminates the effects of changes in currency exchange rates. None of this information is a substitute for or superior to financial information about Aegon presented in EUR, which is the currency of Aegon's primary financial statements.

Forward-looking statements

The statements contained in this document that are not historical facts are forward-looking statements as defined in the US Private Securities Litigation Reform Act of 1995. The following are words that identify such forward-looking statements: aim, believe, estimate, target, intend, may, expect, anticipate, predict, project, counting on, plan, continue, want, forecast, goal, should, would, is confident, will, and similar expressions as they relate to Aegon. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Aegon undertakes no obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which merely reflect company expectations at the time of writing. Actual results may differ materially from expectations conveyed in forward-looking statements due to changes caused by various risks and uncertainties. Such risks and uncertainties include but are not limited to the following:

• Changes in general economic conditions, particularly in the United States, the Netherlands and the United Kingdom;
• Changes in the performance of financial markets, including emerging markets, such as with regard to:
• The frequency and severity of defaults by issuers in Aegon's fixed income investment portfolios;
• The effects of corporate bankruptcies and/or accounting restatements on the financial markets and the resulting decline in the value of equity and debt securities Aegon holds; and
• The effects of declining creditworthiness of certain private sector securities and the resulting decline in the value of sovereign exposure that Aegon holds;
• Changes in the performance of Aegon's investment portfolio and decline in ratings of Aegon's counterparties;
• Consequences of a potential (partial) break-up of the euro;
• The frequency and severity of insured loss events;
• Changes affecting mortality, morbidity, persistence and other factors that may impact the profitability of Aegon's insurance products;
• Reinsurers to whom Aegon has ceded significant underwriting risks may fail to meet their obligations;
• Changes affecting interest rate levels and continuing low or rapidly changing interest rate levels; changes affecting currency exchange rates, in particular the EUR/USD and EUR/GBP exchange rates;
• Changes in the availability of, and costs associated with, liquidity sources such as bank and capital markets funding, as well as conditions in the credit markets in general such as changes in borrower and counterparty creditworthiness;
• Increasing levels of competition in the United States, the Netherlands, the United Kingdom and emerging markets;
• Changes in laws and regulations, particularly those affecting Aegon's operations, ability to hire and retain key personnel, the products Aegon sells, and the attractiveness of certain products to its consumers;
• Regulatory changes relating to the insurance industry in the jurisdictions in which Aegon operates;
• Changes in customer behavior and public opinion in general related to, among other things, the type of products also Aegon sells, including legal, regulatory or commercial necessity to meet changing customer expectations;
• Acts of God, acts of terrorism, acts of war and pandemics;
• Changes in the policies of central banks and/or governments;
• Lowering of one or more of Aegon's debt ratings issued by recognized rating organizations and the adverse impact such action may have on Aegon's ability to raise capital and on its liquidity and financial condition;
• Lowering of one or more of insurer financial strength ratings of Aegon's insurance subsidiaries and the adverse impact such action may have on the premium writings, policy retention, profitability and liquidity of its insurance subsidiaries;
• The effect of the European Union's Solvency II requirements and other regulations in other jurisdictions affecting the capital Aegon is required to maintain;
• Litigation or regulatory action that could require Aegon to pay significant damages or change the way Aegon does business;
• As Aegon's operations support complex transactions and are highly dependent on the proper functioning of information technology, a computer system failure or security breach may disrupt Aegon's business, damage its reputation and adversely affect its results of operations, financial condition and cash flows;
• Customer responsiveness to both new products and distribution channels;
• Competitive, legal, regulatory, or tax changes that affect profitability, the distribution cost of or demand for Aegon's products;
• Changes in accounting regulations and policies may affect Aegon's reported results and shareholders' equity;
• The impact of acquisitions and divestitures, restructurings, product withdrawals and other unusual items, including Aegon's ability to integrate acquisitions and to obtain the anticipated results and synergies from acquisitions;
• Catastrophic events, either manmade or by nature, could result in material losses and significantly interrupt Aegon's business; and
• Aegon's failure to achieve anticipated levels of earnings or operational efficiencies as well as other cost saving initiatives.

Further details of potential risks and uncertainties affecting Aegon are described in its filings with the Netherlands Authority for the Financial Markets and the US Securities and Exchange Commission, including the Annual Report. These forward-looking statements speak only as of the date of this document. Except as required by any applicable law or regulation, Aegon expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Aegon's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

About Aegon

As an international insurance, pensions and asset management company based in The Hague, Aegon has businesses in over twenty markets in the Americas, Europe and Asia. Aegon companies employ approximately 24,000 people and have millions of customers across the globe. Further information: aegon.com.

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SOURCE AEGON N.V.