[Notes to the Condensed Consolidated Interim Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20consolidated%20interim%20financial%20statements) [Company Information](index=7&type=section&id=1.1%20Company%20Information) Aegon N.V. is a Dutch holding company with global operations in life insurance, pensions, savings, and asset management - Aegon N.V. is a Dutch holding company with global operations in life insurance, pensions, savings, and asset management across more than 20 countries, employing over **22,000 people**[14](index=14&type=chunk) - Aegon Funding Company LLC (AFC), a wholly-owned subsidiary, raises funds for US subsidiaries, with Aegon N.V. providing full and unconditional guarantees for its debt securities[15](index=15&type=chunk) [Basis of Presentation](index=7&type=section&id=1.2%20Basis%20of%20presentation) Interim financial statements are prepared under IAS 34 (IFRS), presented in EUR millions, and are unaudited - The interim financial statements are prepared under IAS 34 'Interim Financial Reporting' (IFRS) and are unaudited, presented in **EUR millions**[16](index=16&type=chunk)[17](index=17&type=chunk) - Aegon applies IFRS-EU, which includes a 'carve out' for fair value hedge accounting for portfolio hedges of interest rate risk, differing from standard IFRS[19](index=19&type=chunk) IFRS vs. IFRS-EU Financial Metrics | Metric | June 30, 2021 (EUR millions) | December 31, 2020 (EUR millions) | First half 2021 (EUR millions) | First half 2020 (EUR millions) | | :------------------------------------- | :--------------------------- | :--------------------------- | :----------------------------- | :----------------------------- | | Shareholders' equity (IFRS) | 23,052 | 23,089 | - | - | | Adjustment of EU 'IAS 39' carve out | 758 | 1,051 | (296) | 277 | | Tax effect of the adjustment | (183) | (226) | 74 | (59) | | Effect of the adjustment after tax | 575 | 826 | (222) | 218 | | Shareholders' equity (IFRS-EU) | 23,627 | 23,914 | - | - | | Net result (IFRS) | - | - | 1,457 | (16) | | Net result (IFRS-EU) | - | - | 1,235 | 202 | [Significant Accounting Policies](index=8&type=section&id=1.3%20Significant%20accounting%20policies) Accounting policies remain consistent with 2020, with new IFRS standards having no material impact - Accounting policies and methods are consistent with 2020 financial statements; new IFRS standards effective from 2021, including 'Interest Rate Benchmark Reform – Phase 2', had **no impact**[22](index=22&type=chunk)[23](index=23&type=chunk) - Aegon is assessing the impact of IASB amendments to IAS 1, IFRS Practice Statement 2, IAS 8 (effective Jan 1, 2023), and IFRS 16 (effective April 1, 2021), with the latter not expected to be significant[26](index=26&type=chunk)[27](index=27&type=chunk) [Judgments and Critical Accounting Estimates](index=9&type=section&id=1.4%20Judgments%20and%20critical%20accounting%20estimates) Financial statements rely on management judgments and estimates, with H1 2021 showing improved net result despite COVID-19 impacts - Financial statements rely on management judgments and estimates, which are subject to change[28](index=28&type=chunk) - COVID-19 continued to disrupt markets in H1 2021, but vaccination progress reduced its economic impact[29](index=29&type=chunk) Key Financial Performance and Sensitivity Metrics | Metric | YTD 2021 (EUR millions) | YTD 2020 (EUR millions) | Change (YoY) | | :-------------------------------- | :---------------------- | :---------------------- | :----------- | | Net result | 1,457 | (16) | Significant increase | | Adverse mortality (Americas) | 165 | - | - | | COVID-19 claims (Americas) | 103 | 34 | +203% | | Impairment charges | 3 | 246 | -98.8% | | Solvency II capital position | 208% | 196% | +12 percentage points | | Actuarial assumption updates charge | 86 | 850 | -89.9% | - Updated indexation assumption for Dutch pensions portfolio resulted in a **EUR 75 million lower market value liability**[33](index=33&type=chunk) - Variable Annuities GLWB surrender floor update in the Americas led to a **EUR 123 million charge to income before tax**[34](index=34&type=chunk) - A **10% increase in mortality assumption** would reduce net result by approximately **EUR 136 million** (December 31, 2020: EUR 124 million); a relative **20% increase in the lapse rate assumption** would increase net result by approximately **EUR 58 million** (December 31, 2020: EUR 89 million)[35](index=35&type=chunk) - The Liability Adequacy Test (LAT) deficit in Aegon the Netherlands improved by **EUR 1.2 billion to EUR 1.3 billion** (from EUR 2.5 billion at Dec 31, 2020), driven by market movements[37](index=37&type=chunk) - An increase of **100 bps in interest rate** would result in a decrease in LAT deficit of approximately **EUR 3.2 billion** (December 31, 2020: EUR 3.9 billion); a decrease of **100 bps** would result in an increase of approximately **EUR 4.3 billion** (December 31, 2020: EUR 5.2 billion)[39](index=39&type=chunk) [Other Notes](index=11&type=section&id=1.5%20Other) Income taxes are estimated using the full-year rate, and foreign currency translations follow specific rules - Income taxes for the period are calculated using the estimated full-year tax rate[40](index=40&type=chunk) - Foreign operations' assets/liabilities are translated at closing rates; income/expenses/capital transactions use average or prevailing transaction rates[41](index=41&type=chunk) Exchange Rates | Currency | June 30, 2021 (1 EUR =) | December 31, 2020 (1 EUR =) | YTD 2021 (1 EUR =) | YTD 2020 (1 EUR =) | | :------- | :---------------------- | :-------------------------- | :----------------- | :----------------- | | USD | 1.1859 | 1.2236 | 1.2052 | 1.1017 | | GBP | 0.8584 | 0.8951 | 0.8678 | 0.8737 | [Segment Information](index=12&type=section&id=1.6%20Segment%20information) Aegon renamed its primary performance measure to "Operating result" and introduced "Non-operating result" with specific measurement changes - Aegon renamed its primary performance measure to **"Operating result"** and introduced **"Non-operating result"** (Fair value items, Realized gains/losses, Net impairments)[44](index=44&type=chunk) - Measurement changes include: US macro hedge costs in Operating result; periodic intangibles unlocking in Fair value items; run-off businesses results in Operating result; CEE operations results in Other income/charges (prospectively)[45](index=45&type=chunk) - These changes increased H1 2020 consolidated operating result by **EUR 5 million** (EUR 1 million from fair value items, EUR 4 million from run-off businesses), with no impact on net result or shareholders' equity[46](index=46&type=chunk) Consolidated Segment Performance | Segment (EUR millions) | Operating Result YTD 2021 | Operating Result YTD 2020 | Fair Value Items YTD 2021 | Fair Value Items YTD 2020 | Net Result YTD 2021 | Net Result YTD 2020 | | :--------------------- | :------------------------ | :------------------------ | :------------------------ | :------------------------ | :------------------ | :------------------ | | Americas | 445 | 262 | 328 | (754) | 630 | (1,165) | | The Netherlands | 370 | 321 | 477 | 1,102 | 754 | 1,056 | | United Kingdom | 84 | 81 | (66) | 89 | 35 | 114 | | International | 62 | 82 | (2) | (8) | 73 | 91 | | Asset Management | 146 | 71 | (1) | (7) | 97 | 46 | | Holdings & Other | (112) | (113) | 31 | (21) | (133) | (159) | | **Consolidated Total** | **960** | **714** | **749** | **372** | **1,457** | **(16)** | [Investments](index=14&type=section&id=1.7%20Investments) General account investments decreased due to higher interest rates, while policyholder investments increased from positive market movements - Total investments for general account decreased in H1 2021 due to fair value decreases from higher interest rates in US and NL, partially offset by positive foreign currency translations[66](index=66&type=chunk) - Investments for account of policyholders increased in H1 2021 due to positive market movements in US and UK and foreign currency translations[68](index=68&type=chunk) Investments by Type | Investment Type (EUR millions) | June 30, 2021 | December 31, 2020 | | :----------------------------- | :------------ | :---------------- | | **Investments (General Account)** | | | | Available-for-sale (AFS) | 100,777 | 99,580 | | Loans | 45,674 | 44,519 | | Financial assets at FVTPL | 6,977 | 10,057 | | Investments in real estate | 2,423 | 2,385 | | **Total General Account** | **155,851** | **156,541** | | **Investments for Policyholders** | | | | Shares | 27,620 | 25,288 | | Debt securities | 19,557 | 19,885 | | Unconsolidated investment funds | 184,459 | 168,777 | | Investments in real estate | 485 | 467 | | **Total Policyholders** | **241,693** | **224,172** | [Premium Income and Premiums Paid to Reinsurers](index=15&type=section&id=1.8%20Premium%20income%20and%20premiums%20paid%20to%20reinsurers) Total premium income decreased in H1 2021, driven by reductions in Dutch and UK life insurance portfolios - Premium income decreased in H1 2021, mainly due to reductions in the Individual Life portfolio in NL and upgraded Life insurance policies in the UK[54](index=54&type=chunk) Premium Income and Reinsurance Premiums | Metric (EUR millions) | YTD 2021 | YTD 2020 | Change (YoY) | | :-------------------- | :------- | :------- | :----------- | | Life insurance | 6,768 | 7,526 | -10.07% | | Non-life insurance | 1,099 | 1,217 | -9.69% | | **Total premium income** | **7,867** | **8,744** | **-10.03%** | | Premiums paid to reinsurers | 1,158 | 1,200 | -3.49% | [Investment Income](index=15&type=section&id=1.9%20Investment%20income) Total investment income decreased in H1 2021 across interest, dividend, and rental income for both general and policyholder accounts Investment Income Breakdown | Metric (EUR millions) | YTD 2021 | YTD 2020 | Change (YoY) | | :-------------------- | :------- | :------- | :----------- | | Interest income | 2,599 | 2,805 | -7.31% | | Dividend income | 1,086 | 1,165 | -6.80% | | Rental income | 49 | 64 | -23.34% | | **Total investment income** | **3,734** | **4,034** | **-7.44%** | | General account | 2,388 | 2,591 | -7.83% | | Policyholders account | 1,346 | 1,443 | -6.72% | [Results from Financial Transactions](index=16&type=section&id=1.10%20Results%20from%20financial%20transactions) Results from financial transactions significantly improved to a EUR 13.5 billion gain in H1 2021, driven by fair value changes on policyholder assets - Results from financial transactions significantly improved from a loss of **EUR 4,962 million in H1 2020** to a gain of **EUR 13,477 million in H1 2021**[57](index=57&type=chunk) - The improvement was mainly driven by a net fair value change on policyholder financial assets at FVTPL, which increased by **EUR 13,996 million** (from EUR -4,294 million in H1 2020) due to positive equity markets[57](index=57&type=chunk) Results from Financial Transactions | Metric (EUR millions) | YTD 2021 | YTD 2020 | | :-------------------- | :------- | :------- | | Net fair value change of general account financial investments at FVTPL (other than derivatives) | 368 | (219) | | Realized gains /(losses) on financial investments | 209 | (3) | | Gains /(losses) on investments in real estate | 40 | 11 | | Net fair value change of derivatives | (1,269) | (405) | | Net fair value change on for account of policyholder financial assets at FVTPL | 13,996 | (4,294) | | Net foreign currency gains /(losses) | 123 | (22) | | **Total** | **13,477** | **(4,962)** | [Benefits and Expenses](index=17&type=section&id=1.11%20Benefits%20and%20expenses) Total benefits and expenses significantly increased in H1 2021, primarily due to higher claims and changes in liability valuations - Total benefits and expenses increased significantly by **145.5% from EUR 10,700 million in H1 2020 to EUR 26,268 million in H1 2021**[59](index=59&type=chunk) - The increase was mainly due to a rise in "Claims and benefits" from **EUR 8,726 million to EUR 24,475 million**, driven by changes in valuation of liabilities for insurance and investment contracts[59](index=59&type=chunk)[60](index=60&type=chunk) Total Benefits and Expenses | Metric (EUR millions) | YTD 2021 | YTD 2020 | Change (YoY) | | :-------------------- | :------- | :------- | :----------- | | Claims and benefits | 24,475 | 8,726 | +180.49% | | Employee expenses | 967 | 1,038 | -6.84% | | Administration expenses | 786 | 822 | -4.49% | | Deferred expenses | (305) | (400) | +23.75% | | Amortization charges | 345 | 513 | -32.75% | | **Total** | **26,268** | **10,700** | **+145.49%** | Claims and Benefits Breakdown | Claims and Benefits Breakdown (EUR millions) | YTD 2021 | YTD 2020 | | :------------------------------------------- | :------- | :------- | | Benefits and claims paid life | 10,628 | 6,246 | | Benefits and claims paid non-life | 691 | 779 | | Change in valuation of liabilities for insurance contracts | 8,816 | 1,465 | | Change in valuation of liabilities for investment contracts | 2,072 | (2,134) | | Policyholder claims and benefits | 22,185 | 6,362 | | Premium paid to reinsurers | 1,158 | 1,200 | | Commissions | 1,128 | 1,159 | [Other Charges](index=18&type=section&id=1.12%20Other%20charges) Other charges primarily relate to settlements concerning monthly deduction rate adjustments on universal life policies - Other charges are mainly related to settlements for monthly deduction rate adjustments on universal life policies[62](index=62&type=chunk) [Income Tax](index=18&type=section&id=1.13%20Income%20tax) Income tax includes recurring benefits from tax-exempt income and US tax credits, plus a one-off UK tax rate change benefit - Income tax includes recurring benefits from tax-exempt income (e.g., US dividend received deduction, NL participation exemption) and US tax credits (e.g., affordable housing investments)[63](index=63&type=chunk) - A one-off beneficial impact of **EUR 34 million** was recorded in H1 2021 due to the enacted UK corporate income tax rate change (19% to 25% effective April 1, 2023)[63](index=63&type=chunk) [Fair Value](index=21&type=section&id=1.14%20Fair%20value) Financial instruments are categorized into Level I, II, and III for fair value measurement, with total assets increasing in H1 2021 - Financial instruments are categorized into Level I (quoted prices), Level II (observable inputs), and Level III (unobservable inputs) for fair value measurement[70](index=70&type=chunk) Total Financial Assets and Liabilities at Fair Value | Metric (EUR millions) | June 30, 2021 | December 31, 2020 | | :-------------------- | :------------ | :---------------- | | Total financial assets at fair value | 360,463 | 347,327 | | Total financial liabilities at fair value | 80,750 | 74,242 | Level III Financial Instruments | Level III Financial Instruments (EUR millions) | Jan 1, 2021 | Total gains/losses in income statement (H1 2021) | June 30, 2021 | | :--------------------------------------------- | :---------- | :----------------------------------------------- | :------------ | | Total assets at fair value | 6,000 | 409 | 5,983 | | Total liabilities at fair value | 4,890 | 2,082 | 3,410 | - Transfers between fair value levels are identified based on transaction volume and frequency, indicating active market conditions[71](index=71&type=chunk) Financial Instruments Not Measured at Fair Value | Financial Instruments Not Measured at Fair Value (EUR millions) | Carrying Amount (June 30, 2021) | Fair Value (June 30, 2021) | Carrying Amount (Dec 31, 2020) | Fair Value (Dec 31, 2020) | | :-------------------------------------------------------------- | :------------------------------ | :------------------------- | :----------------------------- | :------------------------ | | Mortgage loans - held at amortized cost | 39,440 | 44,456 | 38,244 | 43,258 | | Private loans - held at amortized cost | 4,307 | 5,008 | 4,358 | 5,280 | | Borrowings – held at amortized cost | 9,303 | 9,806 | 8,524 | 9,165 | | Investment contracts - held at amortized cost | 22,207 | 21,582 | 20,889 | 20,382 | [Share Capital](index=24&type=section&id=1.15%20Share%20capital) Share capital remained stable, while share premium decreased due to a share dividend, and EPS significantly improved Share Capital and Share Premium | Metric (EUR millions) | June 30, 2021 | December 31, 2020 | | :-------------------- | :------------ | :---------------- | | Share capital | 320 | 320 | | Share premium | 7,106 | 7,160 | | **Total share capital** | **7,426** | **7,480** | Earnings Per Share | Metric (EUR per share) | YTD 2021 | YTD 2020 | | :--------------------- | :------- | :------- | | Basic EPS (common) | 0.69 | (0.02) | | Diluted EPS (common) | 0.69 | (0.02) | - A final dividend for 2020 of **EUR 0.06 per common share** was paid (total EUR 0.12 for 2020)[82](index=82&type=chunk) - An interim dividend for 2021 of **EUR 0.08 per common share** is planned, payable in cash or stock, with the dilutive effect to be neutralized in Q4 2021[85](index=85&type=chunk) [Borrowings](index=25&type=section&id=1.16%20Borrowings) Total borrowings increased to EUR 9.3 billion, driven by mortgage securitization and FHLB advances Borrowings Breakdown | Metric (EUR millions) | June 30, 2021 | December 31, 2020 | | :-------------------- | :------------ | :---------------- | | Capital funding | 1,274 | 1,241 |\ | Operational funding | 8,029 | 7,283 |\ | **Total borrowings** | **9,303** | **8,524** | - Operational funding increased by **EUR 0.7 billion** due to "Saecure 20" mortgage securitization (EUR 0.7 billion) and Federal Home Loan Bank advances (EUR 0.5 billion), partly offset by other mortgage loan funding decrease (EUR 0.4 billion)[87](index=87&type=chunk) [Financial Risks](index=25&type=section&id=1.17%20Financial%20risks) Aegon's interest rate risk sensitivity changed due to a US macro hedge and improved NL LAT deficit, while other sensitivities remained stable - Aegon's sensitivity to interest rate risk changed due to a US interest rate macro hedge and improved NL LAT deficit; other sensitivities (equity market, bond credit spreads, liquidity premium) were stable[88](index=88&type=chunk) Interest Rate Sensitivity | Yield Curve Movement | Estimated approximate effects on net result (June 30, 2021) | Estimated approximate effects on shareholders' equity (June 30, 2021) | Estimated approximate effects on net result (Dec 31, 2020) | Estimated approximate effects on shareholders' equity (Dec 31, 2020) | | :------------------- | :-------------------------------------------------------- | :-------------------------------------------------------------------- | :------------------------------------------------------- | :------------------------------------------------------------------- | | Shift up 100 bps | 687 | (2,746) | 813 | (1,690) | | Shift down 100 bps | (947) | 1,826 | (1,174) | 1,352 | [Capital Management and Solvency](index=26&type=section&id=1.18%20Capital%20management%20and%20solvency) Aegon's estimated Group Solvency II ratio increased to 208% in H1 2021, driven by favorable market movements and management actions - Aegon's Group Solvency II ratio increased from **196% to 208% in H1 2021**, driven by favorable market movements and one-time items[91](index=91&type=chunk)[31](index=31&type=chunk) Group Solvency II Key Figures | Solvency II Key Figures (EUR millions) | June 30, 2021 | December 31, 2020 | | :------------------------------------- | :------------ | :---------------- | | Group Own Funds | 19,436 | 18,582 | | Group SCR | 9,353 | 9,473 | | Group Solvency II ratio | 208% | 196% | - Group Own Funds increased by **EUR 854 million** due to expected return on in-force business, market impacts, and management actions, partly offset by dividends[334](index=334&type=chunk) - Group SCR decreased by **EUR 120 million** due to framework, model, and assumption changes, and management actions, offset by market impacts[335](index=335&type=chunk) Available Own Funds | Available Own Funds (EUR millions) | June 30, 2021 | December 31, 2020 | | :--------------------------------- | :------------ | :---------------- | | Tier 1 - unrestricted | 13,918 | 12,971 | | Tier 1 - restricted | 2,572 | 2,571 | | Tier 2 | 2,305 | 2,340 | | Tier 3 | 641 | 700 | | **Total Available Own Funds** | **19,436** | **18,582** | Reconciliation of Shareholders' Equity to Own Funds | Reconciliation Shareholders' Equity - Own Funds (EUR millions) | June 30, 2021 | December 31, 2020 | | :------------------------------------------------------------- | :------------ | :---------------- | | IFRS Shareholders' Equity | 23,627 | 22,815 | | IFRS adjustments for Other Equity instruments and non controlling interests | 2,710 | 2,644 | | IFRS Group Equity | 26,338 | 25,459 | | Solvency II revaluations and reclassifications | (9,259) | (9,418) | | Transferability restrictions | (1,825) | (1,766) | | Excess of Assets over Liabilities | 15,254 | 14,274 | | Availability adjustments | 4,271 | 4,416 | | Fungibility adjustments | (89) | (108) | | **Available Own Funds** | **19,436** | **18,582** | [Commitments and Contingencies](index=27&type=section&id=1.19%20Commitments%20and%20contingencies) Aegon faces class actions and litigation regarding monthly deduction rate increases, with appeals delaying a settlement implementation - Aegon subsidiaries are involved in class actions and individual litigation concerning increases in monthly deduction rates (MDR) on universal life products[96](index=96&type=chunk) - Settlements for two class actions were approved in 2019 and 2020, but appeals by opt-out policyholders have delayed implementation of the second settlement[96](index=96&type=chunk) - Aegon maintains a provision for remaining opt-outs, but an insufficient provision could negatively impact its financial position[96](index=96&type=chunk) [Acquisitions/Divestments](index=27&type=section&id=1.20%20Acquisitions%2FDivestments) Aegon divested Stonebridge in the UK, while the acquisition of its Hungarian entities by VIG was unexpectedly denied - Aegon divested Stonebridge (UK accident insurance) for approximately **GBP 60 million** in February 2021, with no material impact on capital or results[97](index=97&type=chunk) - The Hungarian Ministry of the Interior denied the acquisition of Aegon's Hungarian entities by VIG, despite constructive talks, but VIG anticipates a positive resolution[98](index=98&type=chunk) [Post Reporting Date Events](index=27&type=section&id=1.21%20Post%20reporting%20date%20events) Aegon announced a EUR 133 million common share repurchase program to neutralize dilutive effects of dividends and compensation plans - Aegon announced a **EUR 133 million common share repurchase** on July 8, 2021, to neutralize the dilutive effect of its 2020 final stock dividend and share-based compensation plans[99](index=99&type=chunk) [Operating and Financial Review and Prospects](index=28&type=section&id=Item%202%3A%20Operating%20and%20financial%20review%20and%20prospects) [Introduction](index=28&type=section&id=2.1%20Introduction) Aegon provides transparent information on business drivers and financial performance, with critical accounting policies detailed in its 2020 Form 20-F - Aegon provides transparent information on business drivers and financial performance, with supplemental details in annual and semi-annual accounts[101](index=101&type=chunk) - Critical accounting policies and risk management methodologies are detailed in Aegon's 2020 Form 20-F[102](index=102&type=chunk) [Application of Critical Accounting Policies - IFRS Accounting Policies](index=28&type=section&id=2.2%20Application%20of%20Critical%20Accounting%20Policies%20-%20IFRS%20Accounting%20Policies) Financial statements under IFRS require management judgments and estimates, particularly for life insurance contract valuations and liability adequacy testing - Financial statements are based on IFRS, requiring management judgments and estimates that are inherently subject to change[103](index=103&type=chunk) - Valuation of life insurance contract assets and liabilities uses complex models and assumptions (mortality, morbidity, investment return, expenses, surrender/lapse rates)[105](index=105&type=chunk)[110](index=110&type=chunk) - Liability adequacy testing assesses insurance liabilities against fair value; deficiencies can impact the income statement or revaluation reserve in shareholders' equity[105](index=105&type=chunk) - Actuarial and economic assumption updates in H1 2021 resulted in a pre-tax charge of **EUR 86 million** (compared to EUR 850 million in H1 2020)[116](index=116&type=chunk) Deferred Expense Movements | Deferred Expense Type (EUR millions) | Jan 1, 2021 | Costs deferred (H1 2021) | Amortizations (H1 2021) | June 30, 2021 | | :----------------------------------- | :---------- | :----------------------- | :---------------------- | :------------ | | DPAC | 8,253 | 292 | (269) | 9,104 | | Deferred costs of reinsurance | 141 | - | (19) | 140 | | Deferred transaction costs | 404 | 13 | (12) | 418 | Value of Business Acquired (VOBA) | VOBA (EUR millions) | Jan 1, 2021 | Amortization/depreciation (H1 2021) | June 30, 2021 | | :------------------ | :---------- | :---------------------------------- | :------------ | | VOBA | 815 | (51) | 819 | [Guarantees in Insurance Contracts](index=31&type=section&id=2.3%20Guarantees%20in%20insurance%20contracts) Aegon categorizes minimum guarantees with specific accounting treatments, showing a decrease in liabilities due to market conditions - Aegon categorizes minimum guarantees into financial guarantees (derivatives), total return annuities, life contingent guarantees, and minimum investment return guarantees, each with specific accounting treatments[123](index=123&type=chunk) Liabilities for Financial Guarantees | Liabilities for Financial Guarantees for Minimum Benefits (EUR millions) | June 30, 2021 | December 31, 2020 | | :--------------------------------------------------------------------- | :------------ | :---------------- | | United States | 1,654 | 2,715 | | The Netherlands | 1,584 | 2,032 | | **Total** | **3,238** | **4,747** | - The decrease in incurred guarantee benefits in 2021 is mainly due to increasing interest rates and rising equity markets, partially offset by policyholder behavior assumption updates[128](index=128&type=chunk) - Guarantees valued at fair value contributed a net loss before tax of **EUR 44 million** for the six months ended June 30, 2021 (six months ended June 30, 2020: gain of EUR 275 million)[146](index=146&type=chunk) - This net loss was influenced by fair value loss on guarantee reserve hedges (**EUR 3,410 million**), positive results from increased risk-free rates (**EUR 2,691 million**), and gains from equity markets (**EUR 777 million**)[146](index=146&type=chunk) - Guarantee reserves decreased **EUR 2,954 million** in the first six months of 2021 (six months ended June 30, 2020: increase of EUR 4,830 million)[147](index=147&type=chunk) [Additional Information on Credit Risk, Unrealized Losses and Impairments](index=37&type=section&id=2.4%20Additional%20information%20on%20credit%20risk%2C%20unrealized%20losses%20and%20impairments) Aegon monitors debt securities for impairment, with unrealized losses increasing in H1 2021 due to rising US Treasury rates - Aegon monitors debt securities for impairment indicators, including market-to-book ratio, issuer financial condition, covenant violations, and credit rating downgrades[162](index=162&type=chunk)[164](index=164&type=chunk) Gross Unrealized Gains and Losses | Metric (EUR millions) | June 30, 2021 | December 31, 2020 | | :-------------------- | :------------ | :---------------- | | Gross unrealized gains (AFS debt securities, money markets, other) | 12,152 | 14,938 | | Gross unrealized losses (AFS debt securities, money markets, other) | 405 | 249 | - The unrealized loss increased during the first half of 2021 mainly due to increasing US Treasury rates offset by credit spread tightening[192](index=192&type=chunk) Net Impairments and Recoveries | Net (impairments) and recoveries (EUR millions) | June 30, 2021 | June 30, 2020 | | :---------------------------------------------- | :------------ | :------------ |\ | Impairments: Other | (6) | (135) |\ | Recoveries: Total recoveries | 20 | 15 |\ | **Net (impairments) and recoveries** | **14** | **(121)** | - No impairment charges were recorded for equity instruments classified as available-for-sale in H1 2021 (vs. EUR 6 million in H1 2020)[202](index=202&type=chunk) Unrealized Gains and Losses on Shares | Unrealized Gains and Losses on Shares (EUR millions) | Cost basis | Carrying value | Net unrealized gains / (losses) | | :--------------------------------------------------- | :--------- | :------------- | :------------------------------ | | June 30, 2021 | 232 | 293 | 61 | | December 31, 2020 | 222 | 266 | 44 | [Results of Operations – First Half 2021 Compared with First Half 2020](index=47&type=section&id=2.5%20Results%20of%20Operations%20%E2%80%93%20first%20half%202021%20compared%20with%20first%20half%202020) This section presents Aegon's results using non-IFRS financial measures, consolidating joint ventures proportionately for enhanced comparability - The report uses non-IFRS measures (operating result, net operating result) for segment reporting, consolidating joint ventures and associates proportionately[209](index=209&type=chunk) - These non-IFRS measures provide supplemental information for investors and align with senior management's performance evaluation, aiding comparability despite IFRS accounting policy alternatives[210](index=210&type=chunk) - Changes in segment reporting, including name convention and measurement of performance measures, were implemented from January 1, 2021[212](index=212&type=chunk) [Results 2021 Worldwide](index=49&type=section&id=2.5.1%20Results%202021%20worldwide) Aegon's net result significantly improved to EUR 1.46 billion in H1 2021, driven by strong operating results and fair value gains Worldwide Financial Performance Summary | Metric (EUR millions) | First half 2021 | First half 2020 | % Change | | :-------------------- | :-------------- | :-------------- | :------- | | Net result | 1,457 | (16) | n.m. | | Operating result | 993 | 705 | 41% | | Non-operating items | 991 | 224 | n.m. | | Other income / (charges) | (152) | (1,071) | 86% | | Result before tax | 1,832 | (143) | n.m. | | Income tax | (375) | 126 | n.m. | - Operating result increased by **41%** due to better claims experience in the Americas, expense savings, and increased fee income, despite CEE reclassification[215](index=215&type=chunk)[221](index=221&type=chunk) - Non-operating items included fair value gains on investments (private equity, real estate) and realized gains on debt securities sold for long-duration assets[215](index=215&type=chunk)[216](index=216&type=chunk) - Other charges decreased significantly due to lower assumption updates in the Americas (**EUR 126 million** vs. EUR 834 million in H1 2020), mainly for Variable Annuities surrender rates[217](index=217&type=chunk) Worldwide Operating Metrics | Metric (EUR millions) | First half 2021 | First half 2020 | % Change | | :-------------------- | :-------------- | :-------------- | :------- | | Operating expenses | 1,916 | 1,985 | (4)% | | Addressable expenses | 1,398 | 1,643 | (15)% | | New life sales | 353 | 382 | (8)% | | Total net deposits | 1,718 | 952 | 80% | - Income tax was a charge of **EUR 375 million**, with an effective tax rate of **20%** due to tax-exempt income and tax credits in the Americas[220](index=220&type=chunk) - New premium production for accident & health insurance decreased by **30% to EUR 83 million**, and property & casualty decreased by **12% to EUR 52 million**[227](index=227&type=chunk)[228](index=228&type=chunk) - Total net deposits increased by **80% to EUR 1.7 billion**, driven by Asset Management, partly offset by higher net outflows in the Americas (Retirement Plans, Variable Annuities)[229](index=229&type=chunk) - Shareholders' equity (excluding revaluation reserves) increased by **EUR 2.0 billion to EUR 17.5 billion**, and the gross financial leverage ratio improved by **210 basis points to 25.9%**[230](index=230&type=chunk) - Cash Capital at the Holding increased from **EUR 1,149 million** at the end of 2020 to **EUR 1,386 million** on June 30, 2021, which is in the upper half of the operating range of EUR 0.5 billion to EUR 1.5 billion; free cash flow to the Holding of **EUR 250 million** resulted from **EUR 390 million** gross remittances and **EUR 141 million** holding expenses[232](index=232&type=chunk) [Americas](index=54&type=section&id=2.5.2%20Americas) Americas businesses reported a net result of USD 760 million in H1 2021, driven by improved non-operating items and higher operating result Americas Financial Performance Summary | Metric (USD millions) | First half 2021 | First half 2020 | % Change | | :-------------------- | :-------------- | :-------------- | :------- | | Net result | 760 | (1,284) | n.m. | | Operating result | 536 | 288 | 86% | | Non-operating items | 621 | (957) | n.m. | | Other income / (charges) | (263) | (1,034) | 75% | | Income tax | (134) | 419 | n.m. | - Operating result increased by **86%** due to better morbidity claims experience (Long-Term Care), increased fees from higher equity markets, and lower addressable expenses[244](index=244&type=chunk) - Individual Solutions' operating result increased to **USD 402 million**, benefiting from favorable morbidity claims (**USD 145 million**), higher fee revenue, and lower employee expenses, despite adverse Life mortality (**USD 184 million**, largely COVID-19 related)[245](index=245&type=chunk) - Non-operating items included fair value gains (**USD 395 million**, from private equity, real estate, and hedge outperformance) and realized gains on debt securities (**USD 206 million**)[239](index=239&type=chunk) - Other charges included restructuring (**USD 90 million**), litigation provision (**USD 68 million**), and actuarial assumption updates (**USD 152 million**, mainly Variable Annuities surrender rates)[241](index=241&type=chunk) Americas Operating Metrics | Metric (USD millions) | First half 2021 | First half 2020 | % Change | | :-------------------- | :-------------- | :-------------- | :------- | | Operating expenses | 884 | 939 | (6)% | | Addressable expenses | 729 | 828 | (12)% | | New life sales | 256 | 204 | 25% | | Total net deposits | (8,719) | (2,501) | n.m. | - Total net outflows increased significantly to **USD 8.7 billion**, driven by Variable Annuities (decision to stop sales of interest-rate sensitive riders) and large-market Retirement Plans[251](index=251&type=chunk) [The Netherlands](index=58&type=section&id=2.5.3%20The%20Netherlands) Net result from Aegon's Netherlands businesses decreased by 29% in H1 2021, despite a higher operating result Netherlands Financial Performance Summary | Metric (EUR millions) | First half 2021 | First half 2020 | % Change | | :-------------------- | :-------------- | :-------------- | :------- | | Net result | 754 | 1,056 | (29)% | | Operating result | 370 | 321 | 15% | | Non-operating items | 505 | 1,039 | (51)% | | Other income / (charges) | 126 | (48) | n.m. | | Income tax | (246) | (256) | 4% | - Operating result increased by **15%** due to higher investment margin in Life, growth in Mortgages, and expense savings initiatives[257](index=257&type=chunk) - Non-operating items (**EUR 505 million gain**) were mainly fair value gains from interest rate hedges on mortgage portfolio, positive revaluations, and decreased Liability Adequacy Test deficit[255](index=255&type=chunk) - Other income (**EUR 126 million**) was driven by a technical provision release from a co-insurance contract settlement and favorable inflation assumption updates[256](index=256&type=chunk) Netherlands Operating Metrics | Metric (EUR millions) | First half 2021 | First half 2020 | % Change | | :-------------------- | :-------------- | :-------------- | :------- | | Operating expenses | 378 | 381 | (1)% | | Addressable expenses | 303 | 320 | (5)% | | New life sales | 37 | 47 | (22)% | | Total net deposits | 445 | 691 | (36)% | - New life sales declined by **22%** following the decision to classify the Dutch Life business as a Financial Asset and close most products for new sales[261](index=261&type=chunk) - Total net deposits decreased by **36%** due to increased outflows in Bank (after stopping savings products) partially offset by growth in Workplace Solutions (defined contribution pensions)[262](index=262&type=chunk) [The United Kingdom](index=61&type=section&id=2.5.4%20The%20United%20Kingdom) Net result from Aegon's UK businesses decreased by 69% in H1 2021, primarily due to non-operating fair value losses United Kingdom Financial Performance Summary | Metric (GBP millions) | First half 2021 | First half 2020 | % Change | | :-------------------- | :-------------- | :-------------- | :------- | | Net result | 31 | 100 | (69)% | | Operating result | 73 | 71 | 2% | | Non-operating items | (58) | 78 | n.m. | | Other income | 6 | (47) | n.m. | | Income tax | 10 | (2) | n.m. | - Operating result increased by **2%** due to higher fee revenues from platform growth and favorable equity markets, and lower expenses, offsetting impacts from Stonebridge sale and adverse COVID-19 claims[268](index=268&type=chunk) - Non-operating items resulted in a **GBP 58 million loss**, reflecting fair value losses on hedges to protect solvency, driven by higher interest rates and equity markets[266](index=266&type=chunk) - Income tax was a **GBP 10 million benefit**, including a one-time **GBP 28 million tax benefit** from the UK corporate income tax rate increase (19% to 25% effective April 2023)[267](index=267&type=chunk) United Kingdom Operating Metrics | Metric (GBP millions) | First half 2021 | First half 2020 | % Change | | :-------------------- | :-------------- | :-------------- | :------- | | Operating expenses | 191 | 206 | (7)% | | Addressable expenses | 165 | 170 | (3)% | | New life sales | 13 | 17 | (21)% | | Total net deposits | 2,143 | 1,795 | 19% | - Net deposits increased by **19% to GBP 2.1 billion**, driven by higher net deposits in Workplace (large scheme win) and lower net outflows in Retail, partly offset by higher outflows in Traditional products[270](index=270&type=chunk) [International](index=63&type=section&id=2.5.5%20International) Net result from International operations decreased by 20% in H1 2021, primarily due to CEE reclassification and lower operating result International Financial Performance Summary | Metric (EUR millions) | First half 2021 | First half 2020 | % Change | | :-------------------- | :-------------- | :-------------- | :------- | | Net result | 73 | 91 | (20)% | | Operating result | 62 | 82 | (25)% | | Non-operating items | 1 | (5) | n.m. | | Other income / (charges) | 29 | 25 | 17% | | Income tax | (18) | (11) | (71)% | - Operating result declined by **25%** due to reclassification of CEE results to Other income; adjusted for CEE, operating result increased by **EUR 37 million**, driven by Spain & Portugal and TLB[276](index=276&type=chunk) - Spain & Portugal operating result increased by **27% to EUR 30 million** due to growing portfolio and improved claims; TLB operating result increased by **15% to EUR 37 million** from favorable claims and improved investment margin; China operating result increased by **21% to EUR 10 million** from portfolio growth[276](index=276&type=chunk)[277](index=277&type=chunk) - Other income (**EUR 29 million**) predominantly from CEE reclassification, partly offset by a one-time charge in India[275](index=275&type=chunk) International Operating Metrics | Metric (EUR millions) | First half 2021 | First half 2020 | % Change | | :-------------------- | :-------------- | :-------------- | :------- | | Operating expenses | 196 | 198 | (1)% | | Addressable expenses | 57 | 63 | (10)% | | New life sales | 89 | 131 | (32)% | | Total net deposits | 4 | 82 | (95)% | - New life sales declined by **32%** due to CEE exclusion and strategic channel closures in India; Spain & Portugal sales increased by **14%** and TLB by **18%**[281](index=281&type=chunk)[282](index=282&type=chunk) - Net deposits decreased by **95% to EUR 4 million**, almost entirely due to the exclusion of CEE gross deposits[283](index=283&type=chunk) [Asset Management](index=66&type=section&id=2.5.6%20Asset%20Management) Asset Management's net result increased by 113% in H1 2021, driven by higher management and performance fees Asset Management Financial Performance Summary | Metric (EUR millions) | First half 2021 | First half 2020 | % Change | | :-------------------- | :-------------- | :-------------- | :------- | | Net result | 97 | 46 | 113% | | Operating result | 146 | 71 | 106% | | Other income / (charges) | (6) | - | n.m. | | Income tax | (44) | (18) | 141% | - Operating result increased by **106%** due to higher management and performance fees in AIFMC and increased revenues from Global Platforms[290](index=290&type=chunk) - AIFMC's performance fees amounted to **EUR 61 million**, driven by strong performance of the New Horizons multi-asset retail fund and separate account mandates[291](index=291&type=chunk) Asset Management Operating Metrics | Metric (EUR millions) | First half 2021 | First half 2020 | % Change | | :-------------------- | :-------------- | :-------------- | :------- | | Operating expenses | 294 | 232 | 18% | | Addressable expenses | 180 | 179 | 1% | | Total net deposits | 1,735 | 8,316 | (79)% | - Total net deposits declined by **79%** due to higher general account and affiliate net outflows, despite third-party net deposits increasing to **EUR 6.0 billion**[293](index=293&type=chunk) - Assets under management increased by **EUR 29 billion to EUR 391 billion** at June 30, 2021, driven by third-party net deposits and favorable market movements[295](index=295&type=chunk) [Post Reporting Date Events](index=68&type=section&id=2.6%20Post%20reporting%20date%20events) Post reporting date events are detailed in Note 18 of the condensed consolidated interim financial statements - Post reporting date events are disclosed in Note 18 of the condensed consolidated interim financial statements[295](index=295&type=chunk) [Capital and Liquidity Management](index=68&type=section&id=2.7%20Capital%20and%20Liquidity%20Management) Aegon's capital and liquidity management aims for strong capital adequacy, efficient structure, and adequate liquidity across its operations - Aegon's capital and liquidity management aims for strong capital adequacy, efficient capital structure, and adequate liquidity, guided by its ERM framework[296](index=296&type=chunk)[297](index=297&type=chunk)[298](index=298&type=chunk) - Operating units maintain capital at levels sufficient to absorb moderate shocks (**150% SCR for Solvency II, 400% RBC CAL in US**) and a minimum dividend payment level (**135% SCR, 350% RBC CAL**)[300](index=300&type=chunk)[302](index=302&type=chunk) Operating Unit Capitalization Levels | Operating Unit | Capitalization Metric | Dec 31, 2020 | June 30, 2021 | | :------------- | :-------------------- | :----------- | :------------ | | US | RBC ratio | 432% | 444% | | NL Life | Solvency II ratio | 159% | 172% | | SE Plc | Solvency II ratio | 156% | 163% | - Aegon is reducing its US economic interest rate exposure by **one-third to one-half**, having executed three-quarters of the plan by H1 2021[312](index=312&type=chunk) - Transamerica launched a lump-sum buy-out program for Variable Annuities with GMIB riders to reduce economic exposure and hedge costs[313](index=313&type=chunk) - Aegon plans to expand its dynamic hedge program for US Variable Annuities to cover GMDB and remaining GMIB riders from Q4 2021[314](index=314&type=chunk) - Aegon redeemed **USD 250 million floating rate perpetual capital securities**, in line with its target to reduce leverage to EUR 5.0-5.5 billion by 2023[314](index=314&type=chunk) [Guiding Principles](index=68&type=section&id=2.7.1%20Guiding%20principles) Aegon's capital and liquidity management is guided by principles promoting strong capital adequacy, efficient structure, and adequate liquidity - Guiding principles include promoting strong capital adequacy, efficient capital structure, optimizing cost of capital, maintaining adequate liquidity, and ensuring access to international capital markets[297](index=297&type=chunk) - Capital and liquidity management is embedded in Aegon's Enterprise Risk Management (ERM) framework, aligning with its risk tolerance for capital generation, solvency, liquidity, and responsible business[298](index=298&type=chunk) [Management of Capital](index=68&type=section&id=2.7.2%20Management%20of%20capital) Aegon's capital management framework focuses on operating unit capitalization, Cash Capital at Holding, and leverage, with units maintaining target and minimum levels - Aegon's capital management framework focuses on operating unit capitalization, Cash Capital at Holding, and leverage, with updated policies in 2020[299](index=299&type=chunk) - Operating units maintain capital at operating levels (**150% SCR for Solvency II, 400% RBC CAL for US**) to absorb moderate shocks and minimum dividend payment levels (**135% SCR, 350% RBC CAL**) for remittances[300](index=300&type=chunk)[302](index=302&type=chunk) Operating Unit Capitalization Levels | Operating Unit | Regulatory Capital Requirement | Minimum Dividend Payment Level | Operating Level | Actual Capitalization (June 30, 2021) | | :------------- | :----------------------------- | :----------------------------- | :-------------- | :------------------------------------ | | United States | 100% RBC CAL | 350% | 400% | 444% | | Aegon Levensverzekering N.V. | 100% SII SCR | 135% | 150% | 172% | | Scottish Equitable Plc | 100% SII SCR | 135% | 150% | 163% | - Aegon Americas' RBC ratio increased from **432% at 4Q 2020 to 444% at 2Q 2021**, driven by favorable equity market performance, higher interest rates, and positive morbidity experience, partly offset by negative mortality[306](index=306&type=chunk) - Aegon Levensverzekering N.V. (NL Life) Solvency II ratio increased from **159% at 4Q 2020 to 172% at 2Q 2021**, driven by operating capital generation, model updates, and management actions[310](index=310&type=chunk) - Scottish Equitable Plc (SE Plc) Solvency ratio increased from **156% at 4Q 2020 to 163% at 2Q 2021**, driven by operating capital generation, management actions, and corporate income tax changes[311](index=311&type=chunk) [Cash Capital at Holding and Liquidity Management](index=71&type=section&id=2.7.3%20Cash%20Capital%20at%20Holding%20and%20liquidity%20management) Aegon manages Cash Capital at Holding within a EUR 0.5-1.5 billion range and maintains a two-year liquidity projection policy - Aegon manages Cash Capital at Holding within an operating range of **EUR 0.5 to EUR 1.5 billion** to ensure liquidity, support units, and stabilize dividends[317](index=317&type=chunk) - Cash Capital at Holding increased to **EUR 1.4 billion** (from EUR 1.1 billion at Dec 31, 2020), reflecting net impact of remittances (**EUR 390 million gross**), divestitures (**EUR 61 million**), and holding expenses/capital injections (**EUR 141 million expenses, EUR 67 million injections**)[319](index=319&type=chunk)[232](index=232&type=chunk)[320](index=320&type=chunk) - Aegon's liquidity policy requires business units to project and assess liquidity sources and uses over a two-year period under normal and severe market scenarios[322](index=322&type=chunk) [Leverage](index=72&type=section&id=2.7.4%20Leverage) Aegon uses leverage to lower capital costs and aims to reduce its gross financial leverage to EUR 5.0-5.5 billion by 2023 - Aegon uses leverage to lower capital costs and aims to reduce gross financial leverage from **EUR 6.1 billion to EUR 5.0-5.5 billion by 2023**[324](index=324&type=chunk)[325](index=325&type=chunk) - Gross financial leverage ratio improved by **210 basis points** compared with December 31, 2020 to **25.9%** on June 30, 2021, driven by retained earnings[230](index=230&type=chunk)[325](index=325&type=chunk) - Operational leverage primarily finances mortgage portfolios through securitizations, warehouse facilities, covered bonds, and Federal Home Loan Bank (FHLB) facilities[328](index=328&type=chunk) - Aegon N.V. has access to international capital markets via a **USD 6 billion debt issuance program** and **EUR 2.5 billion commercial paper programs**, supported by backup credit and LOC facilities (**EUR 2 billion revolving credit, USD 2.0 billion LOC**)[329](index=329&type=chunk)[330](index=330&type=chunk) [Rating Agency Ratings](index=73&type=section&id=2.7.5%20Rating%20agency%20ratings) Aegon aims for very strong financial strength ratings for operating units and a strong credit rating for Aegon N.V - Aegon aims to maintain very strong financial strength ratings for its main operating units and a strong credit rating for Aegon N.V[331](index=331&type=chunk) - Fitch Ratings withdrew its ratings for Aegon N.V., Aegon USA, and Aegon UK in December 2020, affirming strong ratings (e.g., A- for Aegon N.V. long-term issuer) prior to withdrawal[331](index=331&type=chunk) Rating Agency Ratings Overview | Rating Agency | Aegon N.V. | Aegon USA | Aegon the Netherlands | Aegon UK | | :------------ | :--------- | :-------- | :-------------------- | :------- | | S&P Global | | | | | | Financial strength | - | A+ | A+ | A+ | | Long-term issuer | A- | - | - | - | | Senior debt | A- | - | - | - | | Subordinated debt | BBB | - | - | - | | Commercial paper | A-2 | - | - | - | | Moody's Investors Service | | | | | | Financial strength | - | A1 | - | - | | Long-term issuer | A3 | - | - | - | | Senior debt | A3 | - | - | - | | Subordinated debt | Baa1 | - | - | - | | Commercial paper | P-2 | - | - | - | | A.M. Best | | | | | | Financial strength | - | A | - | - | [Aegon Group Solvency Ratio](index=74&type=section&id=2.7.6%20Aegon%20Group%20Solvency%20Ratio) Aegon's Group Solvency II ratio increased to 208% in H1 2021, driven by higher Own Funds and lower SCR, with limited interest rate sensitivity Group Solvency II Key Figures | Solvency II Key Figures (EUR millions) | June 30, 2021 | December 31, 2020 | | :------------------------------------- | :------------ | :---------------- | | Group Own Funds | 19,436 | 18,582 | | Group SCR | 9,353 | 9,473 | | Group Solvency II ratio | 208% | 196% | - Group Own Funds increased by **EUR 854 million** due to positive impact from expected return on in-force business, market impacts, and management actions, partly offset by dividends[334](index=334&type=chunk) - Group SCR decreased by **EUR 120 million** due to framework, model, and assumption changes and management actions, offset by market impacts[335](index=335&type=chunk) - The Group Solvency II ratio has limited sensitivity to interest rate movements driven by hedging programs in place[341](index=341&type=chunk) Solvency II Sensitivity Analysis | Sensitivity | Group (1H2021) | US (1H2021) | NL Life (1H2021) | SE Plc (1H2021) | | :---------- | :------------- | :---------- | :--------------- | :-------------- | | Equity -25% | -13% | -32% | -4% | -8% | | Equity +25% | 6% | 16% | 2% | 5% | | Interest Rates -50bps | -5% | -2% | 2% | -3% | | Interest Rates +50bps | 2% | 4% | -1% | 2% | - The Available Own Funds are equal to the Eligible Own Funds per June 30, 2021; no overflow from restricted Tier 1 to Tier 2 Own Funds is applied per half year 2021 and year end 2020[356](index=356&type=chunk) Available Own Funds Breakdown | Available Own Funds (EUR millions) | June 30, 2021 | December 31, 2020 | | :--------------------------------- | :------------ | :---------------- | | Tier 1 (Unrestricted + Restricted) | 16,489 | 15,542 | | Tier 2 | 2,305 | 2,340 | | Tier 3 | 641 | 700 | | **Total Available Own Funds** | **19,436** | **18,582** | [Disclaimer](index=79&type=section&id=2.8%20Disclaimer) This section contains cautionary notes on non-IFRS measures, forward-looking statements, and associated risks, with no obligation to update - The document includes non-IFRS financial measures (operating result, income tax, result before tax, addressable expenses) which are defined and explained as supplemental information for investors[359](index=359&type=chunk) - Forward-looking statements are not guarantees of future performance and involve risks and uncertainties related to economic/governmental conditions, financial markets, regulatory changes, catastrophic events, and operational risks[359](index=359&type=chunk) - 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[359](index=359&type=chunk) [About Aegon](index=80&type=section&id=2.9%20About%20Aegon) Aegon is a global financial services organization with over 170 years of history, operating in more than 20 countries - Aegon is a global financial services organization with over 170 years of history, operating in more than 20 countries across the Americas, Europe, and Asia[360](index=360&type=chunk) - Aegon provides life insurance, pensions, and asset management services, aiming to help people take responsibility for their financial future[360](index=360&type=chunk)

Aegon NV (NYSE:AEG) Q4 2020 Earnings Conference Call February 11, 2021 3:00 AM ET Company Participants Jan Weidema - IR Lard Friese - CEO Matt Rider - CFO Conference Call Participants Farooq Hanif - Crédit Suisse Robin van den Broek - Mediobanca Michael Huttner - Berenberg Steven Haywood - HSBC Fulin Liang - Morgan Stanley Ashik Musaddi - JPMorgan Andrew Baker - Citi Operator Good day, and welcome to the Aegon Second Half Year 2020 Results Conference Call. Today's conference is being recorded. And at this t ...

Aegon NV (NYSE:AEG) Q2 2020 Earnings Conference Call August 13, 2020 3:00 AM ET Company Participants Jan Willem Weidema - IR Lard Friese - CEO Matt Rider - CFO Conference Call Participants Farooq Hanif - Crédit Suisse Cor Kluis - ABN AMRO Bank Michael Huttner - Berenberg Farquhar Murray - Autonomous Research LLP Ashik Musaddi - JP Morgan William Hawkins - KBW David Motemaden - Evercore Albert Ploegh - ING Jason Kalamboussis - KBC Securities Fulin Liang - Morgan Stanley Andrew Baker - Citi Benoit Petrarque - ...

Financial Data and Key Metrics Changes - The group reported net income of €1.3 billion and underlying earnings before tax of €366 million for Q1 2020, with underlying earnings in the U.K., Netherlands, asset management, and international businesses holding up well [12][14][30] - The Solvency II ratio increased to 208% during Q1, remaining above the target range, primarily due to normalized capital generation and positive market movements [15][20][30] - The U.S. RBC ratio decreased to 376% at the end of Q1 but improved to an estimated range of 390% to 400% by the end of April [18][19][42] Business Line Data and Key Metrics Changes - In the U.S., underlying earnings were negatively impacted by an intangible adjustment of €37 million and adverse mortality concentrated in March, amounting to €62 million [13][14] - Life sales and net deposits were largely unaffected in Q1, but sales depending on face-to-face contact are expected to be negatively impacted in the coming months [10][11] - Asset management benefited from performance fees from a joint venture in China, contributing positively to earnings [12][14] Market Data and Key Metrics Changes - The COVID-19 pandemic led to volatile financial markets and lower interest rates across all markets, negatively impacting underlying earnings [10][11] - The Netherlands saw a significant increase in the Solvency II ratio from 171% to 249%, driven by the EIOPA volatility adjustment [20][21] Company Strategy and Development Direction - The company is focused on maintaining a solid capital position and strong balance sheet during the COVID-19 crisis, with management actions taken to protect the economic value of the balance sheet [30][31] - Aegon is adapting its business models to more digital interactions with customers, particularly in the U.S. and China [37] - The company is planning to merge two of its largest U.S. legal entities to streamline operations and improve asset adequacy testing [24] Management Comments on Operating Environment and Future Outlook - Management indicated that it is unlikely to meet the annual return on equity target of over 10% for 2020 due to the pandemic's impact [31] - The company expects short-term normalized capital generation to be negatively impacted by adverse market movements and higher mortality rates, but management actions may mitigate some of these effects [31][32] Other Important Information - The company has implemented various measures to support customers facing financial challenges, including flexibility on mortgage payments and fee waivers on retirement plan withdrawals [8][9] - Aegon is maintaining excess cash of €1.4 billion and ample liquidity across its units, providing financial flexibility during the crisis [30] Q&A Session Summary Question: U.S. capital position and dividend policy - Management stated that as long as the U.S. RBC ratio remains above 350%, normal planned dividends are expected to be remitted [35] - The decision on the interim dividend will be made in August, with considerations for returning surplus capital to shareholders as soon as appropriate [36] Question: RBC ratio and market impacts - The U.S. RBC ratio improved to 390%-400% due to tightening credit spreads and improved equity markets, but management refrained from providing a pro forma outlook due to market volatility [42] Question: Long-term interest rate assumptions - Management updated the long-term interest rate assumption to 3.25%, which could lead to a $300 million to $325 million impact on IFRS results [44][45] Question: U.S. mortality expectations - Management noted that while Q1 mortality was poor, it was not necessarily COVID-19 related, and future expectations remain uncertain [65] Question: U.S. capital generation and impairments - U.S. reinvestment yields were reported at 3.64% for new money and 4.5% for back book yields, with lower rates expected to strain capital generation [66][67]