Aegon(US:AEG)2024-03-01 16:09Financial Data and Key Metrics Changes - In the second half of 2023, operating capital generation before holding funding and operating expenses increased by 16% compared to the same period in 2022, reaching nearly EUR660 million [7][19] - The full year operating capital generation was 14% higher than 2022, totaling nearly EUR1.3 billion, exceeding guidance [7][19] - The IFRS operating result decreased to EUR681 million in the second half of 2023, a 32% decline compared to the prior year period [18][20] - Shareholder's equity per share remained stable at EUR4.27 despite significant capital distributions [7][27] Business Line Data and Key Metrics Changes - In the U.S. Individual Solutions business, the number of licensed agents increased by 18% year-over-year to nearly 74,000, with multi-ticket agents rising by 12% [9][10] - New life sales in the U.S. increased by 13% compared to 2022, driven by higher indexed universal life sales [11] - In the U.S. Workplace Solutions Retirement Plans business, written sales rose by 72% compared to 2022, with net deposits amounting to $1.2 billion [12] - In the U.K., net deposits in the workplace channel amounted to GBP1.8 billion, while retail channel experienced net outflows of GBP3.1 billion [13][14] - New life sales in growth markets increased by 18% compared to 2022, with significant growth in Brazil and China [15] Market Data and Key Metrics Changes - The U.S. market share of life insurance products sold by WFG remained high at 64% [10] - The group solvency ratio decreased by 9 percentage points to 193% due to the ASR transaction and share buyback [20][36] - The U.S. RBC ratio increased to 432%, remaining well above the operating level of 400% [36] Company Strategy and Development Direction - Aegon is focused on improving returns from its businesses and generating value for shareholders, with a significant share buyback program and a legal setup move to Bermuda [5][6] - The company aims to increase the number of WFG agents to 110,000 by 2027 and improve agent productivity [9] - Aegon plans to grow its dividend per share, proposing a final dividend of EUR0.16 for 2023, bringing the total to EUR0.30, with a target of EUR0.40 by 2025 [8][42] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's prospects, highlighting strong commercial momentum in the U.S. business and commitment to financial targets for 2025 [6][44] - The company acknowledged macroeconomic challenges affecting the U.K. retail business and asset management sectors [44] - Management noted that operating results declined partly due to management actions that benefited capital generation [44] Other Important Information - Aegon completed 76% of its EUR1.5 billion share buyback program, returning over EUR1.1 billion to shareholders [8] - The company reported a total comprehensive income of EUR445 million, increasing shareholders' equity despite capital returns [27] Q&A Session Summary Question: Operating capital generation guidance for 2024 - Management indicated that the EUR1.1 billion guidance for 2024 includes conservatism, with expectations for new business stream growth [46][48] Question: Remittances trajectory in the U.S. - Management stated that U.S. remittances are expected to grow in the mid-single digits, with a focus on maintaining sufficient capital for growth investments [51][52] Question: Agent recruitment targets for WFG - Management confirmed internal targets for agent recruitment, aiming for 90,000 by 2025 and 110,000 by 2027 [64][65] Question: Dynamics of onerous contracts - Management explained that experience variances are offset in the CSM, and they aim to average out experience variances to around zero over time [68][70]