Financial Data and Key Metrics Changes - The operating result for 2022 was stable at EUR1.9 billion, supported by expense savings and improved claims experience, but offset by lower fees due to adverse market movements [19][20] - Operating capital generation before holding funding and operating expenses amounted to EUR1.5 billion for 2022, reflecting similar drivers as the operating result [19] - Free cash flow for 2022 was EUR780 million, with a cumulative total of EUR1.5 billion over the last two years, exceeding the target of EUR1.4 billion to EUR1.6 billion for the period 2021 to 2023 [16][20] Business Line Data and Key Metrics Changes - Life insurance sales in growth markets and the U.S. increased, with individual solutions achieving the highest quarterly new life sales in five years [7][11] - The U.S. Retirement business recorded written sales of $7.9 billion in 2022, despite challenging market conditions [12] - The U.K. workplace business achieved the highest level of net deposits in four years, while the retail channel faced outflows due to weak investor sentiment [13] Market Data and Key Metrics Changes - In Asset Management, challenging market conditions led to net outflows of EUR3.8 billion in Global Platforms, although the Chinese joint venture AIFMC reported net deposits of EUR3.6 billion [15][46] - The Netherlands saw a cooling housing market impacting mortgage sales, yet the mortgage portfolio grew to nearly EUR63 billion [14] Company Strategy and Development Direction - The company is focused on executing its strategic agenda and maintaining a high pace in transformation, closing out the operational improvement plan with significant expense savings [16][35] - Aegon aims to regain a top five position in selected life products in the U.S. and is investing in profitable growth through new product introductions and expanding distribution [10][35] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic environment but highlighted strong performance in strategic assets and a commitment to return surplus capital to shareholders [6][7] - The company expects at least EUR1 billion in operating capital generation from units outside the Netherlands in 2023, with free cash flow projected around EUR600 million [33] Other Important Information - A final dividend of EUR0.12 per common share for 2022 was proposed, bringing the total dividend to EUR0.23, an increase from EUR0.17 in 2021 [7][17] - A new EUR200 million share buyback program was announced for the first half of 2023, following a completed EUR300 million buyback program [7][17] Q&A Session Summary Question: Insights on new capital generation guidance - Management indicated that the new business strain is expected to increase relative to 2022, with a neutral effect from mortality and morbidity for 2023 [38][40] Question: Status on top five aspirations in Retirement Plans sales - Management confirmed progress towards top five positions but indicated that further updates would be provided during the Capital Markets Day in the second quarter of 2023 [39][41] Question: Clarification on dividend and free cash flow guidance - Management explained that the EUR600 million free cash flow includes the interim dividend from a.s.r., and the payout ratio is considered normal [43][49] Question: Outlook for Asset Management flows - Management noted that the start of 2023 has shown better market conditions, but it is too early to predict the overall performance of the Asset Management business [44][46] Question: Details on Solvency II ratios and capital return timeline - Management clarified that model and assumption changes affecting Solvency II ratios are company-specific, and the EUR1.5 billion capital return will be executed primarily through share buybacks within a year after the a.s.r. transaction closes [65][67]
Aegon(AEG) - 2022 Q4 - Earnings Call Transcript