Aegon reports first quarter 2022 results
Please click here to access all 1Q 2022 results related documents.
The Hague, May 12, 2022 - Further progress on transforming the company and achieving financial targets
- Net result increases by 7% compared with the first quarter of 2021 to EUR 412 million, reflecting a EUR 372 million book gain from the sale of Aegon’s businesses in Hungary and a non-economic loss on interest rate hedges
- Operating result increases by 7% to EUR 463 million, supported by an improvement in claims experience in the US, the positive contribution from growth initiatives, and increased fees from higher equity markets compared with the first quarter of 2021
- Cash Capital at the Holding increases by EUR 539 million to EUR 1,817 million during the first quarter of 2022, largely driven by divestment proceeds
- The capital ratios of all three main units remain above their respective operating levels. Group Solvency II ratio stands at 210%, reflecting the sale of Aegon’s businesses in Hungary and the deduction of both the previously announced debt tender offer and EUR 300 million share buyback
- Aegon to engage with external parties to further explore the potential for a reinsurance transaction on parts of the US variable annuity portfolio. Aegon will assess if this could be value accretive to shareholders compared with the alternative of continued full ownership and active management of a de-risked variable annuity portfolio
Statement of Lard Friese, CEO
“The first three months of 2022 have been unprecedented in many ways. The Russian invasion in Ukraine has had a devastating impact on the lives of many people and fueled inflationary pressures and volatility on the global financial markets at a time that many economies were opening up after relaxing COVID-19 measures. I am proud of our colleagues who continued to effectively support and service our customers in a turbulent environment as evidenced by our results, and the substantial progress we made on our 2023 strategic and financial objectives.
We continued sharpening our strategic focus and increasing our financial flexibility with the completion of the divestments of our businesses in Hungary and Turkey to Vienna Insurance Group, and the sale of part of our European venture fund. The closing of the sale of our Hungarian businesses resulted in an increase in Cash Capital at the Holding to EUR 1.8 billion. This enabled us to announce a EUR 300 million share buyback program and a further reduction of our debt, thereby reaching our deleveraging target range 1.5 years early.
Furthermore, we are maintaining a high pace in maximizing the value of our Financial Assets. We took management actions to further reduce the sensitivity of our capital position to market movements in our Dutch Life and US variable annuity businesses. The progress we’ve made so far, enables us to now engage with external parties to further explore the potential for a reinsurance transaction on parts of the US variable annuity portfolio and assess if this could be value accretive to shareholders.
As part of our strategy, we’re also reinvesting in our Strategic Assets to enhance our customer service and strengthen our ability to compete by expanding our distribution network. These investments resulted in higher sales and net deposits in our US life business, UK Retail business and the retirement businesses in our core markets. Our Global Asset Manager also continued its track record of positive third-party net deposits. In the US, we acquired TAG Resources, strengthening our competitive position in the pooled retirement plan market, which is a strategic growth driver. While COVID-19 mortality claims in the US continued to have an adverse impact, we saw our growth initiatives positively contribute to a solid first quarter 2022 operating result.
Our responsibility extends well beyond achieving attractive financial returns. In line with our purpose of helping people live their best lives, we actively contribute to help protect our environment and society. In February, we made a significant donation to the Red Cross to aid the victims of the hostile attack on Ukraine and excluded future investments in Russia and Belarus-based companies. We also sharpened our Responsible Investment policy to further align our investments with our net-zero carbon commitment. Transamerica introduced an innovative retirement plan that offers participants access to ESG investments. Our progress is increasingly recognized by our external stakeholders, as evidenced by the Responsible Investor of the Year award Aegon Asset Management received at the Insurance Asset Risk Awards 2022.
While global economic and geopolitical uncertainty remains, we are seeing the impact from COVID-19 subside and several central banks tightening their monetary policies to protect the economy and address rising inflation. Looking ahead, I am confident that the progress we are making on the execution of our strategy and the implementation of our operational improvement plan, as well as the actions we are taking to strengthen our balance sheet keep us on track for delivering on our strategic and financial objectives.”
|Dick Schiethart||Jan Willem Weidema|
| +31 (0) 6 22 88 99 25|
| +31 (0) 70 344 8028|
For the official press release we refer to our corporate website.
The conference call presentation is available on aegon.com as of 7.30 a.m. CET.
Aegon’s 1Q 2022 Financial Supplement and other supplementary documents are available on aegon.com.
Conference call including Q&A
The conference call starts at 9:00 a.m. CET, with an audio webcast on aegon.com. Two hours after the conference call, a replay will be available on aegon.com.
Click to join conference call
With ‘click to join’, there is no need to dial-in for the conference call. Simply click the link below, enter your information and you will be called back to directly join the conference. The link becomes active 15 minutes prior to the scheduled start time. Click here to connect. Should you wish not to use the ‘click to join’ function, dial-in numbers are also available.
Dial-in numbers for conference call
United States: +1 720 452 7989
United Kingdom: +44 (0)330 165 4012
The Netherlands: +31 (0) 20 703 8218
Financial calendar 2022
Annual General Meeting – May 31
Ex-dividend date final dividend 2021 – June 2
Publication stock fraction final dividend 2021 – June 29
Payment date final dividend 2021 – July 6
Second quarter 2022 results – August 11
Ex-dividend date interim dividend 2022 – August 23
Payment date interim dividend 2022 – September 21
Third quarter 2022 results – November 10
IFRS 9/17 Educational Webinar– December 14
Aegon is an integrated, diversified, international financial services group. The company offers investment, protection, and retirement solutions, with a strategic focus on three core markets (the United States, the United Kingdom, and the Netherlands), three growth markets (Spain & Portugal, Brazil, and China), and one global asset manager.
Aegon's purpose of Helping people live their best lives runs through all its activities. As a leading global investor and employer, the company seeks to have a positive impact by addressing critical environmental and societal issues, with a focus on climate change and inclusion & diversity.
Aegon is headquartered in The Hague, the Netherlands, and listed on Euronext Amsterdam and the New York Stock Exchange. More information can be found at aegon.com.
Cautionary note regarding non-IFRS-EU measures
This document includes the following non-IFRS-EU financial measures: operating result, income tax, result before tax, market consistent value of new business, return on equity and addressable expenses. These non-IFRS-EU measures, except for addressable expenses, are calculated by consolidating on a proportionate basis Aegon’s joint ventures and associated companies. The reconciliation of these measures, except for market consistent value of new business and return on equity, to the most comparable IFRS-EU measure is provided in the notes to this press release. Market consistent value of new business is not based on IFRS-EU, which are used to report Aegon’s primary financial statements and should not be viewed as a substitute for IFRS-EU financial measures. Aegon may define and calculate market consistent value of new business differently than other companies. Return on equity is a ratio using a non-IFRS-EU measure and is calculated by dividing the operating result after tax less cost of leverage by the average shareholders’ equity excluding the revaluation reserve. Operating expenses are all expenses associated with selling and administrative activities (excluding commissions) after reallocation of claim handling expenses to benefits paid. This includes certain expenses recorded in other charges, including restructuring charges. Addressable expenses are expenses reflected in the operating result, excluding deferrable acquisition expenses, expenses in joint ventures and associates and expenses related to operations in CEE countries. Aegon believes that these non-IFRS-EU measures, together with the IFRS-EU information, provide meaningful supplemental information about the operating results of Aegon’s business including insight into the financial measures that senior management uses in managing the business.
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 in 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.
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, could, 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 and/or governmental 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 public sector securities and the resulting decline in the value of government exposure that Aegon holds;
- Changes in the performance of Aegon’s investment portfolio and decline in ratings of Aegon’s counterparties;
- 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 written premium, 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;
- 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;
- Catastrophic events, either manmade or by nature, including by way of example acts of God, acts of terrorism, acts of war and pandemics, could result in material losses, and significantly interrupt Aegon’s business;
- The frequency and severity of insured loss events;
- Changes affecting longevity, mortality, morbidity, persistence, and other factors that may impact the profitability of Aegon’s insurance products;
- Aegon’s projected results are highly sensitive to complex mathematical models of financial markets, mortality, longevity, and other dynamic systems subject to shocks and unpredictable volatility. Should assumptions to these models later prove incorrect, or should errors in those models escape the controls in place to detect them, future performance will vary from projected results;
- Reinsurers to whom Aegon has ceded significant underwriting risks may fail to meet their obligations;
- Changes in customer behavior and public opinion in general related to, among other things, the type of products Aegon sells, including legal, regulatory, or commercial necessity to meet changing customer expectations;
- Customer responsiveness to both new products and distribution channels;
- As Aegon’s operations support complex transactions and are highly dependent on the proper functioning of information technology, operational risks such as system disruptions or failures, security or data privacy breaches, cyberattacks, human error, failure to safeguard personally identifiable information, changes in operational practices or inadequate controls including with respect to third parties with which we do business may disrupt Aegon’s business, damage its reputation and adversely affect its results of operations, financial condition and cash flows;
- 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;
- Aegon’s failure to achieve anticipated levels of earnings or operational efficiencies, as well as other management initiatives related to cost savings, cash capital at Holding, gross financial leverage, and free cash flow;
- Changes in the policies of central banks and/or governments;
- Litigation or regulatory action that could require Aegon to pay significant damages or change the way Aegon does business;
- Competitive, legal, regulatory, or tax changes that affect profitability, the distribution cost of or demand for Aegon’s products;
- Consequences of an actual or potential break-up of the European monetary union in whole or in part, or the exit of the United Kingdom from the European Union and potential consequences if other European Union countries leave the European Union;
- Changes in laws and regulations, particularly those affecting Aegon’s operations’ ability to hire and retain key personnel, taxation of Aegon companies, the products Aegon sells, and the attractiveness of certain products to its consumers;
- Regulatory changes relating to the pensions, investment, and insurance industries in the jurisdictions in which Aegon operates;
- Standard setting initiatives of supranational standard setting bodies such as the Financial Stability Board and the International Association of Insurance Supervisors or changes to such standards that may have an impact on regional (such as EU), national or US federal or state level financial regulation or the application thereof to Aegon, including the designation of Aegon by the Financial Stability Board as a Global Systemically Important Insurer (G-SII); and
- Changes in accounting regulations and policies or a change by Aegon in applying such regulations and policies, voluntarily or otherwise, which may affect Aegon’s reported results, shareholders’ equity, or regulatory capital adequacy levels.
This document contains information that qualifies, or may qualify, as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation (596/2014). 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.
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