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Securities and Exchange Commission

Washington, D.C. 20549

 

 

Form 6-K

 

 

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d/16

of the Securities Exchange Act of 1934

November 2017

 

AEGON N.V.

 

Aegonplein 50

2591 TV THE HAGUE

The Netherlands


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Aegon’s condensed consolidated interim financial statements 3Q 2017, dated November 9, 2017, are included as appendix and incorporated herein by reference.

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

   

AEGON N.V.

 

   

 

   

 

(Registrant)

Date: November 9, 2017     By  

/s/ J.O. van Klinken

     

J.O. van Klinken

     

Executive Vice President and

General Counsel


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LOGO


Table of Contents
 

 

Condensed Consolidated Interim Financial Statements 3Q 2017  

 

 

1  

 

 

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Condensed consolidated income statement

     2  

Condensed consolidated statement of comprehensive income

     3  

Condensed consolidated statement of financial position

     4  

Condensed consolidated statement of changes in equity

     5  

Condensed consolidated cash flow statement

     6  

Notes to the Condensed consolidated interim financial statements

     7  

 

Unaudited

  LOGO


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2

 

   

 

Condensed consolidated income statement

 

                                    
EUR millions    Notes      3Q 2017     3Q 2016     YTD 2017     YTD 2016  
     

Premium income

     4        5,303       5,797       16,783       17,335  

Investment income

     5        1,682       1,852       5,547       5,860  

Fee and commission income

        617     602     1,869       1,801  

Other revenues

              1     1     6     4

Total revenues

        7,603       8,253       24,205       25,001  

Income from reinsurance ceded

     6        893     994     3,638       2,676  

Results from financial transactions

     7        4,707       8,652       14,038       15,519  

Other income

     8        24     9     351     64

Total income

        13,227       17,909       42,233       43,261  
     

Benefits and expenses

     9        12,526       17,373       40,123       42,097  

Impairment charges / (reversals)

     10        (4     (6     6     54

Interest charges and related fees

        109     89     313     258

Other charges

     11        38     -       42     682

Total charges

        12,669       17,456       40,484       43,091  
     

Share in profit / (loss) of joint ventures

        47     44     120     103

Share in profit / (loss) of associates

              2     2     7     2

Income / (loss) before tax

        607       499       1,876       274  

Income tax (expense) / benefit

              (139     (141     (500     (158

Net income / (loss)

              469       358       1,375       116  
     

Net income / (loss) attributable to:

               

Owners of Aegon N.V.

        469     358     1,376       116

Non-controlling interests

              -       -       -       -  
     

Earnings per share (EUR per share)

     19               

Basic earnings per common share

        0.21       0.16       0.62       0.01  

Basic earnings per common share B

        0.01       -       0.02       -  

Diluted earnings per common share

        0.21       0.16       0.62       0.01  

Diluted earnings per common share B

              0.01       -       0.02       -  

 

LOGO   Unaudited


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Condensed Consolidated Interim Financial Statements 3Q 2017  

 

 

3  

 

 

Condensed consolidated statement of comprehensive income

 

        
EUR millions    3Q 2017     3Q 2016     YTD 2017     YTD 2016  
     

Net income / (loss)

     469       358       1,375       116  
     

Other comprehensive income:

            

Items that will not be reclassified to profit or loss:

            

Changes in revaluation reserve real estate held for own use

     5       -       5       2  

Remeasurements of defined benefit plans

     (24     (212     258       (1,304

Income tax relating to items that will not be reclassified

     5       33       (64     336  
     

Items that may be reclassified subsequently to profit or loss:

            

Gains / (losses) on revaluation of available-for-sale investments

     116       (526     1,679       3,363  

Gains / (losses) transferred to the income statement on disposal and impairment of available-for-sale investments

     (114     30       (1,237     (2,115

Changes in cash flow hedging reserve

     (26     (98     (782     729  

Movement in foreign currency translation and net foreign investment hedging reserve

     (547     (297     (1,845     (920

Equity movements of joint ventures

     (1     4       (7     9  

Equity movements of associates

     (5     3       (7     4  

Income tax relating to items that may be reclassified

     8       163       183       (863

Other

     (3     (4     2       3  

Total other comprehensive income / (loss) for the period

     (586     (903     (1,814     (758

Total comprehensive income / (loss)

     (117     (545     (439     (642
     

Total comprehensive income / (loss) attributable to:

            

Owners of Aegon N.V.

     (115     (544     (435     (648

Non-controlling interests

     (3     (1     (4     7  

 

Unaudited

  LOGO


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4

 

   

 

Condensed consolidated statement of financial position                        
             Sept. 30,      Dec. 31,  
              2017      2016  
EUR millions    Notes                  
   

Assets

          

Cash and cash equivalents

        11,837        11,347  

Assets held for sale

     25      5,244        8,705  

Investments

     12      138,440        156,813  

Investments for account of policyholders

     13      192,352        203,610  

Derivatives

     15      6,310        8,318  

Investments in joint ventures

        1,716        1,614  

Investments in associates

        270      270

Reinsurance assets

     14      19,546        11,208  

Deferred expenses

     17      10,288        11,423  

Other assets and receivables

        9,510        10,805  

Intangible assets

     18      1,682        1,820  

Total assets

        397,195        425,935  
   

Equity and liabilities

          

Shareholders’ equity

        20,108        20,913  

Other equity instruments

              3,786        3,797  

Issued capital and reserves attributable to owners of Aegon N.V.

        23,894        24,710  

Non-controlling interests

              20      23

Group equity

        23,914        24,734  
   

Subordinated borrowings

        764      767

Trust pass-through securities

        137      156

Insurance contracts

     20      110,840        119,569  

Insurance contracts for account of policyholders

     21      118,803        120,929  

Investment contracts

     22      16,976        19,572  

Investment contracts for account of policyholders

     23      76,033        84,774  

Derivatives

     15      7,567        8,878  

Borrowings

     24      14,702        13,153  

Liabilities held for sale

     25      4,977        8,816  

Other liabilities

              22,482        24,588  

Total liabilities

             

 

373,281

 

 

 

    

 

401,201

 

 

 

Total equity and liabilities

              397,195        425,935  

 

LOGO   Unaudited


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Condensed Consolidated Interim Financial Statements 3Q 2017  

 

 

5  

 

 

Condensed consolidated statement of changes in equity

 

 
EUR millions    Share capital
1
    Retained
earnings
    Revaluation
reserves
    Remeasurement
of defined benefit
plans
    Other
reserves
    Other equity
instruments
    Issued
capital and
reserves 2
    Non-
controlling
interests
    Total  
       

Nine months ended September 30, 2017

                        
       

At beginning of year

     8,193       7,812       5,381       (1,820     1,347       3,797       24,710       23       24,734  
       

Net income / (loss) recognized in the income statement

     -       1,376       -       -       -       -       1,376       -       1,375  
       

Other comprehensive income:

                        

Items that will not be reclassified to profit or loss:

                        

Changes in revaluation reserve real estate held for own use

     -       -       5       -       -       -       5       -       5  

Remeasurements of defined benefit plans

     -       -       -       258       -       -       258       -       258  

Income tax relating to items that will not be reclassified

     -       -       (2     (62     -       -       (64     -       (64
       

Items that may be reclassified subsequently to profit or loss:

                        

Gains / (losses) on revaluation of available-for-sale investments

     -       -       1,679       -       -       -       1,679       -       1,679  

Gains / (losses) transferred to income statement on disposal and impairment of available-for-sale investments

     -       -       (1,237     -       -       -       (1,237     -       (1,237

Changes in cash flow hedging reserve

     -       -       (782     -       -       -       (782     -       (782

Movement in foreign currency translation and net foreign investment hedging reserves

     -       -       (366     84       (1,563     -       (1,845     -       (1,845

Equity movements of joint ventures

     -       -       -       -       (7     -       (7     -       (7

Equity movements of associates

     -       -       -       -       (7     -       (7     -       (7

Income tax relating to items that may be reclassified

     -       -       118       -       65       -       183       -       183  

Other

     -       5       -       -       -       -       5       (3     2  

Total other comprehensive income

 

     -       5       (584     280       (1,512     -       (1,811     (3     (1,814

Total comprehensive income / (loss) for 2017

     -       1,381       (584     280       (1,512     -       (435     (4     (439
       

Shares issued

     3       -       -       -       -       -       3       -       3  

Issuance and purchase of (treasury) shares

     -       160       -       -       -       -       160       -       160  

Dividends paid on common shares

     (142     (296     -       -       -       -       (439     -       (439

Dividend withholding tax reduction

     -       2       -       -       -       -       2       -       2  

Coupons on non-cumulative subordinated notes

     -       (21     -       -       -       -       (21     -       (21

Coupons on perpetual securities

     -       (78     -       -       -       -       (78     -       (78

Incentive plans

     -       3       -       -       -       (12     (9     -       (9

At end of period

     8,053       8,963       4,798       (1,540     (165     3,786       23,894       20       23,914  
       

Nine months ended September 30, 2016

                        
       

At beginning of year

     8,387       8,075       6,471       (1,532     1,283       3,800       26,485       9       26,494  
       

Net income / (loss) recognized in the income statement

     -       116       -       -       -       -       116       -       116  
       

Other comprehensive income:

                        

Items that will not be reclassified to profit or loss:

                        

Changes in revaluation reserve real estate held for own use

     -       -       2       -       -       -       2       -       2  

Remeasurements of defined benefit plans

     -       -       -       (1,304     -       -       (1,304     -       (1,304

Income tax relating to items that will not be reclassified

     -       -       (1     337       -       -       336       -       336  
       

Items that may be reclassified subsequently to profit or loss:

                        

Gains / (losses) on revaluation of available-for-sale investments

     -       -       3,363       -       -       -       3,363       -       3,363  

Gains / (losses) transferred to income statement on disposal and impairment of available-for-sale investments

     -       -       (2,115     -       -       -       (2,115     -       (2,115

Changes in cash flow hedging reserve

     -       -       729       -       -       -       729       -       729  

Movement in foreign currency translation and net foreign investment hedging reserves

     -       -       (251     73       (742     -       (920     -       (920

Equity movements of joint ventures

     -       -       -       -       9       -       9       -       9  

Equity movements of associates

     -       -       -       -       4       -       4       -       4  

Income tax relating to items that may be reclassified

     -       -       (858     -       (5     -       (863     -       (863

Other

     -       (3     -       -       -       -       (3     6       3  

Total other comprehensive income

     -       (3     869       (895     (735     -       (764     6       (758
       

Total comprehensive income / (loss) for 2016

     -       113       869       (895     (735     -       (648     7       (642
       

Shares issued

     1       -       -       -       -       -       1       -       1  

Shares withdrawn

     (10     (372     -       -       -       -       (382     -       (382

Issuance and purchase of (treasury) shares

     -       90       -       -       -       -       90       -       90  

Dividends paid on common shares

     (186     (305     -       -       -       -       (491     -       (491

Coupons on non-cumulative subordinated notes

     -       (21     -       -       -       -       (21     -       (21

Coupons on perpetual securities

     -       (79     -       -       -       -       (79     -       (79

Incentive plans

     -       (9     -       -       -       (9     (18     -       (18

At end of period

     8,193       7,493       7,340       (2,427     547       3,791       24,937       15       24,953  

1 For a breakdown of share capital please refer to note 19.    

2 Issued capital and reserves attributable to owners of Aegon N.V.    

 

Unaudited

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6

 

   

 

Condensed consolidated cash flow statement

 

              
EUR millions    YTD 2017     YTD 2016  
   

Cash flow from operating activities

     138       3,228  
   

Purchases and disposals of intangible assets

     (7     (15

Purchases and disposals of equipment and other assets

     (56     (40

Purchases and disposals of businesses and subsidiaries

     (1,006     (1,085

Purchases, disposals and dividends joint ventures and associates

     (10     102

Cash flow from investing activities

     (1,079     (1,038
   

Issuance of treasury shares

     2     -  

Purchase of treasury shares

     -       (505

Dividends paid

     (294     (305

Issuances, repurchases and coupons of perpetuals

     (103     (105

Issuances, repurchases and coupons of non-cumulative  subordinated notes

     (28     (28

Issuances and repayments of borrowings

     2,258       618

Cash flow from financing activities

     1,834       (325
   

Net increase / (decrease) in cash and cash equivalents

     892       1,865  

Net cash and cash equivalents at January 1

     11,347       9,593  

Effects of changes in foreign exchange rates

     (184     (158

Net cash and cash equivalents at end of period

     12,054       11,300  

    

                
   

Cash and cash equivalents

     11,837       11,316  

Cash and cash equivalents classified as Assets held for sale

     269     -  

Bank overdrafts classified as other liabilities

     (52     (16

Net cash and cash equivalents

     12,054       11,300  

 

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Condensed Consolidated Interim Financial Statements 3Q 2017  

 

 

7  

 

 

Notes to the Condensed consolidated interim financial statements

Amounts in EUR millions, unless otherwise stated

Aegon N.V., incorporated and domiciled in the Netherlands, is a public limited liability company organized under Dutch law and recorded in the Commercial Register of The Hague under number 27076669 and with its registered address at Aegonplein 50, 2591 TV, The Hague, the Netherlands. Aegon N.V. serves as the holding company for the Aegon Group and has listings of its common shares in Amsterdam and New York.

Aegon N.V. (or ‘the Company’) and its subsidiaries (‘Aegon’ or ‘the Group’) have life insurance and pensions operations in more than 20 countries in the Americas, Europe and Asia and are also active in savings and asset management operations, accident and health insurance, general insurance and to a limited extent banking operations. Headquarters are located in The Hague, the Netherlands. The Group employs close to 30,000 people worldwide.

1. Basis of presentation

The condensed consolidated interim financial statements as at and for the period ended, September 30, 2017, have been prepared in accordance with IAS 34 ‘Interim Financial Reporting’, as adopted by the European Union (hereafter ‘IFRS’). They do not include all of the information required for a full set of financial statements prepared in accordance with IFRS and should therefore be read together with the 2016 consolidated financial statements of Aegon N.V. as included in Aegon’s Annual Report for 2016. Aegon’s Annual Report for 2016 is available on its website (aegon.com).

The condensed consolidated interim financial statements have been prepared in accordance with the historical cost convention as modified by the revaluation of investment properties and those financial instruments (including derivatives) and financial liabilities that have been measured at fair value. Certain amounts in prior periods may have been reclassified to conform to the current year presentation. These reclassifications had no effect on net income, shareholders’ equity or earnings per share. The condensed consolidated interim financial statements as at, and for the period ended September 30, 2017, were approved by the Supervisory Board on November 8, 2017.

The condensed consolidated interim financial statements are presented in euro (EUR) and all values are rounded to the nearest million unless otherwise stated. The consequence is that the rounded amounts may not add up to the rounded total in all cases.

The published figures in these condensed consolidated interim financial statements are unaudited.

 

Unaudited

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2. Significant accounting policies

All accounting policies and methods of computation applied in the condensed consolidated interim financial statements are the same as those applied in the 2016 consolidated financial statements.

New IFRS accounting standards effective

The following standards, interpretations, amendments to standards and interpretations became effective in 2017, but have not yet been endorsed by the European Union:

 

  

IAS 7 Amendment Disclosure Initiative;

 

  

IAS 12 Recognition of Deferred Tax Assets for Unrealised Losses; and

 

  

Annual improvements 2014-2016 Cycle.

None of these revised standards and interpretations will significantly impact the financial position or the condensed consolidated interim financial statements.

For a complete overview of IFRS standards, published before January 1, 2017, that will be applied in future years, and were not early adopted by the Group, please refer to Aegon’s Annual Report for 2016.

Future adoption of IFRS accounting standards

In May 2017, the IASB has issued IFRS 17 Insurance Contracts. IFRS 17 will be mandatorily effective for annual reporting periods beginning on or after January 1, 2021. It aims to provide a more consistent accounting model for insurance contracts among entities issuing insurance contracts globally.

IFRS 17, together with IFRS 9 Financial Instruments, will fundamentally change the accounting in IFRS financial statements of insurance companies. Aegon has started its implementation project on both standards. Aegon expects the impact of these standards to be significant.

The endorsement process of the European Union of the new standard is expected to start in 2017. A final endorsement decision is not expected to be made in 2017.

Taxes

Taxes on income for the nine month period, ended September 30, 2017, are calculated using the tax rate that is estimated to be applicable to total annual earnings.

Judgments and critical accounting estimates

Preparing the condensed consolidated interim financial statements requires management to make judgments, estimates and assumptions, including the likelihood, timing or amount of future transactions or events, that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from the estimates made.

In preparing the condensed consolidated interim financial statements, significant judgments made by management in applying the Group’s accounting policies and the key sources of estimating uncertainty were not significantly different than those that were applied to the consolidated financial statements as at and for the year ended December 31, 2016.

 

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Exchange rates

Assets and liabilities of foreign operations are translated to the presentation currency at the closing rates on the reporting date. Income, expenses and capital transactions (such as dividends) are translated at average exchange rates or at the prevailing rates on the transaction date, if more appropriate. The following exchange rates are applied for the condensed consolidated interim financial statements:

Closing exchange rates

         
                         USD        GBP  
         

September 30, 2017

     1        EUR        1.1822        0.8812  
         

December 31, 2016

     1        EUR        1.0548        0.8536  

 

Weighted average exchange rates

 

    
         
                         USD        GBP  
         

Nine months ended September 30, 2017

     1        EUR        1.1130        0.8722  
         

Nine months ended September 30, 2016

     1        EUR        1.1161        0.8019  

3. Segment information

3.1 Income statement

 

EUR millions    Americas     The
Netherlands
    United
Kingdom
    Central &
Eastern
Europe
    Spain &
Portugal
    Europe     Asia     Asset
Management
   

Holding and
other

activities

    Eliminations     Segment
total
    Joint
ventures and
associates
eliminations
    Consolidated  

Three months ended September 30, 2017

                            
       

Underlying earnings before tax

     376       132       25       16       4       177       14       30       (41     (1     556       19       575  

Fair value items

     142     25     (17     -       -       7       1     -       8     -       159     (28     130

Realized gains / (losses) on investments

     90     16     26     -       -       41       3     1     -       -       135     (2     133

Impairment charges

     (1     (4     -       -       -       (4     -       -       -       -       (5     -       (5

Impairment reversals

     7     2     -       -       -       2       -       -       -       -       9     -       9

Other income / (charges)

     (312     98     -       -       -       98       (19     (1     -       -       (233     -       (233

Run-off businesses

     (3     -       -       -       -       -       -       -       -       -       (3     -       (3

Income / (loss) before tax

     300       268       33       16       4       322       -       30       (33     (1     618       (10     607  

Income tax (expense) / benefit

     (69     (62     (10     (2     (2     (77 )       (2     (10     9     -       (149     10     (139

Net income / (loss)

     231       206       23       14       2       245       (2     20       (25     (1     469       -       469  

Inter-segment underlying earnings

     (21     (25     (20     (2     -       (47     -       52       18            
       

Revenues

                            

Life insurance gross premiums

     1,783       364     2,275       103     46     2,788       199     -       2     (2     4,769       (124     4,645  

Accident and health insurance

     508     35     8     -       -       43       22     -       -       -       573     (3     570

General insurance

     -       35     -       53     25     113       -       -       -       -       113     (25     88

Total gross premiums

     2,291       434       2,283       156       71       2,944       220       -       2       (2     5,455       (151     5,303  

Investment income

     794     531     288     13     9     841       59     1     71     (69     1,697       (15     1,682  

Fee and commission income

     400     85     55     11     4     155       18     145     -       (53     665     (48     617

Other revenues

     2     -       -       -       -       -       -       -       1     -       3     (2     1

Total revenues

     3,486       1,051       2,626       180       84       3,940       297       146       73       (124     7,819       (216     7,603  

Inter-segment revenues

     -       -       -       -       -       -       1       53       71                                  

 

EUR millions    Americas     The
Netherlands
    United
Kingdom
    Central &
Eastern
Europe
    Spain &
Portugal
    Europe     Asia     Asset
Management
   

Holding and
other

activities

    Eliminations     Segment
total
    Joint
ventures and
associates
eliminations
    Consolidated  

Three months ended September 30, 2016

                            
       

Underlying earnings before tax

     307       133       5       12       1       151       6       32       (36     -       461       21       482  

Fair value items

     32     54     (4     -       -       49       6     -       (3     -       84     (29     55

Realized gains / (losses) on investments

     (31     31     17     1     -       49       2     2     -       -       21     (3     19

Impairment charges

     (12     (7     -       -       -       (7     -       -       -       -       (19     -       (19

Impairment reversals

     24     1     -       -       -       1       -       -       -       -       25     -       25

Other income / (charges)

     (109     30     22     -       -       52       (5     -       (9     -       (72     -       (72

Run-off businesses

     8     -       -       -       -       -       -       -       -       -       8     -       8

Income / (loss) before tax

     218       241       39       14       1       296       9       34       (48     -       510       (11     499  

Income tax (expense) /benefit

     (82     (53     (9     (3     (2     (68     (4     (11     13     -       (152     11     (141

Net income / (loss)

     136       188       30       11       (1     228       6       23       (35     -       358       -       358  

Inter-segment underlying earnings

     (47     (21     (23     (3     -       (48     19       56       20            
       

Revenues

                            

Life insurance gross premiums

     1,837       398     2,618       98     37     3,152       235     -       3     (21     5,206       (113     5,093  

Accident and health insurance

     556     31     9     -       1     40       24     -       (7     3     616     (1     615

General insurance

     -       46     -       44     21     112       -       -       4     (4     112     (21     90

Total gross premiums

     2,393       475       2,627       143       59       3,304       259       -       -       (22     5,933       (136     5,797  

Investment income

     931     575     280     11     10     875       58     1     99     (99     1,865       (13     1,852  

Fee and commission income

     419     87     20     9     3     119       17     152     -       (57     650     (48     602

Other revenues

     1     -       -       -       -       -       (1     1     1     -       2     (1     1

Total revenues

     3,744       1,136       2,927       163       72       4,299       333       153       100       (179     8,451       (198     8,253  

Inter-segment revenues

     -       2       -       -       -       2       20       57       99                                  

 

Unaudited

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10

 

   

 

EUR millions    Americas     The
Netherlands
   

United

Kingdom

   

Central &
Eastern

Europe

    Spain &
Portugal
    Europe     Asia     Asset
Management
    Holding and
other
activities
    Eliminations    

Segment

total

   

 

Joint
ventures and
associates
eliminations

    Consolidated  

Nine months ended September 30, 2017

                            
       

Underlying earnings before tax geographically

     1,029       385       93       53       10       541       37       99       (129     -       1,578       45       1,622  

Fair value items

     89     (149     (65     -       -       (213     1     -       38     -       (85     (75     (161

Realized gains / (losses) on investments

     119     163     32     2     -       197       2     3     -       -       321     (5     317

Impairment charges

     (12     (15     -       (2     -       (18     -       -       (3     -       (33     -       (33

Impairment reversals

     19     9     -       -       -       9       -       -       -       -       28     -       28

Other income / (charges)

     (86     90     80     -       -       170       (19     (2     -       -       64     -       64

Run-off businesses

     38     -       -       -       -       -       -       -       -       -       38     -       38

Income / (loss) before tax

     1,197       483       140       52       10       685       22       101       (94     -       1,911       (36     1,876  

Income tax (expense) / benefit

     (325     (107     (55     (7     (6     (175     (28     (32     24     -       (536     36     (500

Net income / (loss)

     872       376       86       45       4       510       (7     69       (70     -       1,375       -       1,375  

Inter-segment underlying earnings

     (58     (84     (67     (9     (1     (161     (2     166       55            
       

Revenues

                            

Life insurance gross premiums

     5,614       1,416       6,749       306     151     8,623       750     -       6     (7     14,986       (451     14,535  

Accident and health insurance

     1,630       175     24     1     83     283       77     -       -       -       1,990       (17     1,972  

General insurance

     -       112     -       163     74     350       -       -       1     (1     349     (74     275

Total gross premiums

     7,245       1,704       6,773       470       308       9,256       827       -       6       (8     17,325       (543     16,783  

Investment income

     2,603       1,648       1,084       36     27     2,796       185     3     226     (223     5,590       (43     5,547  

Fee and commission income

     1,202       260     177     30     11     479       48     445     -       (171     2,002       (132     1,869  

Other revenues

     4     -       -       -       3     3       -       -       3     -       10     (4     6

Total revenues

     11,054       3,612       8,035       537       349       12,533       1,059       448       236       (402     24,927       (722     24,205  

Inter-segment revenues

     -       -       -       -       -       -       2       171       228                                  

 

EUR millions    Americas     The
Netherlands
   

United

Kingdom

   

Central &
Eastern

Europe

    Spain &
Portugal
    Europe     Asia     Asset
Management
    Holding and
other
activities
    Eliminations    

Segment

total

   

 

Joint
ventures and
associates
eliminations

    Consolidated  

Nine months ended September 30, 2016

                            
       

Underlying earnings before tax geographically

     860       400       35       41       5       481       8       114       (107     3       1,359       31       1,389  

Fair value items

     (295     (236     24     -       -       (212     2     -       (126     -       (632     (50     (682

Realized gains / (losses) on investments

     6     142     149     1     (2     290       7     3     -       -       305     (6     299

Impairment charges

     (69     (21     -       2     -       (19     (1     -       (7     1     (95     -       (95

Impairment reversals

     34     9     -       -       -       9       -       -       -       (1     42     -       42

Other income / (charges)

     (74     10     (658     -       -       (648     (5     -       (6     -       (734     -       (734

Run-off businesses

     55     -       -       -       -       -       -       -       -       -       55     -       55

Income / (loss) before tax

     517       304       (450     44       3       (100     10       117       (246     3       300       (25     274  

Income tax (expense) / benefit

     (115     (64     (1     (8     (7     (79     (13     (37     61     -       (183     25     (158

Net income / (loss)

     402       240       (451     36       (4     (179     (3     79       (185     3       116       -       116  

Inter-segment underlying earnings

     (141     (71     (70     (11     -       (153     56       175       64            
       

Revenues

                            

Life insurance gross premiums

     5,405       1,615       7,149       297     133     9,193       812     -       6     (63     15,352       (386     14,967  

Accident and health insurance

     1,656       182     28     1     73     283       80     -       -       -       2,019       (14     2,005  

General insurance

     -       229     -       134     69     433       -       -       4     (4     433     (69     364

Total gross premiums

     7,061       2,026       7,177       432       274       9,909       891       -       9       (66     17,804       (469     17,335  

Investment income

     2,747       1,648       1,265       34     29     2,976       170     3     304     (302     5,898       (37     5,860  

Fee and commission income

     1,243       262     65     26     10     363       46     475     -       (181     1,947       (146     1,801  

Other revenues

     3     -       -       -       2     2       -       1     2     -       7     (3     4

Total revenues

     11,054       3,936       8,508       492       315       13,250       1,108       478       316       (549     25,656       (655     25,001  

Inter-segment revenues

     -       2       -       -       -       3       59       181       306                                  

Impact from 2017 assumption changes and model updates

In 3Q 2017, a charge of EUR 198 million (3Q 2016: EUR 81 million charge) has been recorded in other income/ (charges) in respect of assumption changes and model updates. The impact is mainly attributable to Aegon’s business in the Americas and the Netherlands. Assumption changes and model updates in the Americas led to a net negative impact of EUR 304 million and were mainly driven by a charge of EUR 252 million (USD 280 million) from the conversion of the largest block of universal life business to a new model. The model allows for modeling policyholder behavior and other assumptions on a policy by policy basis. Other assumption changes and model updates led to a charge of EUR 52 million (USD 58 million). In the Netherlands, assumption changes and model updates mainly relate to the guarantee provision.

3.2 Performance measure

Aegon’s segment information is prepared by consolidating on a proportionate basis Aegon’s joint ventures and associated companies.

Performance measure

A non-IFRS performance measure of reporting segments utilized by the Company is underlying earnings before tax. Underlying earnings before tax reflects Aegon’s profit from underlying business operations and excludes components that relate to accounting mismatches that are dependent on market volatility, updates to best estimate actuarial and economic assumptions and model updates or events that are considered outside the normal course of business.

 

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11  

 

 

Aegon believes that its non-IFRS performance measure, underlying earnings before tax, provides meaningful supplemental information about the underlying results of Aegon’s business, including insight into the financial measures that Aegon’s senior management uses in managing the business. Among other things, Aegon’s senior management is compensated based in part on Aegon’s results against targets using underlying earnings before tax. While many other insurers in Aegon’s peer group present substantially similar performance measures, the performance measures presented in this document may nevertheless differ from the performance measures presented by other insurers. There is no standardized meaning to these measures under IFRS or any other recognized set of accounting standards.

The reconciliation from underlying earnings before tax to income before tax, being the most comparable IFRS measure, is presented in the tables in this note.

The items that are excluded from underlying earnings before tax as described further below are: fair value items, realized gain or losses on investments, impairment charges/reversals, other income or charges, run-off businesses and share in earnings of joint ventures and associates.

Fair value items

Fair value items include the over- or underperformance of investments and guarantees held at fair value for which the expected long-term return is included in underlying earnings before tax.

In addition, hedge ineffectiveness on hedge transactions, fair value changes on economic hedges without natural offset in earnings and for which no hedge accounting is applied and fair value movements on real estate are included under fair value items.

Certain assets held by Aegon are carried at fair value and managed on a total return basis, with no offsetting changes in the valuation of related liabilities. These include assets such as investments in hedge funds, private equities, real estate (limited partnerships), convertible bonds and structured products. Underlying earnings before tax exclude any over- or underperformance compared to management’s long-term expected return on assets. Based on current holdings and asset returns, the long-term expected return on an annual basis is 7-10%, depending on asset class, including cash income and market value changes. The expected earnings from these asset classes are net of deferred policy acquisition costs (DPAC) where applicable.

In addition, certain products offered by Aegon Americas contain guarantees and are reported on a fair value basis and the total return annuities and guarantees on variable annuities. The earnings on these products are impacted by movements in equity markets and risk-free interest rates. Short-term developments in the financial markets may therefore cause volatility in earnings. Included in underlying earnings before tax is a long-term expected return on these products and excluded is any over- or underperformance compared to management’s expected return.

The fair value movements of certain guarantees and the fair value change of derivatives that hedge certain risks on these guarantees of Aegon the Netherlands, VA Europe (included in United Kingdom) and Japan are excluded from underlying earnings before tax, and the long-term expected return for these guarantees is set at zero. In addition, fair value items include market related results on our loyalty bonus reserves in the United Kingdom. The value of these reserves are directly related to policyholder investments which value is directly impacted by movements in equity and bond markets.

Holding and other activities include certain issued bonds that are held at fair value through profit or loss (FVTPL). The interest rate risk on these bonds is hedged using swaps. The fair value movement resulting from changes in Aegon’s credit spread used in the valuation of these bonds are excluded from underlying earnings before tax and reported under fair value items.

 

Unaudited

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12

 

   

 

Realized gains or losses on investments

Includes realized gains and losses on available-for-sale investments, mortgage loans and other loan portfolios.

Impairment charges/reversals

Impairment charges include impairments on available-for-sale debt securities, shares including the effect of deferred policyholder acquisition costs, mortgage loans and other loan portfolios at amortized cost, joint ventures and associates. Impairment reversals include reversals on available-for-sale debt securities.

Other income or charges

Other income or charges includes: a) items which cannot be directly allocated to a specific line of business; b) the impact of actuarial and economic assumption and model updates used to support calculations of our liabilities for insurance and investment contracts sold to policyholders and related assets; and c) items that are outside the normal course of business, including restructuring charges. In the condensed consolidated interim financial statements, these restructuring charges are included in operating expenses. Actuarial assumption and model updates are recorded in Claims and Benefits in the IFRS income statement.

Run-off businesses

Includes underlying results of business units where management has decided to exit the market and to run-off the existing block of business. This line includes results related to the run-off of the institutional spread-based business, structured settlements blocks of business, bank-owned and corporate-owned life insurance (BOLI/COLI) business (until April 1, 2017, please refer to note 28 Acquisitions/ divestments for more information on the divestment of this business), and the sale of the life reinsurance business in the United States. Aegon has other blocks of business for which sales have been discontinued and of which the earnings are included in underlying earnings before tax.

Share in earnings of joint ventures and associates

Earnings from Aegon’s joint ventures in the Netherlands, Mexico, Spain, Portugal, China and Japan and Aegon’s associates in India, Brazil, the Netherlands, United Kingdom, Mexico and France are reported on an underlying earnings before tax basis.

 

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13  

 

 

3.3 Investments

Amounts included in the tables on investments are presented on an IFRS basis, which means that investments in joint ventures and associates are not consolidated on a proportionate basis. Instead, these investments are included on a single line using the equity method of accounting.

 

                                                                                    EUR millions  
September 30, 2017    Americas      The
Netherlands
     United
Kingdom
     Central &
Eastern
Europe
     Spain &
Portugal
     Europe      Asia     

Asset

Management

     Holdings
and other
activities
    Eliminations    

Total

EUR

 

Investments

                                

Shares

     567      774      4      51      5      835        1      2      59     -       1,463  

Debt securities

     55,836        21,107        1,792        681      646      24,227        5,064        -        -       -       85,127  

Loans

     8,744        30,059        -        296      61      30,416        6      -        -       -       39,166  

Other financial assets

     9,929        315      116      8      -        439        76      147      20     -       10,612  

Investments in real estate

     674      1,380        -        4      15      1,398        -        -        -       -       2,072  

Investments general account

     75,750        53,636        1,913        1,039        727        57,315        5,147        150        79       -       138,440  

Shares

     -        9,496        15,317        298      14      25,125        -        -        -       (6     25,119  

Debt securities

     3,191        13,424        9,528        225      9      23,186        -        -        -       -       26,377  

Unconsolidated investment funds

     99,337        -        32,544        854      77      33,475        -        -        -       -       132,812  

Other financial assets

     576      3,091        3,688        14      1      6,794        -        -        -       -       7,370  

Investments in real estate

     -        -        674      -        -        674        -        -        -       -       674

Investments for account of policyholders

     103,104        26,011        61,751        1,392        100        89,254        -        -        -       (6     192,352  
   

Investments on balance sheet

     178,854        79,647        63,664        2,431        827        146,569        5,147        150        79       (6     330,792  

Off balance sheet investments third parties

     220,064        1,068        110,250        5,529        543        117,390        2,704        141,306        -       (849     480,615  

Total revenue generating investments

     398,918        80,715        173,915        7,959        1,371        263,959        7,850        141,455        79       (855     811,407  

Investments

                                

Available-for-sale

     61,360        20,402        1,910        723      651      23,687        5,120        146      20     -       90,333  

Loans

     8,744        30,059        -        296      61      30,416        6      -      -     -       39,166  

Financial assets at fair value through profit or loss

     108,077        27,805        61,081        1,408        100      90,394        21      4      59     (6     198,548  

Investments in real estate

     674      1,380        674      4      15      2,072        -        -      -     -       2,746  

Total investments on balance sheet

     178,854        79,647        63,664        2,431        827        146,569        5,147        150        79       (6     330,792  
   

Investments in joint ventures

     4      971      -        -        501      1,472        124      115      1     -       1,716  

Investments in associates

     94      33      8      2      -        43        14      120      (1     -       270

Other assets

     35,372        16,315        8,632        365      210      25,509        2,395        322      29,550       (28,745     64,417  

Consolidated total assets

     214,325        96,966        72,304        2,797        1,539        173,593        7,680        706        29,629       (28,751     397,195  

 

                                                                                    EUR millions  
December 31, 2016    Americas      The
Netherlands
     United
Kingdom
     Central &
Eastern
Europe
     Spain &
Portugal
     Europe      Asia      Asset
Management
    

Holdings

and other
activities

    Eliminations    

Total

EUR

 

Investments

                                

Shares

     793      334      84      35      4      457        -        2      62     -       1,314  

Debt securities

     70,766        23,741        2,036        633      683      27,093        5,310        -        -       -       103,169  

Loans

     10,820        28,627        -        303      45      28,975        18      -        -       -       39,812  

Other financial assets

     9,924        358      115      10      -        483        -        88      23     -       10,519  

Investments in real estate

     743      1,238        -        3      15      1,256        -        -        -       -       1,999  

Investments general account

     93,046        54,298        2,236        983        747        58,264        5,328        90        85       -       156,813  

Shares

     -        9,689        15,503        295      13      25,499        -        -        -       (7     25,492  

Debt securities

     4,779        15,434        9,847        235      10      25,526        -        -        -       -       30,305  

Unconsolidated investment funds

     102,534        -        36,600        879      64      37,543        -        -        -       -       140,077  

Other financial assets

     27      2,862        4,150        9      1      7,022        -        -        -       -       7,049  

Investments in real estate

     -        -        686      -        -        686        -        -        -       -       686

Investments for account of policyholders

     107,341        27,985        66,786        1,418        88        96,276        -        -        -       (7     203,610  
   

Investments on balance sheet

     200,387        82,283        69,021        2,401        834        154,540        5,328        90        85       (7     360,423  

Off balance sheet investments third parties

     240,072        952        5,333        3,154        507        9,946        2,734        130,889        -       (864     382,776  

Total revenue generating investments

     440,458        83,235        74,354        5,556        1,342        164,487        8,061        130,979        85       (871     743,200  

Investments

                                

Available-for-sale

     77,918        23,044        2,152        660      687      26,544        5,289        87      23     -       109,860  

Loans

     10,820        28,627        -        303      45      28,975        18      -      -       -       39,812  

Financial assets at fair value through profit or loss

     110,906        29,374        66,183        1,436        88      97,080        21      4      62     (7     208,066  

Investments in real estate

     743      1,238        686      3      15      1,942        -        -      -       -       2,685  

Total investments on balance sheet

     200,387        82,283        69,021        2,401        834        154,540        5,328        90        85       (7     360,423  
   

Investments in joint ventures

     7      877      -        -        495      1,373        134      99      -       -       1,614  

Investments in associates

     95      21      8      2      -        30        21      125      (1     -       270

Other assets

     31,003        15,260        12,718        293      170      28,426        3,122        293      31,107       (30,338     63,627  

Consolidated total assets

     231,493        98,441        81,747        2,696        1,500        184,370        8,604        607        31,192       (30,345     425,935  

 

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4. Premium income and premiums paid to reinsurers

 

                                  

EUR millions

     3Q 2017        3Q 2016        YTD 2017        YTD 2016  
     

Premium income

               

Life insurance

     4,645          5,093          14,535          14,967    

Non-life insurance

     658          705          2,248          2,369    

Total premium income

     5,303          5,797          16,783          17,335    

Accident and health insurance

     570          615          1,972          2,005    

General insurance

     88          90          275          364    

Non-life Insurance premium income

     658          705          2,248          2,369    
     

Premiums paid to reinsurers 1

               

Life insurance

     562          707          2,375          2,110    

Non-life insurance

     52          61          171          192    

Total premiums paid to reinsurers

     614          769          2,547          2,303    

Accident and health insurance

     49          58          163          182    

General insurance

     3          3          9          10    

Non-life Insurance paid to reinsurers

     52          61          171          192    

1 Premiums paid to reinsurers are recorded within Benefits and expenses in the income statement - refer to note 9 - Benefits and expenses.

Premium income Life insurance includes EUR 1,253 million for 3Q 2017 and EUR 3,414 million for YTD 2017 (3Q 2016: EUR 1,590 million, YTD 2016 EUR 3,638 million) of premiums related to insurance policies upgraded to the retirement platform in the UK.

5. Investment income

 

                                  

EUR millions

     3Q 2017        3Q 2016        YTD 2017        YTD 2016  
     

Interest income

     1,475          1,637          4,624          4,906    

Dividend income

     177          184          827          859    

Rental income

     29          31          96          95    

Total investment income

     1,682          1,852          5,547          5,860    
     

Investment income related to general account

     1,292          1,462          4,120          4,329    

Investment income for account of policyholders

     390          390          1,427          1,531    

Total

     1,682          1,852          5,547          5,860    

6. Income from reinsurance ceded

The income from reinsurance ceded for the first nine-month period of 2017 increased by EUR 1.0 billion compared to the first nine-month period of 2016. This is mainly the result of the reinsurance transaction, related to the pay-out annuity and BOLI/COLI businesses in the US that took place in the second quarter of the year. Due to the transaction the liabilities for insurance contracts increased by EUR 0.9 billion resulting from loss recognition and then were ceded to a reinsurance company. The loss recognition is reflected in the benefits and expenses line (within claims and benefits) and is offset by an equal increase in the income from reinsurance ceded. As a result there is a nil net impact in the income statement. For more details on the divestment of the pay-out annuity and BOLI/COLI businesses refer to note 28 Acquisitions/divestments.

 

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Condensed Consolidated Interim Financial Statements 3Q 2017  

 

 

15  

 

 

7. Results from financial transactions

 

                                  

EUR millions

     3Q 2017        3Q 2016        YTD 2017        YTD 2016  
     

Net fair value change of general account financial investments at FVTPL other than derivatives

     -          44          84          (21)   

Realized gains /(losses) on financial investments

     132          6          353          287    

Gains /(losses) on investments in real estate

     90          27          140          52    

Net fair value change of derivatives

     (163)         244          (1,460)         411    

Net fair value change on for account of policyholder financial assets at FVTPL

     4,641          8,315          14,908          14,776    

Net fair value change on investments in real estate for account of policyholders

     10          (2)         25          (27)   

Net foreign currency gains /(losses)

     (7)         8          (15)         32    

Net fair value change on borrowings and other financial liabilities

     3          11          4          9    

Realized gains /(losses) on repurchased debt

     1          -          -          1    

Total

     4,707          8,652          14,038          15,519    

Net fair value change on for account of policyholder financial assets at FVTPL for the first nine-month period of 2017 remained stable compared to the first nine-month period of 2016, as favorable equity markets results were largely offset by losses from interest rates movements. The decrease of the net fair value change on for account of policyholder financial assets at FVTPL in 3Q 2017 compared to 3Q 2016 is mainly driven by equity markets and interest rate movements.

Net fair value change on for accounts of policyholder financial assets at FVTPL is offset by amounts in the Claims and benefits line reported in note 9 Benefits and expenses.

8. Other income

Other income for the first nine-month period in 2017 of EUR 351 mln mainly related to a book gain of EUR 231 million (USD 250 million) from the divestment of the pay-out annuity and the BOLI/COLI businesses in the US recorded in the second quarter. Furthermore, a release of an expense reserve of EUR 82 million (GBP 71 million) was recorded that was embedded in the liabilities for insurance contracts following the completion of the Part VII transfer to Rothesay Life. In the third quarter EUR 17 million (GBP 14 million) related to the completion in the third quarter of the Part VII transfer of annuities reinsured to Legal & General in 2016 is included. For more details on the divestment of the pay-out annuity and the BOLI/COLI businesses and the completion of the Part VII transfer to Rothesay Life and Legal & General refer to note 28 Acquisitions/divestments.

9. Benefits and expenses

 

                                  

EUR millions

     3Q 2017        3Q 2016        YTD 2017        YTD 2016  
     

Claims and benefits

     11,826          16,536          37,671          39,624    

Employee expenses

     520          549          1,679          1,704    

Administration expenses

     335          300          1,054          931    

Deferred expenses

     (234)         (281)         (755)         (915)   

Amortization charges

     79          268          474          752    

Total

     12,526          17,373          40,123          42,097    

The following table provides an analysis of “claims and benefits”:

 

                                  

EUR millions

     3Q 2017        3Q 2016        YTD 2017        YTD 2016  
     

Benefits and claims paid life

     5,748          6,161          17,471          16,285    

Benefits and claims paid non-life

     450          506          1,450          1,574    

Change in valuation of liabilities for insurance contracts

     5,505          7,143          16,303          15,592    

Change in valuation of liabilities for investment contracts

     (1,134)         1,236          (2,110)         1,631    

Other

     (3)         (24)         (26)         (39)   

Policyholder claims and benefits

     10,566          15,022          33,089          35,042    

Premium paid to reinsurers

     614          769          2,547          2,303    

Profit sharing and rebates

     5          29          17          39    

Commissions

     641          716          2,018          2,240    

Total

     11,826          16,536          37,671          39,624    

 

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The lines “change in valuation of liabilities for insurance contracts” and “change in valuation of liabilities for investment contracts” reflect changes in technical provisions resulting from net fair value changes on for account of policyholder financial assets at fair value through P&L included in Results from financial transactions (note 7) of EUR 4,641 million for 3Q 2017 and EUR 14,908 million for YTD 2017 (3Q 2016: EUR 8,315 million, YTD 2016: EUR 14,776 million). In addition, the line “change in valuation of liabilities for insurance contracts” includes an increase of technical provisions for life insurance contracts of EUR 449 million for 3Q 2017 and EUR 94 million for YTD 2017 (3Q 2016: increase of EUR 447 million, YTD 2016: EUR 3,473 million).

10. Impairment charges/(reversals)

 

                                  

EUR millions

     3Q 2017        3Q 2016        YTD 2017        YTD 2016  
     

Impairment charges / (reversals) comprise:

               

Impairment charges on financial assets, excluding receivables

     5          20          33          99    

Impairment reversals on financial assets, excluding receivables

     (9)         (25)         (28)         (42)   

Impairment charges / (reversals) on non-financial assets and receivables

     -          (1)         1          (3)   

Total

     (4)         (6)         6          54    
     

Impairment charges on financial assets, excluding receivables, from:

               

Shares

     2          -          2          1    

Debt securities and money market instruments

     -          8          11          47    

Loans

     3          7          17          20    

Other

     -          4          -          23    

Investments in associates

     -          -          3          7    

Total

     5          20          33          99    
     

Impairment reversals on financial assets, excluding receivables, from:

               

Debt securities and money market instruments

     (4)         (22)         (15)         (30)   

Loans

     (4)         (2)         (11)         (11)   

Other

     (1)         (1)         (2)         (1)   

Total

     (9)         (25)         (28)         (42)   

11. Other charges

Other charges for the first nine-month period in 2017 of EUR 42 million mainly relate to the impairment of the deferred transaction costs of EUR 36 million (GBP 32 million) recorded in the third quarter as a result of the sale of Aegon Ireland plc, which is subject to customary regulatory approvals. For more details on the divestment of Aegon Ireland plc. refer to note 28 Acquisitions/divestments.

 

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Condensed Consolidated Interim Financial Statements 3Q 2017  

 

 

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12. Investments

 

             
EUR millions    Sept. 30, 2017                 Dec. 31, 2016
     

Available-for-sale (AFS)

   90,333     109,860  

Loans

   39,166     39,812  

Financial assets at fair value through profit or loss (FVTPL)

  

6,869  

 

5,142  

Financial assets, for general account, excluding derivatives

   136,368     154,814  

Investments in real estate

  

2,072  

 

1,999  

Total investments for general account, excluding derivatives

   138,440     156,813  

 

 

Financial assets, for general account, excluding derivatives

 

 
   
EUR millions    AFS      FVTPL      Loans      Total  
   

Shares

     832        631        -          1,463    

Debt securities

     81,321          3,806          -          85,127    

Money market and other short-term investments

     7,067          412        -          7,479    

Mortgages loans

     -          -          33,586          33,586    

Private loans

     -          -          3,412          3,412    

Deposits with financial institutions

     -          -          145        145  

Policy loans

     -          -          1,929          1,929    

Other

     1,112          2,020          93        3,226    

September 30, 2017

     90,333          6,869          39,166          136,368    
   
      AFS      FVTPL      Loans      Total  
   

Shares

     824        490        -          1,314    

Debt securities

     101,054          2,115          -          103,169    

Money market and other short-term investments

     6,776          317        -          7,093    

Mortgages loans

     -          -          34,206          34,206    

Private loans

     -          -          3,166          3,166    

Deposits with financial institutions

     -          -          129        129  

Policy loans

     -          -          2,207          2,207    

Other

     1,206          2,219          104        3,529    

December 31, 2016

     109,860          5,142          39,812          154,814    

The decrease of EUR 18.5 billion in financial assets, for general account, excluding derivatives compared to December 31, 2016 is mainly driven by the disposal of debt securities related to the divestment of the pay-out annuity and BOLI/COLI businesses in the Americas and the investments relating to Aegon Ireland PLC., which were reclassified to held for sale. In addition, the balance is affected by currency translation adjustments.

13. Investments for account of policyholders

 

             

EUR millions

   Sept. 30, 2017                 Dec. 31, 2016
     

Shares

   25,119     25,492  

Debt securities

   26,377     30,305  

Money market and short-term investments

   1,809     1,231  

Deposits with financial institutions

   2,488     2,951  

Unconsolidated investment funds

   132,812     140,077  

Other

  

3,073  

 

2,868  

Total investments for account of policyholders at fair value
through profit or loss, excluding derivatives

   191,678     202,924  

Investment in real estate

  

674  

 

686  

Total investments for account of policyholders

   192,352     203,610  

14. Reinsurance assets

Reinsurance assets increased by EUR 8.3 billion compared to December 31, 2016 mainly due to the reinsurance transaction, related to the pay-out annuity and BOLI/COLI businesses in the US that took place in the second quarter of the year. For more details on the divestment of these businesses refer to note 28 Acquisitions/divestments.

 

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15. Derivatives

The movements in fair value of derivatives on both the asset and liability side of the condensed consolidated statement of financial position mainly result from changes in interest rates and other market movements during the period, as well as purchases, disposals and maturities. The divestment of the pay-out annuity and BOLI/COLI businesses in the US contributed to the decrease of derivative assets with EUR 259 million compared to December 31, 2016.

16. Fair value

The following tables provide an analysis of financial instruments recorded at fair value on a recurring basis by level of the fair value hierarchy:

 

 

Fair value hierarchy

 

                               
   
EUR millions    Level I      Level II      Level III      Total  
     

As at September 30, 2017

               

 

  Financial assets carried at fair value

               

  Available-for-sale investments

               

 Shares

     161          156          515          832    

 Debt securities

     26,418          53,285          1,618          81,321    

 Money markets and other short-term instruments

     -          7,067          -          7,067    

 Other investments at fair value

     -          393          720          1,112    

  Total Available-for-sale investments

     26,579          60,901          2,853          90,333    

 

  Fair value through profit or loss

               

 Shares

     306          101          224          631    

 Debt securities

     1,795          1,969          43          3,806    

 Money markets and other short-term instruments

     -          412          -          412    

 Other investments at fair value

     1          754          1,265          2,020    

 Investments for account of policyholders 1

     115,334          74,683          1,662          191,678    

 Derivatives

     79          6,196          36          6,310    

  Total Fair value through profit or loss

     117,515          84,114          3,229          204,858    

  Total financial assets at fair value

     144,095          145,015          6,082          295,191    

 

  Financial liabilities carried at fair value

               

 Investment contracts for account of policyholders 2

     -          37,493          186          37,678    

 Borrowings 3

     -          550          -          550    

 Derivatives

     30          5,644          1,893          7,567    
  Total financial liabilities at fair value      30          43,687          2,079          45,795    
     
As at December 31, 2016                

 

  Financial assets carried at fair value

               
  Available-for-sale investments                
 Shares      119          312          393          824    
 Debt securities      29,386          69,702          1,966          101,054    
 Money markets and other short-term instruments      -          6,776          -          6,776    
 Other investments at fair value      -          453          754          1,206    
  Total Available-for-sale investments      29,504          77,243          3,112          109,860    

 

  Fair value through profit or loss

               
 Shares      288          152          50          490    
 Debt securities      27          2,082          6          2,115    
 Money markets and other short-term instruments      -          317          -          317    
 Other investments at fair value      1          961          1,257          2,219    
 Investments for account of policyholders 1      125,997          75,202          1,726          202,924    
 Derivatives      41          8,169          108          8,318    
  Total Fair value through profit or loss      126,355          86,883          3,146          216,384    
  Total financial assets at fair value      155,860          164,126          6,259          326,244    

 

  Financial liabilities carried at fair value

               
 Investment contracts for account of policyholders 2      -          42,627          176          42,803    
 Borrowings 3      -          610          -          610    
 Derivatives      64          6,347          2,467          8,878    
  Total financial liabilities at fair value      64          49,584          2,643          52,290    

1 The investments for account of policyholders included in the table above represents only those investments carried at fair value through profit or loss.

2 The investment contracts for account of policyholders included in the table above represents only those investment contracts carried at fair value.

3 Total borrowings on the statement of financial position contain borrowings carried at amortized cost that are not included in the above schedule.

 

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Significant transfers between Level I, Level II and Level III

Aegon’s policy is to record transfers of assets and liabilities between Level I, Level II and Level III at their fair values as of the beginning of each reporting period.

The table below shows transfers between Level I and II for financial assets and financial liabilities recorded at fair value on a recurring basis during the nine-month period ended September 30, 2017.

 

 

Fair value transfers

                          
EUR millions    YTD 2017     Full Year 2016
      Transfers
Level I to 
Level II 
    Transfers
Level II to
Level I 
        Transfers
      Level I to
Level II
    Transfers
Level II to
Level I
Financial assets carried at fair value
 Available-for-sale investments
            
Debt securities      1       -       5     69
 Total      1       -       5     69

 

 Fair value through profit or loss

            
Shares      -       19       -     -
Investments for account of policyholders      -       13       3     (1)
 Total      -       32       3     (1)
 Total financial assets at fair value      1       33       8     68

Transfers are identified based on transaction volume and frequency, which are indicative of an active market.

Movements in Level III financial instruments measured at fair value

The following table summarizes the change of all assets and liabilities measured at estimated fair value on a recurring basis using significant unobservable inputs (‘Level III’), including realized and unrealized gains (losses) of all assets and liabilities and unrealized gains (losses) of all assets and liabilities still held at the end of the respective period.

 

 

Roll forward of Level III financial instruments

 

 

EUR millions    January
1, 2017
     Total gains
/ losses in
income
statement 1
    Total gains /
losses in OCI 2
    Purchases      Sales      Settlements      Net
exchange
differences
     Reclassification      Transfers
from
Level I
and
Level II
     Transfers
to Level I
and
Level II
    

Transfers to

disposal

groups

    

September
30,

2017

    

 

Total unrealized gains

and losses for the

period recorded in the

P&L for instruments

held at

September 30, 2017 ³

 

Financial assets carried at fair value available-for-sale investments

                                      

Shares

     393         47       (41)       270        (89)        (35)        (30)                                    515        -  

Debt securities

     1,966         36       (8)       537        (151)        (578)        (172)               146        (159)               1,618        -  

Other investments at fair value

     754         (95     13       169        (30)        (9)        (84)               1                      720        -  
       3,112         (11     (37     977        (269)        (622)        (287)        -         147        (159)               2,853        -  

Fair value through profit or loss

                                      

Shares

     50         (12     -       193        (8)        -        -                                    224        (12)  

Debt securities

            -       -       38        -        -        (1)                                    43        1  

Other investments at fair value

     1,257         (9     -       246        (204)        -        (144)               321        (203)               1,265        (10)  

Investments for account of policyholders

     1,726         (26     -       437        (417)        -        (22)                      (35)               1,662        (24)  

Derivatives

     108         (59     -       -        -        -        (1)        (12)                             36        (42)  
       3,146         (106     -       915        (629)        -        (168)        (12)        321        (238)               3,229        (88)  

Financial liabilities carried at fair value

                                      

Investment contracts for account of policyholders

     176         (7     -       39        (12)        -        (10)                      (1)               186        (3)  

Derivatives

     2,467         (781     -       -        294        -        (67)        10                      (30)        1,893        (700)  
       2,643         (788     -       39        282        -        (78)        10               (1)        (30)        2,079        (703)  
EUR millions    January
1, 2016
     Total gains
/ losses in
income
statement 1
    Total gains /
losses in OCI 2
    Purchases      Sales      Settlements      Net
exchange
differences
     Reclassification      Transfers
from
Level I
and
Level II
     Transfers
to Level I
and
Level II
    

Transfers to

disposal

groups

     December
31, 2016
    

 

Total unrealized gains

and losses for the

period recorded in the

P&L for instruments

held at

December 31, 2016 ³

 

 Financial assets carried at fair value available-for-sale investments

                                      

 Shares

     293         27       (7)       161         (92)        (1)        11                                    393        -  

 Debt securities

     4,144         1       92        443         (262)        (287)        39               651        (2,854)               1,966        -  

 Other investments at fair value

     928         (177     20        240         (133)        (141)        18                      (1)               754        -  
       5,365         (150     105        845         (487)        (429)        68        -         651        (2,856)               3,112        -  

 Fair value through profit or loss

                                      

 Shares

            3             48                                                          50        3  

 Debt securities

            (1                                                                   6        -  

 Other investments at fair value

     1,265         (44           178         (277)               35               419        (321)               1,257        (42)  

 Investments for account of policyholders

     1,745         22             469         (395)               (35)               8        (88)               1,726        23  

 Derivatives

     222         (285           75         108               (12)                                    108        (287)  
       3,239         (305           770         (564)               (11)        -         427        (409)               3,146        (303)  

 Financial liabilities carried at fair value

                                      

 Investment contracts for account of policyholders

     156         (14           45         (12)               2                      (2)               176        1  

 Derivatives

     2,104         542             -          (207)               28                                    2,467        562  
       2,260         528             45         (219)               31                      (2)               2,643        563  

1 Includes impairments and movements related to fair value hedges. Gains and losses are recorded in the line item results from financial transactions of the income statement.

2 Total gains and losses are recorded in line items Gains/ (losses) on revaluation of available-for-sale investments and (Gains)/losses transferred to the income statement on disposal and impairment of available-for-sale investment of the statement of other comprehensive income.

3 Total gains / (losses) for the period during which the financial instrument was in Level III.

 

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During the first nine months of 2017, Aegon transferred certain financial instruments from Level I and II to Level III of the fair value hierarchy. The reason for the change in level was that the market liquidity for these securities decreased, which led to a change in market observability of prices. Prior to transfer, the fair value for the Level II securities was determined using observable market transactions or corroborated broker quotes respectively for the same or similar instruments. The amount of assets and liabilities transferred to Level III was EUR 468 million (full year 2016: EUR 1,077 million). Since the transfer, all such assets have been valued using valuation models incorporating significant non market-observable inputs or uncorroborated broker quotes.

Similarly, during the first nine months of 2017, Aegon transferred EUR 398 million (full year 2016: EUR 3,266 million) of financial instruments from Level III to other levels of the fair value hierarchy. The change in level was mainly the result of a return of activity in the market for these securities and that for these securities the fair value could be determined using observable market transactions or corroborated broker quotes for the same or similar instruments.

The following table presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level III financial instruments.

 

 

Overview of significant unobservable inputs

 

 

EUR millions   

 

Carrying amount
September 30, 2017

     Valuation technique 1    

 

Significant unobservable
input 2

     Range (weighted average)  

 Financial assets carried at fair value

   available-for-sale investments

            

Shares

     236        Net asset value 4       n.a.        n.a.  
       279        Other       n.a.        n.a.  
       515                            

 

Debt securities

            
       1,099        Broker quote       n.a.        n.a.  
       116        Discounted cash flow       Credit spread        0.95% - 2.82% (1.34%)  
       404        Other       n.a.        n.a.  
       1,618                            

 

Other investments at fair value

            

Tax credit investments

     661        Discounted cash flow       Discount rate        5.6%  

Investment funds

     34        Net asset value 4       n.a.        n.a.  

Other

     25        Other       n.a.        n.a.  

September 30, 2017

     720                            
                                    
   

Fair value through profit or loss

            

Shares

     224        Other       n.a.        n.a.  

Debt securities

     43        Other       n.a.        n.a.  
       267                            

 

Other investments at fair value

            

Investment funds

     1,259        Net asset value  4      n.a.        n.a.  

Other

     6        Other       n.a.        n.a.  
       1,265                            

 

Derivatives

            
   

Longevity swap

     21        Discounted cash flow       Mortality        n.a.  

Other

     12        Other       n.a.        n.a.  

September 30, 2017

     33                            

Total financial assets at fair value 3

     4,416                            
   

Financial liabilities carried at fair value

            

Derivatives

            

Embedded derivatives in insurance contracts

     1,855        Discounted cash flow       Own Credit spread        0.25% - 0.35% (0.27%)  

Longevity swap

     10        Discounted cash flow       Mortality        n.a.  

Other

     28        Other       n.a.        n.a.  

Total financial liabilities at fair value

     1,893                            

1 Other in the table above (column Valuation technique) includes investments for which the fair value is uncorroborated and no broker quote is received.

2 Not applicable (n.a.) has been included when no significant unobservable assumption has been identified.

3 Investments for account of policyholders are excluded from the table above and from the disclosure regarding reasonably possible alternative assumptions. Policyholder assets, and their returns, belong to policyholders and do not impact Aegon’s net income or equity. The effect on total assets is offset by the effect on total liabilities. Derivatives exclude derivatives for account of policyholders amounting to EUR 4 million.

4 Net asset value is considered the best approximation to the fair value of these financial instruments.

 

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The description of Aegon’s methods of determining fair value is included in the consolidated financial statements for 2016. For reference purposes, the valuation techniques included in the table above are described in more detail on the following pages.

Shares

When available, Aegon uses quoted market prices in active markets to determine the fair value of its investments in shares. Fair values for unquoted shares are estimated using observations of the price/earnings or price/cash flow ratios of quoted companies considered comparable to the companies being valued. Valuations are adjusted to account for company-specific issues and the lack of liquidity inherent in an unquoted investment. Adjustments for illiquidity are generally based on available market evidence. In addition, a variety of other factors are reviewed by management, including, but not limited to, current operating performance, changes in market outlook and the third-party financing environment.

Available-for-sale shares include shares in a Federal Home Loan Bank (FHLB) for an amount of EUR 207 million (December 31, 2016: EUR 237 million) that are measured at par, which are reported as part of Other in the column Valuation technique. A FHLB has implicit financial support from the United States government. The redemption value of the shares is fixed at par and they can only be redeemed by the FHLB.

Debt securities

Aegon’s portfolio of debt securities can be subdivided in Residential mortgage-backed securities (RMBS), Commercial mortgage-backed securities (CMBS), Asset-backed securities (ABS), Corporate bonds and Government debt. Below relevant details in the valuation methodology for these specific types of debt securities are described.

Valuations of RMBS, CMBS and ABS are monitored and reviewed on a monthly basis. Valuations per asset type are based on a pricing hierarchy which uses a waterfall approach that starts with market prices from indices and follows with third-party pricing services or brokers. The pricing hierarchy is dependent on the possibilities of corroboration of the market prices. If no market prices are available, Aegon uses internal models to determine fair value. Significant inputs included in the internal models are generally determined based on relative value analyses, which incorporate comparisons to instruments with similar collateral and risk profiles. Market standard models may be used to model the specific collateral composition and cash flow structure of each transaction.

Valuations of corporate bonds are monitored and reviewed on a monthly basis. The pricing hierarchy is dependent on the possibility of corroboration of market prices when available. If no market prices are available, valuations are determined by a discounted cash flow methodology using an internally calculated yield. The yield is comprised of a credit spread over a given benchmark. In all cases, the benchmark is an observable input. The credit spread contains both observable and unobservable inputs. Aegon starts by taking an observable credit spread from a similar bond of the given issuer, and then adjusts this spread based on unobservable inputs. These unobservable inputs may include subordination, liquidity and maturity differences. The weighted average credit spread used in valuation of corporate bonds has decreased to 1.3% (December 31, 2016: 3.1%).

If available, Aegon uses quoted market prices in active markets to determine the fair value of its Government debt investments. If Aegon cannot make use of quoted market prices, market prices from indices or quotes from third-party pricing services or brokers are used.

Tax credit investments

The fair value of tax credit investments is determined by using a discounted cash flow valuation technique. This valuation technique takes into consideration projections of future capital contributions and distributions, as well as future tax credits and the tax benefits of future operating losses. The present value of these cash flows is calculated by applying a discount rate. In general, the discount rate is determined based on the cash outflows for the investments and the cash inflows from the tax credits/tax benefits (and the timing of those cash flows). These inputs are unobservable in the market place. The discount rate used in valuation of tax credit investments remained level at 5.6% (December 31, 2016: 5.6%).

 

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Investment funds

Investment funds include real estate funds, private equity funds and hedge funds. The fair values of investments held in non-quoted investment funds are determined by management after taking into consideration information provided by the fund managers. Aegon reviews the valuations each month and performs analytical procedures and trending analyses to ensure the fair values are appropriate.

Derivatives

Where quoted market prices are not available, other valuation techniques, such as option pricing or stochastic modeling, are applied. The valuation techniques incorporate all factors that a typical market participant would consider and are based on observable market data when available. Models are validated before they are used and calibrated to ensure that outputs reflect actual experience and comparable market prices.

Fair values for exchange-traded derivatives, principally futures and certain options, are based on quoted market prices in active markets. Fair values for over-the-counter (“OTC”) derivatives represent amounts estimated to be received from or paid to a third party in settlement of these instruments. These derivatives are valued using pricing models based on the net present value of estimated future cash flows, directly observed prices from exchange-traded derivatives, other OTC trades, or external pricing services. Most valuations are derived from swap and volatility matrices, which are constructed for applicable indices and currencies using current market data from many industry standard sources. Option pricing is based on industry standard valuation models and current market levels, where applicable. The pricing of complex or illiquid instruments is based on internal models or an independent third party. For long-dated illiquid contracts, extrapolation methods are applied to observed market data in order to estimate inputs and assumptions that are not directly observable. To value OTC derivatives, management uses observed market information, other trades in the market and dealer prices.

Some OTC derivatives are so-called longevity derivatives. The payout of longevity derivatives is linked to publicly available mortality tables. The derivatives are measured using the present value of the best estimate of expected payouts of the derivative plus a risk margin. The best estimate of expected payouts is determined using best estimate of mortality developments. Aegon determined the risk margin by stressing the best estimate mortality developments to quantify the risk and applying a cost-of-capital methodology. The most significant unobservable input for these derivatives is the (projected) mortality development.

Aegon normally mitigates counterparty credit risk in derivative contracts by entering into collateral agreements where practical and in ISDA (International Swaps and Derivatives Association) master netting agreements for each of the Group’s legal entities to facilitate Aegon’s right to offset credit risk exposure. Changes in the fair value of derivatives attributable to changes in counterparty credit risk were not significant.

Embedded derivatives in insurance contracts including guarantees

All bifurcated guarantees for minimum benefits in insurance and investment contracts are carried at fair value. These guarantees include guaranteed minimum withdrawal benefits (GMWB) in the United States, United Kingdom and Japan which are offered on some variable annuity products and are also assumed from a ceding company; minimum investment return guarantees on insurance products offered in the Netherlands, including group pension and traditional products; variable annuities sold in Europe and Japan.

Since the price of these guarantees is not quoted in any market, the fair values of these guarantees are based on discounted cash flows calculated as the present value of future expected payments to policyholders less the present value of assessed rider fees attributable to the guarantees. Given the complexity and long-term nature of these guarantees which are unlike instruments available in financial markets, their fair values are determined by using stochastic models under a variety of market return scenarios. A variety of factors are considered including credit spread, expected market rates of return, equity and interest rate volatility, correlations of market returns, discount rates and actuarial assumptions. The most significant unobservable factor is discount rate. The credit spread used in the valuations of embedded derivatives in insurance contracts has decreased to 0.3% (December 31, 2016: 0.4%).

 

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The expected returns are based on risk-free rates. Aegon added a premium to reflect the credit spread as required. The credit spread is set by using the credit default swap (CDS) spreads of a reference portfolio of life insurance companies (including Aegon), adjusted to reflect the subordination of senior debt holders at the holding company level to the position of policyholders at the operating company level (who have priority in payments to other creditors). Aegon’s assumptions are set by region to reflect differences in the valuation of the guarantee embedded in the insurance contracts.

Since many of the assumptions are unobservable and are considered to be significant inputs to the liability valuation, the liability included in future policy benefits has been reflected within Level III of the fair value hierarchy.

Effect of reasonably possible alternative assumptions

The effect of changes in unobservable inputs on fair value measurement were not significantly different than those that were applied to the consolidated financial statements as at and for the year ended December 31, 2016.

Fair value information about financial instruments not measured at fair value

The following table presents the carrying values and estimated fair values of financial assets and liabilities, excluding financial instruments which are carried at fair value on a recurring basis.

 

 

Fair value information about financial instruments not measured at fair value

 

EUR millions   

 

Carrying amount
September 30, 2017

   

 

Total estimated fair value
September 30, 2017

    

 

Carrying amount
            December 31, 2016

    

 

Total estimated fair value
December 31, 2016

Assets

              

Mortgage loans - held at amortized cost

     33,586        37,707         34,206       38,499 

Private loans - held at amortized cost

     3,412        3,808         3,166       3,569 

Other loans - held at amortized cost

     2,168        2,168         2,441       2,441 
     

Liabilities

              

Subordinated borrowings - held at amortized cost

     764        916         767       844 

Trust pass-through securities - held at amortized cost

     137        135         156       141 

Borrowings - held at amortized cost

     14,152        14,511         12,543       12,935 

Investment contracts - held at amortized cost

     16,697        17,071         19,217       19,748 

Financial instruments for which carrying value approximates fair value

Certain financial instruments that are not carried at fair value are carried at amounts that approximate fair value, due to their short-term nature and generally negligible credit risk. These instruments include cash and cash equivalents, short-term receivables and accrued interest receivable, short-term liabilities, and accrued liabilities. These instruments are not included in the table above.

17. Deferred expenses

 

                
EUR millions    Sept. 30, 2017                               Dec. 31, 2016
     

Deferred policy acquisition costs (DPAC) for insurance contracts and investment contracts with discretionary participation features

     9,831       10,882 

Deferred cost of reinsurance

     46       60 

Deferred transaction costs for investment management services

     410      

481 

Total deferred expenses

     10,288       11,423 

The divestment of the pay-out annuity and BOLI/COLI businesses in the US resulted in a write off regarding deferred policy acquisition costs of EUR 205 million. In addition, deferred policy acquisition costs are predominantly impacted by unfavorable currency translation adjustments.

 

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18. Intangible assets

 

                  
EUR millions    Sept. 30, 2017                           Dec. 31, 2016
     

Goodwill

     324       294 

VOBA

     1,178       1,399 

Future servicing rights

     100       64 

Software

     42       50 

Other

     37      

12 

Total intangible assets

     1,682       1,820 

Intangible assets, except for goodwill, are predominantly impacted by periodic amortization of balances and changes in foreign exchange rates. The acquisition of Cofunds Ltd. in January 2017 resulted in the addition of goodwill amounting to EUR 56 million and of “customer intangibles” (included in the line “Other”) amounting to EUR 29 million. The divestment of the payout annuity and BOLI/COLI businesses in the US resulted in a write off of VOBA of EUR 18 million. Future servicing rights increased by EUR 36 million mainly due to the acquisition of Nordea second-pillar pension fund. Refer to note 28 Acquisitions/divestments.

19. Share capital

 

                  
EUR millions    Sept. 30, 2017                        Dec.  31, 2016
     

Share capital - par value

     322       319 

Share premium

     7,731      

7,873 

Total share capital

     8,053       8,193 
     

Share capital - par value

         

Balance at January 1

     319       328 

Dividend

         

Shares withdrawn

         

(10)

Balance

     322       319 
     

Share premium

         

Balance at January 1

     7,873       8,059 

Share dividend

     (142)     

(186)

Balance

     7,731       7,873 

Basic and diluted earnings per share

 

                                  
EUR millions    3Q 2017            3Q 2016         YTD 2017            YTD 2016
     

Earnings per share (EUR per share)

               

Basic earnings per common share

     0.21         0.16         0.62       0.01 

Basic earnings per common share B

     0.01                0.02      

Diluted earnings per common share

     0.21         0.16         0.62       0.01 

Diluted earnings per common share B

     0.01                0.02      
     

Earnings per share calculation

               

Net income / (loss) attributable to owners of Aegon N.V.

     469         358         1,376       116 

Coupons on other equity instruments

     (35)        (36)        (99)      (100)

Earnings attributable to common shares and common shares B

     434         322         1,276       16 
     

Earnings attributable to common shareholders

     431         320         1,267       16 

Earnings attributable to common shareholders B

                        -
     

Weighted average number of common shares outstanding (in millions)

     2,061         2,037         2,039       2,052 

Weighted average number of common shares B outstanding (in millions)

     583         568         573       578 

 

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Interim dividend 2017

On September 13, 2017 Aegon paid an interim dividend 2017 in cash or stock at the election of the shareholder. The cash dividend amounted to EUR 0.13 per common share and the stock dividend amounted to one new Aegon common share for every 36 common shares held. Dividend paid on common shares B amounted to 1/40th of the dividend paid on common shares. The interim dividend 2017 is paid in cash or in stock at the election of the shareholder. The stock fraction is based on Aegon’s average share price as quoted on Euronext Amsterdam, using the high and low of each of the five trading days from September 4 up to and including September 8, 2017. The value of the stock dividend and the cash dividend are approximately equal in value and 43% of shareholders elected to receive the stock dividend. The remaining 57% opted for cash dividend. The average share price calculated on this basis amounted to EUR 4.7033. The stock dividend and the cash dividend are approximately equal in value.

Final dividend 2016

The Annual General Meeting of Shareholders on May 19, 2017, approved a final dividend for the year 2016 of EUR 0.13 per common share in either cash or stock. The stock dividend amounted to one new Aegon common share for every 35 common shares held. After taking into account the interim dividend 2016 of EUR 0.13 per common share, this resulted in a total 2016 dividend of EUR 0.26 per common share. Final dividend for the year and total 2016 dividend per common share B amounted to 1/40th of the dividend paid on common shares.

The final dividend 2016 is paid in cash or in stock at the election of the shareholder. The value of the stock dividend and the cash dividend are approximately equal in value and 46% of shareholders elected to receive the stock dividend. Those who elected to receive a stock dividend received one Aegon common share for every 35 common shares held. The stock fraction is based on Aegon’s average share price as quoted on Euronext Amsterdam, using the high and low of each of the five trading days from June 12 up to and including June 16, 2017. The average share price calculated on this basis amounted to EUR 4.5254. The dividend was paid as of June 23, 2017.

20. Insurance contracts

Insurance contracts decreased by EUR 8.7 billion to EUR 110.8 billion compared to December 31, 2016 mainly due to changes in foreign exchange rates.

21. Insurance contracts for account of policyholders

Insurance contracts for account of policyholders decreased by EUR 2.1 billion to EUR 118.8 billion compared to December 31, 2016. An increase in insurance liabilities driven by received gross premiums and deposits, and by an increase in the market value of underlying assets, was more than offset by changes in foreign exchange rates and insurance liabilities released. In addition, the reclassification to held for sale of the liabilities related to Aegon Ireland plc. of EUR 1.3 billion contributed to the decrease.

22. Investment contracts

Investment contracts decreased by EUR 2.6 billion to EUR 17.0 billion compared to December 31, 2016 mainly due to an accelerated reduction of run-off balances in the first quarter.

23. Investment contracts for account of policyholders

The decrease of Investment contracts for account of policyholders of EUR 8.7 billion to EUR 76.0 billion compared to December 31, 2016 includes the reclassification of the liabilities related to Aegon Ireland plc. as held for sale. Please refer to note 25 Assets and Liabilites held for sale for more details. In addition, changes in foreign exchange rates also contributed to the decrease.

 

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24. Borrowings

 

                  
EUR millions    Sept. 30, 2017      Dec. 31, 2016
     

Capital funding

     2,299       2,386 

Operational funding

     12,403      

10,766 

Total borrowings

     14,702       13,153 

Included in borrowings is EUR 550 million relating to borrowings measured at fair value (December 31, 2016: EUR 610 million).

During the first nine months of 2017, the operational funding increased EUR 1.7 billion due to new FHLB advances and a EUR 0.5 billion covered bond issuance in the Netherlands. This was partly offset by a decrease of EUR 0.5 billion as a result of foreign exchange losses on the US dollar positions.

On July 18, 2017, Aegon redeemed unsecured notes with a coupon of 3%, issued in 2012. The principal amount of EUR 500 million was repaid with accrued interest. On August 30, 2017 Aegon issued EUR 500 million senior unsecured notes, due August 30, 2018. The notes were issued under Aegon’s USD 6 billion debt issuance program at a price of 100.157%, and will carry a coupon of 0.00%.

25. Assets and Liabilities held for sale

Assets and liabilities held for sale include disposal groups whose carrying amount will be recovered principally through a sale transaction rather than through continuing operations. This relates to businesses for which a sale is agreed upon or a sale is highly probable at the balance sheet date but for which the transaction has not yet fully closed.

Aegon Ireland

On August 9, 2017, Aegon agreed to sell Aegon Ireland plc. The sales price will amount to 81% of the Solvency II Own Funds of Aegon Ireland at the end of 2017. As the transaction is contingent on certain closing and market conditions until closing of the transaction, the book loss is uncertain. The transaction is subject to customary regulatory approvals and is expected to close in the first quarter of 2018.

Aegon Ireland is included in the United Kingdom operating segment.

Aegon UK

In 2016, Aegon reclassed certain assets and liabilities to the assets and liabilities held for sale line, following the sale of its UK annuity portfolio. In 2017, following court approval on the Part VII1 transfers, the sale of the annuity portfolio to Rothesay Life and Legal & General was completed. As a consequence the assets held for sale which were on the balance sheet per December 31, 2016, of EUR 8,705 million and the liabilities held for sale on the balance sheet per December 31, 2016, of EUR 8,816 million have been derecognized. The UK annuity portfolio is included in the United Kingdom operating segment. Also refer to note 28 Acquisitions/divestments.

1 A Part VII transfer is a court-sanctioned legal transfer of some or all of the policies of one company to another governed by Part VII of the Financial Services and Markets Act 2000.

 

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The table below presents the major classes of assets and liabilities of Aegon Ireland plc included in Assets classified as held for sale and Liabilities classified as held for sale on the condensed consolidated statement of financial position:

 

 

Condensed consolidated statement of financial position

Entities held for sale

 

     
EUR millions    Sept. 30, 2017

Assets

    

Cash and cash equivalents

   269 

Investments

   143 

Investments for account of policyholders

   4,723 

Derivatives

   86 

Deferred expenses

  

Other assets and receivables

   16 

Intangible assets

  

Total assets

   5,244 

 

Liabilities

    

Insurance contracts for account of policyholders

   1,347 

Investment contracts for account of policyholders

   3,477 

Derivatives

   86 

Other liabilities

   68 

Total liabilities

   4,977 

Fair value measurement

The fair value hierarchy of financial assets and liabilities (measured at fair value), which are presented as held for sale is included below. The fair value hierarchy consists of three levels. Reference is made to note 16 for more details on the fair value hierarchy.

 

 

Fair value hierarchy

 

                               
   
EUR millions    Level I      Level II      Level III      Total  
     

As at September 30, 2017

               

 

  Financial assets carried at fair value

               

  Fair value through profit or loss

               

 Shares

     143          -          -           143    

 Investments for account of policyholders

     1,666          3,057          -           4,723    

 Derivatives

     -          86          -           86    

  Total Fair value through profit or loss

     1,809          3,143          -          4,953    

  Total financial assets at fair value

     1,809          3,143          -          4,953    

 

  Financial liabilities carried at fair value

               

 Investment contracts for account of policyholders

     -          3,477          -           3,477    
 Derivatives      -          56          30          86    
  Total financial liabilities at fair value      -          3,533          30          3,562    

26. Capital management and solvency

Capital adequacy

The capitalization of the Aegon Group and its operating units is managed in relation to the most stringent of local regulatory requirements, rating agency requirements and/or self-imposed criteria. Aegon manages its Solvency II capital in relation to the required capital. Under Aegon’s capital management framework the own funds are managed such that the Group Solvency II ratio remains within the target range of 150% - 200%. This target range has been updated (previous target range: 140% - 170%) in line with a revision of Aegon’s group capital management policy.

 

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Together with this capital policy update, Aegon agreed with the Dutch Central Bank (DNB) to apply a revised method to calculate the Solvency II contribution of the Aegon US Insurance entities under Deduction & Aggregation (D&A), affecting Aegon’s tiering of capital, retrospectively as of 2Q, 2017. It includes lowering of the conversion factor from 250% to 150% RBC Company Action Level and reducing own funds by a 100% RBC Company Action Level requirement to reflect transferability restrictions. The methodology is subject to annual review. This methodology is consistent with EIOPA’s guidance on group solvency calculation in the context of equivalence, and in line with methods applied by other European peer companies. As a consequence, this adjustment improves the comparability of capital positions of European insurance groups with substantial insurance activities in the US. The impact on Tiering is included in the table in the Capital quality section below.

Capital quality

Aegon’s capital consists of 3 Tiers as an indication of its quality, with Tier 1 capital ranking highest. The Group own funds do not include any impact from contingent liabilities potentially arising from unit-linked products sold, issued or advised on by Aegon in the Netherlands in the past as the potential liability cannot be reliably quantified at this point. Further, the available own funds number reflects Aegon’s interpretation of Solvency II requirements which is subject to supervisory review.

The below table provides the composition of Aegon’s available own funds across Tiers:

 

     

 

September 30, 2017 ¹

Available own

funds

    

 

December 31, 2016 ¹
Available own funds

    

 

December 31, 2016

Available own funds

         

Tier 1 - unrestricted

     10,162        10,081        10,656       

Tier 1 - restricted

     3,576        3,817        3,817       

Tier 2

     1,216        1,291        2,008       

Tier 3

     689        768        1,638           

Total available own funds

     15,644        15,957        18,119           

1 The tiering information is based on the revised method which was confirmed by DNB on August 8, 2017.

On a comparable basis, under the revised methodology Aegon’s own funds reduced by EUR 1.9 billion at December 31, 2016. This is reflected through eliminating deferred tax balances, recorded in Tier 3 for an amount of EUR 0.9 billion and Tier 2 for an amount of EUR 0.7 billion and eliminating Tier 1 – unrestricted of EUR 0.6 billion.

As at September 30, 2017, Tier 1 capital accounted for 88% of own funds (2016: 87%; pro forma number based on revised method), including EUR 3,077 million of junior perpetual capital securities (2016: EUR 3,309 million) and EUR 499 million of perpetual cumulative subordinated bonds (2016: EUR 508 million) which are both classified as grandfathered restricted Tier 1 capital.

The grandfathered restricted Tier 1 and Tier 2 capital instruments are grandfathered such that they are considered as capital under the Solvency II framework for up to 10 years as from January 1, 2016.

Tier 3 capital as of September 30, 2017, is comprised of deferred tax assets balances related to Solvency II entities.

 

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IFRS-EU equity compared to Solvency II own funds

 

             
EUR millions    September 30, 2017 ¹     December 31, 2016 ¹     December 31, 2016
   

Shareholders’ Equity

     20,108       20,913     20,913 

IFRS adjustments for Other Equity Instruments and non controlling interests

     3,806       3,821     3,821 

Group Equity

     23,914       24,734     24,734 

Solvency II revaluations

     (5,119     (5,634   (5,634)

Excess of Assets over Liabilities

     18,795       19,100     19,100 

Availability adjustments

     (599     (361   (361)

Fungibility restrictions 2

     (699     (619   (619)

Transferability restrictions 3

     (1,852     (2,162  

Available own funds

     15,644       15,957     18,119 

1 The own funds information is based on the revised method which was confirmed by DNB on August 8, 2017.

2 Amongst others, this contains the exclusion of Aegon Bank

3 This includes the transferability restriction related to the new RBC CAL conversion methodology

The Solvency II revaluations of EUR 5,119 million (2016: EUR 5,634 million) stem from the difference in valuation between IFRS-EU and Solvency II frameworks, which can be grouped into three categories:

 

  

Items that are not recognized under Solvency II. The most relevant examples of this category for Aegon include Goodwill, DPAC and other intangible assets (EUR 2,037 million, 2016: EUR 2,118 million);

 

  

Items that have a different valuation treatment between IFRS-EU and Solvency II. Solvency II is a market consistent framework hence all assets and liabilities are to be presented at fair value while IFRS-EU also includes other valuation treatments in addition to fair value. The most relevant examples of this category for Aegon Group include Loans and Mortgages, Reinsurance Recoverables and Technical provisions. The revaluation difference stemming from this category amounted to EUR (1,805) million (2016: EUR (1,924) million) compared to the IFRS-EU Statement of Financial Position;

 

  

The Net Asset Value of subsidiaries that are included under the Deduction & Aggregation method (on provisional equivalence or Standard Formula basis) in the Group Solvency II results. The revaluation difference stemming from this category amounted to EUR (5,351) million (2016: EUR (5,828) million) compared to the IFRS-EU Statement of Financial Position.

The availability adjustments are changes to the availability of own funds of Aegon Group in accordance with Solvency II requirements. Examples include the adjustments for subordinated liabilities, ring-fenced fund, treasury shares and foreseeable dividend (if applicable).

Fungibility restrictions limit the availability of own funds on Aegon Group level as prescribed by Supervisory Authorities. These limitations refer to charitable trusts in the Americas for which the local Supervisory Authority could limit the upstream of capital to the Group, and Aegon Bank which is under a different regulatory regime but under the same Supervisory Authority and therefore excluded for Solvency II purposes.

Finally, Transferability restrictions reflect the restrictions on US Life Companies DTA and capping of Tier 1 unrestricted own funds as a consequence of the new RBC CAL conversion methodology as described above.

27. Commitments and contingencies

The U.S. Securities and Exchange Commission is conducting a formal investigation related to certain investment strategies offered through mutual funds, variable products and separately managed accounts. These strategies used quantitative models developed by one of the former portfolio managers of Aegon’s US investment management business unit. Among other things, the investigation relates to the operation of and/or the existence of errors in the quantitative models in question and related disclosures. The funds and strategies under review were sub-advised, advised or marketed by Aegon’s US group companies. The models are no longer being used, although some of the funds are still being offered. The money management strategies are no longer being offered. Aegon is cooperating fully with the investigation.

 

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Government investigations, including this one, may result in the institution of administrative, injunctive or other proceedings and/or the imposition of monetary fines, penalties and/or disgorgement, as well as other remedies, sanctions, damages and restitutionary amounts. While Aegon is unable to predict what action, if any, the SEC might take and is unable to predict the costs to or other impact on Aegon of any such action, there can be no assurances that this matter or other government investigations will not have a material and adverse effect on Aegon’s reputation, financial position, results of operations or liquidity.

There have been no other material changes in contingent assets and liabilities as reported in the 2016 consolidated financial statements of Aegon.

28. Acquisitions / divestments

On January 1, 2017, Aegon completed the acquisition of Cofunds Ltd., following regulatory approval. The purchase of the Cofunds Ltd. business was done through a sale and purchase agreement to acquire all the shares and platform assets. The total consideration of the acquisition amounted to GBP 147 million (EUR 171 million). The fair value of the net assets amounted to GBP 99 million (EUR 116 million), of which GBP 25 million (EUR 29 million) related to “customer intangibles”, resulting in goodwill of GBP 48 million (EUR 56 million). The value of the transferred customer investments as per January 1, 2017 amounted to approximately GBP 82 billion (EUR 96 billion) and is not recognized on Aegon’s balance sheet.

On June 28, 2017, Aegon completed its transaction to divest its two largest US run-off businesses, the payout annuity business and Bank Owned Life Insurance/ Corporate Owned Life Insurance business (BOLI/COLI). Under the terms of the agreement, Aegon’s Transamerica life subsidiaries has reinsured USD 14 billion of liabilities. The transaction resulted in a book gain of USD 250 million (EUR 231 million), reported in the line other income in the condensed consolidated income statement. The book gain consisted of a loss on the reinsurance transaction which is more than offset by the reclassification of gains from Other Comprehensive Income following the disposal of assets to fund the transaction.

The loss on the reinsurance transaction amounted to USD 1,813 million (EUR 1,675 million) being the difference of the reinsurance premium paid and the reinsurance asset received related to the insurance liabilities. Upon disposal an amount of USD 979 million (EUR 905 million) and USD 1,018 million (EUR 941 million) respectively related to revaluation reserves and cash flow hedging reserves has been reclassified from Other Comprehensive Income into the income statement. Gains on sale of certain assets carried at amortized cost backing the insurance liabilities amount to USD 94 million (EUR 87 million). Other expenses related to the transaction, including cost of sale, amounted to USD 28 million (EUR 26 million).

On June 30, 2017, following court approval on the Part VII transfer, the sale of the annuity portfolio to Rothesay Life has been completed. For more details related to the sale of the UK annuity portfolio, refer to the Annual Report 2016.

On August 2, 2017, Aegon Poland has received approval by the Polish Financial Supervision Authority to take over the management of the Nordea second-pillar pension fund.

On August 9, 2017, Aegon agreed to sell Aegon Ireland plc. The sales price will amount to 81% of the Solvency II Own Funds of Aegon Ireland at the end of 2017. This transaction further optimizes its portfolio of businesses. As the transaction is contingent on certain closing and market conditions until closing of the transaction, the book loss is uncertain. This divestment is expected to have an immaterial impact on income before tax and underlying earnings before tax going forward. The transaction is subject to customary regulatory approvals and is expected to close in the first quarter of 2018.

On September 22, 2017, following court approval on the Part VII transfer, the sale of the annuity portfolio to Legal & General has been completed. For more details related to the sale of the UK annuity portfolio, refer to the Annual Report 2016.

 

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29. Post reporting date events

Share buyback

To neutralize the dilutive effect of the 2016 final dividend and the 2017 interim stock dividend paid in shares, Aegon is executing a program to repurchase 51,864,626 common shares. Aegon has committed to the repurchase of the common shares by engaging a third party to execute the transactions on its behalf. These transactions have commenced on October 2, 2017, and are expected to be completed on, or before, December 15, 2017. These shares will be held as treasury shares and will be used to cover future stock dividends.

Unirobe Meeùs Groep

On November 1, 2017, Aegon completed the sale of Unirobe Meeùs Groep (UMG), an independent financial advisory group, for a total consideration of EUR 295 million. The divestment will lead to a book gain of approximately EUR 180 million, which will be reported in Other income in the fourth quarter. As a consequence of this transaction annual income before tax and underlying earnings before tax will decrease by approximately EUR 20 million going forward.

 

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To: The Supervisory Board and the Executive Board of Aegon N.V.

Review report

Introduction

We have reviewed the accompanying condensed consolidated interim financial information for the nine-month period ended September 30, 2017, of Aegon N.V., The Hague, as set out on page 2 to 31, which comprises the condensed consolidated statement of financial position as at September 30, 2017, the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of changes in equity, the condensed consolidated cash flow statement and the selected explanatory notes for the nine-month period then ended. We have not reviewed the condensed consolidated income statement and the condensed consolidated statement of comprehensive income for the three-month period ended as at September 30, 2017. Management is responsible for the preparation and presentation of these condensed consolidated interim financial statement in accordance with IAS 34, ‘Interim Financial Reporting’ as adopted by the European Union. Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope

We conducted our review in accordance with Dutch law including standard 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Dutch auditing standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial statements as at and for the nine-month period ended September 30, 2017, are not prepared, in all material respects, in accordance with IAS 34, ‘Interim Financial Reporting’ as adopted by the European Union.

Amsterdam, November 8, 2017

PricewaterhouseCoopers Accountants N.V.

Original has been signed by

R. Dekkers RA

 

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Disclaimers

Cautionary note regarding non-IFRS-EU measures

This document includes the following non-IFRS-EU financial measures: underlying earnings before tax, income tax and income before tax. These non-IFRS-EU measures are calculated by consolidating on a proportionate basis Aegon’s joint ventures and associated companies. The reconciliation of these measures to the most comparable IFRS-EU measure is provided in note 3 ‘Segment information’ of Aegon’s Condensed Consolidated Interim Financial Statements. Aegon believes that these non-IFRS-EU measures, together with the IFRS-EU information, provide meaningful supplemental information about the underlying operating results of

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 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;

  Consequences of a potential (partial) break-up of the euro;

  Consequences of the anticipated exit of the United Kingdom from the European Union;

  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;

  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, 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);

  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;

  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 or a change by Aegon in applying such regulations and policies, voluntarily or otherwise, which may affect Aegon’s reported results and shareholders’ equity;

  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;

  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;

  Aegon’s failure to achieve anticipated levels of earnings or operational efficiencies as well as other cost saving and excess capital and leverage ratio management initiatives; and

  This press release contains information that qualifies, or may qualify, as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

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.

 

LOGO   Unaudited


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Corporate and shareholder information

 

Headquarters      

Aegon N.V.

     

P.O. Box 85

     

2501 CB The Hague

     

The Netherlands

     

+ 31 (0) 70 344 32 10

     

aegon.com

  

 

Group Corporate Communications & Investor Relations

 

Media relations      

+ 31 (0) 70 344 8344

     

[email protected]

     
Investor relations      

+ 31 (0) 70 344 83 05

     

or 877 548 96 68 - toll free, USA only

  

[email protected]

     

 

Publication dates quarterly results 2018   

February 15, 2018

  

Results fourth quarter 2017

  

August 16, 2018

  

Results first half year 2018

  

Aegon’s 3Q 2017 press release and Financial Supplement are available on aegon.com.

About Aegon

Aegon’s roots go back more than 170 years – to the first half of the nineteenth century. Since then, Aegon has grown into an international company, with businesses in more than 20 countries in the Americas, Europe and Asia. Today, Aegon is one of the world’s leading financial services organizations, providing life insurance, pensions and asset management. Aegon’s purpose is to help people achieve a lifetime of financial security. More information: aegon.com.