Jos Streppel, CFO...Nov 13, 2008 · Weathering the global financial crisis Jos Streppel, CFO Cheuvreux Conference – New York City – November 13, 2008. ... driving demand for

Unlocking the global potential 1

Weathering the global financial crisis

Jos Streppel, CFO

Cheuvreux Conference – New York City – November 13, 2008


AEGON at a glance

o Focus on Life & Pensions

o 33,000 employees worldwide

o 40 million customers worldwide

o Revenues 9M08: EUR 8.1 billion

o EUR 350 billion in revenue generating investments

o Underlying earnings before tax 9M08 : EUR 1.8 billion


Focus on life & pensions

Underlying earnings before tax 9M08

99% of earnings generated by core businesses

� Life and protection

� Individual savings and retirement products

� Pensions and asset management

� Institutional products

� Life reinsurance

� Distribution & general insurance 45%

16%

18%

3% 1%

17%


Fundamentally attractive industry

Attractive prospects for life insurance and pension companies:

o Fundamental demographic and economic changes

... generating new customers and new needs…

… driving demand for financial solutions

o Opportunities arising from current market conditions


o Financial markets impacted Q3 earnings, but fundamentals remain intact

o Significant capital buffer to weather the storm

o Committed to maintain capital level equivalent to AA rating requirements

o Unrealized losses are not a proxy for impairments

o AEGON has ample liquidity

o Executing the right strategy

AEGON well positioned


3

1

3 strategic priorities to improve performance

2

Reallocate capital towards

businesses with higher

growth and return

prospects

Improve growth and returns

from existing businesses

Manage AEGON as an

international group

Geographic mix

2007 Target allocation

2012

New markets*

Western Europe

US

Global businesses

* New markets = Central & Eastern Europe, Asia and Latin America

Capital allocation

15-25%

40-50%

25-35%

10%

60%

30%

5-10%


5007(13)(32)(33)

(120)691

Q3 07 Americas The

Netherlands

United

Kingdom

Other countries Holding and

other

Q3 08

o Underlying earnings before tax in Q3 impacted by

– lower fees in US and UK

– reserve strengthening, mainly related to VA’s sold pre-2004 in US

– higher mortality charges in US life reinsurance

– provisioning in NL for unit linked policies and charge on a group of

pension contracts

Underlying earnings impacted by world financial markets turmoil

Underlying earnings before tax (EUR million)

(22)%7%

Underlying earnings development at constant currency

(18)%(39)%(31)%(17)%


Financial markets and impairments had a negative impact

(407)(47)

(384)500

(329)

14(5)

Underlying

earnings Q3 08

Fair value items

performance

Gain/(losses) on

investments

Impairment

charges

Other

income/(charges)

Income tax Net income Q3 08

o Net income in Q3 mainly impacted by underperformance of fair value items

and impairment charges

– Impairment charges mainly related to Lehman Brothers, Washington Mutual

(EUR336m) and US housing related asset-backed securities (EUR46m)

Underlying earnings to net income development in Q3 (EUR million)


Q3 07 Q3 08 Q3 07 Q3 08

Retail life salesAmericas(USD million)

o Total Q3 new life sales down 18% at constant currency

- Financial turmoil impacted sales of high net worth and middle market products in

the US

- Solid annuity and group pension sales in the UK, offset by individual pensions

- Lower group pension sales in NL due to financial turmoil

Q3 07 Q3 08

160192 303302 3972

New life sales

New life salesUnited Kingdom(GBP million)

New life salesThe Netherlands(EUR million)

-16%

+0%

-46%


Q3 07 Q3 08 Q3 07 Q3 08

o Total Q3 net deposits of EUR 1.7 billion

- Fixed annuities deposits in Americas: best quarter since 2003

- Variable annuities deposits in Americas relatively flat

- Strong increase in deposits in Other countries driven by retail mutual funds and

variable annuity sales in Asia

Q3 07 Q3 08

912934 1,811493 474204

Strong growth in net retail deposits

Variable annuitiesAmericas(USD million)

Fixed annuitiesAmericas(USD million)

Total gross depositsOther countries(EUR million)

-2%

+267%

+132%


o Significant risk reductions implemented

- Limited direct equity exposure

- Interest rate risks lowered

- Guarantees on products lowered

- Hedging of guarantees

- Asset and liability matching

o Disciplined liquidity management

o Strong global risk management organization

o Hedged USD cash flows to holding company

- Remainder of 2008 and 2009

- Putting a floor at present levels

- Full impact of USD strengthening

Proactive steps have been taken to improve capital efficiency


~89% of

common

shares

~11% of

common

shares

100% of

preferred

shares

AEGON secured additional core capital of EUR 3 billion

AEGON N.V.

Public Market Dutch StateVereniging AEGON

Capital facility

EUR 3 billion

Non-voting securities

EUR 3 billion

EUR

EU

R


Reinforced capital position

AEGON to reinforce capital buffer significantly above AA level requirements

Substantial buffer to protect against further market deterioration

EUR 8.5 billion

(205%)

Insurance Group Directive

(IGD) surplus capital

EUR 842 million

S&P risk-based insurance

capital model excess

capital in operating units

above AA level

September 30, 2008

EUR 5.0 billion

(160%)

EUR 312 million

June 30, 2008

74%Capital Base Ratio

(debt / equity ratio)71.5%

+ Underlying

earnings

- Market

movements

+ De-risking

+ Capital

releases

Expectedchanges in Q4

+ EUR 3 billion


Capital position after drawdown of additional capital

EUR 312 million

S&P risk-based insurance

capital model excess

capital in operating units

above AA level

Pro-formapost draw down

EUR 312 million

September 30, 2008

EUR 5.0 billion

(160%)

Insurance Group Directive

(IGD) surplus capital

EUR 8.0 billion

(195%)

o Insurance Group Directive surplus capital includes unrealized losses on bond portfolio

o Excluding unrealized losses IGD ratio would be ~225% and ~260% pro-forma

Capital buffer of EUR 3 billion will be initially held at holding level,

therefore not included in excess capital in operating units


o Lowering investment risk

– New money

– Existing portfolio

o Risk transfer through reinsurance

– Fixed annuities

– Non-life catastrophic risk

o Securitizations

Ongoing acceleration of de-risking and capital release

Capital preservation and risk mitigation actions important

to enhance capital buffer

Complete execution on identified capital preservation and risk mitigation

actions of EUR 600 - 800 million in Q4, including:


40%20%

Assumed equity market decline of40%20%

Assumed equity market decline of

Equity market sensitivity increased due to market deterioration

o Lower fees

o Reserve strengthening for VA guarantees (old book before 2004; new VA is delta hedged)

o DAC unlocking*

-700

-1,600

-900

-1,900

* Acceleration of amortization of deferred acquisition costs

o Direct exposure

o Reserve strengthening for guarantees

o Impact of first 20% decline can be absorbed by capital preservation actions

Estimated impact on earnings (12 month period, EUR million)

Estimated impact on capital (EUR million)

Based on equity markets as of September 30, 2008

� Direct

� Fees

� DAC� Guarantees

� Direct

� Fees

� Guarantees


Policyholder

account

35%

Off balance

sheet

28%

General

account

37%

Equities

20%

Indexed

Universal

Life

21%

Private

equity&

hedge funds

21%

Other

39%

Limited direct equity exposure

Total investments

EUR 351 billion

General account

EUR 132 billion

Shares

EUR 3.3 billion

Direct equity exposure limited

Bonds

70%

Loans

18%

Shares

2%

Real estate

2%

Other

8%

As of September 30, 2008


2%1%

Assumed*

interest rate decline of2%1%

Assumed*

interest rate decline of

Interest rate sensitivity

o Lower funding costs

o Higher capital gains

175

270

-250

-450

* Assumes a parallel shift in the yield curve

o Reserve strengthening for guarantees

Impact on earnings (12 month period, EUR million)

Impact on capital (EUR million)

Based on interest rates as of September 30, 2008


� December 31, 2005

0% 10% 20% 30% 40% 50%

IG Corporate & Preferred

Other

Hedge Funds

Private Equity & Real Estate

Common Equity

Convertible Bonds & Pref Stock

Commercial Mortgage Loans

Commercial MBS

MBS & CMO

ABS

Emerging Markets Debt

High Yield Corporate

Cash/Treasuries/Agency

Active management of US investment portfolio

� September 30, 2008

Shifts in US investment portfolioEUR 83.3 billion(*) as per September 30, 2008

o Increased Cash position

o IG Corporate bond actions:

– Reduced total exposure

– Increased diversification

– Increased exposure to non-cyclicals

– Upgraded rating distribution

* excludes policy loans


2002 2003 2004 2005 2006 2007 Q3 YTD

2008

2002 2003 2004 2005 2006 2007 Q3 YTD

2008

Significant shift into higher rated assets

� AA � BIG� BBB� A

Subprime in US investment portfolio

EUR 2.7 billion as per September 30, 2008

CMBS securities in US investment portfolio


o As stated in previous

presentations, AEGON USA has

restructured its asset portfolio

defensively in numerous ways:

– Reducing and upgrading

corporate exposures

– Reducing financial credit

exposures

– Selling most public common

equity exposures

– Upgrading CMBS and subprime

portfolios

– Increasing treasury and liquidity

balances

70% 49%70%74%73%65%40%

86%82%79%76%61%53%45%

� AAA


Reduced exposure to financials

o Actively reduced financial

sector exposure, esp. in 2007

and 2008

o Risk mitigation actions in the

corporate bond portfolio

Financials as % of general account

assets in US investment portfolio


2005 2006 2007 Q3 YTD

2008

14.6% 12.3%15.7%16.4%

Corporate high yield as % of general account assets

0%

1%

2%

3%

4%

5%

6%

2002 2003 2004 2005 2006 2007 Q3

YTD

2008� B � BB� CCC or less


44 4437

27

9

25

1 2 48

17

64

82

48

17

-6-2

2

54

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 YTD

2008

Credit losses in the Americas remain manageable

Credit losses in bps of assets (includes only bonds and mortgages)

o During Q3, impairments in the US totaled USD 540 million

o Products are priced for expected losses of 25 – 30 basis points

o Almost all fixed income instruments are held as Available For Sale securities and as such are only impaired through earnings if

1) we don't have the ability to hold, or

2) we intend to sell them, or

3) we expect to receive less than full principal and interest

average of 25 bps

since 1990


Impact of potential credit impairments manageable

Impact on IFRS net income Impact on available capital

Example:o 100 bps of losses on USD 120 billion of assets*

o 20% DAC offset(possible range 0% – 60%, depending on business line)

o 35% tax offset(depending on geography)

-624

-1.200

-445

240

336

Losses DAC offset Taxes

IFRS net

income

IFRS net

income

-780

-1.200

-550

420

Losses DAC offset Taxes

Impact on

available

capital

Impact on

available

capital

No DAC

offset

(USD million) (EUR million) (USD million) (EUR million)

* includes bonds and mortgages of US fixed income portfolio


Strong liquidity position

Assumptions:

o Extreme possibility of ‘frozen’ markets for years anticipated

o Impaired capital markets liquidity test assumes an extended period and normal liquidity only resuming in 2 years

Results:

o Our liquidity position remains very strong even ignoring contingent liquidity sources

o Under a conservative best estimate basis, AEGON has positive net inflows into 2010

0

20

40

60

80

7day 1mo 3mo 6mo 1yr 18mo 2yr

Liquidity management

(EUR billion)

� Available liquidity under stress scenario� Required liquidity under stress scenario

Stress scenario

This stress scenario assumes:

- severely impaired capital markets liquidity;

- a 3% immediate and permanent increase in interest rates;

- liabilities are assumed to withdraw at their earliest conceivable date.


Conclusions

o Financial markets impacted earnings, but fundamentals remain intact

o Significant capital buffer to weather the storm

o Committed to maintain capital level equivalent to AA rating requirements

o Unrealized losses are not a proxy for impairments

o AEGON has ample liquidity

Well positioned for the future


Q&A

Unlocking the global potential


CFOAEGON Q3 2009 resultsNovember 12, 2009

CEOAEGON Q2 2009 resultsAugust 13, 2009

MBAEGON Analyst and Investor Conference, New YorkJune 9 and 10, 2009

CFOAEGON Q1 2009 results and EV 2008May 14, 2009

SBAEGON Annual General MeetingApril 22, 2009

CEOAEGON Full year 2008 resultsMarch 12, 2009

CEOSociété Générale Conference, ParisDecember 4, 2008

CEOAEGON Analyst and Investor Day, LondonNovember 24, 2008

Upcoming events


Cautionary note regarding forward-looking statements

The statements contained in this presentation 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: believe, estimate, target, intend, may, expect, anticipate, predict,

project, counting on, plan, continue, want, forecast, should, would, is confident, will, and similar expressions as they relate to our company. These statements

are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. We undertake

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 our fixed income investment portfolios; and

- 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 we hold;

� The frequency and severity of insured loss events;

� Changes affecting mortality, morbidity and other factors that may impact the profitability of our insurance products;

� 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;

� Increasing levels of competition in the United States, the Netherlands, the United Kingdom and emerging markets;

� Changes in laws and regulations, particularly those affecting our operations, the products we sell, and the attractiveness of certain products to our

consumers;

� Regulatory changes relating to the insurance industry in the jurisdictions in which we operate;

� Acts of God, acts of terrorism, acts of war and pandemics;

� Changes in the policies of central banks and/or governments;

� Litigation or regulatory action that could require us to pay significant damages or change the way we do business;

� Customer responsiveness to both new products and distribution channels;

� Competitive, legal, regulatory, or tax changes that affect the distribution cost of or demand for our products;

� Our failure to achieve anticipated levels of earnings or operational efficiencies as well as other cost saving initiatives; and

� The impact our adoption of the International Financial Reporting Standards may have on our reported financial results and financial condition.

Cautionary note regarding Regulation G (non-GAAP measure)

This presentation includes non-GAAP financial measures: net underlying earnings, operating earnings before tax, value of new business and embedded

value. Value of new business and embedded value are not based on IFRS, which are used to prepare and report AEGON’s financial statements and should

not be viewed as a substitute for IFRS financial measures. AEGON believes the non-GAAP measures shown herein, together with GAAP information,

provides a meaningful measure for the investment community to evaluate AEGON’s business relative to the businesses of our peers.

Cautionary note regarding forward-looking statements


For questions please contact Investor Relations+31 70 344 8305

[email protected]

P.O. Box 852501 CB The HagueThe Netherlands

Unlocking the global potential

Documents

Jos Streppel, CFO...Nov 13, 2008 · Weathering the global financial crisis Jos Streppel, CFO Cheuvreux Conference – New York City – November 13, 2008. ... driving demand for