jos streppel – cfo

Unlocking the global potential 1

Unlocking the global potential

Jos Streppel – CFO

Sanford Bernstein Conference, London, 24 September 2008


Key messages

AEGON well positioned to weather the storm

o Strong balance sheet

o Substantial financial flexibility

o Ample liquidity

Implementing new growth strategy

o Ambitious targets to increase value of new business, underlying earnings

and return on equity


o Improvements and diversification in US investment portfolio

o AEGON first in market to announce subprime exposure;

transparency to all stakeholders

o Maintained focus on capital management, cash flow and

excess capital to improve capital productivity

o Active risk and asset management:- Average 20% reduction of stakes in financials in 1H08

- 20% -22% reduction of stake in Lehman and AIG

o Despite market conditions, ambitious strategy with clear

targets set

o Weathering financial turmoil, combined with focus on

sustainable and profitable growth

2006

2007

2008

2009

AEGON well positioned for downturn in financial markets


o Risk reductions across the group implemented over last 5 years

- Insignificant direct equity exposure

- Interest rate risks lowered

- Guarantees on products lowered

- Hedging of guarantees

- Asset and liability matching

- Liquidity risk management

o Global risk management organization

- Economic capital model being implemented

AEGON well positioned for downturn in financial markets


Policyholder

account

36%

Off balance

sheet

27%

General

account

37%

Equities

15%

Canadian

Universal

Life

19%

Private

equity&

hedge funds

26%

Other

40%

Insignificant direct equity exposure

Total investments

EUR 344 billion

General account

EUR 127 billion

Shares

EUR 3.5 billion

Direct equity exposure limited to EUR 0.5 billion

Bonds

70%

Loans

18%

Shares

3%

Real estate

2%

Other

7%

As of 30 June 2008


Improvement of quality in US investment portfolio

� AAA � BIG� BBB� A� AA

Subprime investments

CMBS investments

2002 2003 2004 2005 2006 2007 1H08

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

2001 2002 2003 2004 2005 2006 2007 1H08

70% 49%70%74%73%65%40%27%

o Shift to lower risk asset classes

o Allocating more to higher rated

assets

o Stress tests of various MBS

exposures show manageable

losses, assuming a 30% decline in

the US housing market


AEGON USA credit losses are low

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

o US credit impairments of EUR 57 million before tax in Q2 2008,

reflecting the high quality of AEGON’s investment portfolio

o Products are priced for expected losses of 25 – 30 basispoints

44 4437

27

9

25

1 2 48

17

64

82

48

17

-6-2

2 18

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Q1

2008

Q2

2008

average of 22 bps since 1990


20%10%

Assumed equity market decline of20%10%

Assumed equity market decline of

Equity market impact on earnings and capital

o Lower fees

o Reserve strengthening for guarantees

o DAC unlocking** (only for 20% decline)

-200

-450

-200

-500

* Based on equity markets as of June 30, 2008

** Acceleration of amortization of deferred acquisition costs

o Direct exposure

o Reserve strengthening for guarantees

Impact on earnings*

(12 month period, EUR million)

Impact on capital*

(EUR million)


-780

-1,200

-550

420

Losses DAC offset

Deferred

taxes

Impact on

available

capital

Impact on

available

capital

Impact on available capital

-624

-1,200

-445

240

336

Losses DAC offset

Deferred

taxes

IFRS net

income

IFRS net

income

Manageable impact of potential credit impairments

Impact on IFRS net income

No DAC

offset

(USD million) (EUR million)

(USD million) (EUR million)

Assumption:

• 100 bps of losses on

USD 120 billion of assets*

* includes bonds and mortgages of US fixed

• 20% DAC offset

(possible range 0% – 60%,

depending on business line)

• 35% tax offset

(depending on geography)

income portfolio


Strong capital position

84214102(78)

(432)661571,015

1Q08

Excess

Capital

Statutory

earnings

Investments

in country

units

Impact of

dividend

paid to

holding

Other

capital

movements

Change in

target

capital

Net

currency

effects

2Q08

Excess

Capital

Excess capital in operating units (EUR million)

982279

(66)606(514)

(66)51118

574

1Q08

Leverage

Capacity

and Cash

IFRS

Earnings

Currency

translation

changes

Coupons

perpetuals

External

dividends

Dividends

from units

Capital

injections

in units

Other 2Q08

Leverage

Capacity

and Cash

Additional leverage capacity and cash at holding (EUR million)

31 Mar 08 30 Jun 08

Financial flexibility (EUR billion)

1.6

1.8

� Excess capital in country units:

available capital -/- required capital

� Additional leverage capacity and cash


Liquidity risk management is key

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

o Our liquidity position remains

impressive even ignoring

contingent liquidity sources

o Under a conservative best estimate

basis, AEGON has positive net

inflows into 2010

Even under a prolonged stress environment AEGON will not be a “forced

seller” of securities into distressed markets

0

20

40

60

80

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

0

2

4

6

8

Liquidity management

(EUR billion) (Ratio)

� Available liquidity� Required liquidity

Ratio 30 June 2008Limit


3 strategic priorities to improve performance

Improve growth and returns from existing businesses

1

2

3

Reallocate capital towards businesses with higher growth and

return prospects

Manage AEGON as an international group


Ambitious targets

* Net underlying earnings / average shareholder’s equity excluding revaluation reserves

Grow value of new business to EUR 1.25 billion by 2010

o Delivering on increased 2010 target

Earnings growth of at least 10% p.a. to 2012

o Average net underlying earnings growth target in excess of

10% p.a. to 2012 from 2007 base of EUR 2,033 million (at 2007

constant currency)

Return on equity* in excess of 15% by 2012

o Return on equity* to improve to at least 14% by 2010 and

in excess of 15% by 2012 from 12% in 2007


Optimize capital allocation

Geographic mix

2007 Target allocation

2012

New markets*

Western Europe

US

15-25%

40-50%

25-35%

10%

60%

30%

Global businesses5-10%

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

Capital allocationo Continuous assessment of

group portfolio

o Strict strategic and financial

criteria

- Core business:

fits life cycle need

- Growth

- Returns / risk

- Cash generation

Business mix


� AEGON’s current footprint

6th largest life insurer in Spain

Caixa Terrassa2008

Caja Cantabria 2007

Caja Navarra 2006

Caja Badajoz 2005

Caja Mediterráneo2004

JV’s with regional savings banks

EUR 128 millionValue of new business**

EUR 33 millionUnderlying earnings pre-tax***

EUR 765 millionEmbedded value**

EUR 1.2 billionGross written premiums*

Key financials 2007

Strong position in Spain

o Focus on life, pensions & health products

o Track record in deals with growth potential

o Back offices and product development centralized

o Pursuing further growth opportunities

* On a pro forma basis and JV’s 100% consolidated

** JV’s 100% consolidated

*** AEGON’s share in earnings


Key player in Central & Eastern Europe

o High real wage growth and low insurance penetration across region

o Additional growth by broadening product and distribution range

o Regional synergies lead to cost-efficiencies

o Committed EUR 1 billion to the region for further expansion

Ambition to achieve market leadership (top 5) in all our markets

EUR 72 millionValue of new business

EUR 94 millionUnderlying earnings pre-tax

EUR 933 millionEmbedded value

EUR 1.1 billionGross written premiums

Key financials 2007

●●Czech Rep.

PensionsLife

●●●#3

#2

#10Turkey

#5Poland

#7Romania

#3Slovakia

#2Hungary

●Greenfield


Thailand

Successful execution of growth strategy in Asia

China

India

Singapore

Hong

Kong

Taiwan

Japan

China

AEGON-CNOOC JV

AEGON Industrial JV

Taiwan

AEGON Taiwan

AEGON Taishin JV

Japan

AEGONSony Life JV

India

AEGONReligareAsset Mngt. JV

AEGONReligare Life JV

Regional presence with global businesses

AEGON Direct Marketing Services

Transamerica Life Insurance

Life Reinsurance

AEGON Asia Regional HQHong Kong

Established in 2007

o Businesses are early stage – focus on execution and build scale

o Multi-channel distribution strategy – focus on bancassurance

o Selective entry into new markets

o 10% to 15% of total value of new business targeted from Asia in 2010


Executing on capital efficiency

o Release of EUR 315 million through innovative securitization

o Monetizing future profits from books of unit-linked business in the UK

o Enhancing the Group’s financial flexibility

o Execution underlines continued trust in AEGON’s capital position

o Further opportunities – such as securitizations – are explored to:

1. Improve capital efficiency

2. Optimize capital allocation

3. Improve returns


Changing fundamentals creating attractive prospects

Fundamental demographic and economic changes…

o increasing longevity and ageing populations

o global wealth creation, extending into new markets

o financial market volatility

o reduced safety net from government, employers and family

…generating new customers and new needs…

o shift to dis-savings in developed markets

o new middle class in emerging markets

…driving more demand for our solutions

o need for long-term protection

o need for accumulation products

o need for financial guarantees


AEGON: an attractive investment case

o Strong balance sheet, substantial financial flexibility and ample liquidity

o Strategic capital management, focused on maximizing returns on capital

o Updated strategy to enhance value creation by unlocking global potential

o Pure life and pensions company with well diversified business lines

o Well positioned for growth in existing and new markets

o Ambitious management team, committed to clear targets:

- Strong profitable growth with value of new business target of

EUR 1.25 billion by 2010

- Average underlying earnings growth of at least 10% p.a. to 2012

- Return on equity to improve to at least 14% by 2010 and in excess of

15% by 2012


Q&A




For questions please contact Investor Relations+31 70 344 8305

[email protected]

P.O. Box 852501 CB The HagueThe Netherlands



Alex WynaendtsSociété Générale Conference, Paris4 December 2008

AEGON Analyst and Investor Day, London24 November 2008

Jos StreppelCheuvreux Conference, New York13 November 2008

AEGON Q3 2008 Results6 November 2008

Alex WynaendtsMerrill Lynch Conference, London8-9 October 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

jos streppel – cfo

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