- EUR 336 million operating capital generation, before holding funding and operating expenses. Full-year 2024 guidance raised to around EUR 1.2 billion, from around EUR 1.1 billion previously
- Capital ratios of the main units remain above their respective operating levels
- Planned new EUR 150 million share buyback program announced; completion expected in the first half of 2025. The program includes neutralization of shares issued for share-based compensation plans
- Cash Capital at Holding of EUR 1.5 billion as of September 30, 2024. Expect to reach mid-point of the target range (EUR 1.0 billion) by the end of 2026
- Completed program to purchase institutionally owned universal life policies. Terminated policies negatively impacted US RBC ratio by 16%-points. Expect 8%-points benefit in 4Q 2024 after equity funding repayment. Operating capital generation benefits from the program, as previously guided
- Strong commercial momentum in Asset Management and UK Workplace platform. US Strategic Assets experience commercial volatility. UK Adviser platform continues to be affected by challenging market conditions
Lard Friese, Aegon CEO, commented:
“In the third quarter, we continued to execute our strategy to grow our franchises. Despite some volatility in our commercial results, we are on track to deliver on the strategy outlined at our 2023 Capital Markets Day (CMD).
In the US, the number of World Financial Group agents grew by 19% compared with 3Q 2023 to almost 82,500, but we also observed a shift in focus to third-party annuity products sales during the third quarter, which also benefited WFG revenues. This shift negatively impacted Individual Life sales. Mid-sized retirement plans also saw net outflows of USD 0.4 billion, as higher than usual withdrawals were only partially offset by an increase in gross deposits.
Our UK business continued on its path to become a leading digital savings and retirement platform, as outlined at our June 2024 Strategy Teach-In. Our Workplace platform continued to grow with net inflows of GBP 0.9 billion. Outflows continued in our Adviser platform, as anticipated.
We saw continued momentum at Aegon Asset Management, where third-party net deposits in Global Platforms and Strategic Partnerships totaled EUR 4 billion, driven mostly by alternative fixed income products in Global Platforms.
Our International business experienced some cyclical headwinds, for example, the impact of higher interest rates in Brazil.
We continued to execute our strategy in the US to reduce our exposure to our Financial Assets and have completed our program to purchase universal life policies from institutional shareholders. This program has a negative impact on the US RBC ratio but operating capital generation (OCG) benefits from the program going forward.
During the quarter, we generated EUR 336 million of OCG, mostly from our US business. With year-to-date OCG of over EUR 900 million, we now expect full-year 2024 OCG of around EUR 1.2 billion compared with around EUR 1.1 billion that we previously guided for.
Our cash capital remained strong at EUR 1.5 billion, as did the capital positions of our units. Consequently, consistent with our capital management framework, we announce today a planned new share buyback program of EUR 150 million. We expect the new program to begin in January 2025, and to be completed in the first half of the year. In addition, we today clarify that we plan to manage our Cash Capital at Holding down to the mid-point of the EUR 0.5 – 1.5 billion range by the end of 2026.”
Strategy
Aegon is an international financial services holding company. Aegon’s ambition is to build leading businesses that offer their customers investment, protection, and retirement solutions. Aegon’s portfolio of businesses includes fully owned businesses in the United States and United Kingdom, and a global asset manager. Aegon also creates value by combining its international expertise with strong local partners via insurance joint ventures in Spain & Portugal, China, and Brazil, and via asset management partnerships in France and China. In addition, Aegon owns a Bermuda‑based life insurer and generates value via a strategic shareholding in a market leading Dutch insurance and pensions company. Aegon is taking significant steps to improve its performance and to create sustainable value for all its stakeholders.
Aegon’s businesses in the US are divided into Financial Assets and Strategic Assets. Aegon intends to, over time, reduce capital employed by Financial Assets and grow its Strategic Assets, its partnerships, and the global asset manager. Exposure to businesses outside of Aegon’s core focus has been largely eliminated over recent years.
Throughout its transformation, Aegon aims to maintain a solid capital position in its business units and at the Holding. Through proactive risk management actions, Aegon is improving its risk profile and reducing the volatility of its capital ratios. This is underscored by Aegon’s capital strength.
The next chapter in Aegon’s strategy is expected to lead to operating capital generation from its units of around EUR 1.2 billion, and of free cash flow of around EUR 800 million by 2025. Aegon aims to grow its dividend per share to around EUR 0.40 over 2025, barring unforeseen circumstances and subject to the necessary approvals. Gross financial leverage is expected to remain at around EUR 5 billion.
The company will present an update on its strategy and targets at a Capital Markets Day on December 10, 2025.