RNS Number:3656I
Aegon N.V.
06 March 2003
NET INCOME EUR 355 MILLION FOR FOURTH QUARTER; NET INCOME PER SHARE EUR 0.23
FULL YEAR 2002 NET INCOME EUR 1,547 MILLION, 35% LOWER THAN 2001 EARNINGS; NET
INCOME PER SHARE EUR 1.08
2002 DIVIDEND OF EUR 0.74 IS PROPOSED; FINAL DIVIDEND OF EUR 0.37 IS PROPOSED TO
BE PAID ENTIRELY IN SHARES
HIGHLIGHTS
(amounts in millions, except per share data)
Fourth Full Fourth Fourth Full Full
quarter year quarter quarter year year
2002 2002 2002 2001 2002 2001
USD USD EUR EUR % EUR EUR %
300 1,751 Income before tax 285 809 -65 1,849 3,243 -43
359 1,465 Net income 355 640 -45 1,547 2,397 -35
0.23 1.02 Net income per share 0.23 0.46 -50 1.08 1.76 -39
5,245 20,220 Premium income 5,219 5,518 -5 21,356 21,578 -1
2,346 8,873 Investment income 2,339 2,570 -9 9,372 9,933 -6
7,717 29,487 Total revenues 7,685 8,177 -6 31,144 31,895 -2
1,400 4,935 Commissions and expenses 1,403 1,209 16 5,212 4,574 14
664 2,349 New life production 666 618 8 2,481 2,617 -5
7,304 30,113 Gross deposits (1) 7,226 7,361 -2 31,805 30,643 4
14,924 Shareholders' equity 14,231 15,923 -11
249,807 Total assets 238,206 264,061 -10
1) Annuity, GIC and savings deposits are not included in revenues
Chairman's statement
"In line with our November 2002 forecast, the full year 2002 net income was 35%
lower than 2001. Low interest rates, bond credit defaults and the volatile and
weak equity markets of the past several years have had a significant impact on
our bottom line results. Lower operating results were partially offset by a
lower effective tax rate. Nonetheless, we believe the Group is successfully
managing through the current challenges to the industry as evidenced by our
strong solvency position of over two times the EU minimum standard and our
recent new business results," said Don Shepard, CEO and Chairman of the
Executive Board. "Fourth quarter standardized life production was up in the
Americas, the Netherlands and the UK."
"By continuation of our strategy we are enhancing our distribution capabilities
in existing and new markets to reach more customers while improving the
operating efficiency of our organization. During 2002, we expanded distribution
in the United Kingdom with the acquisition of several high quality IFAs. In the
Netherlands, the acquisition of TKP Pensioen enhances our capability in managing
larger pension schemes; and in the United States we had a solid production year
in our major business units. We have also extended our footprint into France
through the partnership with La Mondiale. At the same time, cost reduction
initiatives in the US and the UK are on track."
Outlook 2003
AEGON remains strongly positioned and capitalized in the markets in which it
operates. Business operations are sound and we look forward to profitable new
business growth and lower expense levels. Nonetheless, weak and volatile
financial markets and geo-political uncertainty continue to create a difficult
operating environment for our businesses. AEGON's Executive Board remains
cautious in its outlook for 2003 and is not providing an earnings forecast at
this time.
Key points fourth quarter 2002
* Standardized life production increased 12% in the Americas, 5% in the
Netherlands and 1% in the UK compared to the fourth quarter 2001. Total annuity
and GICs deposits increased 15% in the Americas, while off balance sheet
production was lower in the Americas (-13%) and Netherlands (-21%) but
significantly higher in the United Kingdom.
* Default provisions in the USA were strengthened by USD 219 million
(EUR 219 million) compared to USD 482 million (EUR 538 million) in the fourth
quarter of 2001. The balance of the USA default provisions at December 31 was
USD 281 million.
* Additional deferred policy acquisition cost (DPAC) amortization
(unlocking) and provisioning for guaranteed minimum benefits resulted from
lowering the equity return assumptions. Additional DPAC amortization on variable
annuities in the Americas was USD 77 million (EUR 76 million). Provisions for
variable and unit linked products with guaranteed minimum benefits were
strengthened by USD 84 million in the Americas (EUR 86 million), CAD 67 million
(EUR 45 million) in Canada and by EUR 25 million in the Netherlands.
* Fourth quarter 2001 results included a USD 307 million (EUR 343
million) profit on the sale of our operations in Mexico.
* Net loss for Transamerica Finance Corporation was USD 15 million
compared to a USD 15 million profit in the fourth quarter 2001. The loss in the
fourth quarter was due primarily to credit loss provisions in commercial lending
and aircraft leasing, partially offset by stronger results in real estate
information services.
* Interest charges and other were EUR 17 million lower reflecting lower
interest rates and debt levels and a release of the provision for the general
insurance run-off operations in the UK.
Key points full year 2002.
* Results include an additional USD 89 million (EUR 94 million) pre-tax
earnings from the acquired J.C. Penney insurance operations.
* Results for 2001 include USD 73 million (EUR 81 million) pre-tax
earnings from the divested operations in Mexico and a USD 307 million (EUR 343
million) gain on sale.
* Additions to provision for defaults in the USA totaled USD 774 million
(EUR 817 million) compared to USD 565 million (EUR 631 million) for 2001.
* Accelerated DPAC amortization (unlocking) was EUR 450 million compared
to positive unlocking of EUR 22 million for 2001.
* Provisions for guaranteed minimum benefits were strengthened by EUR
482 million.
* Currency influence on net income was -2% and on shareholders' equity
was EUR -2,190 million.
* Shareholders' equity was EUR 14,231 million at December 31, 2002. As a
result of active balance sheet management, shareholders' equity increased from
70% in 2001 to 71% in 2002 of total capital base. As of December 31, 2002,
solvency for AEGON N.V. was in excess of two times the minimum EU capital
requirement. The EUR 1,692 million reduction in equity largely reflects currency
exchange rate influences and unrealized investment losses offset partly by
additional paid-in capital on preferred shares as a result of the transaction
with Association AEGON.
* The effective tax rate for 2002 was 19% compared to 28% for 2001. The
lower effective tax rate is largely due to a reduction of the deferred tax
liability, favorable adjustments resulting from the filing of the 2001 corporate
tax returns in the US, lower taxable income relative to tax preferred
investments and tax-exempt income, and the use of tax losses in the UK.
The Hague, March 6, 2003
Inquiries:
AEGON N.V.
Group Communications Investor Relations
Phone : +31 (0)70 344 83 44 NL +31 (0)70 344 83 05
USA +1 410 576 45 77
Web site: www.aegon.com
Press conference
A press conference will be held this morning at AEGON's headquarters in The
Hague at 10.30 MET (09.30 GMT; 4.30 a.m. ET). This press conference will be
webcast live on AEGON's website homepage (www.aegon.com).
Conference call
An investor conference call will be held today at 15.00 MET (14.00 GMT; 09.00
a.m. ET) and will be webcast live on AEGON's website homepage. The numbers to
call to listen in on the conference call are as follows:
+31 (0)45 631 6905 (Netherlands)
+44 208 515 2359 (United Kingdom)
+1 416 646 3096 (United States, Canada)
EARNINGS REPORT
Report of the Executive Board
Net income for 2002 of EUR 1,547 million was 35% lower than last year. Results
were adversely affected by additions to the provision for bond defaults (EUR 817
million), accelerated amortization of deferred policy acquisition costs (EUR 450
million) and increased provisions for products with guaranteed minimum benefit
(EUR 482 million). Comparison with the prior year's result is positively
influenced by the additional earnings from acquired J.C. Penney insurance
operations (EUR 94 million). The 2001 gain on the sale of operations in Mexico
(EUR 343 million) and the loss of earnings on these divested operations (EUR 81
million) negatively influences the comparison with the prior year. Adjusting for
the above items, pre-tax earnings would have been marginally higher in 2002 than
in 2001. The influence of currency exchange rates on net income was -2%.
Total revenues were 2% lower (1% higher, excluding currency influence) and gross
margin was 10% lower (excluding currency influence 6% lower). The decline in
gross margin is due primarily to lower investment returns, higher bond default
provisions and provisions for guaranteed minimum benefits. Commissions and
expenses were 14% above last year (19%, excluding currency influence), which
includes the higher DPAC amortization and the expenses of acquired operations.
Excluding the acquired operations and the additional DPAC amortization,
commissions and expenses were 3% higher.
The effective tax rate for 2002 was 19% compared to 28% for 2001. The lower
effective tax rate is largely due to a reduction of the deferred tax liability,
favorable adjustments resulting from the filing of the 2001 corporate tax
returns in the US, lower taxable income relative to tax preferred investments
and tax-exempt income, and a tax loss in the UK.
Results for Transamerica Finance Corporation were USD 48 million (EUR 51
million) as compared to USD 64 million (EUR 72 million) last year. This reflects
lower asset balances for 2002 as well as tax benefits and investment gains
included in 2001 results, which are non-recurring. Net loss for Transamerica
Finance Corporation was USD 15 million (EUR 17 million) compared to a USD 15
million (EUR 17 million) profit in the fourth quarter 2001. The loss in the
fourth quarter was due primarily to credit loss provisions in commercial lending
and leasing, partially offset by stronger results in real estate information
services.
In light of the recent highly volatile financial market environment, we are
re-examining our product portfolio and pricing strategies in terms of risk and
reward, which may lead to modifications in product benefits and pricing.
The Americas
Net income totaled USD 916 million compared to USD 1,428 million for 2001.
Depressed equity and credit markets led to additions to asset default provisions
(USD 774 million), higher DPAC amortization (USD 407 million and CAD 31 million)
and an increase in guaranteed minimum benefits provisions (USD 203 million and
CAD 88 million). The acquired J.C. Penney insurance operations had a positive
impact of USD 89 million on pre-tax earnings while 2001 results included USD 307
million on the gain on the sale of divested operations in Mexico as well as USD
73 million of earnings from these operations.
AEGON USA applies return assumptions in its DPAC amortization methodology for
variable products. As equity markets do not move in a linear manner, AEGON uses
estimates giving consideration to the effect of short-term swings in the equity
markets. At the end of the third quarter of 2002, the equity market return
assumption was 14.5% for 5 years and 9.5% thereafter. In the fourth quarter
these assumptions were changed. AEGON USA currently assumes equity returns of
12.0% for five years and 9.0% thereafter. All returns quoted above are gross
returns before any asset management or insurance management and expense fees are
deducted. Such fees are deducted from the assumed market returns when projecting
the policyholder account values. Variable annuity fees range from approximately
1% to 2.5%. The effect of this change was a further increase of DPAC
amortization of USD 42 million in the USA and CAD 16 million in Canada and an
increase in the provision for guaranteed minimum benefits of USD 57 million in
the USA and CAD 63 million in Canada in the fourth quarter.
Standardized new premium life production in the Americas was flat for the year
at USD 984 million, but was 12% higher in the fourth quarter. The increase in
traditional life sales was primarily due to the solid production from the
Transamerica Insurance and Investment Group. Total annuity and GIC deposits
increased 14% to USD 26,907 million for the full year and were 15% higher in the
fourth quarter. The strong growth (67% in 2002) in variable annuity sales was
primarily driven by expansion of our distribution network as well as product
guarantee features. The risks arising from the product guarantee features are
continuously evaluated and if appropriate product features altered to limit or
mitigate risk. During the first quarter of 2003 AEGON discontinued the
guaranteed minimum income benefit (GMIB) feature on its variable annuity
product. Fixed annuity sales were positively affected by uncertain and volatile
equity markets, even while declining interest rates resulted in lower
policyholder crediting rates. Initial crediting rates on fixed annuities
declined to an average of 2.7%, which is the effective minimum guaranteed rate.
We have refiled products with many of the US state regulators, which would allow
us to lower the crediting rate to 2%. Many US states have already approved this
change to lower crediting rates on new sales. At the same time, we are leading
an industry effort in the United States to tie the level of guarantees to actual
interest rates. This effort is still in progress. Off-balance sheet production
was USD 18,842 million, a 4% increase for the full year.
Total revenues were 1% higher. Although new business production contributed to
the significant increase in general account assets, investment income was 1%
lower as a result of lower yields. Commissions and expenses increased 16% due to
higher production levels, the higher DPAC amortization and acquired businesses.
When adjusted for acquired businesses, operating expenses for the US operations
decreased by 4% from the prior year through the ongoing realization of
administrative and marketing efficiencies. The organizational restructuring
within the Agency Group and the creation of AEGON Financial Partners as an
internal service provider have contributed to the cost reduction.
Traditional life results of USD 813 million, up 3%, include USD 160 million of
bond defaults compared to USD 157 million for 2001. Fixed annuity results of USD
165 million, down 49%, include USD 401 million of bond defaults compared to USD
229 million for 2001. Fixed annuity results also include a net reduction of DPAC
amortization of USD 34 million compared to a positive unlocking of USD 20
million for 2001. GICs and funding agreement results of USD 257 million, up 33%,
include bond defaults of USD 174 million compared to USD 159 million for 2001.
Life for the account of policyholders results were USD 106 million, up 14%,
reflecting lower expense levels. Variable annuity reported a loss of USD 437
million compared to a profit of USD 107 million in 2001. Due to declining equity
markets and the adjustment of our equity return assumptions, additional DPAC
amortization of USD 327 million and CAD 31 million and guaranteed minimum
benefit provisions of USD 199 million and CAD 88 million were charged against
results. Fee business results were USD 5 million, USD 69 million lower than
2001. The 2001 results included earnings from divested pension operations in
Mexico. Accident and health results increased 60% to USD 233 million due to the
acquired insurance operations of J.C. Penney.
The Netherlands
Net income was EUR 523 million compared to EUR 696 million for 2001. Depressed
equity markets led to an additional provision for guaranteed minimum benefits of
EUR 209 million.
New life production was EUR 345 million, down 2% for the year, but reflecting a
5% increase for the fourth quarter. Off balance sheet production increased 41%
to EUR 1,223 million for the year while savings deposits and investment
contracts were 21% and 52% lower, respectively. Sales in retail markets were
lower due to fiscal changes and weak equity markets, while production in the
group pension business was higher.
Total revenues were level with the prior year at EUR 6,052 million, despite 2%
lower investment income on insurance activities, attributable to lower
investment yields. Commissions and expenses increased 20% to EUR 666 million.
This includes EUR 60 million in investment costs that are recognized on a gross
instead of a net basis and which are offset by an equal amount in revenues. The
change in presentation is the result of the establishment of AEGON Asset
Management as a separate business unit to profile itself as a professional third
party investment manager.
Traditional life results of EUR 552 million were 10% lower than 2001 results due
to lower interest results and higher lapse rates. Life for the account of
policyholder results were EUR 49 million, down from EUR 192 million the prior
year. This is primarily due to the provisions for guaranteed minimum benefits of
EUR 209 million. Accident and health results of EUR 26 million were EUR 10
million lower than 2001 and reflect higher claims as well as lower investment
returns. General insurance results were EUR 24 million, down EUR 13 million from
the prior year, due to the October storm claims and lower investment returns.
Banking activities were EUR 8 million, down EUR 37 million from 2001, reflecting
lower production and investment spreads, as well as increased provisions for
credit risk.
United Kingdom
Net income was GBP 112 million compared to GBP 165 million for 2001. Net income
is lower as a direct result of weak equity markets leading to lower management
and fund related fees as well as the setting up of provisions to meet costs
associated with the expense reduction program.
Standardized new life production was GBP 588 million, 8% lower than 2001, but
reflecting a 1% increase in the fourth quarter. Off balance sheet production
increased to GBP 437 million, a 59% gain over 2001.
Total revenues increased 3%. Investment income increased GBP 30 million
reflecting higher general account assets and capital. Commissions and expenses
increased to GBP 314 million, up GBP 93 million due to setting up provisions for
restructuring costs, inclusion of operating costs of the acquired distribution
companies, additional costs associated with the completion of a major IT systems
project and the growth in our protection businesses.
Other Countries
Net income from other countries was EUR 52 million, a 15% decrease from 2001.
The lower result was due primarily to lower results in Spain and start-up
activities in Asia. Taiwan showed a modest profit for the first time.
Capital Gains
EUR 758 million was released as indirect return to income before tax compared
with EUR 723 million for 2001. The revaluation account balance at December 31,
2002 was EUR 2,598 million, of which realized gains of EUR 2,056 million and
unrealized gains of EUR 542 million.
With International Accounting Standards becoming AEGON's reporting standard in
2005, it is AEGON's intention to discontinue the indirect return system of
accounting for capital gains after 2003. Beginning with the first quarter 2004
capital gains will be reported as earnings when realized. Based on current stock
market levels, AEGON expects to recognize indirect income in 2003 of
approximately EUR 450 million. The remaining realized portion of the revaluation
reserve not recognized in 2003 will be transferred directly to the surplus fund
at year-end 2003.
Capital and Funding
Shareholders' equity was EUR 14,231 million compared to EUR 15,923 million at
December 31, 2001, which has been retroactively increased by EUR 631 million for
a change in accounting policy under Dutch law. The change in policy is that
dividends are no longer accrued until declared. The EUR 1,692 million decrease
is primarily due to the balance of: exchange rate losses of EUR 2,100 million; a
reduction in the revaluation reserve of EUR 2,042 million; net income after
preferred dividend of EUR 1,517 million; paid-in capital on preferred stock of
EUR 2,064 million; dividend payments of EUR 731 million; and the revaluation of
the total return swaps of EUR -318 million.
AEGON is committed to a strategy of continued financial strength as reflected by
the development of AEGON's capital base, which has kept leverage within our
prescribed tolerances. At December 31, 2002, equity capital represented 71% of
our total capital, while senior and dated subordinated debt raised to support
insurance operations comprised 19% of our total capital base. The remaining 10%
comprised capital securities, consisting primarily of perpetual subordinated
loans.
The capital adequacy of our operating units continues to be strong. Although we
manage our capital adequacy to a higher standard than required by the
regulators, as of December 31, 2002, solvency for AEGON N.V. was in excess of
two times the minimum EU capital requirement. Relative to NAIC requirements in
the United States, we held in excess of 350% the minimum required capital.
Dividends
The Board has proposed a dividend of EUR 0.74 per common share for the year 2002
(2001: EUR 0.83). After taking into account the interim dividend of EUR 0.37,
this represents a final dividend of EUR 0.37 per common share. The final
dividend will be paid entirely in stock. For every 25 shares held one new share
will be paid. The stock fraction for the share dividend has been based upon the
average price of the AEGON share on the Euronext Amsterdam stock Exchange for
the five trading days from February 27 up to and including March 5. AEGON shares
will be quoted ex-dividend on April 23, 2003. The dividend will be payable as of
May 13, 2003.
AEGON has proposed to pay the final 2002 dividend entirely in shares as a
measure of prudence and to retain financial flexibility in uncertain political
and economic times. Over the past years, approximately 45% of AEGON's dividends
have been paid in shares. AEGON recognizes the importance of offering its
shareholders a stable and adequate dividend, which is supported by the company's
cash flow and capital position. We consider to propose a dividend for 2003 of
EUR 0.40 to be paid in cash or shares depending upon the company's capital
position.
Corporate governance
AEGON is currently preparing proposals for corporate governance changes to be
decided at the Annual General Meeting of Shareholders on April 17, 2003. Further
announcements will follow on March 20, 2003.
Disclaimer
Forward-looking statements
The statements contained in this press release that are not historical facts are
forward-looking statements as defined in the U.S. Private Securities Litigation
Reform Act of 1995. Words such as "believe", "estimate", "intend", "may",
"expect", "anticipate", "predict", "project", "counting on", "plan", "continue",
"want", "forecast", "should", "would", "is confident" and "will" and similar
expressions as they relate to us are intended to identify such forward-looking
statements. 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 speak only as of their dates.
All forward-looking statements are subject to various risks and uncertainties
that could cause actual results to differ materially from expectations,
including, but 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, including:
- the frequency and severity of defaults by issuers in our fixed income
investment portfolios; and
- the effects of corporate bankruptcies and/or accounting restatements
(such as Enron and WorldCom) on the financial markets and the resulting
decline in 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
affect the profitability of our insurance products;
* changes affecting interest rate levels;
* changes affecting currency exchange rates, including the euro/US
dollar and euro/UK pound 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 and acts of war;
* changes in the policies of central banks and/or foreign governments;
* 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; and
* our failure to achieve anticipated levels of earnings or operational
efficiencies as well as other cost saving initiatives.
Highlights
amounts in
millions
USD EUR EUR
Total year Fourth quarter Total year
2002 2001 % 2002 2001 % 2002 2001 %
Income by product
segment
1.379 1.394 -1 Traditional life 362 226 60 1.457 1.557 -6
165 321 -49 Fixed annuities -29 -65 55 174 358 -51
257 193 33 GICs and funding 68 16 272 215 27
agreements
351 566 -38 Life for account 78 216 -64 371 632 -41
policyholders
-437 107 Variable -177 32 -462 120
annuities
2 84 -98 Fee business 2 29 -93 2 94 -98
- 307 Book profit - 343 - 343
Mexico
1.717 2.972 -42 Life insurance 304 797 -62 1.814 3.319 -45
263 187 41 Accident and 44 58 -24 278 209 33
health insurance
59 60 -2 General insurance 6 17 -65 62 67 -7
2.039 3.219 -37 Total insurance 354 872 -59 2.154 3.595 -40
activities
8 40 -80 Banking -24 -1 8 45 -82
activities
-296 -355 -17 Interest charges -45 -62 -27 -313 -397 -21
and other
1.751 2.904 -40 Income before tax 285 809 -65 1.849 3.243 -43
-334 -822 -59 Corporation tax 87 -186 -147 -353 -918 -62
48 64 -25 Transamerica -17 17 -200 51 72 -29
Finance
Corporation
1.465 2.146 -32 Net income 355 640 -45 1.547 2.397 -35
Income
geographically
1.142 2.034 -44 Americas 145 512 -72 1.206 2.272 -47
624 827 -25 The Netherlands 125 232 -46 659 924 -29
221 333 -34 United Kingdom 43 106 -59 233 372 -37
60 65 -8 Other countries 17 21 -19 64 72 -11
2.047 3.259 -37 Income before tax 330 871 -62 2.162 3.640 -41
business units
-296 -355 -17 Interest charges -45 -62 -27 -313 -397 -21
and other
1.751 2.904 -40 Income before tax 285 809 -65 1.849 3.243 -43
-334 -822 -59 Corporation tax 87 -186 -147 -353 -918 -62
48 64 -25 Transamerica -17 17 -200 51 72 -29
Finance
Corporation
1.465 2.146 -32 Net income 355 640 -45 1.547 2.397 -35
6.686 7.000 -4 Gross margin 1.688 2.018 -16 7.061 7.817 -10
4.935 4.096 20 Commissions and 1.403 1.209 16 5.212 4.574 14
expenses
Amounts per common share of
EUR 0.12
1,02 1,58 -35 Net income 1 0,23 0,46 -50 1,08 1,76 -39
1,02 1,57 -35 Net income fully 0,23 0,45 -49 1,08 1,75 -38
diluted 1
As at As at As at As at
Dec. 31 Dec. 31 Dec. 31 Dec. 31
2002 2001 2002 2001
8,99 10,06 -11 Shareholders' 8,57 11,41 -25
equity 2
9,54 10,50 -9 Shareholders' equity after 9,10 11,91 -24
full conversion 2
Number of 26.659 25.663 4
employees
Outstanding
common shares:
- Number of common shares 1.445 1.422 2
(millions)
- Weighted 1.402 1.357 3
average number
(millions)
1 Based on the weighted average number of common shares.
Revenues and production
amounts in
millions
USD EUR EUR
Total year Fourth quarter Total year
2002 2001 % 2002 2001 % 2002 2001 %
Revenues
1.694 1.939 -13 Life general account 379 561 -32 1.789 2.165 -17
single premiums
5.386 4.954 9 Life general account 1.395 1.474 -5 5.689 5.533 3
recurring premiums
5.900 5.697 4 Life policyholders 1.802 1.605 12 6.232 6.363 -2
account single premiums
3.817 3.779 1 Life policyholders 807 991 -19 4.031 4.220 -4
account recurring
premiums
16.797 16.369 3 Total life insurance 4.383 4.631 -5 17.741 18.281 -3
gross premiums
2.697 2.290 18 Accident and health 664 715 -7 2.848 2.558 11
insurance premiums
726 662 10 General insurance 172 172 0 767 739 4
premiums
20.220 19.321 5 Total gross premiums 5.219 5.518 -5 21.356 21.578 -1
8.829 8.811 0 Investment income 2.300 2.543 -10 9.325 9.840 -5
insurance activities 1
394 344 15 Income from banking 127 89 43 416 384 8
activities
29.443 28.476 3 Total revenues business 7.646 8.150 -6 31.097 31.802 -2
units
44 83 -47 Income from other 39 27 44 47 93 -49
activities
29.487 28.559 3 Total revenues 7.685 8.177 -6 31.144 31.895 -2
Revenues by product
segment
25.029 24.731 1 Life insurance 6.553 6.997 -6 26.435 27.620 -4
3.228 2.666 21 Accident and health 785 874 -10 3.409 2.977 15
insurance
792 735 8 General insurance 181 190 -5 837 821 2
394 344 15 Banking activities 127 89 43 416 384 8
44 83 -47 Other activities 39 27 44 47 93 -49
29.487 28.559 3 Total revenues 7.685 8.177 -6 31.144 31.895 -2
Investment income for
the account
-10.911 -8.520 -28 of policyholders 3.342 6.963 -52 -11.524 -9.515 -21
Standardized new premium
production
life insurance
6.677 7.465 -11 Single premiums 1.788 2.117 -16 7.052 8.337 -15
1.681 1.596 5 Recurring premiums 487 406 20 1.776 1.783 0
annualized
2.349 2.343 0 Total recurring plus 666 618 8 2.481 2.617 -5
1/10 single
Deposits
7.178 6.756 6 Fixed annuities 1.568 2.443 -36 7.582 7.545 0
9.827 10.922 -10 GICs and funding 1.578 2.280 -31 10.379 12.198 -15
agreements
9.902 5.944 67 Variable annuities 3.393 1.707 99 10.458 6.638 58
26.907 23.622 14 Total 6.539 6.430 2 28.419 26.381 8
3.206 3.816 -16 Savings deposits 687 931 -26 3.386 4.262 -21
30.113 27.438 10 Total production on 7.226 7.361 -2 31.805 30.643 4
balance sheet
Net deposits
3.394 2.763 23 Fixed annuities -304 1.585 -119 3.585 3.086 16
1.026 2.938 -65 GICs and funding -1.226 -1.182 -4 1.084 3.281 -67
agreements
5.190 855 Variable annuities 2.431 289 5.481 955
9.610 6.556 47 Total 901 692 30 10.150 7.322 39
-318 946 -134 Savings deposits -372 44 -336 1.057 -132
9.292 7.502 24 Total net deposits 529 736 -28 9.814 8.379 17
372 731 -49 Investment contracts 82 168 -51 393 816 -52
Off balance sheet
production
12.196 11.709 4 Synthetic GICs 3.621 4.296 -16 12.881 13.077 -1
Mutual funds/Collective
Trusts and
8.639 7.629 13 other managed assets 2.456 3.144 -22 9.125 8.520 7
20.835 19.338 8 Total production off 6.077 7.440 -18 22.006 21.597 2
balance sheet
718 647 11 1 Of which indirect income 166 182 -9 758 723 5
on shares and real
estate
Americas
amounts in millions
USD USD EUR
Fourth quarter Total year Total year
2002 2001 % 2002 2001 % 2002 2001 %
Income by product
segment
211 76 178 Traditional life 813 792 3 859 884 -3
-23 -58 60 Fixed annuities 165 321 -49 174 358 -51
68 15 GICs and funding 257 193 33 272 215 27
agreements
26 26 0 Life for account 106 93 14 112 104 8
policyholders
-173 28 Variable annuities -437 107 -462 120
7 22 -68 Fee business 5 74 -93 5 83 -94
- 307 Book profit Mexico - 307 - 343
116 416 -72 Life insurance 909 1.887 -52 960 2.107 -54
42 41 2 Accident and health 233 146 60 246 164 50
insurance
0 1 - General insurance 0 1 - 0 1 -
158 458 -66 Total insurance 1.142 2.034 -44 1.206 2.272 -47
298 382 -22 of which general account 1.468 1.760 -17 1.551 1.965 -21
-140 76 of which policyholders -326 274 -345 307
account 1
158 458 -66 Income before tax 1.142 2.034 -44 1.206 2.272 -47
92 -85 Corporation tax -226 -606 -63 -239 -677 -65
250 373 -33 Net income 916 1.428 -36 967 1.595 -39
Revenues
232 394 -41 Life general account 942 1.047 -10 995 1.170 -15
single premiums
1.144 1.179 -3 Life general account 4.470 4.179 7 4.721 4.667 1
recurring premiums
141 322 -56 Life policyholders 791 1.001 -21 835 1.118 -25
account single premiums
203 153 33 Life policyholders 631 712 -11 667 795 -16
account recurring
premiums
1.720 2.048 -16 Total life insurance 6.834 6.939 -2 7.218 7.750 -7
gross premiums
630 605 4 Accident and health 2.469 2.093 18 2.608 2.337 12
insurance premiums
0 6 - General insurance 0 10 - 0 11 -
premiums
2.350 2.659 -12 Total gross premiums 9.303 9.042 3 9.826 10.098 -3
1.803 1.872 -4 Investment income 7.145 7.233 -1 7.546 8.078 -7
insurance activities
4.153 4.531 -8 Total revenues 16.448 16.275 1 17.372 18.176 -4
Investment income for
the account
1.683 2.999 -44 of policyholders -5.648 -5.329 -6 -5.965 -5.951 0
Gross margin, commissions and
expenses
1.079 1.296 -17 Gross margin 4.676 5.071 -8 4.939 5.664 -13
921 838 10 Commissions and expenses 3.534 3.037 16 3.733 3.392 10
Standardized new premium
production
life insurance
337 668 -50 Single premiums 1.578 1.924 -18 1.667 2.149 -22
241 179 35 Recurring premiums 826 794 4 872 887 -2
annualized
275 245 12 Total recurring plus 984 986 0 1.039 1.102 -6
1/10 single
Deposits
1.597 2.187 -27 Fixed annuities 7.178 6.756 6 7.582 7.545 0
1.660 2.041 -19 GICs and funding 9.827 10.922 -10 10.379 12.198 -15
agreements
3.346 1.528 119 Variable annuities 9.902 5.944 67 10.458 6.638 58
6.603 5.756 15 Total production on 26.907 23.622 14 28.419 26.381 8
balance sheet
Off balance sheet
production
3.603 3.845 -6 Synthetic GICs 12.196 11.709 4 12.881 13.077 -1
Mutual funds/Collective
Trusts and
1.867 2.426 -23 other managed assets 6.646 6.400 4 7.020 7.148 -2
5.470 6.271 -13 Total production off 18.842 18.109 4 19.901 20.225 -2
balance sheet
1 Includes also variable annuities and fees.
The Netherlands
amounts in millions
EUR EUR
Fourth quarter Total year
2002 2001 % 2002 2001 %
Income by product segment
142 134 6 Traditional life 552 614 -10
6 84 -93 Life for account policyholders 49 192 -74
148 218 -32 Life insurance 601 806 -25
3 8 -63 Accident and health insurance 26 36 -28
-2 7 -129 General insurance 24 37 -35
149 233 -36 Total insurance 651 879 -26
143 149 -4 of which general account 602 687 -12
6 84 -93 of which policyholders account 49 192 -74
-24 -1 Banking activities 1 8 45 -82
125 232 -46 Income before tax 659 924 -29
-25 -55 -55 Corporation tax -136 -228 -40
100 177 -44 Net income 523 696 -25
Revenues
48 69 -30 Life general account single 507 768 -34
premiums
116 90 29 Life general account recurring 564 569 -1
premiums
413 254 63 Life policyholders account single 1.171 814 44
premiums
105 325 -68 Life policyholders account 1.331 1.486 -10
recurring premiums
682 738 -8 Total life insurance gross premiums 3.573 3.637 -2
21 23 -9 Accident and health insurance 162 146 11
premiums
90 88 2 General insurance premiums 447 422 6
793 849 -7 Total gross premiums 4.182 4.205 -1
379 374 1 Investment income insurance 1.454 1.484 -2
activities
127 89 43 Income from banking activities 416 384 8
1.299 1.312 -1 Total revenues 6.052 6.073 0
Investment income for the account
210 844 -75 of policyholders -1.165 -155
Gross margin, commissions and
expenses
353 382 -8 Gross margin 1.325 1.479 -10
228 150 52 Commissions and expenses 2 666 555 20
Standardized new premium production
life insurance
417 365 14 Single premiums 1.536 1.625 -5
41 42 -2 Recurring premiums annualized 191 188 2
83 79 5 Total recurring plus 1/10 single 345 351 -2
Deposits
687 931 -26 Savings deposits 3.386 4.262 -21
687 931 -26 Total production on balance sheet 3.386 4.262 -21
82 168 -51 Investment contracts 393 816 -52
Off balance sheet production
320 405 -21 Mutual funds and other managed 1.223 868 41
assets
320 405 -21 Total production off balance sheet 1.223 868 41
1 Includes income on off balance sheet type products.
2 Includes the effect of a change in presentation of investments costs from a net basis to a gross basis and from
various provisions formed in 2002.
United Kingdom
amounts in millions
GBP GBP EUR
Fourth quarter Total year Total year
2002 2001 % 2002 2001 % 2002 2001 %
Income by product
segment
1 1 0 Traditional life 12 14 -14 19 22 -14
30 64 -53 Life for account 140 215 -35 224 346 -35
policyholders
-4 1 Fee business -6 2 -10 4
27 66 -59 Life insurance 146 231 -37 233 372 -37
1 1 0 of which general account 12 14 -14 19 22 -14
26 65 -60 of which policyholders 134 217 -38 214 350 -39
account 1
27 66 -59 Income before tax 146 231 -37 233 372 -37
-1 -20 -95 Corporation tax -34 -66 -48 -55 -107 -49
26 46 -43 Net income 112 165 -32 178 265 -33
Revenues
66 28 136 Life general account 172 112 54 273 181 51
single premiums
21 7 Life general account 81 49 65 129 79 63
recurring premiums
790 602 31 Life policyholders 2.636 2.710 -3 4.196 4.361 -4
account single premiums
282 278 1 Life policyholders 1.153 1.098 5 1.835 1.767 4
account recurring
premiums
1.159 915 27 Total gross premiums 4.042 3.969 2 6.433 6.388 1
55 25 120 Investment income 110 80 38 176 129 36
insurance activities
1.214 940 29 Total revenues 4.152 4.049 3 6.609 6.517 1
Investment income for
the account
733 1.744 -58 of policyholders -2.680 -2.066 -30 -4.266 -3.325 -28
Gross margin, commissions and
expenses
133 101 32 Gross margin 460 452 2 733 728 1
106 35 Commissions and expenses 314 221 42 500 356 40
Standardized new premium
production
life insurance
654 607 8 Single premiums 2.390 2.763 -13 3.804 4.447 -14
79 82 -4 Recurring premiums 349 362 -4 556 583 -5
annualized
144 142 1 Total recurring plus 588 638 -8 936 1.028 -9
1/10 single
Off balance sheet
production
90 8 Mutual funds and other 437 275 59 696 442 57
managed assets
90 8 Total production off 437 275 59 696 442 57
balance sheet
1 Includes also fee income.
Other countries
amounts in millions
EUR EUR
Fourth quarter Total year
2002 2001 % 2002 2001 %
Income by product segment
9 7 29 Traditional life 27 37 -27
-3 0 0 Life for account of policyholders -14 -10 -40
2 2 0 Fee business 7 7 0
8 9 -11 Life insurance 20 34 -41
1 3 -67 Accident and health insurance 6 9 -33
8 9 -11 General insurance 38 29 31
17 21 -19 Total insurance 64 72 -11
18 19 -5 of which general account 71 75 -5
-1 2 -150 of which policyholders account 1 -7 -3 -133
17 21 -19 Income before tax 64 72 -11
-2 -2 0 Corporation tax -12 -11 9
15 19 -21 Net income 52 61 -15
Revenues
-2 5 -140 Life general account single premiums 14 46 -70
109 55 98 Life general account recurring premiums 275 218 26
6 21 -71 Life policyholders account single premiums 30 70 -57
53 46 15 Life policyholders account recurring 198 172 15
premiums
166 127 31 Total life insurance gross premiums 517 506 2
17 16 6 Accident and health insurance premiums 78 75 4
82 78 5 General insurance premiums 320 306 5
265 221 20 Total gross premiums 915 887 3
43 38 13 Investment income insurance activities 149 149 0
308 259 19 Total revenues 1.064 1.036 3
Investment income for the account
11 -30 137 of policyholders -128 -84 -52
Gross margin, commissions and expenses
96 76 26 Gross margin 329 305 8
79 55 44 Commissions and expenses 265 233 14
Standardized new premium production
life insurance
10 26 -62 Single premiums 45 116 -61
80 31 158 Recurring premiums annualized 157 125 26
81 34 138 Total recurring plus 1/10 single 161 137 18
Off balance sheet production
124 16 Mutual funds and other managed assets 186 62
124 16 Total production off balance sheet 186 62
1 Includes also fee income.
Explanatory notes
As of 2002, in line with accounting guidelines, shareholders dividend is not accrued until it is declared. All
other accounting principles applied in this interim report are the same as those applied in the annual accounts 2001.
Traditional life includes income on traditional and fixed universal life products.
Life insurance with investments for account of policyholders includes income on variable universal life, unitised
pension (UK), other unit-linked products with investments for account of policyholders and with profit fund in the
UK.
Fee business includes income on off balance sheet type products.
Gross margin is calculated as the sum of income before tax and commissions and expenses.
Investments, assets and capital geographically
amounts in
million EUR
(unless
otherwise
stated)
United
Americas Kingdom The United Other Total Total
USD GBP As at Americas Netherlands Kingdom countries EUR USD
December
31, 2002
Investments
105.544 980 Fixed 100.643 10.792 1.507 1.611 114.553 120.132
income
3.460 88 Equities 3.299 4.943 135 133 8.510 8.924
and real
estate
109.004 1.068 Total 103.942 15.735 1.642 1.744 123.063 129.056
general
account
11.952 15.401 Fixed 11.397 11.139 23.675 312 46.523 48.789
income
23.274 12.940 Equities 22.193 5.934 19.892 186 48.205 50.552
and real
estate
35.226 28.341 Total 33.590 17.073 43.567 498 94.728 99.341
account
policyholders
144.230 29.409 Total 137.532 32.808 45.209 2.242 217.791 228.397
insurance
activities
- - Banking - 7.167 - - 7.167 7.516
activities
51.008 806 Off balance 48.639 1.689 1.239 471 52.038 54.572
sheet
assets
195.238 30.215 Total 186.171 41.664 46.448 2.713 276.996 290.485
assets
business
units
Other 378 397
investments
Total group 277.374 290.882
149.948 29.864 Assets 142.985 42.750 45.910 2.541 234.186 245.591
business
units
Other 4.020 4.216
assets
Total 238.206 249.807
assets on
balance
sheet
16.518 2.028 Capital in 15.751 2.605 3.117 399 21.872 22.937
units
Total 20.058 21.035
capital
base
Other net 1.814 1.902
liabilities
Total 21.872 22.937
As at
December
31, 2001
Investments
92.614 805 Fixed 105.087 11.411 1.323 1.401 119.222 105.070
income
4.265 89 Equities 4.840 6.290 147 155 11.432 10.075
and real
estate
96.879 894 Total 109.927 17.701 1.470 1.556 130.654 115.145
general
account
12.232 14.009 Fixed 13.879 6.024 23.022 354 43.279 38.142
income
26.477 16.879 Equities 30.044 12.014 27.739 196 69.993 61.685
and real
estate
38.709 30.888 Total 43.923 18.038 50.761 550 113.272 99.827
account
policyholders
135.588 31.782 Total 153.850 35.739 52.231 2.106 243.926 214.972
insurance
activities
- - Banking - 7.047 - - 7.047 6.210
activities
44.931 813 Off balance 50.982 1.319 1.336 247 53.884 47.488
sheet
assets
180.519 32.595 Total 204.832 44.105 53.567 2.353 304.857 268.670
assets
business
units
Other 464 409
investments
Total group 305.321 269.079
140.285 32.236 Assets 159.180 44.834 52.976 2.400 259.390 228.600
business
units
Other 4.671 4.117
assets
Total 264.061 232.717
assets on
balance
sheet
13.920 1.771 Capital in 15.795 3.654 2.910 374 22.733 20.035
units
Total 22.676 19.984
capital
base
Other net 57 51
liabilities
Total 22.733 20.035
Summarized consolidated income statements
amounts
in
millions
USD EUR EUR
Total year Fourth quarter Total year
2002 2001 % 2002 2001 % 2002 2001 %
Revenues
20.220 19.321 5 Gross premiums 5.219 5.518 -5 21.356 21.578 -1
8.873 8.894 0 Investment income 2.339 2.570 -9 9.372 9.933 -6
394 344 15 Income from banking 127 89 43 416 384 8
activities
29.487 28.559 3 Total revenues 7.685 8.177 -6 31.144 31.895 -2
Benefits and expenses
2.397 1.665 44 Premiums to reinsurers 1.332 504 164 2.532 1.859 36
18.722 18.563 1 Benefits paid and 4.157 5.057 -18 19.774 20.731 -5
provided
179 222 -19 Profit sharing and 34 65 -48 189 248 -24
rebates
4.935 4.096 20 Commissions and 1.403 1.209 16 5.212 4.574 14
expenses for own
account
691 771 -10 Interest 200 212 -6 730 862 -15
812 338 140 Miscellaneous income 274 321 -15 858 378 127
and expenditure
27.736 25.655 8 Total benefits and 7.400 7.368 0 29.295 28.652 2
expenses
1.751 2.904 -40 Income before tax 285 809 -65 1.849 3.243 -43
-334 -822 -59 Corporation tax 87 -186 -147 -353 -918 -62
48 64 -25 Transamerica Finance -17 17 51 72 -29
Corporation
1.465 2.146 -32 Net income 355 640 -45 1.547 2.397 -35
Income statement items: average rate 1 EUR = USD 0.9468 (2001: USD
0.8954)
Condensed consolidated balance sheets
amounts in millions
As at As at As at As at
Dec. 31 Dec. 31 Dec. 31 Dec. 31
2002 2001 2002 2001
USD USD % EUR EUR %
136.969 121.764 12 Investments 130.608 138.165 -5
3.729 2.891 29 Group companies and 3.556 3.280 8
participations
99.341 99.827 0 Investments for the account of 94.728 113.272 -16
policyholders
9.768 8.235 19 Other assets 9.314 9.344 0
249.807 232.717 7 Total assets 238.206 264.061 -10
14.924 14.033 6 Total shareholders' equity 1 14.231 15.923 -11
2.106 1.852 14 Capital securities 2.008 2.101 -4
646 590 9 Subordinated (convertible) loans 616 670 -8
3.359 3.509 -4 Senior debt related to insurance 3.203 3.982 -20
activities
21.035 19.984 5 Total capital base 20.058 22.676 -12
107.926 94.520 14 Technical provisions 2 102.914 107.251 -4
Technical provisions with
investments for
99.341 99.827 0 the account of policyholders 3 94.728 113.272 -16
21.505 18.386 17 Other liabilities 4 20.506 20.862 -2
249.807 232.717 7 Total shareholders' equity and 238.206 264.061 -10
liabilities
1 Shareholders' equity January 1 15.923 13.424
Retained earnings 1.517 2.394
Dividend paid -731 -541
Paid in surplus / Issuance of 2.053 1.685
new shares
Currency exchange rate -2.100 386
differences
Goodwill -70 -286
Repurchased and sold own shares 0 -21
Change revaluation account -2.042 -1.537
Sale Mexico - 602
Other changes -319 -183
14.924 14.033 Shareholders' equity end of 14.231 15.923
period 5
% %
42.014 33.639 25 2 Of which fixed annuities 40.063 38.170 5
25.961 24.626 5 2 Of which GICs and funding 24.755 27.943 -11
agreements
-15.938 -14.511 10 2 Of which deferred policy -15.198 -16.466 -8
acquisition costs
32.458 34.131 -5 3 Of which variable annuities 30.951 38.728 -20
6.674 5.690 17 4 Of which savings accounts 6.364 6.456 -1
2.725 4.089 -33 5 Including revaluation account 2.598 4.640 -44
2.156 3.438 -37 of which realized gains 2.056 3.901 -47
Balance sheet items: closing rate 1 EUR = USD 1.0487 (2001: 0.8813)
Summarized information Transamerica Finance
Corporation
amounts in
millions
USD USD EUR
Fourth quarter Total year Total year
2002 2001 % INCOME STATEMENT 2002 2001 % 2002 2001 %
Revenues
143 182 -21 Finance charges 636 823 -23 672 919 -27
110 107 3 Leasing revenues 420 438 -4 444 489 -9
63 65 -3 Real estate information 240 253 -5 254 283 -10
services
32 51 -37 Other revenues 134 234 -43 141 261 -46
348 405 -14 Total revenues 1.430 1.748 -18 1.511 1.952 -23
Expenses
48 84 -43 Interest and debt expense 239 421 -43 252 470 -46
80 81 -1 Salaries and other 314 327 -4 332 365 -9
employee expenses
52 53 -2 Depreciation on equipment 210 220 -5 222 246 -10
held for lease
183 168 9 Miscellaneous income and 552 667 -17 583 745 -22
expenditure
363 386 -6 Total expenses 1.315 1.635 -20 1.389 1.826 -24
-15 19 -179 Income before tax 115 113 2 122 126 -3
8 8 0 Corporation tax -32 -1 -34 -1
-7 27 -126 Net income from 83 112 -26 88 125 -30
operations
Net income by segment
-4 19 -121 Commercial lending 89 78 14 94 87 8
-6 5 Leasing -9 -11 18 -9 -12 25
14 9 56 Real estate information 40 38 5 42 42 0
services
-11 -6 -83 Other -37 7 -39 8
-7 27 -126 Net income from 83 112 -26 88 125 -30
operations
Income reported by AEGON
-7 27 -126 Net income from 83 112 -26 88 125 -30
operations
-8 -12 -33 Funding costs on the -35 -48 -27 -37 -53 -30
related raised debt
-15 15 Net income reported by 48 64 -25 51 72 -29
AEGON
Income statement items: average rate 1 EUR = USD 0.9468 (2001: USD 0.8954)
As at As at As at As at
Dec. 31 Dec. 31 Dec. 31 Dec. 31
2002 2001 2002 2001
USD USD % BALANCE SHEET EUR EUR %
6.007 6.931 -13 Finance receivables 5.728 7.865 -27
102 114 -11 Equipment 97 129 -25
2.485 2.864 -13 Other assets 2.370 3.250 -27
8.594 9.909 -13 Total assets 8.195 11.244 -27
1.627 1.642 -1 Accounts payable and other 1.551 1.863 -17
liabilities
6.052 7.145 -15 Debts 5.771 8.108 -29
915 1.122 -18 Shareholders' equity 873 1.273 -31
8.594 9.909 -13 Total liabilities and shareholders' 8.195 11.244 -27
equity
Balance sheet items: closing rate 1 EUR = USD 1.0487 (2001: 0.8813)
2 Based on the number of common shares outstanding at the end of the period, adjusted for repurchased own
shares.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR NKAKNOBKKONK