Annual Report 2013 This pdf is interactive. The content is clickable so you can navigate through this document. 1 Table of contents Strategic information Financial statements of Aegon N.V. Introduction 3 Income statement of Aegon N.V. 291 Letter of the CEO 4 Statement of financial position of Aegon N.V. 292 Composition of the Executive Board and the Notes to the financial statements 293 Management Board 6 Aegon’s strategy 8 Other information Independent auditor’s report 306 Business overview Proposal for profit appropriation 307 History and development of Aegon 12 Major shareholders 307 Selected financial data 13 Business lines 16 Results of operations 17 Other financial information Worldwide 17 Schedule I 310 Americas 25 Schedule II 311 Netherlands 43 Schedule III 313 United Kingdom 53 Schedule IV 314 New Markets 62 Schedule V 315 Risk management 85 Capital and liquidity management 88 In control statement 92 Additional information Supervision 318 Risk factors 318 Governance Property, plants and equipment 334 Report of the Supervisory Board 93 Employees and labor relations 334 Members of the Supervisory Board 99 Dividend policy 335 Remuneration Report 101 The offer and listing 336 Corporate governance 108 Additional company information 337 Differences between Dutch and US company laws 112 Memorandum and Articles of Association 337 Code of ethics 113 Material contracts 339 Controls and procedures 114 Exchange controls 339 Taxation 339 Principal accountant fees and services 346 Consolidated financial statements Purchases of equity securities by the issuer Exchange rates 120 and affiliated purchasers 347 Consolidated income statement of Aegon N.V. 122 Quarterly results – unaudited 348 Consolidated statement of comprehensive income Glossary 349 of Aegon N.V. 123 Disclaimer 354 Consolidated statement of financial position of Aegon N.V. 124 Consolidated statement of changes in equity of Aegon N.V. 125 Consolidated cash flow statement of Aegon N.V. 128 Notes to the consolidated financial statements 129 Remuneration 283 Independent auditor’s report 289 2 This page has been intentionally left blank. Annual Report 2013 Strategic information This pdf is interactive. The content is clickable so you can navigate through this document. 3 Introduction About this report References to the “NYSE” are to the New York Stock Exchange This report serves as Aegon´s Annual Report prepared in and references to the “SEC” are to the Securities and Exchange accordance with International Financial Reporting Standards, as Commission. Aegon uses “EUR” and “euro” when referring to the adopted by the European Union (IFRS), and with Part 9 of Book 2 lawful currency of the member states of the European Monetary of the Dutch Civil Code for the year ended December 31, 2013, Union; “USD” and “US dollar” when referring to the lawful for Aegon N.V. (the company) and its subsidiaries (collectively currency of the United States of America; “GBP”, “UK pound” and known as Aegon). This report presents the consolidated financial “pound sterling” when referring to the lawful currency of the statements of Aegon (pages 122-288) and the Parent Company United Kingdom; “CAD” and “Canadian dollar” when referring to Financial Statements of Aegon (pages 291-305). the lawful currency of Canada; “PLN” when referring to the lawful currency of Poland; “CNY” when referring to the lawful Presentation of certain information currency of the People’s Republic of China; “RON” when referring Aegon N.V. is referred to in this document as “Aegon”, or to the lawful currency of Romania; “HUF” when referring to the “the company” Aegon N.V. together with its member companies lawful currency of Hungary; “TRY” when referring to the lawful are referred to as “Aegon Group”. For such purposes, “member currency of Turkey; “CZK” when referring to the lawful currency companies” means, in relation to Aegon N.V., those companies of Czech Republic, and “UAH” when referring to the lawful that are required to be consolidated in accordance with the currency of Ukraine. legislative requirements of the Netherlands relating to consolidated accounts. 4 Strategic information Letter of the CEO Letter of the CEO In 2013 we achieved strong results across our markets and experienced increasing demand for our core products and services, as we pursue our mission of helping individuals and families take responsibility for their financial future. Over the past year, we have made significant progress in enhancing the growth prospects for our business, strengthening our financial position, and in transforming our business to create value for our many stakeholders. In each of our chosen markets, profound and lasting market At the center of our strategy is our focus on getting closer to changes are driving increased demand for reliable financial our customers through an accelerated investment in technology. solutions. People are living longer than at any time in history; the The nature of many of our products necessitates professional post-war (“baby boomer”) generation is now entering retirement advice and, as such, we believe the financial advisor will continue with an immense pool of accumulated and still-growing to play an essential role in our business. New digital platforms assets that will need to be managed for an increasingly longer have been introduced to provide intermediaries with the tools to retirement; governments are continuing to withdraw from operate more efficiently in a rapidly changing landscape. In the traditional means of publicly-provided pension support; and United Kingdom for instance, Aegon's new pension platform, companies have considerably decreased, or ended altogether, known as Aegon Retirement Choices, is demonstrating early their contributions to employee retirement plans. In many success. We recognize that consumers increasingly research developing markets, strong economic growth is creating a sizable and wish to purchase financial services products online, as and growing affluent middle class that will inevitably seek the they do many other products and services. Consequently, we same financial protection and long-term security solutions as are committed to enabling our current and future customers to those in more mature economies. All of these factors provide interact with us in the ways they choose. In the Netherlands, excellent growth opportunities for our business and confirm we launched new digital channels aimed at specific customer that our products and services have never been more needed. segments more likely to purchase life insurance and retirement Moreover, they provide the basis for the broad range of actions solutions through digital rather than traditional channels. we are taking to further transform our businesses and enhance our ability to interact better and more frequently with those who In addition to enabling our businesses to connect and engage depend on us. with customers better and with greater frequency, technology also delivers the tools to create a truly distinctive and relevant During 2013, we expanded our reach through promising new customer experience. We are committed to providing greater distribution agreements in our key markets. We continued to ease of interaction with our businesses, simplifying product invest in our businesses in Central & Eastern Europe, Asia and explanations, and empowering customers with practical online Latin America, given the strong demand for protection and tools that will both enable them to better understand their savings products in these developing economies. Meanwhile, we financial needs and provide greater clarity about the products continued to review our products and services, broadening and and services available to address these needs. This approach, deepening our capabilities in order to target opportunities, and we believe, is essential to our focus on building customer loyalty ensuring that the products we offer deliver value for both our and strengthening our competitive advantage in an increasingly customers and Aegon, given our long-term risk-return criteria. crowded market. In the United States, we have brought nearly all of Consistent with our strict risk-return discipline, we further our businesses together under the well-recognized strengthened Aegon’s risk profile by maintaining a solid balance Transamerica brand, furthering the strategic integration of our sheet and further improving our capital position. The strong operations which began three years ago. In what continues to be financial performance, combined with our actions to reduce the largest market in the world for life insurance and retirement costs across our organization during 2013, enabled us to products and services, we have enhanced our leadership continue the momentum of recent years. Clearly, our strategic positions with new distribution partners, and developed new priorities have delivered their intended benefits to our customers digital capabilities that will allow us to better serve our current and businesses, and to our valued shareholders who have and future customers’ diverse financial needs across their every reason to expect an attractive and growing return on life-cycle. their investment. Annual Report 2013 5 Essential to our long-term success is creating an internal culture My Management Board colleagues and I wish to express our of customer-centricity, innovation and shared responsibility. gratitude to the dedicated men and women of Aegon who have Equipping our leaders with the resources they require to promote contributed