•ŸUnderlying earnings up 7% to EUR 514 million, driven by growth, improved operational performance and higher equity markets; partly offset by unfavorable mortality experience and exchange rate movements
•Fair value items loss of EUR 263 million, mainly due to hedging programs and model updates
•Net income up 43% to EUR 343 million, resulting mainly from higher realized gains
•Return on equity increases to 8.8%, or 9.6% excluding capital allocated to run-off businesses

Profitable sales growth generated by expanding distribution and product innovation
•ŸGross deposits up 3% to EUR 13.0 billion, driven by pensions and variable annuities in US; record net deposits of EUR 6.1 billion
• Life sales down 2% to EUR 511 million; growth in Asia, US and Spain offset by UK and Netherlands
•ŸAccident and health and general insurance sales 36% higher to EUR 252 million, driven by US
•Higher margins drive 9% increase of market consistent value of new business to EUR 221 million

Continued strong capital position and cash flows supporting dividend
•Holding excess capital and solvency ratio both stable at EUR 1.7 billion and 211% respectively
•Operational free cash flows of EUR 370 million, including market impacts and one-time items of EUR 51 million
•Interim dividend of EUR 0.11 per share

Statement of Alex Wynaendts, CEO

"We are pleased with the strong results that Aegon has delivered, as we build on the positive momentum achieved in previous quarters.

"We are continuing to offer innovative new products to our customers and expand our distribution – indeed we will soon be extending our successful partnership in Spain with Banco Santander to Portugal. Ever more customers are choosing Aegon, and placing their trust in our products and services to secure their financial future. As a result, our revenue-generating investments now exceed EUR 500 billion for the first time in the company's history.

"Our strong financial base is underlined by our healthy cash flows and capital position, and we are therefore pleased to announce an interim dividend of 11 eurocents per share."

Strategic Highlights
•Successful strategic partnership with Banco Santander in Spain extended to Portugal
•Individual Savings & Retirement and Employer Solutions & Pensions divisions in the United States to be combined into a new division, Investments & Retirement
•Third annual global Aegon Retirement Readiness Survey raised awareness of the need to prepare for retirement and promoted the Aegon brand

Aegon's ambition

Aegon continues to pursue its strategic aim to be a leader in all of its chosen markets, supported by four strategic objectives embedded in all Aegon businesses: Optimize portfolio; Deliver operational excellence; Enhance customer loyalty; and Empower employees. These provide the strategic framework for the company's ambition to become the most-recommended life insurance and pension provider by customers and business partners, as well as the most-preferred employer in the sector.

Optimize portfolio

In July, Aegon signed a 25-year agreement to distribute both protection and general insurance products through Banco Santander's network of branches in Portugal. Banco Santander Totta is one of Portugal's leading banks with more than 600 branches and over 2 million customers, and this new agreement builds on the successful start of Aegon's partnership with Banco Santander in Spain in 2013. Under the terms of the agreement, Aegon will acquire a 51% stake in Banco Santander Totta's insurance activities.

In the Netherlands, Aegon has acquired the remaining 50% stake in the online car insurance broker Onna-Onna, which has over 30,000 customers. The company focuses on female drivers, and in recent years has established a reputation for exceptional customer service. Full ownership of Onna-Onna demonstrates Aegon's commitment to utilizing innovative technology to improve the customer experience.

Deliver operational excellence

Aegon's focus on operational excellence is about identifying the most efficient and effective way to use the group's resources. This often results in cost savings that can either lead to an absolute reduction of expenses or be invested back into the business to improve the customer experience and fuel growth. On other occasions, the result is a new structure that improves cooperation and innovation.

In the United States, Aegon will combine its Individual Savings & Retirement division and its Employer Solutions & Pensions division into one group called Transamerica Investments & Retirement. The new structure will improve the coordination of distribution efforts, and supports Aegon's strategy to provide products that address customers' needs at every stage of their financial journey – from buying a house and starting a family, to retirement and elderly care.

Transamerica Retirement Solutions was recently recognized as a "Best in Class" retirement plan provider by plan sponsors in Chatham Partners' 2013 Client Satisfaction Analysis. Transamerica was ranked as a top retirement plan provider for participant services, participant statements, participant website, voice response system, and helping to fulfill fiduciary responsibilities. Overall, Transamerica Retirement Solutions received 165 "Best in Class" designations.

Enhance customer loyalty

An essential element of Aegon's strategy is getting closer to its customers by increasing innovation at all levels of the organization. Creating an ever more customer-centric culture will enable Aegon to continue growing by better anticipating and responding to changing markets and customer behaviors.

Aegon released the results of its third annual global Retirement Readiness Survey. This annual survey is based on responses from over 16,000 people in 15 countries – from China and Brazil, to the United Kingdom and United States – about how they view retirement and how they are preparing for it. The results from the 2014 survey not only underlined the clear concerns people have about their retirement, but also that many are not taking the right steps to prepare for the future. The survey attracted considerable media attention across the world helping to raise awareness, and supporting Aegon's purpose of helping people take responsibility for their financial future.

Transamerica launched the Your Client is Now a Family (external link) program, a 'digital toolkit' that includes videos, fast facts and eGuides to help financial advisors provide higher-quality advice and stay relevant in the age of instant information and online advice. The site was developed as a means to help advisors develop stronger relationships with customers by understanding the unique needs of each generation of a customer's family.

Empower employees

Aegon's ambition is to become the most-preferred employer in its sector. For this reason, Aegon is implementing a range of processes and programs that enable employees to better understand how they are contributing to the company's strategy and to recognize individual and team efforts that directly support its four strategic objectives.

It is important that Aegon reflects the societies in which it operates, both in terms of understanding customers and attracting and retaining the highest-caliber employees. Aegon has joined Workplace Pride, an international non-profit organization that promotes Lesbian, Gay, Bisexual and Transgender (LGBT) inclusion. The decision has proven popular with employees, and follows the creation of 'Aegon Proud', Aegon's online community that supports LGBT employees.

Interim dividend

The 2014 interim dividend amounts to EUR 0.11 per common share. The interim dividend will be paid in cash or stock at the election of the shareholder. The value of the stock dividend will be approximately equal to the cash dividend. Aegon will neutralize the dilutive effect of the stock dividend on earnings per share.

Aegon's shares will be quoted ex-dividend on August 21, 2014. The record date is August 25, 2014. The election period for shareholders will run from August 27 up to and including September 12, 2014. The stock fraction will be based on the average share price on Euronext Amsterdam from September 8 through September 12, 2014. The stock dividend ratio will be announced on September 17, 2014 and the dividend will be payable as of September 19, 2014.


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