Q4 2016 Real-Time Call Brief

Highlights

As a result of favorable markets, our Solvency II position increased to 159%, which is in the upper half of our target range.

Furthermore, I'm also pleased to announce final 2016 dividends of EUR0.13 per share bringing our full year dividends to EUR0.26 per share.

Underlying earnings before tax increased by 27% to EUR554 million.

Earnings were also positively impacted by favorable markets, as higher interest rates resulted in a favorable EUR25 million intangible adjustments in the US and Asia.

As announced in December, we've increased our 2018 expense savings target by EUR150 million to a total of EUR350 million.

In 2016, we achieved run rate expense savings of EUR110 million, doubled our original full year target of EUR56 million.

This has allowed us to double our US expense savings target $300 million, and we expect to reach original target of $150 million, one year ahead of schedule.

To support this target, we've taken significant management actions in the fourth quarter.

They include the plan closure 3 locations a further net reduction of more than 500 roles and the strategic decision to close our Affinity, Direct TV and Direct Mail channels.

Our net income of EUR470 million is a significant improvement both in comparison with quarters and with the fourth quarter of 2015.

We reported underlying earnings of EUR554 million or from non-underlying earnings perspective it was imbalanced variable nine quarter.

Fair value items, which amounted to a EUR13 million loss were mainly impacted in the Americas by market performance, and volatility following the US elections.

Realized gains totaled EUR36 million and were mostly results of private equity divestments while other charges amounted to EUR38 million.

As a result, effective fixed rate this quarter on underlying earnings was 15%, which is below our plan blended statutory tax rate of 32%.

The records of EUR100 billion of gross deposits in 2016 was mainly driven by a retirement plans in the US and a global asset management business.

Full year net deposits were positive and totaled EUR2.7 billion in 2016.

In the UK, Aegon's platform showed a record net inflows of EUR2.2 billion for the quarter, of which EUR600 million were from new customer inflows.

The platform now is over EUR16 million of assets, and over 440,000 customers.

Indeed, including Cofunds and BlackRocks defined contribution business, we will manage well over EUR100 billion in assets.

Thee inflows in combination with favorable market movements contributed to an increase in revenue generating investments of 5% year-on-year.

Insurance business; new Life sales were down by 12%.

As a result of our decision to exit certain products in the Americas in the first half 2016, Accident & Health new premium production declined to EUR224 million.

As a result of our decision, $100 million of capital will be released over the next years.

Our Solvency II ratio increased to 59% as capital generation and favorable market impacts were partially offset by one-time items.

In the Netherlands, the Solvency II ratio decreased to 141% as the volatility adjuster did not show material recovery after the steep decrease in the third quarter.

Our current assumptions for LAC-DT is 75%, a reduction of LAC-DT assumption by 25 percentage points would reduced our Dutch Solvency II ratio by 8 points and would reduce the Group ratio by 3 points.

US RBC ratio amounted to 440% as capital generation was more than offset by dividend payments to the holding.

In the UK also, our Solvency II ratio was up to 156%.

Holding excess capital position, which amounted to EUR1.5 billion at the end of 2016.

Our holding excess capital EUR1.5 billion is at the top end of our target zone.

In December, we issued EUR500 million of senior notes with a coupon of only 1% taking advantage of market-driven senses.

The proceeds of this issuance are earmarked for the redemption of 3% senior note due in July of this year.

In the meantime, we have upstream EUR100 million from our operating entities to the Dutch Holding Company.

In 2016, we made significant progress with our commitment of returning capital shareholders by completing the EUR400 million share buyback in first half of the year and by announcing a final dividend of $0.13, bringing the total dividend payment for the full year to $0.26 as an increase of 4% compared with last year.

Since 2011, we've increased our dividend by nearly 25%.

In the UK, we successfully completed a transformation of our business from a largely traditional pension business to a Ageon leading platform business in the UK market, and we achieved just by divesting in two steps, our capital intensive of the sizeable ₤9 billion U.K.

Annuity book above, and by freeing up approximately ₤500 million of capital.

With the Cofunds and BlackRock acquisitions, the platform will have over ₤100 billion of assets on administration making it the largest platform in the market.

2018 financial targets; so far, we have achieved run rate expense savings of EUR110 million, which is significantly ahead of our initial 2016 target.

This has allowed us to increase our expense savings target and gives me every confidence that we will reach our increased target of EUR350 million by the end of 2018.

I'm pleased with our solid Solvency II capital ratio earned 59% for the Group, which is in upper half our target range.

We've also been able to maintain a stable holding shares capital position, while returning EUR930 million to shareholders in 2016, including a final 2016 dividend of $0.13 per share.