RNS Number:7215K
Aegon N.V.
06 May 2003
FIRST QUARTER 2003 NET INCOME, EUR 393 MILLION; NET INCOME PER SHARE, EUR 0.26
HIGHLIGHTS
(amounts in millions, except per share data)
First First First First
quarter quarter 2003 quarter quarter
2002 2002 2003
USD USD % EUR EUR %
740 476 -36 Income before tax 845 444 -47
540 421 -22 Net income 617 393 -36
0.39 0.28 -28 Net income per share 0.44 0.26 -41
5,230 6,066 16 Premium income 5,972 5,653 -5
2,183 2,184 - Investment income 2,493 2,036 -18
7,495 8,351 11 Total revenues 8,558 7,783 -9
1,095 1,328 21 Commissions and expenses 1,250 1,238 -1
584 687 18 Standardized new life production 666 640 -4
7,611 7,787 2 Gross deposits (1) 8,690 7,257 -16
14,924 14,732 -1 Shareholders' equity (2) 14,231 13,522 -5
249,807 258,611 4 Total assets (2) 238,206 237,367 -
1) Annuity, GIC and savings deposits are not included in revenues
2) Amounts reported for 2002 are as of December 31, 2002
Chairman's statement
"Income before tax increased significantly in comparison to the fourth quarter
of 2002, but was 47% lower compared to the first three months of 2002. The first
quarter of 2003 proved to be challenging, with continued low interest rates,
lower equity markets, continued bond defaults and the weaker US dollar versus
the euro. However, it is encouraging to see that the first quarter of 2003
showed some signs of improvement in the credit markets, even though default
rates remain far above a level considered average for AEGON and the industry",
said Don Shepard, CEO and Chairman of the Executive Board. "Excluding currency
influence, we continue to increase total life production as we maintain our
focus on cost control".
Outlook 2003
AEGON's Executive Board remains cautious in its outlook for 2003 in view of
continuing uncertainties in the financial markets and is not providing an
earnings forecast.
Key points for the first quarter 2003
* Standardized life production increased 10% in the Americas and 4% in
the UK but was down 42% in the Netherlands, reflecting volatility in the
placement of new business in the pension fund markets compared to first quarter
of 2002. Total annuity and GIC deposits increased 2% in the Americas.
Off-balance sheet production in the Americas increased 32% over the first
quarter of 2002. Off-balance sheet production decreased 48% in the Netherlands
but increased fourfold in the United Kingdom, compared to first quarter 2002.
* Default provisions in the USA were strengthened by USD 149 million
compared to USD 82 million in the first three months of 2002 but showed
improvement in comparison to the fourth quarter of 2002 (USD 219 million). The
balance of the USA default provisions at March 31, 2003 was USD 280 million.
* EUR 126 million was released as indirect investment income from the
revaluation account to income before tax compared with EUR 215 million for the
first quarter of 2002.
* Earnings are negatively affected by lower employee pension plan
benefits in the USA (USD 22 million) and higher pension costs in the Netherlands
(EUR 15 million) and the UK (GBP 4 million) totaling EUR 42 million.
* Variable annuity results continue to assume annual equity returns of
12% for five years and 9% thereafter in the determination of deferred policy
acquisition costs (DPAC) amortization and provisions for guaranteed benefits.
* There was no accelerated amortization of deferred policy acquisition
costs (DPAC unlocking). Additions to the provisions for guaranteed minimum
benefits taken during the first quarter 2003 in the USA were USD 9 million, in
Canada CAD 12 million and in the Netherlands EUR 13 million. In the first
quarter 2002 the additions were nil in all countries.
* Net income for Transamerica Finance Corporation was USD 78 million
compared to USD 24 million in the first quarter of 2002. The increase was driven
by lower credit losses, increased revenue due to mortgage refinancing activity,
lower funding costs, and one-time tax benefits of USD 31 million.
* Currency exchange rates negatively impacted net earnings by 10%
compared to first quarter 2002, driven mainly by the lower US dollar exchange
rate.
* The ratio of shareholders' equity to total capital remains stable at
approximately the same level as year-end 2002. Currency exchange rate
translations do not affect the solvency at the operating units.
Report of the Executive Board
Income before tax for the first quarter of 2003 totaled EUR 444 million, 56%
higher than the previous quarter but 47% lower than the same period last year.
Earnings per share of EUR 0.26 were 41% lower than first quarter 2002. The
decline from first quarter 2002 resulted from the lower average exchange rates
of the main currencies (EUR 112 million), lower gross margin due to lower direct
and indirect investment income, increased default charges (EUR 62 million),
increased provisions for products with guaranteed minimum benefits (EUR 28
million) and lower fees on variable and unit-linked accounts.
Total revenues were 9% lower (3% higher, excluding currency influence) and gross
margin was 20% lower (excluding currency influence 7% lower). Commissions and
expenses were 1% lower than the first quarter of 2002 (16% higher excluding
currency influence) and negatively affected by higher employee pension cost; on
balance higher DPAC amortization; EUR 13 million of investment costs in the
Netherlands that are now recognized on a gross instead of a net basis, but which
are offset by an equal amount in revenues; and EUR 27 million related to a USA
coinsurance agreement.
The Americas
Net income totaled USD 245 million compared to USD 358 million in the first
quarter of 2002. Pre-tax income for the quarter totaled USD 356 million compared
to USD 536 million during the same period last year. Additions to asset default
provisions of USD 149 million (USD 67 million higher than first quarter 2002),
no indirect income compared to USD 81 million in the first quarter of 2002 and
lower investment yields and squeezed spreads with an impact of approximately USD
44 million contributed to the decline.
Variable annuity results continue to assume annual equity returns of 12% for
five years and 9% thereafter in the determination of deferred policy acquisition
costs (DPAC) amortization and provisions for guaranteed benefits.
There was no accelerated DAC amortization (unlocking). Additions to the
provisions for guaranteed minimum benefits in the U.S. were USD 9 million. In
Canada provisions for guaranteed minimum benefits increased CAD 12 million.
Excluding commissions and DPAC amortization, operating expenses increased USD 63
million. Reflected in the expenses of the first quarter 2003 is USD 22 million
less in employee pension overfunding benefit, USD 27 million related to a
coinsurance agreement that was cancelled and USD 7 million higher expenses
related to acquisitions since the first quarter 2002. Excluding these items,
expenses were up 2% from first quarter 2002 primarily as a result of increased
sales production and growth of the in-force block of business.
Standardized new premium life production in the Americas increased 10% over
first quarter 2002 to USD 250 million. The majority of the increase was driven
by the strong traditional universal life sales in our Agency operations. Total
annuity and guaranteed investment contract (GIC) deposits increased 2% to USD 7
billion in the first quarter. Fixed annuity sales were down 20% compared to the
first quarter of 2002. The strong growth (49% increase over the first quarter
2002) in variable annuity sales was influenced by consumer demand to capture the
guaranteed minimum income benefit (GMIB) feature before its discontinuance in
January 2003. Variable annuity production decreased significantly in the latter
part of the quarter after the GMIB withdrawal. Off-balance sheet production was
USD 5.6 billion, a 32% increase compared to the first quarter of 2002.
Traditional life results of USD 174 million, down 24% compared to the first
quarter of 2002, include USD 49 million of bond defaults compared to USD 13
million in the first quarter of 2002. Fixed annuity results of USD 64 million,
down 44%, include USD 61 million of bond defaults compared to USD 19 million for
the first quarter of 2002. The loss of the indirect investment income negatively
impacted both the traditional life and fixed annuity earnings by USD 21 million
and USD 31 million, respectively.
GICs and funding agreement results of USD 44 million decreased 29% compared to
the first three months of 2002. The loss of indirect investment income impacted
GICs and funding agreement earnings by USD 22 million. Life for the account of
policyholders results were USD 24 million compared to USD 28 million for the
same period in 2002. Variable annuities experienced a loss of USD 4 million
compared to a profit of USD 29 million in the first quarter of 2002. The
majority of the decline over first quarter 2002 is due to higher guarantee death
claims, higher DPAC amortization and an increase in provisions for guaranteed
minimum benefits in Canada. Accident and health earnings were 29% lower due to
increased bond defaults, loss of indirect investment income, and a one-time
foreign currency gain in the first quarter of 2002.
The Netherlands
Net income was EUR 136 million compared to EUR 182 million for the first quarter
2002. Continued bearish equity markets were the primary driver of the decline.
This resulted in lower investment income and in additions to the provisions for
guaranteed minimum benefits, which were EUR 13 million and were nil in the first
quarter 2002. The balance of DPAC amortization was EUR 7 million higher.
New life production of EUR 73 million was down 42% compared to first quarter
2002 while off-balance sheet production decreased 48% to EUR 161 million for the
quarter. With 6% production growth individual life performed well, while
production in pensions decreased 62% compared to the first quarter 2002
reflecting the volatility in the placement of new business in the pension fund
markets. Compared to year-end 2002 savings account balances slightly decreased
(-1%) to a total of EUR 6 billion at the end of the first quarter 2003.
Total revenues of EUR 2 billion were lower than the same period last year. The
individual life business showed satisfying growth in premium income of 11%.
Commissions and expenses increased 25% to EUR 189 million. Additional employee
pension costs, lower deferral of policy acquisition costs and higher DPAC
amortization are the primary drivers of the increase in commissions and expenses
compared to the first quarter of 2002. Also included in expenses are EUR 13
million of investment costs that are now recognized on a gross instead of net
basis, accounting for approximately 10% out of the 25% increase. This latter
amount in expenses is offset by an equal amount in revenues.
Traditional life results of EUR 133 million were 8% lower than the first quarter
2002, influenced by lower investment income. Life for the account of
policyholder results were EUR 25 million, down from EUR 65 million in the prior
year first quarter. Life results were affected by the higher provisions of EUR
31 million (e.g. guaranteed minimum benefits) and lower investment income due to
the decline in the equity markets.
Technical results from non-life were EUR 10 million, an increase of 9%. Mainly
due to lower investment income total results were EUR 8 million lower compared
with the first quarter 2002. Results from banking activities were zero, compared
to EUR 9 million in the first quarter 2002. Lower interest spreads and further
increases in provisions for credit risk contributed to the decline.
United Kingdom
Net income was GBP 21 million compared to GBP 42 million in the first quarter of
2002. The reduction in net income is primarily due to lower management and fund
related fees as a direct result of the lower equity markets and higher DPAC
amortization. Commissions and expenses increased to GBP 91 million, up GBP 36
million, due to inclusion of the operating costs of the acquired distribution
companies, growth in the protection businesses, higher contributions of GBP 4
million to the employee pension plan and higher DPAC amortization.
Standardized new life production of GBP 161 million was 4% higher than the first
quarter 2002. Off-balance sheet production increased to GBP 127 million, a
fourfold increase from the same quarter in 2002.
Total revenues were up 21% as a result of increased single premium business and
income from the acquired distribution companies.
Other Countries
Net income from other countries was EUR 14 million, a 17% increase from first
quarter 2002. Higher investment income in Hungary, strict cost control and
strong life sales at AEGON Taiwan as well as higher general insurance business
results at AEGON Spain contributed to the increase.
Capital Gains
EUR 126 million was released as indirect investment income from the revaluation
account to income before tax compared with EUR 215 million for the first quarter
of 2002. The revaluation account balance at March 31, 2003 was EUR 2,170
million. Realized gains of EUR 1,840 million and unrealized gains of EUR 330
million account for the total.
Capital and Funding
Shareholders' equity was EUR 13,522 million compared to EUR 14,231 million at
December 31, 2002. The decrease of EUR 709 million is largely comprised of
negative currency exchange rate differences of EUR 539 million, a reduction in
the revaluation account of EUR 428 million, a EUR 105 million decrease in the
fair value of the total return swaps with Vereniging AEGON, and net income of
EUR 393 million.
AEGON is committed to a strategy of continued financial strength. At the end of
the first quarter 2003, equity capital represented 71% of our total capital
base, while senior and dated subordinated debt comprised 19% of our total
capital base. Capital securities accounted for the remaining 10%. The ratio of
shareholders' equity to total capital remains stable at approximately the same
level as year-end 2002. Currency exchange rate translations do not affect the
solvency at the operating units.
Extraordinary General Meeting of Shareholders
AEGON will hold an Extraordinary General Meeting of Shareholders on May 9, 2003,
to adopt proposed changes to AEGON's corporate governance and to end its
voluntary application of the Dutch large company regime. For further information
please refer to the press release of 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:
3/4 the frequency and severity of defaults by issuers in our fixed income
investment portfolios; and
3/4 the effects of corporate bankruptcies and/or accounting restatements 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.
The Hague, May 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
Conference call
An investor conference call will be held today at 15.00 MET DST (14.00 BST;
09.00 a.m. ET). The phone numbers to listen in on the conference call are as
follows:
+31 (0)45 631 6905 (Netherlands)
+44 208 515 2326 (United Kingdom)
+1 416 646 3096 (United States, Canada)
Webcast
On 7 May 2003 the AEGON Executive Board will host an analyst and investor
conference at 8.15 a.m. - 5.00 p.m. CET which will be webcast live on AEGON's
website (www.aegon.com).
Highlights
amounts in
millions
USD EUR
First three months First three months
2003 2002 % 2003 2002 %
Income by product segment
322 372 -13 Traditional life 300 425 -29
64 114 -44 Fixed annuities 60 130 -54
44 62 -29 GICs and funding 41 71 -42
agreements
100 156 -36 Life for account 93 178 -48
policyholders
-4 29 Variable annuities -4 33
3 4 -25 Fee business 3 4 -25
529 737 -28 Life insurance 493 841 -41
59 81 -27 Accident and health 55 93 -41
insurance
16 15 7 General insurance 15 17 -12
604 833 -27 Total insurance activities 563 951 -41
0 8 -100 Banking activities 0 9 -100
-128 -101 27 Interest charges and other -119 -115 3
476 740 -36 Income before tax 444 845 -47
-133 -224 -41 Corporation tax -124 -255 -51
78 24 225 Transamerica Finance 73 27 170
Corporation
421 540 -22 Net income 393 617 -36
Income geographically
356 536 -34 Americas 332 612 -46
181 209 -13 The Netherlands 169 238 -29
46 83 -45 United Kingdom 43 95 -55
21 13 62 Other countries 19 15 27
604 841 -28 Income before tax business 563 960 -41
units
-128 -101 27 Interest charges and other -119 -115 3
476 740 -36 Income before tax 444 845 -47
-133 -224 -41 Corporation tax -124 -255 -51
78 24 225 Transamerica Finance 73 27 170
Corporation
421 540 -22 Net income 393 617 -36
1,804 1,835 -2 Gross margin 1,682 2,095 -20
1,328 1,095 21 Commissions and expenses 1,238 1,250 -1
Amounts per common share of EUR 0.12
0.28 0.39 -28 Net income 1 0.26 0.44 -41
0.28 0.39 -28 Net income fully diluted 1 0.26 0.44 -41
As at As at As at As at
March 31 Dec. 31 March Dec. 31
31
2003 2002 2003 2002
8.79 8.99 -2 Shareholders' equity 2 8.07 8.57 -6
9.22 9.54 -3 Shareholders' equity after full 8.46 9.10 -7
conversion 2
Number of employees 26,559 25,817 3
Outstanding common shares:
- Number of common shares (millions) 1,445 1,422 2
- Weighted average number 1,414 1,391 2
(millions)
1 Based on the weighted average number of common shares, adjusted for repurchased own
shares.
2 Based on the number of common shares outstanding at the end of the period, adjusted for repurchased own
shares.
Revenues and production
amounts
in
millions
USD EUR
First three months First three months
2003 2002 % 2003 2002 %
Revenues
539 391 38 Life general 502 447 12
account single
premiums
1,610 1,446 11 Life general 1,500 1,651 -9
account recurring
premiums
1,413 1,319 7 Life policyholders 1,317 1,506 -13
account single
premiums
1,502 1,150 31 Life policyholders account recurring premiums 1,400 1,313 7
5,064 4,306 18 Total life 4,719 4,917 -4
insurance gross
premiums
753 726 4 Accident and health 702 829 -15
insurance premiums
249 198 26 General insurance 232 226 3
premiums
6,066 5,230 16 Total gross 5,653 5,972 -5
premiums
2,182 2,163 1 Investment income 2,034 2,470 -18
insurance
activities 1
101 82 23 Income from banking 94 93 1
activities
8,349 7,475 12 Total revenues 7,781 8,535 -9
business units
2 20 -90 Income from other 2 23 -91
activities
8,351 7,495 11 Total revenues 7,783 8,558 -9
Revenues by product
segment
7,102 6,314 12 Life insurance 6,619 7,210 -8
881 861 2 Accident and health 821 983 -16
insurance
265 218 22 General insurance 247 249 -1
101 82 23 Banking activities 94 93 1
2 20 -90 Other activities 2 23 -91
8,351 7,495 11 Total revenues 7,783 8,558 -9
Investment income
for the account
-1,662 859 of policyholders -1,549 981
Standardized new
premium production
life insurance
1,840 1,647 12 Single premiums 1,715 1,880 -9
503 419 20 Recurring premiums 468 478 -2
annualized
687 584 18 Total recurring 640 666 -4
plus 1/10 single
Deposits
1,705 2,140 -20 Fixed annuities 1,589 2,443 -35
2,669 2,957 -10 GICs and funding 2,487 3,376 -26
agreements
2,586 1,739 49 Variable annuities 2,410 1,986 21
6,960 6,836 2 Total 6,486 7,805 -17
827 775 7 Savings deposits 771 885 -13
7,787 7,611 2 Total production on 7,257 8,690 -16
balance sheet
Net deposits
782 1,514 -48 Fixed annuities 729 1,729 -58
672 1,168 -42 GICs and funding 626 1,334 -53
agreements
1,577 476 Variable annuities 1,470 543
3,031 3,158 -4 Total 2,825 3,606 -22
-325 -37 -778 Savings deposits -303 -42 -621
2,706 3,121 -13 Total net deposits 2,522 3,564 -29
9 132 -93 Investment 8 151 -95
contracts
Off balance sheet
production
3,368 2,538 33 Synthetic GICs 3,139 2,898 8
Mutual funds/
Collective Trusts
and
2,709 2,059 32 other managed 2,525 2,351 7
assets
6,077 4,597 32 Total production 5,664 5,249 8
off balance sheet
135 188 -28 1 Of which indirect income on shares and real estate 126 215 -41
Americas
amounts in
millions
USD EUR
First three months First three months
2003 2002 % 2003 2002 %
Income by product segment
174 230 -24 Traditional life 162 263 -38
64 114 -44 Fixed annuities 60 130 -54
44 62 -29 GICs and funding 41 71 -42
agreements
24 28 -14 Life for account 22 32 -31
policyholders
-4 29 Variable annuities -4 33
4 3 33 Fee business 4 3 33
306 466 -34 Life insurance 285 532 -46
50 70 -29 Accident and health 47 80 -41
insurance
0 0 - General insurance 0 0 -
356 536 -34 Total insurance 332 612 -46
332 476 -30 of which general account 310 544 -43
24 60 -60 of which policyholders 22 68 -68
account 2
356 536 -34 Income before tax 332 612 -46
-111 -178 -38 Corporation tax -104 -203 -49
245 358 -32 Net income 228 409 -44
Revenues
187 193 -3 Life general account 174 220 -21
single premiums
1,143 1,115 3 Life general account 1,065 1,273 -16
recurring premiums
131 146 -10 Life policyholders account 122 167 -27
single premiums
239 167 43 Life policyholders account recurring 223 191 17
premiums
1,700 1,621 5 Total life insurance gross 1,584 1,851 -14
premiums
637 631 1 Accident and health 594 720 -18
insurance premiums
0 0 - General insurance premiums 0 0 -
2,337 2,252 4 Total gross 2,178 2,571 -15
premiums
1,701 1,769 -4 Investment income 1,585 2,020 -22
insurance activities 1
4,038 4,021 0 Total revenues 3,763 4,591 -18
Investment income for the
account
-543 -96 of policyholders -506 -110
Gross margin, commissions and expenses
1,254 1,359 -8 Gross margin 1,169 1,552 -25
898 823 9 Commissions and expenses 837 940 -11
Standardized new premium
production
life insurance
302 325 -7 Single premiums 281 371 -24
220 195 13 Recurring premiums 205 223 -8
annualized
250 228 10 Total recurring plus 1/10 233 260 -10
single
Deposits
1,705 2,140 -20 Fixed annuities 1,589 2,443 -35
2,669 2,957 -10 GICs and funding 2,487 3,376 -26
agreements
2,586 1,739 49 Variable annuities 2,410 1,986 21
6,960 6,836 2 Total production on 6,486 7,805 -17
balance sheet
Off balance sheet
production
3,368 2,538 33 Synthetic GICs 3,139 2,898 8
Mutual funds/Collective
Trusts and
2,281 1,730 32 other managed 2,126 1,975 8
assets
5,649 4,268 32 Total production off 5,265 4,873 8
balance sheet
0 81 -100 1 Of which indirect income on shares and real 0 92 -100
estate
2 Includes also variable
annuities and fees.
The Netherlands
amounts
in
millions
EUR
First three months
2003 2002 %
Income by product segment
Traditional life 133 145
Life for account policyholders 25
Life insurance 158 210
Accident and health insurance 6
General insurance 5 8
Total insurance 169 229
of which general account 144
of which policyholders account 25
Banking activities 2 0 9
Income before tax 169 238
Corporation tax -33 -56
Net income 136 182
Revenues
Life general account single premiums 240
Life general account recurring premiums 290
Life policyholders account single premiums 121
Life policyholders account recurring 687
premiums
Total life insurance gross premiums 1,338
Accident and health insurance premiums 80
General insurance premiums 147
Total gross premiums 1,565 1,717
Investment income insurance activities 1 360
Income from banking activities 94
Total revenues 2,019 2,181
Investment income for the account
of policyholders -226 249
Gross margin, commissions and expenses
Gross margin 358 389
Commissions and expenses 3 189
Standardized new premium production
life insurance
Single premiums 317 548
Recurring premiums annualized 41
Total recurring plus 1/10 single 73
Deposits
Savings deposits 771 885
Total production on balance sheet 771
Investment contracts 8 151
Off balance sheet production
Mutual funds and other managed assets 161
Total production off balance sheet 161
1 Of which indirect income on shares and 126
real estate
2 Includes income on off balance sheet type
products.
3 Includes the effect of a change in presentation of investments costs from a net basis to a gross basis.
United Kingdom
amounts in millions
GBP EUR
First three months First three months
2003 2002 % 2003 2002 %
Income by product segment
-1 7 -114 Traditional life -2 12 -117
32 52 -38 Life for account policyholders 48 84 -43
-2 -1 Fee business -3 -1
29 58 -50 Life insurance 43 95 -55
-1 7 -114 of which general account -2 12 -117
30 51 -41 of which policyholders account 2 45 83 -46
29 58 -50 Income before tax 43 95 -55
-8 -16 -50 Corporation tax -12 -27 -56
21 42 -50 Net income 31 68 -54
Revenues
56 32 75 Life general account single premiums 83 53 57
21 17 Life general account recurring premiums 32 27 19
716 560 28 Life policyholders account single premiums 1,069 912 17
292 290 1 Life policyholders account recurring premiums 437 472 -7
1,085 899 21 Total gross premiums 1,621 1,464 11
33 24 38 Investment income insurance activities 1 49 39 26
1,118 923 21 Total revenues 1,670 1,503 11
Investment income for the account
-530 514 of policyholders -792 837
Gross margin, commissions and expenses
120 113 6 Gross margin 179 184 -3
91 55 65 Commissions and expenses 136 89 53
Standardized new premium production
life insurance
741 582 27 Single premiums 1,107 948 17
87 97 -10 Recurring premiums annualized 129 158 -18
161 155 4 Total recurring plus 1/10 single 240 253 -5
Off balance sheet production
127 25 Mutual funds and other managed assets 190 41
127 25 Total production off balance sheet 190 41
0 1 -100 1 Of which indirect income on shares and real estate 0 2 -100
2 Includes also fee income.
Other countries
amounts in millions
EUR
First three months
2003 2002 %
Income by product segment
Traditional life 7 5 40
Life for account of policyholders -2 -3 33
Fee business 2 2 0
Life insurance 7 4 75
Accident and health insurance 2 2 0
General insurance 10 9 11
Total insurance 19 15 27
of which general account 19 16 19
of which policyholders account 2 0 -1 100
Income before tax 19 15 27
Corporation tax -5 -3 67
Net income 14 12 17
Revenues
Life general account single premiums 5 4 25
Life general account recurring premiums 113 53 113
Life policyholders account single premiums 5 11 -55
Life policyholders account recurring premiums 53 45 18
Total life insurance gross premiums 176 113 56
Accident and health insurance premiums 28 26 8
General insurance premiums 85 81 5
Total gross premiums 289 220 31
Investment income insurance activities 1 40 40 0
Total revenues 329 260 27
Investment income for the account
of policyholders -25 5
Gross margin, commissions and expenses
Gross margin 85 76 12
Commissions and expenses 66 61 8
Standardized new premium production
life insurance
Single premiums 10 13 -23
Recurring premiums annualized 93 27
Total recurring plus 1/10 single 94 28
Off balance sheet production
Mutual funds and other managed assets 48 25 92
Total production off balance sheet 48 25 92
1 Of which indirect income on shares and real estate 0 2 -100
2 Includes also fee income.
Explanatory notes
The published figures are unaudited.
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 March 31, Americas Netherlands Kingdom countries EUR USD
2003
Investments
109,676 1,019 Fixed income 100,666 12,498 1,479 1,637 116,280 126,687
3,520 78 Equities and real 3,231 4,629 113 128 8,101 8,826
estate
113,196 1,097 Total general 103,897 17,127 1,592 1,765 124,381 135,513
account
12,788 15,812 Fixed income 11,738 11,446 22,929 312 46,425 50,580
23,722 12,122 Equities and real 21,773 6,035 17,578 181 45,567 49,645
estate
36,510 27,934 Total account 33,511 17,481 40,507 493 91,992 100,225
policyholders
149,706 29,031 Total insurance 137,408 34,608 42,099 2,258 216,373 235,738
activities
- - Banking activities - 6,926 - - 6,926 7,546
53,751 821 Off balance sheet 49,335 1,842 1,190 456 52,823 57,551
assets
203,457 29,852 Total assets 186,743 43,376 43,289 2,714 276,122 300,835
business units
Other investments 25 27
Total group 276,147 300,862
157,175 29,530 Assets business 144,263 44,273 42,822 2,601 233,959 254,898
units
Other assets 3,408 3,713
Total assets on 237,367 258,611
balance sheet
16,762 2,036 Capital in units 15,385 2,316 2,953 416 21,070 22,956
Total capital base 19,119 20,830
Other net 1,951 2,126
liabilities
Total 21,070 22,956
As at March 31,
2002
Investments
96,878 832 Fixed income 111,047 12,777 1,358 1,467 126,649 110,488
4,311 92 Equities and real 4,942 5,503 149 169 10,763 9,390
estate
101,189 924 Total general 115,989 18,280 1,507 1,636 137,412 119,878
account
12,043 14,526 Fixed income 13,805 8,096 23,697 358 45,956 40,092
27,375 17,023 Equities and real 31,379 9,748 27,770 220 69,117 60,298
estate
39,418 31,549 Total account 45,184 17,844 51,467 578 115,073 100,390
policyholders
140,607 32,473 Total insurance 161,173 36,124 52,974 2,214 252,485 220,268
activities
- - Banking activities - 7,092 - - 7,092 6,187
47,058 816 Off balance sheet 53,941 1,070 1,331 281 56,623 49,398
assets
187,665 33,289 Total assets 215,114 44,286 54,305 2,495 316,200 275,853
business units
Other investments 436 380
Total group 316,636 276,233
145,039 32,639 Assets business 166,253 45,152 53,245 2,366 267,016 232,945
units
Other assets 5,102 4,451
Total assets on 272,118 237,396
balance sheet
14,224 1,806 Capital in units 16,304 3,591 2,946 388 23,229 20,265
Total capital base 22,272 19,430
Other net 957 835
liabilities
Total 23,229 20,265
As at December 31,
2002
Investments
105,544 980 Fixed income 100,643 10,792 1,507 1,611 114,553 120,132
3,460 88 Equities and real 3,299 4,943 135 133 8,510 8,924
estate
109,004 1,068 Total general 103,942 15,735 1,642 1,744 123,063 129,056
account
11,952 15,401 Fixed income 11,397 11,139 23,675 312 46,523 48,789
23,274 12,940 Equities and real 22,193 5,934 19,892 186 48,205 50,552
estate
35,226 28,341 Total account 33,590 17,073 43,567 498 94,728 99,341
policyholders
144,230 29,409 Total insurance 137,532 32,808 45,209 2,242 217,791 228,397
activities
- - Banking activities - 7,167 - - 7,167 7,516
51,008 806 Off balance sheet 48,639 1,689 1,239 471 52,038 54,572
assets
195,238 30,215 Total assets 186,171 41,664 46,448 2,713 276,996 290,485
business units
Other investments 378 397
Total group 277,374 290,882
149,948 29,864 Assets business 142,985 42,750 45,910 2,541 234,186 245,591
units
Other assets 4,020 4,216
Total assets on 238,206 249,807
balance sheet
16,518 2,028 Capital in units 15,751 2,605 3,117 399 21,872 22,937
Total capital base 20,058 21,035
Other net 1,814 1,902
liabilities
Total 21,872 22,937
Summarized consolidated income statements
amounts in
millions
USD EUR
First three First three
months months
2003 2002 % 2003 2002 %
Revenues
6,066 5,230 16 Gross premiums 5,653 5,972 -5
2,184 2,183 0 Investment income 2,036 2,493 -18
101 82 23 Income from banking activities 94 93 1
8,351 7,495 11 Total revenues 7,783 8,558 -9
Benefits and expenses
559 376 49 Premiums to reinsurers 521 430 21
5,556 4,967 12 Benefits paid and provided 5,178 5,671 -9
52 50 4 Profit sharing and rebates 48 57 -16
1,328 1,095 21 Commissions and expenses for own account 1,238 1,250 -1
178 166 7 Interest 166 190 -13
202 101 100 Miscellaneous income and expenditure 188 115 63
7,875 6,755 17 Total benefits and expenses 7,339 7,713 -5
476 740 -36 Income before tax 444 845 -47
-133 -224 -41 Corporation tax -124 -255 -51
78 24 Transamerica Finance Corporation 73 27
421 540 -22 Net income 393 617 -36
Income statement items: average rate 1 EUR = USD 1.0730 (2002: USD 0.8758).
Condensed consolidated balance sheets
amounts in
millions
As at As at As at As at As at As at
March 31 Dec. 31 March March 31 March 31 Dec. 31
31
2003 2002 2002 2002 2003 2002
USD USD % USD EUR EUR EUR %
143,086 136,969 4 Investments 126,445 144,940 131,332 130,608 1
3,715 3,729 0 Group companies and participations 3,043 3,488 3,410 3,556 -4
100,225 99,341 1 Investments for the account of 100,390 115,073 91,992 94,728 -3
policyholders
11,585 9,768 19 Other assets 7,518 8,617 10,633 9,314 14
258,611 249,807 4 Total assets 237,396 272,118 237,367 238,206 0
14,732 14,924 -1 Total shareholders' equity 1 14,482 16,600 13,522 14,231 -5
2,167 2,106 3 Capital securities 1,838 2,107 1,989 2,008 -1
659 646 2 Subordinated (convertible) loans 587 673 605 616 -2
3,272 3,359 -3 Senior debt related to insurance 2,523 2,892 3,003 3,203 -6
activities
20,830 21,035 -1 Total capital base 19,430 22,272 19,119 20,058 -5
111,579 107,926 3 Technical provisions 2 97,366 111,607 102,413 102,914 0
Technical provisions with investments
for
100,225 99,341 1 the account of policyholders 3 100,390 115,073 91,992 94,728 -3
25,977 21,505 21 Other liabilities 4 20,210 23,166 23,843 20,506 16
258,611 249,807 4 Total shareholders' equity and 237,396 272,118 237,367 238,206 0
liabilities
1 Shareholders' equity January 1 15,923 14,231 15,923
Net income excluding preferred dividend 617 370 1,517
Dividend paid - - -731
Paid in surplus / Issuance of new shares - - 2,053
Currency exchange rate differences 82 -539 -2,100
Goodwill -5 0 -70
Repurchased and sold own shares - - 0
Change revaluation account 65 -428 -2,042
Other changes -82 -112 -319
14,732 14,924 Shareholders' equity end of period 5 14,482 16,600 13,522 14,231
% %
43,551 42,014 4 2 Of which fixed annuities 35,580 40,784 39,973 40,063 0
26,684 25,961 3 2 Of which GICs and funding agreements 25,866 29,649 24,492 24,755 -1
-16,338 -15,938 3 2 Of which deferred policy acquisition -14,710 -16,862 -14,996 -15,198 -1
costs
33,602 32,458 4 3 Of which variable annuities 34,824 39,918 30,842 30,951 0
6,844 6,674 3 4 Of which savings accounts 5,809 6,659 6,282 6,364 -1
2,364 2,725 -13 5 Including revaluation account 4,105 4,705 2,170 2,598 -16
2,005 2,156 -7 of which realized gains 3,272 3,750 1,840 2,056 -11
Balance sheet items: closing rate 1 EUR = USD 1.0895 (2002: 0.8724; year-end 2002: USD
1.0487).
Summarized information Transamerica Finance Corporation
amounts in
millions
USD EUR
First three months First three months
2003 2002 % INCOME STATEMENT 2003 2002 %
Revenues
150 169 -11 Finance charges 140 193 -27
104 102 2 Leasing revenues 97 116 -16
67 59 14 Real estate information services 62 67 -7
34 33 3 Other revenues 32 38 -16
355 363 -2 Total revenues 331 414 -20
Expenses
47 70 -33 Interest and debt expense 44 80 -45
80 78 3 Salaries and other employee expenses 74 89 -17
50 53 -6 Depreciation on equipment held for 47 61 -23
lease
92 122 -25 Miscellaneous income and expenditure 86 139 -38
269 323 -17 Total expenses 251 369 -32
86 40 Income before tax 80 45 78
-1 -7 -86 Corporation tax -1 -8
85 33 Net income from operations 79 37 114
Net income by segment
70 35 100 Commercial lending 65 40 63
5 1 Leasing 5 1
18 7 Real estate information services 17 8
-8 -10 20 Other -8 -12
85 33 Net income from operations 79 37
Income reported by AEGON
85 33 Net income from operations 79 37
-7 -9 -22 Funding costs on the related raised -6 -10 -40
debt
78 24 Net income reported by AEGON 73 27
Income statement items: average rate 1 EUR = USD 1.0730 (2002: USD 0.8758)
As at As at As at As at As at As at
March 31 Dec. 31 March 31 March 31 March 31 Dec. 31
2003 2002 2002 2002 2003 2002
USD USD % BALANCE SHEET USD EUR EUR EUR %
6,441 6,007 7 Finance receivables 6,745 7,732 5,912 5,728 3
98 102 -4 Equipment 110 126 90 97 -7
2,317 2,485 -7 Other assets 2,737 3,137 2,127 2,370 -10
8,856 8,594 3 Total assets 9,592 10,995 8,129 8,195 -1
1,673 1,627 3 Accounts payable and other liabilities 1,619 1,856 1,536 1,551 -1
6,239 6,052 3 Debts 6,888 7,895 5,727 5,771 -1
944 915 3 Shareholders' equity 1,085 1,244 866 873 -1
8,856 8,594 3 Total liabilities and shareholders' 9,592 10,995 8,129 8,195 -1
equity
Balance sheet items: closing rate 1 EUR = USD 1.0895 (2002: 0.8724; year-end 2002: USD
1.0487).
Results by segment twelve months cumulative
amounts in million EUR
(unless otherwise stated)
United
Americas Kingdom April 1, 2002 - March The United Other Total Total
31, 2003
USD GBP Americas Netherlands Kingdom countries EUR USD
Net income
749 117 Life insurance 713 549 181 23 1,466 1,509
213 - Accident and health 213 21 - 6 240 241
insurance
- - General insurance - 21 - 39 60 60
- - Banking activities - -1 - - -1 0
Interest charges and -317 -323
other
Income before tax
962 117 business units 926 590 181 68
Income before tax 1,448 1,487
-159 -26 Corporation tax business -140 -113 -40 -14
units
Corporation tax -222 -243
803 91 Net income business 786 477 141 54
units
Transamerica Finance 97 102
Corporation
Net income 1,323 1,346
4,571 467 Gross margin business 4,556 1,294 728 338
units
Gross margin 6,648 6,655
3,609 350 Commissions and expenses 3,630 704 547 270
business units
Commissions and expenses 5,200 5,168
Net income per share 0.90 0.91
United
Americas Kingdom April 1, 2001 - March The United Other Total Total
31, 2002
USD GBP Americas Netherlands Kingdom countries EUR USD
Net income
1,868 234 Life insurance 2,114 825 380 31 3,350 2,961
196 - Accident and health 222 37 - 9 268 237
insurance
1 - General insurance 1 35 - 34 70 62
- - Banking activities - 39 - - 39 34
Interest charges and -395 -348
other
Income before tax
2,065 234 business units 2,337 936 380 74
Income before tax 3,332 2,946
-617 -66 Corporation tax business -699 -230 -108 -12
units
Corporation tax -949 -839
1,448 168 Net income business 1,638 706 272 62
units
Transamerica Finance 96 85
Corporation
Net income 2,479 2,192
5,254 446 Gross margin business 5,942 1,498 723 309
units
Gross margin 8,115 7,176
3,189 212 Commissions and expenses 3,605 562 343 235
business units
Commissions and expenses 4,783 4,230
Net income per share 1.79 1.59
This information is provided by RNS
The company news service from the London Stock Exchange
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