AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of “a+” (Excellent) of the U.S. life/health (L/H) subsidiaries of Aegon Ltd. (Bermuda) [NYSE: AEG]. Aegon Ltd.’s U.S. L/H companies are Transamerica Life Insurance Company (Cedar Rapids, IA) and Transamerica Financial Life Insurance Company (Harrison, NY) and referred to collectively as Aegon USA Group (Aegon USA). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Aegon USA’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management.

Aegon Ltd., Aegon USA’s ultimate parent, announced on Oct. 27, 2022, that it has reached an agreement to sell its Dutch pension, life and non-life insurance, banking, and mortgage origination operations to ASR Nederland N.V. The transaction closed on July 4, 2023. On Sept. 30, 2023, Aegon Ltd.’s extraordinary general meeting of shareholders approved its cross-border conversion into a Bermuda Limited company. The company was renamed to Aegon Ltd. from Aegon N.V. and on Oct. 1, 2023, the Bermuda Monetary Authority became Aegon Ltd.’s group supervisor. AM Best expects this arrangement to have a minimal impact to the group’s overall U.S. operations and to maintain its very strong balance sheet strength assessment in the near term, with at least a strong level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). Realized losses in the fixed income portfolio in 2022 were related to divestments made to maintain the group’s liquidity position in line with its liquidity framework; however, the losses negatively impacted the group’s risk-adjusted capitalization.

Aegon USA’s operating earnings have been positive over the longer term with double-digit return on equity and diversified earnings across different product lines. The company was impacted by higher mortality in recent years due to COVID-19, but that has reverted toward pre-pandemic levels broadly since mid-year 2022. However, Aegon USA’s overall top-line premium growth has been pressured in recent years, where direct premium declined in 2021 and 2022. Aegon USA’s overall business profile remains favorable with continued progress toward building a less capital-intensive book of business, driven by targeted growth and strategic exits and buyouts in certain lines. The group’s diverse product line of traditional life, indexed universal life, variable annuities (VA) without interest sensitive living and death benefit riders, mutual funds, retirement plans, and accident and health insurance contribute to operating earnings. With the Transamerica brand having a large operating footprint, Aegon USA’s business also is viewed as geographically diversified. The group does have interest rate sensitivity risk on its balance sheet. AM Best views the group’s VA with living benefit riders as displaying some of the highest risk characteristics, as well as being vulnerable to tail risks, though Aegon USA has taken actions to manage and mitigate these risks through increased hedging and closing this product line for new business.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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Louis Silvers Senior Financial Analyst +1 908 882 2316 louis.silvers@ambest.com

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