FORM 6-K
Table of Contents

Securities and Exchange Commission

Washington, D.C. 20549

 

 

Form 6-K

 

 

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d/16

of the Securities Exchange Act of 1934

May 2015          

 

 AEGON N.V.

 

 

Aegonplein 50

2591 TV  THE HAGUE

The Netherlands


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Aegon’s condensed consolidated interim financial statements Q1 2015, dated May 13, 2015, are included as appendix and incorporated herein by reference.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

AEGON N.V.

 

 

(Registrant)

Date: May 13, 2015 By 

/s/ J.H.P.M. van Rossum

J.H.P.M. van Rossum
Executive Vice President
Corporate Controller


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Condensed consolidated income statement

     2   

Condensed consolidated statement of comprehensive income

     3   

Condensed consolidated statement of financial position

     4   

Condensed consolidated statement of changes in equity

     5   

Condensed consolidated cash flow statement

     6   

Notes to the condensed consolidated interim financial statements

     7   

 

 

 

 

 

Unaudited    1


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Condensed consolidated income statement  
                       

EUR millions

    Notes        Q1 2015        Q1 2014   
   

Premium income and premiums paid to reinsurers

    4        6,347        5,265   

Investment income

    5        2,098        1,948   

Fee and commission income

      582        466   

Other revenues

            2        1   

Total revenues

      9,028        7,680   

Income from reinsurance ceded

      686        699   

Results from financial transactions

    6        9,905        2,228   

Other income

            -        8   

Total income

      19,618        10,614   
   

Benefits and expenses

    7        19,098        10,013   

Impairment charges / (reversals)

    8        13        8   

Interest charges and related fees

      108        116   

Other charges

            11        2   

Total charges

      19,230        10,140   
   

Share in net result of joint ventures

      29        5   

Share in net result of associates

            -        8   

Income before tax

      418        488   

Income tax (expense) / benefit

            (101     (96

Net income

            316        392   
   

Net income attributable to:

       

Equity holders of Aegon N.V.

            316        392   
   

Earnings per share (EUR per share)

    15         

Basic earnings per common share

      0.13        0.16   

Basic earnings per common share B

      -        -   

Diluted earnings per common share

      0.13        0.16   

Diluted earnings per common share B

            -        -   

 

2    Unaudited


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Condensed consolidated statement of comprehensive income

 

 
EUR millions   Q1 2015     Q1 2014  
   

Net income

    316        392   
   

Other comprehensive income:

     

Items that will not be reclassified to profit or loss:

     

Changes in revaluation reserve real estate held for own use

    5        -   

Remeasurements of defined benefit plans

    (627     (234

Income tax relating to items that will not be reclassified

    159        66   
   

Items that may be reclassified subsequently to profit or loss:

     

Gains / (losses) on revaluation of available-for-sale investments

    1,595        1,819   

(Gains) / losses transferred to the income statement on disposal and impairment of available-for-sale investments

    (132     (112

Changes in cash flow hedging reserve

    558        198   

Movement in foreign currency translation and net foreign investment hedging reserve

    1,733        (19

Equity movements of joint ventures

    3        6   

Equity movements of associates

    -        (1

Income tax relating to items that may be reclassified

    (450     (580

Other

    3        (1

Other comprehensive income for the period

    2,845        1,142   

Total comprehensive income/(loss)

    3,161        1,534   
   

Total comprehensive income/(loss) attributable to:

     

Equity holders of Aegon N.V.

    3,161        1,535   

Non-controlling interests

    -        (1

 

Unaudited    3


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Condensed consolidated statement of financial position

 

 
            Mar. 31,
2015
    Dec. 31,
2014
 

EUR millions

    Notes                   
   

Assets

       

Intangible assets

    9        2,187        2,073   

Investments

    10        172,504        153,653   

Investments for account of policyholders

    11        215,291        191,467   

Derivatives

    12        37,795        28,014   

Investments in joint ventures

      1,536        1,468   

Investments in associates

      142        140   

Reinsurance assets

      10,679        9,593   

Deferred expenses

    14        11,507        10,373   

Assets held for sale

    17        9,846        9,881   

Other assets and receivables

      7,518        7,628   

Cash and cash equivalents

            13,236        10,610   

Total assets

      482,240        424,902   
   

Equity and liabilities

       

Shareholders’ equity

      27,429        24,293   

Other equity instruments

            3,825        3,827   

Issued capital and reserves attributable to equity holders of Aegon N.V.

      31,254        28,120   

Non-controlling interests

            9        9   

Group equity

      31,263        28,129   
   

Trust pass-through securities

      163        143   

Subordinated borrowings

      755        747   

Insurance contracts

      126,939        111,927   

Insurance contracts for account of policyholders

      115,207        102,250   

Investment contracts

      17,170        15,359   

Investment contracts for account of policyholders

      102,982        91,849   

Derivatives

    12        33,951        26,048   

Borrowings

    16        14,432        14,158   

Liabilities held for sale

    17        8,061        7,810   

Other liabilities

            31,315        26,481   

Total liabilities

 

            450,977        396,772   

Total equity and liabilities

            482,240        424,902   

 

4    Unaudited


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Condensed consolidated statement of changes in equity

 

 
EUR millions   Share
capital 1
    Retained
earnings
    Revaluation
reserves
    Remeasurement
of defined
benefit plans
    Other
reserves
    Other equity
instruments
    Issued
capital and
reserves  2
    Non-
controlling
Interests
    Total  
       

Three months ended March 31, 2015

                       
       

At beginning of year

    8,597        9,076        8,308        (1,611     (77     3,827        28,120        9        28,129   
       

Net income recognized in the income statement

    -        316        -        -        -        -        316        -        316   
       

Other comprehensive income:

                       

Items that will not be reclassified to profit or loss:

                       

Changes in revaluation reserve real estate held for own use

    -        -        5        -        -        -        5        -        5   

Remeasurements of defined benefit plans

    -        -        -        (627     -        -        (627     -        (627

Income tax relating to items that will not be reclassified

    -        -        -        159        -        -        159        -        159   
       

Items that may be reclassified subsequently to profit or loss:

                       

Gains / (losses) on revaluation of available-for-sale investments

    -        -        1,595        -        -        -        1,595        -        1,595   

(Gains) / losses transferred to income statement on disposal and impairment of available-for-sale investments

    -        -        (132     -        -        -        (132     -        (132

Changes in cash flow hedging reserve

    -        -        558        -        -        -        558        -        558   

Movement in foreign currency translation and net foreign investment hedging reserves

    -        -        -        (104     1,837        -        1,733        -        1,733   

Equity movements of joint ventures

    -        -        -        -        3        -        3        -        3   

Income tax relating to items that may be reclassified

    -        -        (400     -        (50     -        (450     -        (450

Other

    -        3        -        -        -        -        3        -        3   

Total other comprehensive income

    -        3        1,625        (573     1,791        -        2,845        -        2,845   

Total comprehensive income/ (loss) for 2015

    -        319        1,625        (573     1,791        -        3,161        -        3,161   
       

Issuance and purchase of treasury shares

    -        1        -        -        -        -        1        -        1   

Coupons on non-cumulative subordinated notes

    -        (7     -        -        -        -        (7     -        (7

Coupons on perpetual securities

    -        (30     -        -        -        -        (30     -        (30

Share options and incentive plans

    -        10        -        -        -        (2     8        -        8   

At end of period

    8,597        9,371        9,933        (2,184     1,713        3,825        31,254        9        31,263   
       

Three months ended March 31, 2014

                       
       

At beginning of year

    8,701        8,361        3,023        (706     (1,778     5,015        22,616        10        22,626   
       

Net income recognized in the income statement

    -        392        -        -        -        -        392        -        392   
       

Other comprehensive income:

                       

Items that will not be reclassified to profit or loss:

                       

Remeasurements of defined benefit plans

    -        -        -        (234     -        -        (234     -        (234

Income tax relating to items that will not be reclassified

    -        -        -        66        -        -        66        -        66   
       

Items that may be reclassified subsequently to profit or loss:

                       

Gains / (losses) on revaluation of available-for-sale investments

    -        -        1,819        -        -        -        1,819        -        1,819   

(Gains) / losses transferred to income statement on disposal and impairment of available-for-sale investments

    -        -        (112     -        -        -        (112     -        (112

Changes in cash flow hedging reserve

    -        -        198        -        -        -        198        -        198   

Movement in foreign currency translation and net foreign investment hedging reserves

    -        -        -        (1     (18     -        (19     -        (19

Equity movements of joint ventures

    -        -        -        -        6        -        6        -        6   

Equity movements of associates

    -        -        -        -        (1     -        (1     -        (1

Income tax relating to items that may be reclassified

    -        -        (577     -        (3     -        (580     -        (580

Other

    -        -        -        -        -        -        -        (1     (1

Total other comprehensive income

    -        -        1,328        (169     (16     -        1,143        (1     1,142   

Total comprehensive income / (loss) for 2014

    -        392        1,328        (169     (16     -        1,535        (1     1,534   
       

Issuance and purchase of treasury shares

    -        1        -        -        -        -        1        -        1   

Other equity instruments redeemed

    -        35        -        -        -        (438     (403     -        (403

Coupons on non-cumulative subordinated notes

    -        (6     -        -        -        -        (6     -        (6

Coupons on perpetual securities

    -        (41     -        -        -        -        (41     -        (41

Share options and incentive plans

    -        4        -        -        -        3        7        -        7   

At end of period

    8,701        8,748        4,351        (875     (1,795     4,580        23,709        8        23,718   

 

1 

For a breakdown of share capital please refer to note 15.

2 

Issued capital and reserves attributable to equity holders of Aegon N.V.

 

Unaudited    5


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Condensed consolidated cash flow statement

 

 
EUR millions   Q1 2015     Q1 2014  
   

Cash flow from operating activities

    2,338        913   
   

Purchases and disposals of intangible assets

    (2     (2

Purchases and disposals of equipment and other assets

    (15     (15

Purchases, disposals and dividends of subsidiaries, associates and joint ventures

    330        (16

Cash flow from investing activities

    313        (32
   

Issuances, repurchases and coupons of perpetuals

    (39     (451

Issuances, repurchases and coupons of non-cumulative subordinated notes

    (9     (8

Issuances and repayments of borrowings

    (210     917   

Cash flow from financing activities

    (258     459   
   

Net increase / (decrease) in cash and cash equivalents

    2,393        1,340   

Net cash and cash equivalents at January 1

    10,649        5,652   

Effects of changes in foreign exchange rates

    235        6   

Net cash and cash equivalents at end of period

    13,277        6,998   
   

    

               

Cash and cash equivalents

    13,236        7,116   

Cash and cash equivalents classified as Assets held for sale

    46        -   

Bank overdrafts

    (4     (118

Net cash and cash equivalents

    13,277        6,998   

 

6    Unaudited


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Notes to the condensed consolidated interim financial statements

Amounts in EUR millions, unless otherwise stated

Aegon N.V., incorporated and domiciled in the Netherlands, is a public limited liability company organized under Dutch law and recorded in the Commercial Register of The Hague under number 27076669 and with its registered address at Aegonplein 50, 2591 TV, The Hague, the Netherlands. Aegon N.V. serves as the holding company for the Aegon Group and has listings of its common shares in Amsterdam and New York.

Aegon N.V. (or ‘the Company’) and its consolidated subsidiaries (‘Aegon’ or ‘the Group’) have life insurance and pensions operations in over twenty-five countries in the Americas, Europe and Asia and are also active in savings and asset management operations, accident and health insurance, general insurance and to a limited extent banking operations. Its headquarters are located in The Hague, the Netherlands. The Group employs over 28,000 people worldwide.

1. Basis of presentation

The condensed consolidated interim financial statements as at, and for the period ended, March 31, 2015, have been prepared in accordance with IAS 34 ‘Interim Financial Reporting’, as adopted by the European Union (hereafter ‘IFRS’). They do not include all of the information required for a full set of financial statements prepared in accordance with IFRS and should therefore be read together with the 2014 consolidated financial statements of Aegon N.V. as included in Aegon’s Annual Report for 2014. Aegon’s Annual Report for 2014 is available on its website (aegon.com).

The condensed consolidated interim financial statements have been prepared in accordance with the historical cost convention as modified by the revaluation of investment properties and those financial instruments (including derivatives) and financial liabilities that have been measured at fair value. Certain amounts in prior periods have been reclassified to conform to the current year presentation. These reclassifications had no effect on net income, shareholders’ equity or earnings per share. The condensed consolidated interim financial statements as at, and for the period ended, March 31, 2015, were approved by the Executive Board on May 12, 2015.

The condensed consolidated interim financial statements are presented in euro (EUR) and all values are rounded to the nearest million unless otherwise stated. The consequence is that the rounded amounts may not add up to the rounded total in all cases.

The published figures in these condensed consolidated interim financial statements are unaudited.

2. Significant accounting policies

All accounting policies and methods of computation applied in the condensed consolidated interim financial statements are the same as those applied in the 2014 consolidated financial statements.

New IFRS accounting standards effective

The following standards, interpretations, amendments to standards and interpretations became effective in 2015:

 

t  

IAS 19 Employee Benefits – Amendment Employee Contributions;

t  

Annual improvements 2010-2012 Cycle; and

t  

Annual improvements 2011-2013 Cycle.

None of these new or revised standards and interpretations had a significant effect on the condensed consolidated interim financial statements as at and for the period ended March 31, 2015.

 

Unaudited    7


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For a complete overview of IFRS standards, published before January 1, 2015, that will be applied in future years, but were not early adopted by the Group, please refer to Aegon’s Annual Report for 2014.

Judgments and critical accounting estimates

Preparing the condensed consolidated interim financial statements requires management to make judgments, estimates and assumptions, including the likelihood, timing or amount of future transactions or events, that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from the estimates made.

In preparing the condensed consolidated interim financial statements, significant judgments made by management in applying the Group’s accounting policies and the key sources of estimating uncertainty were not significantly different than those that applied to the consolidated financial statements as at and for the year ended December 31, 2014.

Exchange rates

Assets and liabilities are translated at the closing rates on the balance sheet date. Income, expenses and capital transactions (such as dividends) are translated at average exchange rates or at the prevailing rates on the transaction date, if more appropriate. The following exchange rates are applied for the condensed consolidated interim financial statements:

Closing exchange rates

                         USD         GBP   

March 31, 2015

     1         EUR         1.0740         0.7235   

December 31, 2014

     1         EUR         1.2101         0.7760   

Weighted average exchange rates

                         USD         GBP   

Q1 2015

     1         EUR         1.1272         0.7434   

Q1 2014

     1         EUR         1.3695         0.8276   

3. Segment information

Aegon conducts its operations through five primary reporting segments:

 

1. Aegon Americas: Covers business units in the United States, Canada, Brazil and Mexico, including any of the units’ activities located outside these countries;
2. Aegon the Netherlands: Covers businesses operating in the Netherlands;
3. Aegon UK: Covers businesses operating in the United Kingdom;
4. New Markets: Covers businesses operating in Central & Eastern Europe; Asia, Spain and Portugal, as well as Aegon’s variable annuity activities in Europe and Aegon Asset Management that are aggregated as one reportable segment;
5. Holding and other activities: Includes financing, employee and other administrative expenses of holding companies.

These segments are based on the business as presented in internal reports that are regularly reviewed by the Executive Board which is regarded as the chief operating decision maker.

Aegon’s segment information is prepared by consolidating on a proportionate basis Aegon’s joint ventures and associated companies.

 

8    Unaudited


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Performance Measure

A performance measure of reporting segments utilized by the Company is underlying earnings. Underlying earnings reflects Aegon’s profit from underlying business operations and excludes components that relate to accounting mismatches that are dependent on market volatility or relate to events that are considered outside the normal course of business.

Aegon believes that its performance measure underlying earnings provides meaningful information about the underlying results of Aegon’s business, including insight into the financial measures that Aegon’s senior management uses in managing the business. Among other things, Aegon’s senior management is compensated based in part on Aegon’s results against targets using underlying earnings. While many other insurers in Aegon’s peer group present substantially similar performance measures, the performance measures presented in this document may nevertheless differ from the performance measures presented by other insurers. There is no standardized meaning to these measures under IFRS or any other recognized set of accounting standards.

The reconciliation from underlying earnings before tax to income before tax, being the most comparable IFRS measure, is presented in the tables in this note.

The items that are excluded from underlying earnings as described further below are: fair value items, realized gain or losses on investments, impairment charges/reversals, other income or charges, run-off businesses and share in earnings of joint ventures and associates.

Fair value items

Fair value items include the over- or underperformance of investments and guarantees held at fair value for which the expected long-term return is included in underlying earnings. Changes to these long-term return assumptions are also included in the fair value items.

In addition, hedge ineffectiveness on hedge transactions, fair value changes on economic hedges without natural offset in earnings and for which no hedge accounting is applied and fair value movements on real estate are included under fair value items.

Certain assets held by Aegon Americas, Aegon the Netherlands and Aegon UK are carried at fair value and managed on a total return basis, with no offsetting changes in the valuation of related liabilities. These include assets such as investments in hedge funds, private equities, real estate (limited partnerships), convertible bonds and structured products. Underlying earnings exclude any over- or underperformance compared to management’s long-term expected return on assets. Based on current holdings and asset returns, the long-term expected return on an annual basis is 8-10%, depending on asset class, including cash income and market value changes. The expected earnings from these asset classes are net of deferred policy acquisition costs (DPAC) where applicable.

In addition, certain products offered by Aegon Americas contain guarantees and are reported on a fair value basis, including the segregated funds offered by Aegon Canada and the total return annuities and guarantees on variable annuities of Aegon USA. The earnings on these products are impacted by movements in equity markets and risk-free interest rates. Short-term developments in the financial markets may therefore cause volatility in earnings. Included in underlying earnings is a long-term expected return on these products and excluded is any over- or underperformance compared to management’s expected return.

 

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The fair value movements of certain guarantees and the fair value change of derivatives that hedge certain risks on these guarantees of Aegon the Netherlands and Variable Annuities Europe (included in New Markets) are excluded from underlying earnings, and the long-term expected return for these guarantees is set at zero.

Holding and other activities include certain issued bonds that are held at fair value through profit or loss (FVTPL). The interest rate risk on these bonds is hedged using swaps. The fair value movement resulting from changes in Aegon’s credit spread used in the valuation of these bonds are excluded from underlying earnings and reported under fair value items.

Realized gains or losses on investments

Includes realized gains and losses on available-for-sale investments, mortgage loans and other loan portfolios.

Impairment charges/reversals

Impairment charges include impairments on available-for-sale debt securities, shares including the effect of deferred policyholder acquisition costs, mortgage loans and other loan portfolios at amortized cost, joint ventures and associates. Impairment reversals include reversals on available-for-sale debt securities.

Other income or charges

Other income or charges is used to report any items which cannot be directly allocated to a specific line of business. Also items that are outside the normal course of business are reported under this heading.

Other charges include restructuring charges that are considered other charges for segment reporting purposes because they are outside the normal course of business. In the condensed consolidated interim financial statements, these charges are included in operating expenses.

Run-off businesses

Includes underlying results of business units where management has decided to exit the market and to run-off the existing block of business. Currently, this line includes results related to the run-off of the institutional spread-based business, structured settlements blocks of business, bank-owned and corporate-owned life insurance (BOLI/COLI) business, and the sale of the life reinsurance business in the United States. Aegon has other blocks of business for which sales have been discontinued and of which the earnings are included in underlying earnings.

Share in earnings of joint ventures and associates

Earnings from Aegon’s joint ventures in the Netherlands, Mexico, Spain, Portugal, China and Japan and Aegon’s associates in India, Brazil, the Netherlands, United Kingdom and Mexico are reported on an underlying earnings basis.

 

10    Unaudited


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3.1 Income statement

 

EUR millions   Americas     The
Netherlands
    United
Kingdom
    New
Markets
    Holding and
other
activities
    Eliminations    

Segment

Total

   

Joint

ventures and

associates

eliminations

    Consolidated  

Three months ended March 31, 2015

                   
     

Underlying earnings before tax geographically

    290        131        38        51        (40     (2     469        3        472   

Fair value items

    (90     151        (22     (4     (193     -        (159     (8     (167

Realized gains / (losses) on investments

    (29     140        2        5        -        -        119        (2     116   

Impairment charges

    (7     (7     -        (2     -        -        (16     -        (16

Impairment reversals

    3        2        -        -        -        -        5        -        5   

Other income / (charges)

    -        (22     21        -        -        -        (1     -        (1

Run-off businesses

    8        -        -        -        -        -        8        -        8   

Income/ (loss) before tax

    175        396        39        50        (233     (2     425        (8     418   

Income tax (expense) / benefit

    (30     (92     (21     (22     57        -        (109     8        (101

Net income/ (loss)

    145        304        18        28        (176     (2     316        -        316   

Inter-segment underlying earnings

    (53     (13     (16     80        3             
     

Revenues

                   

Life insurance gross premiums

    1,693        1,046        2,077        757        -        (24     5,547        (119     5,429   

Accident and health insurance

    552        129        13        60        1        (1     754        (11     743   

General insurance

    -        131        -        63        -        -        194        (19     175   

Total gross premiums

    2,244        1,306        2,089        879        1        (26     6,495        (149     6,347   

Investment income

    908        590        544        117        94        (95     2,158        (61     2,098   

Fee and commission income

    406        85        12        196        -        (68     630        (48     582   

Other revenues

    1        -        -        1        1        -        3        (1     2   

Total revenues

    3,559        1,981        2,644        1,193        97        (188     9,286        (258     9,028   

Inter-segment revenues

    6        -        -        86        96                                   

 

EUR millions   Americas    

The

Netherlands

   

United

Kingdom

   

New

Markets

   

Holding and

other

activities

    Eliminations    

Segment

Total

   

Joint

ventures and

associates

eliminations

    Consolidated  

Three months ended March 31, 2014

                   
     

Underlying earnings before tax geographically

    302        129        27        61        (21     -        498        (8     490   

Fair value items

    (49     (36     (3     7        (36     -        (116     5        (111

Realized gains / (losses) on investments

    9        84        16        2        -        -        110        (1     109   

Impairment charges

    (6     (4     -        (9     -        -        (19     -        (19

Impairment reversals

    10        2        -        -        -        -        12        -        12   

Other income / (charges)

    3        (3     (4     (2     -        -        (6     -        (6

Run-off businesses

    14        -        -        -        -        -        14        -        14   

Income/ (loss) before tax

    282        172        37        59        (58     -        492        (4     488   

Income tax (expense) / benefit

    (63     (29     (9     (16     16        -        (100     4        (96

Net income/ (loss)

    219        143        28        43        (41     -        392        -        392   

Inter-segment underlying earnings

    (41     (14     (14     65        5             
     

Revenues

                   

Life insurance gross premiums

    1,488        1,499        1,220        373        2        (17     4,564        (85     4,479   

Accident and health insurance

    417        130        15        55        1        (1     618        (8     610   

General insurance

    -        135        -        58        -        -        194        (18     176   

Total gross premiums

    1,906        1,764        1,234           486        3        (19     5,375        (111     5,265   

Investment income

    803        636        465        54           78        (78     1,958        (10     1,948   

Fee and commission income

    313        78        10        142        -        (57     486        (20     466   

Other revenues

    -        -        -        1        -        -        2        (1     1   

Total revenues

    3,022        2,478        1,709        683        82        (153     7,821        (141     7,680   

Inter-segment revenues

    4        -        -        70        79                                   

 

Unaudited    11


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3.2 Investments geographically

Amounts included in the tables on investments geographically are presented on an IFRS basis.

 

                                  EUR millions (unless otherwise stated)  
Americas
USD millions
    United
Kingdom
GBP millions
     March 31, 2015   Americas     The
Netherlands
    United
Kingdom
    New
Markets
   

Holding &

other

activities

    Eliminations     Total
EUR
 
         Investments                  
  784        108       Shares     730        152        149        33        130        (1     1,192   
  77,987        10,115       Debt securities     72,614        26,460        13,981        5,062        -        -        118,117   
  11,075        -       Loans     10,312        27,685        -        463        78        -        38,539   
  12,661        325       Other financial assets     11,789        377        450        42        109        -        12,767   
  874        -       Investments in real estate     814        1,072        -        2        -        -        1,888   
  103,381        10,549       Investments general account     96,258        55,747        14,580        5,602        318        (1     172,504   
  -        13,892       Shares     -        9,783        19,201        334        -        (11     29,307   
  5,596        9,974       Debt securities     5,210        20,224        13,786        241        -        -        39,462   
  108,087        24,082       Unconsolidated investment funds     100,640        -        33,286        6,809        -        -        140,735   
  16        3,066       Other financial assets     15        372        4,238        15        -        -        4,640   
  -        829       Investments in real estate     -        -        1,146        -        -        -        1,146   
  113,699        51,844       Investments for account of policyholders     105,865        30,380        71,658        7,400        -        (11     215,291   
       
  217,081        62,393       Investments on balance sheet     202,124        86,127        86,238        13,002        318        (12     387,795   
  174,811        506       Off balance sheet investments third parties     162,766        843        700        85,495        -        -        249,804   
  391,892        62,899       Total revenue generating investments     364,890        86,969        86,938        98,497        318        (12     637,599   
       
         Investments                  
  86,450        10,340       Available-for-sale     80,494        25,881        14,291        5,057        19        -        125,741   
  11,075        -       Loans     10,312        27,685        -        463        78        -        38,539   
  118,681        51,224       Financial assets at fair value through profit or loss     110,504        31,489        70,800        7,480        221        (12     220,480   
  874        829       Investments in real estate     814        1,072        1,146        2        -        -        3,035   
  217,081        62,393       Total investments on balance sheet     202,124        86,127        86,238        13,002        318        (12     387,795   
       
  11        -       Investments in joint ventures     10        791        -        734        1        -        1,536   
  95        19       Investments in associates     88        19        26        8        -        -        142   
  38,627        4,952       Other assets     35,966        46,579        6,845        4,256        41,685        (42,563     92,768   
  255,814        67,364       Consolidated total assets     238,188        133,516        93,108        17,999        42,004        (42,575     482,240   

 

                                  EUR millions (unless otherwise stated)  
Americas
USD millions
    United
Kingdom
GBP millions
     December 31, 2014   Americas     The
Netherlands
    United
Kingdom
    New
Markets
   

Holding &

other

activities

    Eliminations     Total
EUR
 
         Investments                  
  770        150       Shares     636        161        193        28        105        (1     1,122   
  76,393        9,832       Debt securities     63,130        23,250        12,670        4,274        -        -        103,324   
  11,117        -       Loans     9,187        27,052        -        487        11        -        36,738   
  11,914        267       Other financial assets     9,845        366        344        16        107        -        10,678   
  873        -       Investments in real estate     721        1,069        -        2        -        -        1,792   
  101,067        10,249       Investments general account     83,519        51,898        13,208        4,806        224        (1     153,653   
  -        13,287       Shares     -        9,487        17,122        420        -        (10     27,019   
  5,549        10,026       Debt securities     4,585        19,320        12,920        244        -        -        37,070   
  104,704        22,769       Unconsolidated investment funds     86,525        -        29,341        6,293        -        -        122,159   
  34        2,851       Other financial assets     28        401        3,674        13        -        -        4,117   
  -        855       Investments in real estate     -        -        1,101        -        -        -        1,101   
  110,287        49,788       Investments for account of policyholders     91,138        29,209        64,159        6,971        -        (10     191,467   
       
  211,353        60,037       Investments on balance sheet     174,658        81,106        77,367        11,777        224        (11     345,121   
  168,561        443       Off balance sheet investments third parties     139,295        868        570        72,474        -        -        213,208   
  379,914        60,479       Total revenue generating investments     313,953        81,974        77,937        84,251        224        (11     558,328   
       
         Investments                  
  84,527        9,998       Available-for-sale     69,851        23,197        12,884        4,284        12        -        110,229   
  11,117        -       Loans     9,187        27,052        -        487        11        -        36,738   
  114,836        49,184       Financial assets at fair value through profit or loss     94,898        29,788        63,381        7,005        200        (11     195,261   
  873        855       Investments in real estate     721        1,069        1,101        2        -        -        2,893   
  211,353        60,037       Total investments on balance sheet     174,658        81,106        77,367        11,777        224        (11     345,121   
       
  11        -       Investments in joint ventures     9        789        -        670        1        -        1,468   
  110        18       Investments in associates     91        19        24        6        -        -        140   
  39,994        4,740       Other assets     33,050        34,737        6,108        4,067        36,785        (36,574     78,172   
  251,468        64,795       Consolidated total assets     207,808        116,652        83,498        16,519        37,010        (36,586     424,902   

 

12    Unaudited


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4. Premium income and premiums paid to reinsurers

 

                

EUR millions

    Q1 2015        Q1 2014   
   

Gross

     

Life

    5,429        4,479   

Non-Life

    918        786   

Total

    6,347        5,265   
   

Reinsurance 1

     

Life

    620        645   

Non-Life

    69        78   

Total

    689        722   

1 Premiums paid to reinsurers are recorded within Benefits and expenses in the income statement.

5. Investment income

 

                

EUR millions

    Q1 2015        Q1 2014   
   

Interest income

    1,762        1,697   

Dividend income

    301        220   

Rental income

    35        30   

Total investment income

    2,098        1,948   
   

Investment income related to general account

    1,504        1,394   

Investment income for account of policyholders

    594        553   

Total

    2,098        1,948   

6. Results from financial transactions

 

                

EUR millions

    Q1 2015        Q1 2014   
   

Net fair value change of general account financial investments at FVTPL other than derivatives

    71        69   

Realized gains /(losses) on financial investments

    136        110   

Gains /(losses) on investments in real estate

    10        (5

Net fair value change of derivatives

    1,407        89   

Net fair value change on for account of policyholder financial assets at FVTPL

    8,300        1,946   

Net fair value change on investments in real estate for account of policyholders

    7        6   

Net foreign currency gains /(losses)

    (22     6   

Net fair value change on borrowings and other financial liabilities

    (6     7   

Total

    9,905        2,228   

Net fair value change on for accounts of policyholder financial assets at FVTPL is offset by amounts in the Claims and benefits line reported in note 7 - Benefits and expenses.

 

Unaudited    13


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7. Benefits and expenses

 

                

EUR millions

    Q1 2015        Q1 2014   
   

Claims and benefits

    18,338        9,332   

Employee expenses

    562        475   

Administration expenses

    297        276   

Deferred expenses

    (413     (317

Amortization charges

    314        247   

Total

    19,098        10,013   

Claims and benefits includes claims and benefits in excess of account value for products for which deposit accounting is applied, and the change in valuation of liabilities for insurance and investment contracts. In addition, commissions and expenses and premiums paid to reinsurers are included. Claims and benefits fluctuate mainly as a result of changes in technical provisions resulting from fair value changes on for account of policyholder financial assets included in Results from financial transactions (note 6).

8. Impairment charges/(reversals)

 

                

EUR millions

    Q1 2015        Q1 2014   
   

Impairment charges / (reversals) comprise:

     

Impairment charges on financial assets, excluding receivables 1

    18        22   

Impairment reversals on financial assets, excluding receivables 1

    (5     (12

Impairment charges / (reversals) on non-financial assets and receivables

    -        (2

Total

    13        8   
   

Impairment charges on financial assets, excluding receivables, from:

     

Shares

    2        -   

Debt securities and money market instruments

    3        5   

Loans

    12        16   

Total

    18        22   
   

Impairment reversals on financial assets, excluding receivables, from:

     

Debt securities and money market instruments

    (3     (10

Loans

    (2     (2

Total

    (5     (12

1 Impairment charges / (reversals) on financial assets, excluding receivables, are excluded from underlying earnings before tax for segment reporting (refer to note 3).

 

14    Unaudited


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9. Intangible assets

Intangible assets, except for goodwill, are predominantly impacted by periodic amortization of balances and changes in exchange rates.

 

                

EUR millions

    Mar. 31, 2015        Dec. 31, 2014   
   

Goodwill

    236        216   

VOBA

    1,614        1,546   

Future servicing rights

    282        255   

Software

    49        50   

Other

    7        5   

Total intangible assets

    2,187        2,073   

10. Investments

 

                

EUR millions

    Mar. 31, 2015        Dec. 31, 2014   
   

Available-for-sale (AFS)

    125,741        110,229   

Loans

    38,539        36,738   

Financial assets at fair value through profit or loss (FVTPL)

    6,336        4,895   

Financial assets for general account, excluding derivatives

    170,616        151,862   

Investments in real estate

    1,888        1,792   

Total investments for general account, excluding derivatives

    172,504        153,653   

 

         

Total financial assets, excluding derivatives

 

                               
     AFS     FVTPL     Loans     Total  
   

Shares

    696        497        -        1,192   

Debt securities

    115,541        2,576        -        118,117   

Money market and other short-term investments

    8,097        555        -        8,652   

Mortgages loans

    -        -        33,539        33,539   

Private loans

    -        -        2,369        2,369   

Deposits with financial institutions

    -        -        162        162   

Policy loans

    -        -        2,263        2,263   

Other

    1,407        2,708        205        4,321   

March 31, 2015

    125,741        6,336        38,539        170,616   
   
      AFS        FVTPL        Loans        Total   
   

Shares

    623        499        -        1,122   

Debt securities

    101,498        1,826        -        103,324   

Money market and other short-term investments

    6,799        500        -        7,299   

Mortgages loans

    -        -        32,164        32,164   

Private loans

    -        -        2,058        2,058   

Deposits with financial institutions

    -        -        349        349   

Policy loans

    -        -        2,028        2,028   

Other

    1,310        2,070        139        3,519   

December 31, 2014

    110,229        4,895        36,738        151,862   

 

Unaudited    15


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11. Investments for account of policyholders

 

                

EUR millions

    Mar. 31, 2015        Dec. 31, 2014   

Shares

    29,307        27,019   

Debt securities

    39,462        37,070   

Money market and short-term investments

    1,205        795   

Deposits with financial institutions

    3,057        2,908   

Unconsolidated investment funds

    140,735        122,159   

Other

    378        415   

Total investments for account of policyholders at fair value through profit or loss, excluding derivatives

    214,144        190,366   

Investment in real estate

    1,146        1,101   

Total investments for account of policyholders

    215,291        191,467   

12. Derivatives

The movements in derivative balances mainly result from changes in interest rates and other market movements during the period.

13. Fair value

The following tables provide an analysis of financial instruments recorded at fair value on a recurring basis by level of the fair value hierarchy:

 

Fair value hierarchy

                               
EUR millions   Level I     Level II     Level III     Total  

As at March 31, 2015

         
   

Financial assets carried at fair value

         

Available-for-sale investments

         

Shares

    25        366        305        696   

Debt securities

    31,436        79,759        4,346        115,541   

Money markets and other short-term instruments

    -        8,097        -        8,097   

Other investments at fair value

    35        381        992        1,407   

Total Available-for-sale investments

    31,495        88,603        5,643        125,741   
   

Fair value through profit or loss

         

Shares

    210        287        -        497   

Debt securities

    51        2,513        11        2,576   

Money markets and other short-term instruments

    91        464        -        555   

Other investments at fair value

    22        1,261        1,425        2,708   

Investments for account of policyholders 1

    129,833        82,272        2,039        214,144   

Derivatives

    21        37,438        336        37,795   

Total Fair value through profit or loss

    130,228        124,236        3,812        258,275   

Total financial assets at fair value

    161,723        212,839        9,454        384,016   
   

Financial liabilities carried at fair value

         

Investment contracts for account of policyholders 2

    17,879        25,831        194        43,904   

Borrowings 3

    -        638        -        638   

Derivatives

    7        30,221        3,723        33,951   

Total financial liabilities at fair value

    17,887        56,690        3,916        78,493   

 

16    Unaudited


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Fair value hierarchy

                               
EUR millions   Level I     Level II     Level III     Total  

As at December 31, 2014

         
   

Financial assets carried at fair value

Available-for-sale investments

         

Shares

    26        316        280        623   

Debt securities

    27,491        70,203        3,803        101,497   

Money markets and other short-term instruments

    -        6,799        -        6,799   

Other investments at fair value

    31        345        934        1,310   

Total Available-for-sale investments

    27,548        77,662        5,018        110,229   
   

Fair value through profit or loss

         

Shares

    217        282        -        499   

Debt securities

    48        1,761        17        1,826   

Money markets and other short-term instruments

    95        405        -        500   

Other investments at fair value

    1        832        1,237        2,070   

Investments for account of policyholders 1

    114,490        73,919        1,956        190,366   

Derivatives

    52        27,642        320        28,014   

Total Fair value through profit or loss

    114,903        104,842        3,530        223,275   

Total financial assets at fair value

    142,451        182,504        8,548        333,515   
   

Financial liabilities carried at fair value

         

Investment contracts for account of policyholders 2

    15,371        22,683        165        38,220   

Borrowings 3

    -        571        -        571   

Derivatives

    31        23,007        3,010        26,048   

Total financial liabilities at fair value

    15,403        46,261        3,175        64,839   

 

1 

The investments for account of policyholders included in the table above represents only those investments carried at fair value through profit or loss.

2 

The investment contracts for account of policyholders included in the table above represents only those investment contracts carried at fair value.

3 

Total borrowings in the statement of financial position contain borrowings carried at amortized cost that are not included in the above schedule.

Significant transfers between Level I, Level II and Level III

Aegon’s policy is to record transfers of assets and liabilities between Level I, Level II and Level III at their fair values as of the beginning of each reporting period.

The table below shows transfers between Level I and II for financial assets and financial liabilities recorded at fair value on a recurring basis during the period ended March 31, 2015.

 

Fair value transfers                            
EUR millions   Q1 2015     Full Year 2014  
    

Transfers

Level I to

Level II

   

Transfers

Level II to
Level I

   

Transfers

Level I to

Level II

   

Transfers

Level II to
Level I

 

Financial assets carried at fair value Available-for-sale investments

         

Debt securities

    6        39        -        45   

Total

    6        39        -        45   
     

Fair value through profit or loss

         

Investments for account of policyholders

    1        204        163        1   

Total

    1        204        163        1   

Total financial assets at fair value

    7        243        163        46   

Transfers are identified based on transaction volume and frequency, which are indicative of an active market.

 

Unaudited    17


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Movements in Level III financial instruments measured at fair value

The following table summarizes the change of all assets and liabilities measured at estimated fair value on a recurring basis using significant unobservable inputs (‘Level III’), including realized and unrealized gains (losses) of all assets and liabilities and unrealized gains (losses) of all assets and liabilities still held at the end of the respective period.

 

Roll forward of Level III financial instruments                                            
EUR millions   January 1,
2015
   

Total gains /

losses in

income

statement 1

   

Total gains /

losses in OCI 2

    Purchases     Sales     Settlements     Net exchange
differences
   

Transfers from

Level I and

Level II

   

Transfers to

Level I and

Level II

   

March 31,

2015

   

Total unrealized

gains and losses

for the period

recorded in the

P&L for

instruments

held at

March 31, 2015 3

 

Financial assets carried at fair value available-for-sale investments

                       

Shares

    280        3        6        24        (27     -        18        -        -        305        -   

Debt securities

    3,803        1        70        394        (91     (45     241        52        (80     4,346        -   

Other investments at fair value

    934        (40     1        26        (34     (10     114        -        -        992        -   
      5,018        (36     78        445        (153     (54     372        52        (80     5,643        -   
   

Fair value through profit or loss

                       

Debt securities

    17        -        -        -        -        -        2        -        (8     11        -   

Other investments at fair value

    1,237        12        -        60        (76     -        158        46        (11     1,425        15   

Investments for account of policyholders

    1,956        42        -        90        (75     -        41        10        (25     2,039        39   

Derivatives

    320        (59     -        -        56        -        20        -        -        336        (62
      3,530        (6     -        150        (96     -        220        56        (43     3,812        (7
   

Financial liabilities carried at fair value

                       

Investment contracts for account of policyholders

    165        16        -        -        (4     -        17        -        -        194        16   

Derivatives

    3,010        551        -        -        -        -        162        -        -        3,723        567   
      3,175        567        -        -        (4     -        178        -        -        3,916        583   

1 Includes impairments and movements related to fair value hedges. Gains and losses are recorded in the line item results from financial transactions of the income statement.

2 Total gains and losses are recorded in line items Gains/ (losses) on revaluation of available-for-sale investments and (Gains)/ losses transferred to the income statement on disposal and impairment of available-for-sale investment of the statement of other comprehensive income.

3 Total gains / (losses) for the period during which the financial instrument was in Level III.

During 2015, Aegon transferred certain financial instruments from Level II to Level III of the fair value hierarchy. The reason for the change in level was that the market liquidity for these securities decreased, which led to a change in market observability of prices. Prior to transfer, the fair value for the Level II securities was determined using observable market transactions or corroborated broker quotes respectively for the same or similar instruments. The amount of assets and liabilities transferred to Level III was EUR 108 million (full year 2014: EUR 485 million). Since the transfer, all such assets have been valued using valuation models incorporating significant non market-observable inputs or uncorroborated broker quotes.

Similarly, during 2015, Aegon transferred EUR 123 million (full year 2014: EUR 712 million) of financial instruments from Level III to other levels of the fair value hierarchy. The change in level was mainly the result of a return of activity in the market for these securities and that for these securities the fair value could be determined using observable market transactions or corroborated broker quotes for the same or similar instruments.

 

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The table below presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level III financial instruments.

 

Overview of significant unobservable inputs          
EUR millions  

Carrying

amount March 31,
2015

        Valuation technique 1