Form 6-K
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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

August 2015

 

 AEGON N.V.

 

 

Aegonplein 50

2591 TV  THE HAGUE

The Netherlands


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Aegon’s condensed consolidated interim financial statements Q2 2015, dated August 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: August 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        Q2 2015        Q2 2014        YTD 2015        YTD 2014   
     

Premium income 1

    4        4,981        4,360        10,622        9,625   

Investment income

    5        2,262        2,140        4,360        4,088   

Fee and commission income

      626        487        1,208        953   

Other revenues

            7        2        9        3   

Total revenues

      7,877        6,989        16,199        14,669   

Income from reinsurance ceded

      788        744        1,474        1,443   

Results from financial transactions

    6        (7,179     4,444        2,725        6,672   

Other income

            -        3        -        12   

Total income

      1,486        12,181        20,398        22,795   
     

Benefits and expenses 1

    7        1,074        11,695        19,466        21,708   

Impairment charges / (reversals)

    8        (6     8        7        16   

Interest charges and related fees

      75        65        183        182   

Other charges

            -        4        11        6   

Total charges

      1,143        11,772        19,667        21,912   
     

Share in net result of joint ventures

      32        14        61        20   

Share in net result of associates

            3        8        3        16   

Income before tax

      378        431        796        919   

Income tax (expense) / benefit

            (28     (88     (130     (184

Net income

            350        343        666        735   
     

Net income attributable to:

             

Equity holders of Aegon N.V.

      350        343        666        735   

Non-controlling interests

            -        -        -        -   
     

Earnings per share (EUR per share)

    15               

Basic earnings per common share

      0.15        0.15        0.28        0.31   

Basic earnings per common share B

      -        -        0.01        0.01   

Diluted earnings per common share

      0.15        0.15        0.28        0.31   

Diluted earnings per common share B

            -        -        0.01        0.01   

 

1 

Premium income and Benefits and expenses as previously reported in Q1 2015 have been adjusted, refer to note 1 basis of presentation.

 

2    Unaudited


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Condensed consolidated statement of comprehensive income

 

               
EUR millions   Q2 2015     Q2 2014     YTD 2015     YTD 2014  
     

Net income

    350        343        666        735   
     

Other comprehensive income:

           

Items that will not be reclassified to profit or loss:

           

Changes in revaluation reserve real estate held for own use

    (1     (2     4        (2

Remeasurements of defined benefit plans

    894        (209     267        (443

Income tax relating to items that will not be reclassified

    (240     59        (81     125   
     

Items that may be reclassified subsequently to profit or loss:

           

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

    (3,120     1,493        (1,525     3,312   

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

    (148     (207     (280     (319

Changes in cash flow hedging reserve

    (521     182        37        380   

Movement in foreign currency translation and net foreign investment hedging reserve

    (456     192        1,277        173   

Equity movements of joint ventures

    (5     6        (2     12   

Equity movements of associates

    (1     7        (1     6   

Disposal of group assets

    -        -        -        -   

Income tax relating to items that may be reclassified

    1,110        (408     660        (988

Other

    1        (3     4        (5

Other comprehensive income for the period

    (2,486     1,110        359        2,252   

Total comprehensive income/(loss)

    (2,136     1,453        1,025        2,987   
     

Total comprehensive income/(loss) attributable to:

           

Equity holders of Aegon N.V.

    (2,136     1,453        1,025        2,988   

Non-controlling interests

    -        -        -        (1

 

Unaudited    3


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Condensed consolidated statement of financial position

 

 
            Jun. 30,
2015
    Dec. 31,
2014
 

EUR millions

    Notes                   
   

Assets

       

Intangible assets

    9        2,216        2,073   

Investments

    10        158,956        153,653   

Investments for account of policyholders

    11        205,903        191,467   

Derivatives

    12        21,937        28,014   

Investments in joint ventures

      1,553        1,468   

Investments in associates

      256        140   

Reinsurance assets

      10,154        9,593   

Deferred expenses

    14        11,930        10,373   

Assets held for sale

    17        9,625        9,881   

Other assets and receivables

      7,400        7,628   

Cash and cash equivalents

            10,882        10,610   

Total assets

      440,812        424,902   
   

Equity and liabilities

       

Shareholders’ equity

      25,047        24,293   

Other equity instruments

            3,796        3,827   

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

      28,844        28,120   

Non-controlling interests

            9        9   

Group equity

      28,853        28,129   
   

Trust pass-through securities

      152        143   

Subordinated borrowings

      755        747   

Insurance contracts

      119,085        111,927   

Insurance contracts for account of policyholders

      110,882        102,250   

Investment contracts

      17,043        15,359   

Investment contracts for account of policyholders

      97,551        91,849   

Derivatives

    12        20,666        26,048   

Borrowings

    16        14,335        14,158   

Liabilities held for sale

    17        7,881        7,810   

Other liabilities

            23,610        26,481   

Total liabilities

 

            411,959        396,772   

Total equity and liabilities

            440,812        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  
       

Six months ended June 30, 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

    -        666        -        -        -        -        666        -        666   
       

Other comprehensive income:

                       

Items that will not be reclassified to profit or loss:

                       

Changes in revaluation reserve real estate held for own use

    -        -        4        -        -        -        4        -        4   

Remeasurements of defined benefit plans

    -        -        -        267        -        -        267        -        267   

Income tax relating to items that will not be reclassified

    -        -        -        (81     -        -        (81     -        (81
       

Items that may be reclassified subsequently to profit or loss:

                       

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

    -        -        (1,525     -        -        -        (1,525     -        (1,525

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

    -        -        (280     -        -        -        (280     -        (280

Changes in cash flow hedging reserve

    -        -        37        -        -        -        37        -        37   

Movement in foreign currency translation and net foreign investment hedging reserves

    -        -        -        (81     1,358        -        1,277        -        1,277   

Equity movements of joint ventures

    -        -        -        -        (2     -        (2     -        (2

Equity movements of associates

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

Income tax relating to items that may be reclassified

    -        -        687        -        (27     -        660        -        660   

Other

    -        4        -        -        -        -        4        -        4   

Total other comprehensive income

    -        4        (1,078     105        1,328        -        359        -        359   

Total comprehensive income/ (loss) for 2015

    -        670        (1,078     105        1,328        -        1,025        -        1,025   
       

Shares issued and withdrawn

    1        -        -        -        -        -        1        -        1   

Issuance and purchase of treasury shares

    -        58        -        -        -        -        58        -        58   

Dividends paid on common shares

    (108     (147     -        -        -        -        (255     -        (255

Coupons on non-cumulative subordinated notes

    -        (14     -        -        -        -        (14     -        (14

Coupons on perpetual securities

    -        (54     -        -        -        -        (54     -        (54

Share options and incentive plans

    -        (7     -        -        -        (30     (38     -        (38

At end of period

    8,490        9,582        7,230        (1,506     1,251        3,796        28,844        9        28,853   
       

Six months ended June 30, 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

    -        735        -        -        -        -        735        -        735   
       

Other comprehensive income:

                       

Items that will not be reclassified to profit or loss:

                       

Changes in revaluation reserve real estate held for own use

    -        -        (2     -        -        -        (2     -        (2

Remeasurements of defined benefit plans

    -        -        -        (443     -        -        (443     -        (443

Income tax relating to items that will not be reclassified

    -        -        1        125        -        -        125        -        125   
       

Items that may be reclassified subsequently to profit or loss:

                       

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

    -        -        3,312        -        -        -        3,312        -        3,312   

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

    -        -        (319     -        -        -        (319     -        (319

Changes in cash flow hedging reserve

    -        -        380        -        -        -        380        -        380   

Movement in foreign currency translation and net foreign investment hedging reserves

    -        -        -        (10     183        -        173        -        173   

Equity movements of joint ventures

    -        -        -        -        12        -        12        -        12   

Equity movements of associates

    -        -        -        -        6        -        6        -        6   

Income tax relating to items that may be reclassified

    -        -        (985     -        (3     -        (988     -        (988

Other

    -        (4     -        -        -        -        (4     (1     (5

Total other comprehensive income

    -        (4     2,387        (328     198        -        2,253        (1     2,252   

Total comprehensive income / (loss) for 2014

    -        732        2,387        (328     198        -        2,988        (1     2,987   
       

Issuance and purchase of treasury shares

    -        (65     -        -        -        -        (65     -        (65

Other equity instruments redeemed

    -        15        -        -        -        (1,184     (1,169     -        (1,169

Dividends paid on common shares

    -        (138     -        -        -        -        (138     -        (138

Coupons on non-cumulative subordinated notes

    -        (11     -        -        -        -        (11     -        (11

Coupons on perpetual securities

    -        (72     -        -        -        -        (72     -        (72

Share options and incentive plans

    -        7        -        -        -        (20     (13     -        (13

At end of period

    8,701        8,830        5,410        (1,034     (1,581     3,811        24,136        9        24,144   

 

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   Q2 2015     Q2 2014  
   

Cash flow from operating activities

    368        1,566   
   

Purchases and disposals of intangible assets

    (21     (18

Purchases and disposals of equipment and other assets

    (34     (27

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

    218        27   

Cash flow from investing activities

    162        (18
   

Issuance and purchase of treasury shares

    (53     (38

Dividends paid

    (147     (138

Issuances, repurchases and coupons of perpetuals

    (72     (1,265

Issuances, repurchases and coupons of non-cumulative subordinated notes

    (18     (15

Issuances and repayments of borrowings

    (173     1,777   

Cash flow from financing activities

    (463     320   
   

Net increase / (decrease) in cash and cash equivalents

    67        1,868   

Net cash and cash equivalents at January 1

    10,649        5,652   

Effects of changes in foreign exchange rates

    202        34   

Net cash and cash equivalents at end of period

    10,918        7,554   
   

    

               

Cash and cash equivalents

    10,882        7,850   

Cash and cash equivalents classified as Assets held for sale

    45        -   

Bank overdrafts classified as other liabilities

    (9     (296

Net cash and cash equivalents

    10,918        7,554   

 

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 approximately 28,000 people worldwide.

1. Basis of presentation

The condensed consolidated interim financial statements as at, and for the period ended, June 30, 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 may have been reclassified to conform to the current year presentation. These reclassifications had no effect on net income, shareholders’ equity or earnings per share.

Premium income and Benefits and expenses as previously reported in Q1 2015 have been adjusted as they were overstated by EUR 706 million. Q2 2015 YTD numbers presented in this report include this change. This adjustment had no effect on net income, shareholders’ equity or earnings per share as reported in any of these periods. The overstatement resulted from the conversion of certain contracts which were treated as new business instead of existing business.

The condensed consolidated interim financial statements as at, and for the period ended, June 30, 2015, were approved by the Executive Board on August 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.

 

Unaudited    7


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None of these revised standards and interpretations had a significant effect on the condensed consolidated interim financial statements as at and for the period ended June 30, 2015.

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

Taxes

Taxes on income for the six months interim period, ending June 30, 2015, are accrued using the tax rate that would be applicable to expected total annual earnings.

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 were 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   

June 30, 2015

     1         EUR         1.1142         0.7085   

December 31, 2014

     1         EUR         1.2101         0.7760   

Weighted average exchange rates

                         USD         GBP   

Six months ended June 30, 2015

     1         EUR         1.1162         0.7322   

Six months ended June 30, 2014

     1         EUR         1.3704         0.8212   

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 annuities activities in Europe and Aegon Asset Management that are aggregated as one reportable segment due to their respective size;
5. Holding and other activities: Includes financing, employee and other administrative expenses of holding companies.

 

8    Unaudited


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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.

Performance Measure

A performance measure of reporting segments utilized by the Company is underlying earnings before tax. Underlying earnings before tax 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 before tax 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 before tax. 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 before tax 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 before tax. 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 before tax 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 before tax is a long-term expected return on these products and excluded is any over- or underperformance compared to management’s expected return.

 

Unaudited    9


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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 before tax, 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 before tax 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 before tax.

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, Mexico and France are reported on an underlying earnings before tax 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 June 30, 2015

                   
     

Underlying earnings before tax geographically

    358        136        34        62        (43     1        549        -        549   

Fair value items

    (288     (117     (7     (3     123        -        (293     (8     (300

Realized gains / (losses) on investments

    (25     101        54        4        -        -        134        (3     131   

Impairment charges

    (14     (3     -        1        -        -        (17     -        (17

Impairment reversals

    23        1        -        -        -        -        23        -        23   

Other income / (charges)

    -        -        (11     -        -        -        (11     -        (11

Run-off businesses

    3        -        -        -        -        -        3        -        3   

Income/ (loss) before tax

    55        117        70        63        81        1        389        (11     378   

Income tax (expense) / benefit

    26        (26     5        (24     (20     -        (39     11        (28

Net income/ (loss)

    82        91        75        39        61        1        350        -        350   

Inter-segment underlying earnings

    (56     (15     (16     84        3             
     

Revenues

                   

Life insurance gross premiums

    1,750        367        1,520        615        2        (27     4,228        (100     4,128   

Accident and health insurance

    583        37        12        36        2        (2     668        (1     667   

General insurance

    -        147        -        60        -        -        207        (20     187   

Total gross premiums

    2,334        552        1,532        711        4        (29     5,103        (121     4,981   

Investment income

    917        596        691        25        98        (97     2,229        33        2,262   

Fee and commission income

    444        87        9        208        -        (70     678        (52     626   

Other revenues

    7        -        -        3        1        -        11        (4     7   

Total revenues

    3,701        1,235        2,232        946        102        (196     8,021        (144     7,877   

Inter-segment revenues

    6        1        -        90        100                                   

 

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 June 30, 2014

                   
     

Underlying earnings before tax geographically

    331        131        32        62        (42     -        514        -        514   

Fair value items

    (118     (132     (13     1        -        -        (263     1        (262

Realized gains / (losses) on investments

    51        47        97        2        -        -        198        (1     197   

Impairment charges

    (6     (5     -        (15     -        -        (26     -        (26

Impairment reversals

    21        2        -        -        -        -        23        -        23   

Other income / (charges)

    (11     (5     2        1        (1     -        (14     (1     (15

Run-off businesses

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

Income/ (loss) before tax

    268        39        117        51        (43     -        432        (1     431   

Income tax (expense) / benefit

    (51     (7     (27     (16     13        -        (88     1        (88

Net income/ (loss)

    216        32        90        35        (30     -        343        -        343   

Inter-segment underlying earnings

    (42     (15     (14     65        6             
     

Revenues

                   

Life insurance gross premiums

    1,538        540        1,171        486        (1     (18     3,716        (88     3,628   

Accident and health insurance

    454        39        14        35        1        (1     542        (1     541   

General insurance

    -        154        -        56        -        -        211        (20     191   

Total gross premiums

    1,991        734        1,186        577        -        (20     4,469        (109     4,360   

Investment income

    798        684        608        60        80        (79     2,151        (10     2,140   

Fee and commission income

    328        80        10        148        -        (56     509        (22     487   

Other revenues

    -        -        -        -        1        -        2        -        2   

Total revenues

    3,118        1,498        1,803        785        82        (155     7,131        (142     6,989   

Inter-segment revenues

    4        -        -        71        80                                   

 

Unaudited    11


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EUR millions   Americas     The
Netherlands
    United
Kingdom
    New
Markets
    Holding and
other
activities
    Eliminations     Segment
Total
    Joint
ventures and
associates
eliminations
    Consolidated  

Six months ended June 30, 2015

                   
     

Underlying earnings before tax geographically

    648        267        72        113        (83     (1     1,018        3        1,020   

Fair value items

    (379     34        (30     (8     (69     -        (451     (16     (467

Realized gains / (losses) on investments

    (54     241        56        9        -        -        252        (5     247   

Impairment charges

    (21     (11     -        (1     -        -        (32     -        (32

Impairment reversals

    26        3        -        -        -        -        28        -        28   

Other income / (charges)

    -        (22     10        -        -        -        (11     -        (11

Run-off businesses

    11        -        -        -        -        -        11        -        11   

Income/ (loss) before tax

    230        513        109        114        (152     (1     814        (18     796   

Income tax (expense) / benefit

    (4     (118     (16     (46     37        -        (148     18        (130

Net income/ (loss)

    226        395        93        67        (115     (1     666        -        666   

Inter-segment underlying earnings

    (110     (27     (33     164        6             
     

Revenues

                   

Life insurance gross premiums 1

    3,443        1,413        2,890        1,372        2        (51     9,069        (219     8,851   

Accident and health insurance

    1,135        166        25        96        3        (3     1,421        (12     1,410   

General insurance

    -        279        -        122        -        -        401        (39     362   

Total gross premiums

    4,578        1,858        2,915        1,590        5        (54     10,892        (270     10,622   

Investment income

    1,826        1,185        1,235        142        192        (192     4,388        (28     4,360   

Fee and commission income

    849        172        21        403        -        (138     1,307        (100     1,208   

Other revenues

    7        -        -        4        2        -        14        (5     9   

Total revenues

    7,260        3,216        4,171        2,139        199        (384     16,601        (402     16,199   

Inter-segment revenues

    12        1        -        176        195                                   

 

1 

Life insurance gross premiums as previously reported in Q1 2015 have been adjusted, refer to note 1 basis of presentation.

 

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

Joint
ventures and

associates
eliminations

    Consolidated  

Six months ended June 30, 2014

                   
     

Underlying earnings before tax geographically

    633        259        58        123        (63     1        1,012        (8     1,004   

Fair value items

    (167     (167     (16     8        (36     -        (379     5        (373

Realized gains / (losses) on investments

    60        131        113        4        -        -        308        (1     306   

Impairment charges

    (12     (9     -        (24     -        -        (45     -        (45

Impairment reversals

    31        4        -        -        -        -        35        -        35   

Other income / (charges)

    (8     (8     (2     (1     (1     -        (20     (1     (21

Run-off businesses

    13        -        -        -        -        -        13        -        13   

Income/ (loss) before tax

    550        211        154        109        (101     1        924        (5     919   

Income tax (expense) / benefit

    (115     (35     (36     (32     29        -        (189     5        (184

Net income/ (loss)

    435        175        118        77        (71     1        735        -        735   

Inter-segment underlying earnings

    (83     (29     (28     130        10             
     

Revenues

                   

Life insurance gross premiums

    3,026        2,039        2,391        859        1        (36     8,280        (173     8,107   

Accident and health insurance

    871        170        29        90        2        (2     1,160        (9     1,151   

General insurance

    -        290        -        114        -        -        404        (38     367   

Total gross premiums

    3,897        2,498        2,420        1,064        3        (38     9,844        (220     9,625   

Investment income

    1,601        1,320        1,072        113        158        (156     4,108        (20     4,088   

Fee and commission income

    641        158        20        290        -        (113     995        (42     953   

Other revenues

    1        -        -        1        2        -        4        (1     3   

Total revenues

    6,140        3,976        3,512        1,468        163        (308     14,952        (283     14,669   

Inter-segment revenues

    8        -        -        141        159                                   

 

12    Unaudited


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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
    June 30, 2015   Americas     The
Netherlands
    United
Kingdom
    New
Markets
    Holding &
other
activities
    Eliminations     Total
EUR
 
        Investments                  
  739        108      Shares     663        153        153        49        130        (1     1,148   
  73,175        9,612      Debt securities     65,675        23,612        13,566        5,026        -        -        107,878   
  10,729        -      Loans     9,629        27,787        -        446        78        -        37,941   
  10,286        289      Other financial assets     9,231        346        408        27        99        -        10,110   
  846        -      Investments in real estate     759        1,118        -        2        -        -        1,879   
  95,774        10,009      Investments general account     85,957        53,016        14,128        5,549        307        (1     158,956   
  -        12,981      Shares     -        9,225        18,322        283        -        (10     27,821   
  5,500        9,269      Debt securities     4,936        18,101        13,083        217        -        -        36,338   
  107,490        23,123      Unconsolidated investment funds     96,473        -        32,637        6,891        -        -        136,000   
  25        2,893      Other financial assets     22        374        4,083        19        -        -        4,499   
  -        882      Investments in real estate     -        -        1,245        -        -        -        1,245   
  113,015        49,149      Investments for account of policyholders     101,431        27,700        69,371        7,410        -        (10     205,903   
       
  208,788        59,159      Investments on balance sheet     187,389        80,716        83,498        12,960        307        (11     364,859   
  175,691        540      Off balance sheet investments third parties     157,684        831        762        120,881        -        -        280,158   
  384,480        59,698      Total revenue generating investments     345,072        81,547        84,260        133,841        307        (11     645,017   
       
        Investments                  
  79,419        9,800      Available-for-sale     71,279        22,779        13,832        5,021        18        -        112,930   
  10,729        -      Loans     9,629        27,787        -        446        78        -        37,941   
  117,795        48,476      Financial assets at fair value through profit or loss     105,721        29,031        68,421        7,490        211        (11     210,864   
  846        882      Investments in real estate     759        1,118        1,245        2        -        -        3,124   
  208,788        59,159      Total investments on balance sheet     187,389        80,716        83,498        12,960        307        (11     364,859   
       
  10        -      Investments in joint ventures     9        803        -        739        2        -        1,553   
  98        17      Investments in associates     88        21        24        122        -        -        256   
  38,930        4,751      Other assets     34,940        29,346        6,706        4,341        35,585        (36,774     74,144   
  247,827        63,927      Consolidated total assets     222,426        110,887        90,229        18,161        35,894        (36,785     440,812   

 

                                 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   

 

Unaudited    13


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4. Premium income and premiums paid to reinsurers

 

                              

EUR millions

    Q2 2015        Q2 2014        YTD 2015        YTD 2014   
     

Gross

         

Life

    4,128        3,628        8,851        8,107   

Non-Life

    853        732        1,771        1,518   

Total

    4,981        4,360        10,622        9,625   
     

Reinsurance 1

         

Life

    678        675        1,298        1,319   

Non-Life

    69        74        138        152   

Total

    747        749        1,436        1,471   

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

5. Investment income

 

                              

EUR millions

    Q2 2015        Q2 2014        YTD 2015        YTD 2014   
     

Interest income

    1,776        1,682        3,538        3,379   

Dividend income

    453        421        754        642   

Rental income

    33        37        68        67   

Total investment income

    2,262        2,140        4,360        4,088   
     

Investment income related to general account

    1,528        1,406        3,032        2,801   

Investment income for account of policyholders

    735        734        1,328        1,287   

Total

    2,262        2,140        4,360        4,088   

6. Results from financial transactions

 

                              

EUR millions

    Q2 2015        Q2 2014        YTD 2015        YTD 2014   
     

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

    (23     92        48        161   

Realized gains /(losses) on financial investments

    131        198        268        307   

Gains /(losses) on investments in real estate

    7        (9     17        (14

Net fair value change of derivatives

    (2,023     247        (617     336   

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

    (5,289     3,921        3,011        5,867   

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

    6        21        14        28   

Net foreign currency gains /(losses)

    (6     (18     (28     (12

Net fair value change on borrowings and other financial liabilities

    17        (11     12        (4

Realized gains /(losses) on repurchased debt

    1        3        1        3   

Total

    (7,179     4,444        2,725        6,672   

The decrease of the net fair value change on for account of policyholder financial assets at FVTPL in Q2 2015 compared to Q2 2014 is mainly driven by interest rates and equity markets movements. 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.

 

14    Unaudited


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7. Benefits and expenses

 

                              

EUR millions

    Q2 2015        Q2 2014        YTD 2015        YTD 2014   
     

Claims and benefits

    235        11,006        17,867        20,338   

Employee expenses

    563        506        1,125        982   

Administration expenses

    315        276        612        552   

Deferred expenses

    (382     (339     (795     (656

Amortization charges

    343        246        657        493   

Total

    1,074        11,695        19,466        21,708   

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) of EUR 5,289 negative (2014 Q2: EUR 3,921 positive).

8. Impairment charges/(reversals)

 

                              

EUR millions

    Q2 2015        Q2 2014        YTD 2015        YTD 2014   
     

Impairment charges / (reversals) comprise:

         

Impairment charges on financial assets, excluding receivables 1

    17        28        35        49   

Impairment reversals on financial assets, excluding receivables 1

    (23     (23     (28     (35

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

    -        3        1        1   

Total

    (6     8        7        16   
     

Impairment charges on financial assets, excluding receivables, from: