Aegon N.V. Value Stock - Dividend - Research Selection

Aegon is an international life insurance, pensions and asset management group. Its listed holding company, Aegon N.V., is a public limited liability company with its corporate seat and head office in the Netherlands.

The Company’s history dates back over 170 years. Aegon N.V. was formed in 1983 through the merger of AGO and Ennia, both of which were successors to insurance companies founded in the 1800s.

Aegon is headquartered in the Netherlands, and through its subsidiaries and joint ventures it employs over 28,000 people worldwide. Aegon’s common shares are listed on stock exchanges in Amsterdam (Euronext) and New York (NYSE). Aegon’s main operating units are separate legal entities that operate under the laws of their respective countries. The shares of these legal entities are directly or indirectly held by three intermediate holding companies incorporated under Dutch law: Aegon Europe Holding B.V., the holding company for all European activities; Aegon International B.V., which serves as a holding company for the Aegon Group companies of all non-European countries; and Aegon Asset Management Holding B.V., the holding company for a number of its asset management entities.

Aegon exists to help people achieve a lifetime of financial security. It uses a multi-brand, multichannel distribution approach to meet its customers’ needs, and fosters an entrepreneurial spirit within its businesses, encouraging the development of innovative products and services.

Aegon has the following operating segments: the Americas, which includes the United States, Mexico and Brazil; the Netherlands; the United Kingdom; Central & Eastern Europe; Spain & Portugal; Asia and Aegon Asset Management. The separate operating segments of the Netherlands, the United Kingdom, Central & Eastern Europe and Spain & Portugal may be referred together as ‘Europe’, although Europe is not an operating segment.

Introduction

To prosper, companies must create long-term value for society and their stakeholders. It’s from this value that a company derives its license to operate2. Aegon creates value in several ways: as a provider of insurance and other financial services, and a responsible employer and business partner. Aegon also makes significant social and economic contributions through its returns to shareholders, its tax payments, its support for local communities and, most importantly, through investments for both for its own account and on behalf of its customers. Aegon’s aim is to be a responsible corporate citizen, fully aware of the impact the Company’s businesses have on its stakeholders and on society as a whole.

Social and economic role of insurance

Insurance plays a very important role in strengthening social stability and in creating the conditions necessary for long-term economic growth. Insurance protects people, property and assets and, by doing so, allows individuals and businesses to take risks, and invest and plan for the future. By pooling risk, insurance increases social solidarity between individuals, groups and generations. Insurers are also significant long-term investors in the economy, financing both public and private sectors, creating new jobs and driving business growth.

Aegon’s businesses

Aegon is an international financial services, insurance, pension and asset management company. Its purpose is to help customers achieve a lifetime of financial security. Aegon’s main operations are located in the US, the Netherlands and the UK. The Company also has operations elsewhere in Europe, as well as in Asia and Latin America.

Aegon offers a range of financial products, including life insurance, savings and investments, retirement plans and property & casualty cover. Most of Aegon’s products and services are sold through brokers and other financial intermediaries, though direct-to-customer sales have been increasing in recent years.

Business model

Please refer to page 9 of Aegon’s Strategy to view Aegon’s business model.

Stakeholders

As an international business, Aegon has many stakeholders. Their relationship with the Company depends not only on the

nature of each stakeholder’s organization or activities, but also the value created by that relationship (both for the stakeholder and for Aegon).

Aegon defines its stakeholders as: any individual or organization affected, or likely to be affected, by its business or that may, in turn, affect the environment in which the Company operates. Aegon recognizes five main stakeholder groups:

◆ Customers (individual customers, group and corporate clients);

◆ Employees (full-time and part-time employees, tied agents, trade unions and other employee representative groups);

◆ Investors (institutional and retail investors);

◆ Business partners (distributors, joint venture partners, reinsurers and suppliers of goods and services);

◆ Wider community (governments, regulators, charities, tax authorities, community groups and other non-governmental organizations, academic and other public institutions).

Aegon regularly engages its stakeholders, and uses their input to improve products and services, and to ensure the Company remains accountable and relevant.

Current operating environment

Most Aegon businesses operate in a highly-regulated environment. This environment may be affected by a number of factors: economic, financial, regulatory, social, political and environmental. Over the past year, Aegon’s operating environment has shown signs of improvement, particularly as a result of stronger financial markets and economic growth in the US, Europe and parts of Asia. Interest rates remain low, however. Insurance sector regulation, meanwhile, has become increasingly complex. There has also been a rise in political uncertainty, and rapid social change, driven by aging and the introduction of new digital technologies.

Material issues

Every year, Aegon identifies a number of material issues. This is done through a formal materiality exercise, involving both stakeholders and the Company’s senior management. Material issues are those likely to have the most impact, over the next few years, on Aegon’s business, profits, reputation, and its ability to continue creating long-term value for stakeholders. Results of the materiality exercise are incorporated into Aegon’s strategy and reporting processes3.