Profile: Aegon NV (AEG.N)
10 Jul 2014
AEGON N.V. (AEGON), incorporated in 1983, is a holding company. The Company is a provider of life insurance, pensions and asset management. AEGON’s businesses focus on life insurance, pensions and asset management. AEGON is engaged in accident, supplemental health, general insurance, and some limited banking activities. AEGON’s main markets are the United States, the Netherlands and the United Kingdom. As of December 31, 2011, AEGON operated in more than 20 countries in the Americas, Europe and Asia. The Company’s geographic segments include the Americas, which include the United States, Canada, Mexico and Brazil; the Netherlands; the United Kingdom, and New markets, which include Central & Eastern Europe, Asia, Spain, France, Variable Annuities Europe and AEGON Asset Management. TKP Investments was sold to AEGON Asset Management Holding B.V. in 2011.
AEGON Americas consists of AEGON USA, AEGON Canada, as well as its operations in Mexico and Brazil. AEGON USA is a life insurance organization in the United States. AEGON USA operates under Transamerica. Through its subsidiaries and affiliated companies, AEGON USA provides a wide range of life insurance, pensions, long-term savings and investment products. AEGON Canada offers a range of insurance products and financial services, through its Transamerica Life Canada subsidiary. AEGON’s subsidiary companies in the United States contain three lines of business acting through AEGON USA life insurance companies, which include Life and Protection, Individual Savings and Retirement, and Employer Solutions and Pensions.
AEGON USA affiliates provide whole life, universal life, variable universal life, indexed life, and term life insurance and supplemental health, special accident, and long-term care protection products. The Life & Protection (L&P) offers a range of products for distributors, business clients and customers. Term life insurance provides protection for a stated period of time. Universal life insurance pays death benefits, accumulates cash values, which adjusts periodically, and has flexible premiums. Indexed universal life products has both interest rate guarantees and equity index return guarantees, with a cap. Variable universal life products include varying investment options for the cash values, along with death benefit guarantees. Whole (Permanent) life insurance provides life-long death benefit protection as long as required premiums are paid. Premiums are fixed and usually payable over the life of the policy. Life products also include life insurance sold as part of defined benefit pension plans, endowment policies, post-retirement annuity products and group risk products. Supplemental health insurance products include accidental death, other injury, critical illness, hospital indemnity, Medicare supplement, and student health. Specialty lines include travel, membership and creditor (installment/mortgage/guaranteed auto protection) products. Long term care (LTC) insurance products provide benefits to policyholders who require care due to a chronic illness or cognitive impairment.
AEGON USA offers a range of savings and retirement products and services, including mutual funds, fixed and variable annuities, as well as investment advice to individuals entering their retirement years. The Individual Savings and Retirement Division administers and distributes these products through a range of channels, including wirehouse firms, banks, regional broker dealers, independent financial planners and direct distribution. Variable annuities are sold to individuals and retirement plans in the United States. Variable annuities allow a policyholder to provide for their financial future on a tax-deferred basis and to participate in equity or bond market performance. Variable annuities allow a policyholder to select payout options to meet the policyholder’s need for income upon maturity, including lump sum payment or income for life or for a period of time.
AEGON’s fee business consists of products, which generate fee income by providing management, administrative or risk services related to off balance sheet assets. AEGON’s operations in the United States provide investment products and administrative services, individual and group variable annuities, mutual funds, collective investment trusts and asset allocation (retirement planning) services. The operations in the United States provide the fund manager oversight for the Transamerica Funds. AEGON USA selects, manages, and retains affiliated and non-affiliated managers from a range of investment firms. AEGON USA earns investment management fees on these investment products. Fixed annuities include both deferred annuities and immediate annuities.
AEGON USA offers retirement plans, pension plans, pension-related products and services, life and supplemental health insurance products through employers. A range of investment options is offered to customized investment lineup for clients and a personalized retirement funding strategy for their retirement plan participants. Diversified Investment Advisors’ open architecture investment platform provides its clients access to a investment universe, including institutional and retail mutual funds, registered or non-registered variable annuities, or a collective investment trust. The investment options offered in each plan are selected by the client and/or the client’s financial advisor. Single premium group annuities are a non-participating group annuity product. This product is used for an insurance company takeover of a terminating defined benefit pension plan. The Company receives a single deposit from the contract holder and in return guarantees the payment of benefits to participants. These annuity payments are paid monthly for the life of the participant or participant and spouse, commencing for retired participants or at some date in the future for deferred participants. Transamerica Employee Benefits offers life, supplemental health and Stop Loss products.
Life products include universal life insurance, whole life insurance and term life insurance. Supplemental health products include dental, accident, critical illness, cancer treatment, hospital indemnity and short-term disability policies. Some of these plans provide lump sum or specified income payments when hospitalized, disabled or diagnosed with an illness. Others pay scheduled benefits for specific hospital or surgical expenses and cancer treatments, hospice care and cover deductible, as well as co-payment amounts not covered by other health insurance. Stop Loss provides catastrophic coverage to self-insured employer health plans. AEGON Stable Value Solutions provides synthetic GICs in the United States to tax-qualified institutional entities, such as 401(k) plans and other retirement plans. AEGON provides a synthetic GIC wrapper around fixed-income invested assets, which are owned by the plan and managed by the plan or a third party money manager hired by the plan.
Transamerica Life Canada (TLC) is AEGON Canada’s operating company. It offers a range of individual life insurance products, including universal life and term life insurance to consumers in the middle market. AEGON Canada’s product offerings consist of segregated funds, mutual funds, guaranteed investment accounts and single premium immediate annuities. During the year ended December 31, 2011, AEGON’s business in Latin America consisted of the 49% interest in Seguros Argos S.A. de C.V., a Mexican life insurance company and the 50% interest in Mongeral AEGON S.A. Seguros e Previdencia, a Brazil’s independent life insurer.
AEGON The Netherlands operates through a range of brands, including TKP Pensioen, OPTAS, Meeus and AEGON. The Netherlands’ subsidiaries are AEGON Bank N.V., AEGON Levensverzekering N.V., AEGON Schadeverzekering N.V.,; AEGON Spaarkas N.V., OPTAS Pensioenen N.V., AEGON Hypotheken B.V. ,
TKP Pensioen B.V., and Unirobe Meeus Groep B.V.. AEGON The Netherlands is present in four lines of Life and Savings, Pensions, Non-life and Distribution.
AEGON The Netherlands’ provides a range of individual savings products and a range of life insurance and personal protection products and services, including traditional, universal and term life. The life products of AEGON The Netherlands’ consist endowment insurance Term and Whole Life Insurance, Annuity Insurance, Variable Unit-Linked Products, Tontine Plans, Mortgage Loans, Savings Accounts, Investment Contracts, Levensloop and Banksparen.
Premiums are paid at inception or over the term of the contract. The accumulation products pay benefits on the policy maturity date, subject to survival of the insured. Premiums and amounts insured are established at inception of the contract.Term life insurance pays out death benefits when the insured dies during the term of the contract. Whole life insurance pays out death benefits when the insured dies, regardless of the timing of this event. Annuity insurance includes products in the accumulation phase and in the payout phase. Variable Unit-Linked Products have a minimum benefit guarantee if premiums are invested in certain funds.
Tontine plans in the Netherlands are linked endowment savings contracts with a specific bonus structure. Policyholders can choose from AEGON funds to invest premiums paid. The characteristic of a tontine system is that when the policyholder dies, the balance is not paid out to the policyholder’s estate, but is distributed at the end of the year to the surviving policyholders of the specific series, to which the deceased policyholder belonged. Different types of residential mortgage loans are offered: interest-only, savings and unit-linked. Customers may also combine the different types in their own mortgage. Savings accounts are offered which allow customers to retain flexibility to withdraw cash with limited restrictions. In addition deposit accounts are offered with a pre determined maturity. Investment contracts are investment products that offer index-linked returns and generate fee income on the performance of the investments.
Levensloop allows savers to put aside a certain amount each year, tax free, either to fund their retirement, retire early, or even finance a sabbatical. Banksparen is a saving product for which amounts are deposited on a blocked account, tax free.
Pensions provide a range of full service pension products to pension funds and companies. AEGON The Netherlands provides full service pension solutions and also administration-only services to company and industry pension funds and some large companies. The full service pension products for account of policyholders are separate account group contracts with or without guarantees. Non-life consists of general insurance and accident and health insurance. AEGON The Netherlands offers a range of non life insurance products in both the corporate and retail markets. They include house, inventory, car, fire and travel insurance. AEGON The Netherlands offers sick leave products to employers, which cover the sick leave payments to employees, which are not covered by social security and where the employers bear the risk.
The United Kingdom
In the United Kingdom, AEGON is a provider of life insurance and pensions, and it also has a presence in both the asset management and financial advice markets. AEGON UK plc (AEGON UK) is AEGON UK’s holding company. AEGON UK’s operating subsidiaries are Scottish Equitable plc., Origen Financial Services Ltd., Positive Solutions (Financial Services) Ltd. and Guardian Assurance plc. AEGON UK is organized into two distinct businesses AEGON life and pensions, which provides pensions, annuities, investments and protection products for people and companies; and AEGON UK Distribution, which consists of intermediary distribution and advice businesses. AEGON UK has three lines of business Life, Pensions and Distribution. The AEGON UK life business consists of individual protection and individual annuities. The protection business provides insurance on individual or groups of lives for life events, such as death or serious illness, as well as providing business protection. Annuities are used to convert savings accumulated as part of a pension plan into a regular income throughout retirement. AEGON UK offers a range of products for individual customers, including life cover, critical illness and income protection.
AEGON UK provides a range of personal pensions as well as associated products and services. The company also offers investment products, including onshore and offshore bonds, and trusts. AEGON UK provides a range of personal pensions, as well as associated products and services. These include Flexible personal pensions; Self-invested personal pensions (SIPPs), which provide a range of pre- and post-retirement investment options for high net worth customers, including insured funds and real estate; transfers from other retirement plans; phased retirement options and income drawdown, and stakeholder pensions . As an alternative to annuities, AEGON UK also offers Income for life, a retirement solution, which bridges the gap between annuities and income drawdown products. It offers customers a guaranteed income for life, plus continued control over their investments up to age 75. One of AEGON UK’s businesses is providing pension plans for companies. Defined contribution (DC) plans are similar to personal pensions with contributions being paid into a plan owned by individual employees and then invested.
AEGON UK offers a group SIPPs to extend to group pension customers the benefits associated with individual SIPPs. AEGON also offers two types of investment bonds designed for customers residing in the United Kingdom: the onshore bond and offshore contracts. The onshore bond offers a range of investment options and funds. AEGON’s offshore contracts have been marketed to high net worth individuals. AEGON offers a range of pension and investment products which provide valuable guarantees for the At Retirement market. There is an onshore bond, which provides a guaranteed income for 20 years, an offshore investment plan, which provides an income for life and a version of the income drawdown pension, which also provides a guaranteed income for life.
AEGON is present in more than 20 markets in total in Europe, the Americas and in Asia. AEGON’s other international businesses operate through a range of subsidiaries and joint venture partnerships. AEGON’s activities in Central & Eastern Europe (CEE) operate through a range of different sales channels. These include tied agents, insurance brokers, call centers, online channels in Poland, Romania, Turkey and Hungary. Through tied agents, brokers and call centers, AEGON sells life and non life insurance and pensions. Through online channels AEGON sells household and car insurance. Banks and loan centers are used to sell life insurance, mortgages, mutual fund and household insurance. AEGON companies in Central & Eastern Europe offers a range of life insurance and personal protection products. This range includes traditional life, as well as unit-linked products. Unit-linked products cover life insurance, including pension, endowment and savings. In Poland, AEGON provides unit-linked products, offering around 184 different investment funds.
Traditional account life insurance is a marginal product for the region’s businesses, except Hungary. Traditional general account includes index life products, which are not unit-linked but guaranteed rates of interest. Group life and preferred life are also part of traditional general account life. Group life contracts are renewable each year. AEGON offers savings products in Central & Eastern Europe as part of employee benefit programs. These products include guaranteed interest rate returns. In Poland, an insurance fund with a guaranteed rate resets quarterly and annually is offered on unit-linked products. Similar products are sold in the Czech Republic with interest guarantee of 2% and 1.5%. The universal life products in the Czech Republic have a guaranteed interest rate of 2.4%.
In four of the six CEE countries in which AEGON has businesses, AEGON has private pension plans, including Hungary, Slovakia, Poland and Romania. In addition, in three countries, AEGON has voluntary pension plans: Hungary, the Czech Republic and Turkey. As of December 31, 2011, AEGON had a total of 1.7 million pension fund members in the CEE region. In addition to life insurance and pensions, AEGON Hungary offers non-life cover (household, car insurance and some wealth industrial risk).
AEGON has life insurance joint ventures in the People’s Republic of China, India and Japan. AEGON operates through a range of different sales channels in Asia. In the People’s Republic of China, AEGON sells its products through multiple distribution channels like agents, independent brokers, banks, direct marketing and the group channel. The agency channel sells universal life and critical illness products. The key product of bank channel is regular premium participating endowment, telemarketers mainly sell return of premium products and the popular products in the brokerage channel are participating endowment and critical illness. As of December 31, 2011, AEGON’s bancassurance network in the People’s Republic of China totaled 810 outlets.
AEGON provides a range of life insurance products through its businesses in the People’s Republic of China and India. These include unit-linked and traditional life products, as well as endowment, term life, health, group life, accident and annuities. In the People’s Republic of China AEGON-CNOOC’s agency channel sells universal life and critical illness products while regular premium participating endowment products are key products for the banks. Telemarketers sell return of premium products and the popular products in the brokerage channel are participating endowment and critical illness products. AEGON Sony Life sells only variable annuities. It provides a guaranteed life time withdrawal benefit (GLWB) product with 10, 12 and 15 year accumulation period options). AEGON-CNOOC offers non-life products to all channels. In the group channel, the main product is group medical policies.
The Company competes with AIG,American General, John Hancock, Lincoln National, Primerica, American Funds, Franklin Templeton, Oppenheimer, Putnam, Fidelity, Reinsurance Group of America, Swiss Re, Generali USA Life Re, Munich Re, T. Rowe Price, Vanguard, Schwab, Principal Financial, Mass Mutual, New York Life, Prudential, Mass Mutual, Prudential, John Hancock, Metropolitan Life, Mutual of Omaha, Power Corporation, Manulife Financial, Sun Life Financial, Industrial-Alliance, RBC Life, Empire Life, Equitable Life, Desjardins Financial, BMO Life, ING Group, Eureko, ASR, SNS Reaal, Delta Lloyd/OHRA, Rabobank and ABN AMRO.
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