[ad_1]
Aegon Nederland set up a program to disentangle its’ operations from Aegon N.V. and to be able to operate as a standalone company.
Financial Assets
Aegon Levensverzekering is considered a Financial Asset. Aegon has established a dedicated team to manage these businesses, which is responsible for maximizing its value. Aegon selectively competes in the defined benefit market. This also includes supporting employers in their transition towards defined contribution solutions under the new pension agreement. New sales for these blocks are limited and focused on products with higher returns and a moderate risk profile: mainly immediate pensions annuities, indexations on existing group life contracts and risk insurance.
Performance
The result for Aegon Levensverzekering before tax for 2022 was EUR 1,018 million (2021: gain of EUR 436 million), EUR 582 million higher than in 2021, which is mainly explained by improved result on fair value items, which is only partly offset by a decreased investment margin, primarily impacted by sales within the fixed income assets to generate liquidity to maintain a robust liquidity position, consistent with Aegon’s strict liquidity framework. For fair value items, in 2022 the positive results on the guaranteed portfolio, alternative assets and the Liability Adequacy Test (LAT) headroom deficit were partly offset by a negative result on real estate revaluations and the interest hedges. Furthermore, there was a significant negative impact in 2022 of model and assumption updates.
Premium income decreased from EUR 1,328 million in 2021 to EUR 1,213 million in 2022. The individual life portfolio is shrinking and new contribution plans are no longer offered by Aegon Levensverzekering, but are placed in Aegon Cappital, a subsidiary of Aegon Nederland.
The commissions and expenses decreased by EUR 29 million to EUR 251 million (2021: EUR 280 million). This is mainly driven by expense savings programs, lower expenses on the outsourcing of individual life policies as these costs are front loaded.
The change in valuation of liabilities for insurance and investment contracts is the result of fair value changes of the guarantee provision as well as the profit recorded as a decrease of the LAT deficit. The change includes a gain in 2022 of EUR 3,972 million (2021: gain of EUR 1,856 million) relating to fair value movements of guarantees and is due to the decrease of the guarantee provision as a result of higher interest rates and increased credit spreads in 2022. The LAT deficit decreased by EUR 5,292 million (2021: decrease of EUR 1,771 million), which is primarily the result of higher interest rates and increased spreads, partly offset by a negative impact from model and assumption updates.
Full details on the Aegon’s business and performance are described in chapter A. Business and performance.
4 | Solvency and Financial Condition Report 2022
B. System of governance
The system of governance has been put in place centrally at Aegon Nederland, which is the holding company of Aegon Levensverzekering and several other companies and is used throughout Aegon Nederland. Aegon Levensverzekering complies with the policies of both Aegon Group and Aegon Nederland. The Aegon Nederland policies are tailored to fit local circumstances and therefore imply additional restrictions to the Group policies.
Over the last few years, Aegon Nederland’s strategy has been enhanced and refined. Changes to the strategy have been made to reflect developments inside as well as outside of the company, whereby the company has been further transformed from being product-driven towards being customer-driven. Changes to our organization and governance structure were required, the concept of “Accountability within a clear framework” was introduced, with a well-defined company strategy, functional policies and group-wide standards and replaced a more “federated” model in August 2021.
Aegon Nederland is divided into four Business Units: Life (comprising of Aegon Levensverzekering and Aegon Spaarkas), Bank, Mortgages and Workplace Solutions. Within each Business Unit, each legal entity remains responsible for its own statutory accounting and reporting (including SII reporting). By bringing value delivery and cost under control of the relevant Business Unit accountability further increased.
Aegon Levensverzekering is considered a Financial Asset. By doing so, the organizational structure is well aligned to our business strategy and allows for an efficient and effective execution of our strategy.
General governance
Aegon Levensverzekering’s Statutory Management Board is charged with the overall management of the company and is responsible for achieving Aegon Levensverzekering’s goals, developing the strategy and its associated risk profile, in addition to overseeing any relevant sustainability issues and the development of the company’s earnings. Aegon Levensverzekering’s Statutory Management Board is assisted in its duties by the Chief Legal Officer and Chief People Officer, collectively referred to as Management Board Aegon Nederland (MB NL).
Aegon Levensverzekering’s Supervisory Board oversees the management of the Statutory Management Board, in addition to the company’s business and strategy. The Supervisory Board takes into account the interests of all Aegon stakeholders. The Supervisory Board also oversees the activities of its committees. These committees are composed exclusively of Supervisory Board members and deal with specific topics related to Aegon’s financial accounts, risk management, and executive remuneration. These committees are the:
- Risk and Audit Committee; and
- Remuneration Committee.
[ad_2]
Source link