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News Breaks
January 22, 2014
05:27 EDTAEGAegon to implement accounting changes
Aegon announces changes to its accounting policies related to deferred policy acquisition costs and longevity reserves as of January 1. These changes improve the consistency, comparability and transparency of Aegon's financial results and will be applied beginning with Q1 condensed consolidated interim financial statements. The retrospective adoption of these two accounting changes is expected to decrease shareholders' equity by between EUR 2.2B-2.5B at January 1. Aegon estimates that these accounting changes will increase underlying earnings before tax by approximately EUR 80M in 2014. In addition, effective January 1, Aegon will establish its longevity reserves in the Netherlands on prospective mortality tables instead of observed mortality tables. IFRS reserves were previously based on observed mortality tables, while actual experience was taken through underlying earnings. The adoption of prospective mortality tables ensures that Aegon's IFRS reserving for longevity is consistent with that of its regulatory solvency calculations and internal economic framework. The change is expected to lead to a decrease in shareholders' equity of between EUR 0.8B-0.9B, and an increase in underlying earnings before tax of approximately EUR 130M in 2014. Aegon's gross financial leverage ratio stood at 30.1% on September 30, 2013. The pro forma impact of the announced accounting policy changes on the leverage ratio is 2.8 to 3.3 percentage points as a result of lower shareholders' equity. Consistent with Aegon's objective to reduce its gross financial leverage ratio to within its target range of 26 to 30%, the company has today announced the redemption of the $550M junior perpetual capital securities in a separate press release. This redemption improves the gross leverage ratio by 1.2 percentage points and will reduce Aegon's future leverage costs. The adverse impact on Aegon's group IGD ratio is approximately six percentage points. On September 30, 2013, the pro forma group IGD solvency ratio including the repayment of the securities would have been approximately 202%
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October 16, 2014
05:32 EDTAEGAEGON agrees to sell Canadian operations for C$600M
Aegon has reached an agreement with Wilton Re to sell its Canadian operations for C$600M. The net underlying earnings of Aegon's Canadian operations were C$26M over the trailing four quarters ending June, while its shareholders' equity excluding revaluation reserves on an IFRS basis amounted to C$1.8B at the end of June. As a result, the sale price represents a multiple of 23 times net underlying earnings. The transaction is expected to result in a book loss of approximately C$1.2B. The parties anticipate that the transaction will close in 1Q15, subject to regulatory approval.

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