Making AEGON more agile and returning more capital to shareholders.                   


Dear investor, analyst, 

The past few years Aegon made some steps in optimizing their portfolio and making a more simplified legal structure. Exactly the points we addressed in 2016 in our first open letter to the board.

But still Aegon is severely underperforming its peers, lost more faith of investors and therefore still not creating any shareholder value the last few years. In our opinion there is only one path for Aegon to follow: it should become a smaller and simpler company: more agile. 

We are urging for the case for making Aegon more agile by exiting more countries faster and returning the excess capital to shareholders.  

These are the main concerns we are addressing to the board:

  • Aegon stock is severe underperforming their peers i.e on profitability (both in the US as in Europe);
  • The credibility of the current CEO is lost. It’s time for a new CEO, it’s time for bringing back faith and restore trust from investors;
  • The new medium term financial targets are "soft" and "not challenging" at all;
  • Creating more shareholder value and reduce regulatory risks and costs by becoming a smaller and simpler company: more agile;
  • Investigating the option to break up Aegon in two parts and make separate listings: US & Europe. As we believe this would increase the value as investors and analyst can value and understand this much better. 

In the meantime Aegon should:

  • Streamline operations faster into a more agile insurer by committing to sell, spin, or otherwise separate non- core operations. This could be done by exiting Spain & Portugal and Asia on a short term;
  • Not acquire VIVAT (!) as issuing new shares is not an option (due to low price) and the current debt level should be lowered instead of increased, so Aegon becomes more solid and less sensitive. Besides that current management has not a good track record in cost cutting ( ROE in Netherland is with 8,2% still below 10% despite "management" actions.);
  • Return on equity (ROE) should be double digit faster through new improved cost reductions. The current ROE goal is still conservative. The achieved ROE in 2018 was still below the desired 10,0% from current management (for many years!) and mainly drive by Aegon Asset Management;
  • Especially for Spain & Portugal (2,5%) & Asia (3,0%) the ROE is underperforming. Exiting these two countries will unlock € 1,5 billion of capital which be can given back to shareholders;
  • The group expense ratio is to high compared with the industry. Management should take more firm actions, such as further concentration, digitalization and further FTE reduction on a short term;
  • More predictable and less volatile earnings (big gap between net profit and underlying results) and more focus on cash generation, better mortality control. Aegon has to become less sensitive to equity markets and allocate it's investments better;
  • A small Dutch insurer is managing a larger US Asset (!). Investigate the option to move the headquarter from The Hague (The Netherlands) to the United States as we see this could reduce regulatory risks and will lead to  better capital management of their largest asset;
  • Break down of “Vereniging Aegon” which primary objective is to protect Aegon in a special cause such as a hostile takeover bid. The special voting right and the call option should be broken down and the CEO Wynaendts should leave "Verening Aegon". This will attract new investors as the Verening Aegon is a burden for a large group of US investors.

There is no more time for providing excuses for past underperformance as peers keep performing better, it’s time for making Aegon more agile. Since 2016 we have spoken to many investors and analysts around the world who also address our concerns. We look forward to engaging with you again. Together we can put pressure on current management to make Aegon more agile. 

United we stand, divided we fall.

Van Spaendonck / Activist Shareholders

The Hague, The Netherlands, 26/03/2019