Aegon’s Q4 2024: Navigating Contradictions in Capital Generation, Annuities, and Market Sensitivity

These are the key contradictions discussed in Aegon's latest 2024Q4 earnings call, specifically including: Operating Capital Generation (OCG) and interest rate benefits, the impact of variable annuity transactions on capital and OCG, OCG expectations and the impact of interest rates, and the management of the RBC ratio:



Strong Financial Performance:
- Aegon reported an operating result of nearly €1.5 billion for 2024, which is in line with the previous year’s results, with a notable improvement in claims experience.
- The company also met its guidance on free cash flow, which came in at €759 million.
- This performance was driven by the successful execution of the transformation of Aegon and improved claims experience after assumption updates in the first half of 2024.

U.S. Strategic Assets Growth:
- The Americas operating results amounted to $599 million, with the Protection Solutions results increasing by 35% and the Savings & Investments segment increasing by 10%.
- This growth is attributed to increased revenues in Retirement Plans and the impact of favorable markets and new business strain.
- The transformation of Transamerica into the leading middle-market life insurance and retirement company is a key driver of this growth.

International Market Challenges:
- New life sales in the International segment decreased by 15% compared to 2023, mainly driven by pricing actions in China due to lower interest rates.
- Sales volume also increased before a regulatory change in China, but this was not sufficient to offset the decline.
- The company is closely monitoring the situation in China and other international markets where profitability and solvency challenges exist.

Asset Management Expansion:
- Aegon Asset Management reported strong third-party net deposits of €9.2 billion, driven by alternative fixed income funds and retirement funds in the U.K. and the Netherlands.
- The Global Platforms business and Strategic Partnerships contributed significantly to these net deposits.
- Growth in assets under management to €332 billion at year-end 2024 is attributed to favorable market conditions and strategic partnerships.