Aegon Limited

and thank you for standing by. Welcome to the Ergon Q1 2023 Trading Update Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jan Willem Weidema, Head of Investor Relations. Please go ahead, sir.

Thank you, Sharon, and good morning to everyone. Thank you for joining this conference call on AGL's first quarter 2023 trading update. Before we start, we would like to ask you to review our disclaimer on forward-looking statements, which you can find at the back of the presentation. With me today are Aegon's CEO, Lars Friese, and CFO, Matt Ryder. We will take you through the highlights of the first quarter and the progress we are making in the transformation of Aegon. After that, we will continue with our Q&A session. On that note, I will now give the floor to Lars.

Thank you, Jan Willem, and good morning, everyone. We appreciate that you're joining us on the call today. The format of today's disclosure is different from what you are used to. As previously announced, we have changed the reporting format for the first and third quarters to trading updates. These will focus on sales and capital metrics and we will also update you on the progress that we are making on our strategic priorities. We will of course report full IFRS results for the first half year and second half year to align with ASR's reporting cycle. Moving on to slide number two. I want to start by highlighting our achievements this quarter. Agon has had a good start to the year. In the first quarter, we demonstrated strong commercial momentum and advanced on our strategic priorities. I am especially pleased with the progress that we're making in light of the continued global volatility, specifically in financial markets. Preparations for the closing of the ASR transaction continue at pace, and I am confident that we will be able to complete the transaction in the second half of the year as planned. On the strategy front, we continue to make steps in optimizing our portfolio. We have sold our UK protection business and divested and liquidated several non-core activities in Asia. At the same time, we strengthened our capabilities in the alternative asset management space. Turning to our commercial results, we delivered strong sales growth in all of our U.S. strategic assets and in our life insurance businesses in China and Brazil. Our U.K. workplace business is gaining traction as growing numbers of new customers are entrusting their retirement savings to us. However, Aegon Asset Management and our U.K. retail business were affected by reduced investor confidence as a result of the challenging market conditions. Against this challenging macroeconomic backdrop, we maintained a strong balance sheet. This is testament to the work we have done to improve our risk profile over the past years. Therefore, I am confident that we will deliver on our strategic commitments and on our 2023 financial guidance. I look forward to updating you on our strategic plans and medium-term financial objectives at our upcoming Capital Markets Day on the 22nd of June in London. So let's move to our strategic assets on slide number three. First, I would like to highlight the progress made in our individual solutions business. As you know, we have the ambition to regain a top five position in selected life insurance products over the coming years. And as you can see, commercial momentum remains strong. New life sales increased by 21% this quarter compared with the first quarter of 2022, largely driven by higher index universal life sales. For this flagship product, we have been consistently achieving internal rates of return north of 12%. We further improved the service experience for agents of World Financial Group, or WFG. Combined with the continued competitiveness of Transamerica's products, This allowed us to increase our market share in the WFG distribution channel from 58% to 64%. WFG also expanded its distribution reach by growing the number of licensed agents to a record level of close to 67,000, an increase of more than 10,000 agents compared with the prior year quarter. On slide number four, we show the decent progress we have made in the U.S. workplace solutions business. In the retirement business, Transamerica aims to compete as a top five player in the new middle market sales. Sales momentum remained strong in the first quarter of 2023, with written sales of $2.6 billion, double the amount realized in the same quarter last year. The main driver was a pooled plan contract win of 1.7 billion US dollars that included 1,400 individual employer plans. Net deposits for the middle market segment benefited from strong written sales in previous periods and lower withdrawals in this year's first quarter. So now let's move to the UK on slide number five. Net deposits in the workplace channel rose by 5% compared with the first quarter of last year to £733 million this quarter, as the sales momentum remains strong. In the retail channel, on the other hand, the macroeconomic environment continues to negatively impact investor sentiment. In addition, higher interest rates have reduced the attractiveness to transfer from defined benefit to defined contribution pension plans reducing gross deposits in this channel. As a result, net outflows amounted to 413 million pounds compared with net deposits of 23 million pounds in the first quarter of 22. Annualized revenues lost on net deposits amounted to 3 million pounds for the quarter, predominantly due to the gradual runoff of the traditional product portfolio, partly offset by revenues gained on net deposits in the workplace channel. I'm now turning to slide number six for the highlights of the performance of our asset manager. Market conditions remain challenging, which led to third-party net outflows in both global platforms and strategic partnership segments. Within global platforms, we attracted net deposits in the Dutch Mortgage Fund, which were more than offset by net outflows in other asset classes. This was in part driven by redemptions in light of the persistent market uncertainty. Third-party net outflows in strategic partnerships amounted to 1.3 billion euros and mostly occurred in our Chinese asset management joint venture, AIFMC. This reflects subdued investor sentiment and less demand for new fund launches. Operating capital generation in the first quarter of 2023 was negatively impacted by lower revenues as a result of lower assets under management, mainly due to adverse market movements. Let's move on to our growth markets on slide number seven. We continue to invest in profitable growth as evidenced by the 27% increase in new life sales from these markets. This growth was in part driven by our business in China following the relaxation of the country's COVID-19 measures. Operating capital generation of the international segment, excluding TLB, increased by 57% as a result of business growth. On slide number eight, you are seeing that we continue to maintain a high pace on the transformation of AGON. Starting with the ASR transaction, we are making good progress with the disentanglement of AGON The Netherlands from the Group. We are confident that the necessary regulatory approvals in order to close the transaction will be received in the second half of 2023 as planned. In the UK, we have announced the sale of our individual protection book to Royal London. The transaction supports a strategy to focus on further improving and growing the UK platform activities by freeing up resources and management time. Outside of our core perimeter, we continue to exit non-core businesses and manage capital tightly. We sold Eagon Insights activities in Japan and Hong Kong and decided to liquidate our remaining eBroker activities in Indonesia. In our asset manager, we've also made progress on our strategic agenda with two announcements regarding our collateralized loan obligation or CLO franchise. In the US, we entered into a strategic partnership with Lakemoor Partners to further strengthen our successful and growing US CLO management activities. AGON will originate the CLOs and Lakemoor will provide the necessary equity behind these transactions. In Europe, we agreed to buy NIBC's European CLO management activities. The move allows AGON to expand its successful US CLO franchise into Europe. These transactions cater to asset management's capabilities in the alternative investment space, which is the strength of the business. I now hand over to Matt Ryder for the capital update for the first quarter of 2023.