Aegon Limited

Good day and thank you for standing by. Welcome to the Ayrgon third quarter 2023 trading update. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to slowly press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. Please note that today's conference is being recorded. I would now like to hand the conference over to your speaker. Heelke Heelkema, Investor Relations Officer, please go ahead.

Good morning, everyone. Thank you for joining this conference call on Agon's third quarter 2023 trading update. My name is Heelke Heelkema and I'm from Agon's Investor Relations team. With me today are Agon's CEO, Laert Friese, and CFO, Matt Ryder, who will take you through the highlights of the quarter and the progress that we are making in the transformation of Agon. After that, we will continue with a Q&A session. 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. And on that note, I now give the floor to Laert.

Yeah, thank you, Hylke, and good morning, everyone. It is good to speak to you all again today. Let's move to slide two for our achievements in the third quarter of 2023, this trading update. Slide two, we are making steady progress with Agon's transformation and the execution of our strategy to create leading businesses in investment, protection, and retirement solutions. This is demonstrated by our continued commercial momentum, especially in our US strategic assets and in our growth markets. I'm pleased that Transamerica continues to deliver on growth in its strategic assets in line with our ambition to create America's leading middle market life insurance and retirement company. Commercial results in the UK and our asset manager were more varied. The progress we are making in realigning Agon is also visible in our capital generation for the third quarter of 2023. Operating capital generation before holding and funding expenses increased by 16% to 354 million euros. The main driver was higher earnings on in-force in Transamerica, which increased by 45% in US dollars over the prior year period. Driving this was growth of our US strategic assets, as well as previously taken management actions on our financial assets. This is the third quarter in a row where we saw continued commercial momentum in the US strategic assets and strong overall operating capital generation, which benefited from exceptional items. We expect the full year 2023 operating capital generation from the units to be around 1.2 billion euros. This is an increase from previous guidance of more than 1 billion euros. We continue to have significant financial flexibility with strong capital positions of our units above their operating levels and cash capital at the holding of 2.9 billion euros. Our holding cash increased considerably this quarter as we received the cash proceeds from the ASR transaction. The transaction with ASR was an important catalyst for a number of changes to our profile. Aegon now owns a strategic stake in a leading Dutch insurer and is using 1.5 billion euros of the cash proceeds to buy back stock. We have already completed 45% of this buyback program in our own track to complete it on or before the end of June 2024. This partnership further strengthens Agon's asset management leading positions in alternative fixed income and retirement investment solutions in the Netherlands. We are also creating value for shareholders by actively managing our US financial assets. A clear example of this active management is the ongoing program of purchasing institutionally owned universal life policies in order to reduce the mortality risk of the portfolio. So far, we have purchased 20% of the face value of this book, which is half of the amount we have targeted by 2027. Finally, today is the first time we discuss our results after our redomiciliation to Bermuda. And I want to take this opportunity to thank our investors for their support during that process. As you will notice, the change of our legal seat has no impact on how we run the business or our capital management approach. We remain laser focused on executing our strategy, improving performance and creating sustainable value for our shareholders. With that, let's move on to the results of our US activities in strategic assets starting with slide number three. Let's start with the first of two focus areas in our U.S. individual solutions business, World Financial Group, or WFG. Our ambition is to increase the number of WFG agents to 110,000 by 2027, while at the same time improving agent productivity. Momentum remains strong with the number of licensed agents at 69,000 by the end of September, which is an increase of 17% compared with a year earlier. The number of multi-ticket agents, those selling more than one life insurance policy over the last 12 months, has increased by 16% over the same timeframe. The market share of Transamerica's life insurance products sold by WFG in the US remains high, at 65%. This is testament to the improvements we have made to the service experience for WFG agents and the continued competitiveness of Transamerica's products in this distribution network. Let's go to slide number four. The second focus area of our U.S. individual solutions business is addressed on this slide. We are investing in both the operating model and in-product manufacturing capabilities in order to position the individual life insurance business for further growth through WFG and third-party distributors. Here again, commercial momentum has remained strong. New life sales increased by 10% compared with the third quarter of last year, mainly from higher sales of indexed universal life insurance, an attractive rate of return. World Financial Group accounted for 71% of total new individual solutions life sales this quarter, demonstrating how these two pillars of our strategy complement each other. Earnings on Inforce increased by 25%, reflecting the strong growth of this portfolio compared with the third quarter of 2023. Slide number five. shows the progress we made in U.S. Workplace Solutions' retirement plans business. To remind you, Transamerica aims to increase earnings on Inforce from its retirement business by leveraging its capabilities as a record keeper with the ambition to maturely increase the penetration of the ancillary products and services it offers. Net deposits in our focus area of mid-size plans amounted to $243 million. benefiting from written sales in previous periods. This quarter, written sales in this segment more than doubled to $1.8 billion compared with the third quarter of 2022, which will lead to higher inflows in the future. The written sales performance was driven by growth in sales of both single employer plans and pooled plans. Our general account stable value product recorded continued growth as did the individual retirement accounts product in line with our strategy to grow and diversify our revenue streams within the workplace solution sector. Earnings on imports of our strategic assets in the retirement class business were $22 million, benefiting from increased fee revenues. slide number six we show the progress of our uk activities net outflows in the workplace channel amounted to 0.4 billion pounds driven by the departure of a low margin pension scheme excluding this net deposits were half a billion were half a billion due to both the onboarding of new schemes and net deposits on existing schemes momentum in the retail channel remains weak this is driven by the cost of living crisis in the UK, which negatively impacts customers' willingness to invest. Annualized revenues lost on net deposits amounted to £6 million for the quarter, driven by the gradual runoff of the traditional product portfolio and net outflows in the retail channel. Let's move on to our growth markets on slide number seven, where commercial momentum remains strong. New live sales in our growth markets increased by 34% compared with the third quarter of 2022. This was largely driven by our Brazilian joint venture, where new life sales almost doubled compared with the previous year's third quarter. Following an increase in our stake of the joint venture, we now own nearly 60% of that business. Non-life new premium production in Spain and Portugal rose 9%. That's growth in accident and health insurance, was partly offset by lower demand for funeral and household insurance. Operating capital generation of the international segment, excluding TLB, which we classify as a financial asset, decreased compared with the elevated level of the third quarter of 2022 when a positive non-recurring item was recorded. Excluding this, OCG increased due to the higher earnings on in-force from business growth. We turn now to slide number eight to address the results of our asset manager. Market conditions remain challenging, which led to third-party net outflows in both the global platforms and strategic partnership segments. Within global platforms, net outflows amounted to 1.2 billion euro. This was driven by outflows from two specific larger clients. In strategic partnerships, net deposits were recorded in our Chinese asset management joint venture which were more than offset by net outflows in a joint venture with La Banque Postale. Operating capital generation declined compared with the third quarter of 2022. This was driven by net outflows and unfavorable market conditions. We are adapting to the reality of current market conditions and have taken measures to increase the focus on improving efficiency within the global platform business. On slide number nine, we highlight the additional assets under management coming from strategic initiatives in the third quarter of 2023. Our asset management partnership with ASR has now come into effect. As part of the partnership, Agon Asset Management will continue to manage large parts of the former Agon NL investment portfolio, including its PPI retirement offering, and has taken over the management of the combined company's illiquid assets and mortgage funds. ASR has transferred to AGON Asset Management investments amounting to €16.2 billion, consisting of illiquid assets and the ASR Mortgage Fund. In turn, AGON Asset Management has transferred investments amounting to €9.6 billion to ASR, largely consisting of core fixed income assets. We expect that the net impact of these transfers to lead to an annualized revenue uplift of EGON asset management of around €20 million. Other strategic initiatives relate to the recent acquisition of La Financière de l'Essiquier by our joint venture with La Banque Postale, as well as our acquisition of NIBC's European CLO business. We expect that these initiatives will be accretive to our asset managers' earnings. This is important given the pressure on the global platforms business stemming from the difficult market conditions, as well as margin pressure in our Chinese asset management joint venture following the regulatory changes in the summer. At the same time, we are working to improve efficiency and have recently decided to simplify our product offering by closing or merging subscale funds. This increases focus in the business and our key strengths, namely alternative fixed income, real assets, and responsible investing. We remain focused on improving the results of this business and will update you in more detail at an investor event in 2024. I now hand over to Matt to talk about our financial assets and our capital performance in the third quarter of 2023. Matt, over to you.