Drie redenen van Aegon waarom je in hun moet investeren.
1. Positioned to benefit from global trends
2. Delivering shareholder value
Between 2012 and 2016 Aegon paid out approximately EUR 2.3 billion in dividends to shareholders.
Our operations around the world are expected to generate EUR 4.2 billion of capital between 2016 and 2018, of which EUR 3.9 billion is expected to be paid to our holding company. After head office expenses of EUR 900 million, we aim to have EUR 3 billion of capital available for redeployment.
It is our intention to return 70% of this capital (over EUR 2.0 billion), to shareholders. This will be in the form of dividends of EUR 1.7 billion over a three-year period and a EUR 400 million share buyback that was completed in the first half of 2016.
Share buyback
Share buybacks, like the one we completed in the first half of 2016, add shareholder value in a couple of ways. First, it reduces the number of shares outstanding, which increases our earnings per share (EPS). EPS is one metric used when valuing companies, a higher EPS correlates to a higher market value for the remaining shares. Second, repurchasing shares reduces our equity, which improves our return on equity.
In our latest share buyback we repurchased shares using our cash buffer at the Holding. We aim to maintain a cash buffer at the Holding of EUR 1.0–1.5 billion, which gives us the financial flexibility to continue pursuing activities to increase shareholder value.
3. Financially stable
Aegon is dedicated to meeting its long-term commitments to shareholders by delivering sustainable financial results and maintaining a strong and stable balance sheet.
Return on Investment
The continued optimization of our portfolio, together with cost savings programs and a wide range of management actions, will enable us to increase our return on equity. Our objective is to increase our return on equity to 10% by 2018.
Our target return on equity will be achieved by:
- organically growing our business in our largest markets profitably;
- reducing expenses by a total of EUR 350 million in the Netherlands and Americas;
- further investment in the digital transformation of our businesses;
- reaching scale in our emerging markets (including Asia and CEE);
- paying attractive and growing dividends of EUR 550 million in 2016; and
- a EUR 400 million share buyback completed in the first half of 2016.
Solid capital position
Since January 2016, European insurance companies have been required to comply with the new capital adequacy framework, Solvency II, which was introduced to protect policyholders. The framework ensures insurers and supervisors identify risks to capital levels at an earlier stage and take action where needed.
Under the new framework, the level of funds an insurer has to cover its level of risk is expressed as a Solvency II ratio. This means that insurers with higher-risk investments, such as equities, must hold more capital than those investing in lower-risk assets, such as government bonds.
The statutory supervisory standard under Solvency II is 100%, which means that an insurer's capital is such that it would still be able to meet its obligations in the event of a severe shock expected to occur only once every 200 years.