AEGON NV :AEG-US: Earnings Analysis: Q3, 2017 By the Numbers : November 20, 2017

AEGON NV reports financial results for the quarter ended September 30, 2017.

We analyze the earnings along side the following peers of AEGON NV – Lincoln National Corporation and MetLife, Inc. (LNC-US and MET-US) that have also reported for this period.


  • Summary numbers: Revenues of USD 8,540.38 million, Net Earnings of USD 513.58 million.
  • Earnings growth from operating margin improvements as well as from unusual items

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

2017-09-30 2017-03-31 2016-12-31 2016-09-30 2016-06-30
Relevant Numbers (Quarterly)
Revenues (mil) 8540.38 8016.06 8393.35 8409.63 9526.81
Revenue Growth (%YOY) -10.35 -21.45 -38.43 555.64 340.44
Earnings (mil) 513.58 367.34 467.84 360.19 -466.12
Earnings Growth (%YOY) 210.18 205.61 -2.21 157.64 -232.01
Net Margin (%) 6.01 4.58 5.57 4.28 -4.89
EPS 0.25 0.18 0.22 0.17 -0.22
Return on Equity (%) 1.86 1.49 1.86 1.27 -1.58
Return on Assets (%) 0.46 0.33 0.41 0.31 -0.4

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Market Share Versus Profits

Revenues History
Earnings History

AEG-US’s change in revenue this period compared to the same period last year of -10.35% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that AEG-US is holding onto its market share. Also, for comparison purposes, revenues changed by 6.54% and earnings by 39.81% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

Insurance companies sometimes tradeoff for improvements in premiums earned by relaxing standards in underwriting policies. A quick way to check against such activity is to compare the changes in loan loss provisions as well any chnages in the level of policy claims. If either of these checks point to a decline in the underwriting standards, it is quite possible that the company’s performance is a result of underwriting policy changes that could have a longer term impact compared to the shorter term pop in premiums earned.

Premiums Earned Percent History
Loss Ratio History

The company’s earnings have gone up year-on-year. But this growth has not come as a result of improvement in premiums earned as a percent of total revenues or any underwriting policy improvements in its operations – premiums earned as percent of revenues are currently at 64.97%, while the loan loss ratio is 206.46%. For comparison, these were 65.44% and 243.53% respectively in the immediate last period.

Premiums Earned Percent Versus Loss Ratio


The company’s earnings growth has also been influenced by the following factors: (1) Improvements in operating margins after interest from -51.49% to 8.88% and (2) One-time items. The company’s pretax margins are now 7.73% compared to -4.60% for the same period last year.

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

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Company Profile

Aegon N.V. is a holding company, which engages in the provision of insurance, pensions, and asset management services. It operates through the following segments: Americas; the Netherlands; United Kingdom; Central and Eastern Europe; Spain and Portugal; Asia; Asset Management; and Holding and Other Activities. The Americas segment covers business units in the United States, Brazil, and Mexico. The Netherlands segment involves products with mortality, morbidity, and longevity risks. The United Kingdom segment offers life and pension insurance products. The Central and Eastern Europe segment refers to the activities in Czech Republic, Hungary, Poland, Romania, Slovakia, and Turkey. The Spain and Portugal segment supplies life insurance, accident and health insurance, general insurance, and investment products. The Asia segment consists of Hong Kong, Singapore, China, Japan, India, and Indonesia including any of the units’ activities located outside these countries. The Asset Management segment includes the activities from Aegon Asset Management. The Holding and Other Activities segment deals with the financing, reinsurance activities, employee, and other administrative expenses of holding companies. The company was founded in 1983 and is headquartered in The Hague, the Netherlands.

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