Aegon (AEG) 12 Aug 222022 Q2 Earnings call transcript

Good day, and welcome to the Aegon Second Quarter 2022 Results Conference Call for Analysts and Investors. Today's call is being recorded. At this time, I would like to turn the conference over to Jan Willem. Please go ahead, sir.

Thank you, operator. thank quarter joining XXXX and on conference everyone, second Aegon's results. morning, you this for call Good

the Before Matt, we on a Rider. start, of CEO, could results you take Lard you our find brief the would we'll appreciate moment can Lard floor and today by review update it presentation. to E. With to on our are the Friese; Q&A. After disclaimer at forward-looking open me which a statements, and back if Aegon's you Matt CFO,

the me Let Lard. floor give to

Thank you, everyone. Jan Willem, and good morning,

returns we maintained COVID-XX in by challenging to Aegon's course on to making growth of reinsurance In impacted our build progress environment. assets, and increased our plan. are further investors Against even operating backdrop, The equity the a of the of first five and market improvement the net challenging This curb and on was due half XXXX interest rates Nonetheless, year result on in impact Bank's we the year objective stockholders. our of we continue experiencing strategic our was strategy. decades. inflation. quarter start remain to initiatives. deliver commercial challenging We delivered momentum, to growing a reflects to worst in testament receding lower for Despite United of rising remained second as impact result continued charge we onetime to war well, with their from our Volatility our the was rate over strength markets operational the savings our States. increases Ukraine strong. the in the a markets, on performed Central equity this

dividend at main basis and is capital with holding share. common strong interim positions growth the to the Together raise levels. is units stands free capital Cash with to three this a cash sheet balance their solid the €X.XX above range. respective per Our operating operating above the our of the flow,

also to on make our continue to approach We progress sustainability.

pension Aegon a of a to US$XXX As the part for to so world, of to Management in zero achieve low-carbon our emissions dwellings buildings we in strategies administration by and partnered over net options are in to Based the €X.X over X free to default expectations cumulative we least a have This consider €X.X period assets XXXX. multifamily billion far, is to U.K. ESG contribute climate-neutral to we of Asset from GBP million the acquire at transformation our customers carbon on venture of billion. flow our cash the billion transition recent the them U.K. investment energy efforts moved U.S. months, from to our efficient that commitment on the XXXX progress launch part In range increasing the our €X.X into platform credentials. of comfortable made 'XX of and billion

are We for operating generation expectation €X.X XXXX for units around capital to in the also billion. raising our

move let So Slide us to X.

our execution continue improvement plan. see that to progress can we of the You with operational

as part initiatives this now out of X,XXX of more have X,XXX plan. We than implemented

Just months, trailing the a million initiatives quarters. XXX finalized the of in reduction four Expense about annual €XXX in expenses last we initiatives. three of accessible resulted our in

million far, to we confident towards base we've to and headwinds remain I goal that savings, expense We but this our reach XXXX. target by experience that continue these expense further our so will inflation €XXX reduce been absorb and able of

executed that the have have from been We growth so XXX positive are our on our results. The also growth increasingly seeing impact had initiatives a benefits far operating initiatives.

million the to growth Over four quarters, the €XXX trailing initiatives contributed result.

to operational quarters. coming further intense maintain course, improvement plan of execution will, the an rhythm in our implement We

ambition the a assets. strategic discuss to years. of X we coming turn light In the Slide the progress U.S. have position our in top regain let's Individual to over products five selected to So Solutions,

periods. As see, which of increased with benefited last light number XX% the business, second to net growth middle licensed quarter, five as US$XXX compete a new by from from written the million, Retirement sales year. a top by market year. last aims with channel, strong for quarter XX% This middle Financial benefiting approximately million US$XXX the Britain sales in this compared new in the the life to World the player distribution you market agents sales. Group of can was sales compared In increased Transamerica while in supported were prior deposits

workplace enables suite employers expanded business the financial by improved our our unexpected to and events of solutions Savings product have Account. in for a Emergency financial employees help We introducing our called wellness well-being. further product The save

to to me Dutch sales turn we're market looking defined mortgage our €X €XX a X, due billion, In we financing with the at last market mortgages attract performance amounted of €X.X origination rates. billion. compared Slide strategic mortgage Mortgage to U.K. reduced assets. continued to billion the increasing and year with last new grow in continue the year Let compared leaders customers. over to decrease pensions both administration and increasing and of to are in contribution Netherlands, Nevertheless, interest activity under almost

business. on €XXX is workplace continued quarter as of in to nearly level consistently the same year also products in the We deposits to second pension million grow prior quarter. for net amounted contribution the which XXXX, our defined

on asset on the offset movements million, X, amount the by deposits efficiency €XXX Slide gradual We stable third-party to of impact platform. of and United portfolio. million from the workplace the our to Moving net platforms from traditional on saw Expense On deposits under to were saw challenging positively a GBP but the of platform across Net lost net contributed market channels. to than generated product ratio the revenues, the runoff the market savings approximately outflows global platform see XXX retail assets the reflecting business business administration, on we that initiatives the conditions. Kingdom. offset revenues leading more management

The than offset platforms Dutch asset more other two of lower were constant rate On rising operating margin currency the more by freeing than deposits market adverse percentage offset around due funds to a decreased up mortgage approximately a revenues in basis, outflows in as savings. by to XX%. global net environment. conditions liquidity classes points saw customers expense we interest Continued into

operating is in strategic is In Our partnerships continued This partnerships profitable well than with net from in decreased you Asset Management normalized billion. more fees last to see growth. high to of €XX level their deposits investing our Aegon markets, strategic Performance exceptional perform year. €X.X growth the million. result why from

nonlife a more the over well to €XX million, you. In now to in sales mainly by strength testament and against channel of €XX these X% detail. quarter talk Spain. in Matt life due from through sales New to financial grew our by markets we've increased sales both growth to X% bancassurance second will summary, backdrop, million a strategy. is our Matt, performed the challenging in results you to which the for

welcome, Good for morning, everyone, and again, us. thank you joining and

an Let our Slide of performance me with second on financial quarter X. overview start

buyback to to have generation favorable reflects profile. was impact and capital and taken capital both capital quarters release basis improvement As we an quality you trailing €X.X decrease only of fees despite on claims million holding actions generation the due the favorable million last spend can capital base. have and part €XXX in more free XX% than savings generation offset the the benefits initiatives see, growth for from than operating €XXX million holding, expenses at market that first versus currency Aegon's improve at on the adverse more in to experience. tranche led operating our deleveraging the to in net the of result cash Addressable million. support investment experience, flow billion of risk growth and year to slightly actions the during strong income funding program and €XXX in to lower quarter. movements year decreased a Lower cash operating million. by XXXX with capital compared Cash and totaled the before full in included four the our These claims and savings. €XXX expense Operating we expense the expense constant decreased share €XXX The

leverage rate We exchange we €X.X billion, reduced set to billion our we XXXX. at deleveraging is Euro-U.S. rate the €X a have our which billion means was on the our financial based target financial have gross that which to gross in leverage $X.XX, dollar €X.X range to €X.X target of billion reduced of This be that set XXXX. to the within by or accomplished

main positions all II remains of the our operating of respective remaining by three group over Our to the Solvency levels. balance second above points units four quarter percentage The ratio their capital increased strong XXX%. sheet with

other and U.S. decrease in result to operating €XXX increases We or contribution lower offset in in the The movements in at - X. the due the operating driven partly market Asset operating results saw quarter Slide in million. XX% to units. Management increase Turning and the from fees U.S. the come death. in line was by adverse by included Lower was the million last other quarter was result favorable broadly in were second annuity and from quarter. adverse attributable related This to by €X experience experience than €XX the business. were variable in experience with a experience million Claims claims directly of the deaths second in outflows This Mortality more U.S. in favorable offset causes year. was to that favorable COVID-XX. the

book Brazil benefit addressable favorable well. care a of environment. contributed net a across Bank to Aegon the than non-life U.K. disability is favorable reserve morbidity million. result U.K. the our life €XX amounted benefited Portugal claims a sale of driven These corporate release reduction new expected the the in International items of Aegon In the operating and remaining claimants the performed which business. million. both rising lower region This fee of the and that, Growth in and experience of our to well income bonds hedging the investment offset in part level of position a €XX result exceptional but the onetime rate long-term of the recoveries low liquidity as by was and provision in operating result the by from more The business. the in income to business. increase releases This in included reflects incurred not the expenses. reported Spain, income XX% of both number driven Next experience the to in an in than Aegon in increase of and in Netherlands, protect as International.

operating market driven lower of Management other conditions fees by from result on revenues, the impact the mainly The decreased XX%, the operating decreased performance of Finally, Chinese venture. asset normalization driven partly the result and expense savings. slightly, adverse offset fees Asset the by joint management by platforms management global in by

amounted result items net turn Now €XXX loss by a fair Slide program second to you items can to Fair and see were liability. GMIB our driven hedges variable realized of U.S. value riders. quarter. items let's by where totaled the bonds. losses the the driven million, Nonoperating in loss for rate XX, interest a of that million annuities value This with on economic GMDB and the hedges €XXX mainly

onetime market IFRS the the quarter. as on operational €XXX on rising increase related a a consequence to Aegon's capital from against for from locked a million million. protect €XXX and and included which reporting, effectively to XX. are to during sold in mismatch under Other for liabilities increases €XXX rates the book bonds primarily fair well continue These Slide movements. investments added to of business in assumption amounted resulted various as environment. as €XXX which charges were position amounted These to million. updates Aegon's the protect rates Realized up drivers in charge of improvement €XX hedges accounting the a sale in, resulting now moving rate Other Americas. of rate interest €XX the million losses to charge loss million, to in liquidity position loss And million However, reinsurance an in plan, a the discount to leads Turkey value from

adoption U.S. with above ratios their in a main the due point company. in by our to the impact of solvency see modeling can as higher In Dutch quarter long-term an our mainly actions offset the to Management that On internal the increase This is by operating XXX%. four impact billion a and you the ratio ended cross the environment. made Scottish positive XXX%. from a is these percentage legal The a the percentage RBC to markets liquidity of levels. movements. entity rates guidance. quarter captive the assumptions liabilities interest holding offset volatility rising points, points. ratio three increased neutral position increase rate universal that was the XX, sharp The from impact the the the We of equity points a favorable RBC €X.X Netherlands, previous ratio in partially update quarter result including negative market effects impact you partly in tender. spreads the completion reinsurance the in million by only had a reduction impact market announced have percentage XX with one a reduced than see Slide unit successful of the II despite positive respective would items our ratio indexed over of a updates in offset line more interest model ratio the our to previously at €XXX the sensitivities units decreased by eight of solvency interest reduced was debt The from which the required capital our other model life our by recapturing suggested. to movements. Here, which of of had rate to multiyear ratio enhancement capital was during second Market the percentage slightly reserves, our main Interest and from was the the implied of quarter. cash XXX%. Furthermore, the Equitable, other a magnitude This program. on result of bonds rates to the Life protect quarter U.K., increased possible Solvency and sale from decreased movements in of decline

of million the cash million Next the tranche keeping €XXX business program to our sale position business that, share of range. we units above the from Gross the proceeds €XXX our this contributed executed the Turkey in first and quarter. remittances buyback the operating from favorably,

remainder We payments of buybacks and dividend will the during spend year. cash on part of this the

in of our is assets, financial announced and tranche continue shows tranche our to results we underway, where third share of to value. year. of take we this maximize October buyback actions commence that to is Second the XX their today Slide the expected

now As parts directly shared third transaction we you last with reinsurance the portfolio. to are with quarter, on annuity engaging potential a of we discuss parties variable

engagements trade-offs will made the continued and you of to of outcome of that management and a the the portfolio. part remind those Let me external full against ownership alternative transaction weighed now annuity be active the be as potential of derisked variable

outcome will as soon share we of on accordingly. you As the this process, we update have more to

quarter, guarantees. As ongoing adoption instruments. volatility hedging long-term valuation Furthermore, long-term the To will second protect adopted business, going short-term which the part variable volatility this reduce implied to annuity underlying of in annuity and taking Transamerica's market enhancements made increase position of hedge capital of the the variable for been predictability the a have active the will cash actions we portfolio our from to of basis block is The risk a forward. assumption this of flows assumption funds program investment against better between end, of further Transamerica management dislocations.

came of We this continued we Transamerica additional obtained risks of well the variable on million, book. record of in includes in-force hedging of an XX% have our rate reported care, the claims track of was release long-term of of annuity for that hedge long-term care million that in incurred embedded second second approvals care value but for The rate On quarter increases XX%. the actual-to-expected expectation. the effectiveness as a increase the dynamic remaining have we the claims. ratio this for million. quarter of at targeted hedge US$XXX management reserve US$XXX not successfully achieved quarter. set approvals This This program XXXX, guarantees. US$XX progressed achieved of In achieved regulatory previously XX% the the bringing means Long-term our up delayed

the of second levels. mainly pre-pandemic claims claims experienced to returned result terminations expected to experience claims new have while of actual higher claims would the mortality as reflects The increased XXXX to XX%. release, this for Excluding amounted quarter a

our term regular Dutch been generator know, has into dividends. predictable cash you aim Life in a low-risk business to As our

the million ratio steepening capital million the NL the Life of €XX quarter's the remittance generation of This rate updated reduce the interest comfortably to to operating end, rate of holding. in €XX the sensitivity longer To interest its program curve covered the second quarter. at hedging

through Capital achievements let Day an slide. overview since capital briefly me last like to strengthened Now our walk turn you the to Markets XXXX in our position. that have my of I'd

market reduced our risk. to We have financial exposure

holding cash the operating maintained levels and have capital units volatility. of the three our market the at capital main above relevant despite We positions

experienced us outlook capital our approximately X.X we Operating the in management XXXX. schedule. The allow Aegon and leverage well first expect to had Markets This that range it have capital now the strong is We from least period of to benefited years, increase at will of performance, the for This financial Barring billion cumulative outlook XXXX, overall target to generation the supported from to the over made which business Day. half is progress our more billion come generation active will onetime the €X.X the flow. units. provided our XXXX ahead one-third - in Capital operating of to XXXX items come we of ahead cash favorable balance by claims range, to year. we billion reduced in achieve €X.X cash of gross flow €X.X and free targeted free within have transform the sheet of at unforeseen circumstances,

year. around €X.X €X.X billion of provided guidance quarter performance achieve to that Lard, Following compares results. the billion capital And with we now for year-to-date, XXXX final fourth now wrap-up. the the that we note, back XXXX in to around I the at pass it full the to for you, generation This operating strong of expect

questions. repeating our through uncertainty Thanks, Slide want I to the in to XX, high outlook help the expected financial challenging customers circumstances and service. navigate to by level interest and dedication, would questions two our continued markets to yourself remain, XXXX we on to economic I also brief commitments. session. you And their by Operator, confident that end kindly open am limit is for request in open Q&A your thank will while now expertise together, continue the them colleagues per call our Matt. our On the of will person. deliver with stand I update strategic I that financial for and the to I'd we to like of please time, like and economic and our

take first will [Operator ahead. from from our now Baker Andrew Instructions] question Please go We Citi.

Thank you for questions. taking my

is on free So - the dividends. I first guess and flow on cash

flow then you free significantly how through half? your walk really, the to improved then second of Thank of there the on any increase to performance? by are just And for cash the higher. outlook target it now And So second in the in secondly, Or of expectations obviously really thinking has bridge just get XQ €X.XX a you. performance? the are able is half €X.X obviously your you effective OCT, end Was XXXX? just billion anything strong EPS thought a in on

and that I'll your cash very that the we the you increase - thank Matt. On then very to capital allowing Capital that time dividend that made first way for us strength your cash flow the Yes, outlook sheet year. to hand the and we for outlook has pleased to over Day. capital Andrew, trajectory compared is the yes, our to we're balance growing date this run have free you, on don't of positions answer mind, and our with the accelerate expectations also at the see of you generation our Markets strengthening The to had operating if much one allowed questions. our free flow we progress and

us expect to share dividend we further 'XX, of per allow free flows that cash to grow sustainable level the around a For €X.XX. will

for Yes, up capital I'll XXXX. generation operating pick the

generation. the So million of the quarter, is to think €XXX way second operating in about capital reported this we

items about that in in the €XX Now U.S. other claims million experience Netherlands. favorable onetime the in and included and

you number of a So to if the about you it deduct quarter that, gets €XXX clean for million.

So quarters number €X.X €XXX next to of quarters, a of that's reported guiding to that you add generation the and two take the year-to-date we times two €XXX kind little the for that capital off. north million of billion that million, bit gets operating a we're if that you

Thank you.

We KBW. will question now take Please next from Michele Ballatore our from go ahead.

taking my for questions. thank Yes, you

So I two questions. have

RBC of and these from give on the about I the is was bit impact The the one negative a first little market give management first exactly a bit what of details breakdown from little actions. on more ratio. if the the impact don't us can impact you action maybe more That's know the color volatility question. and explore positive the

question is, the flow. about The second cash free it's

you you on So if Thank about free of mean, have effect may mean of IFRS And depends your I today course, way XX of can extent I factor highlighted variety on factors. But determine the IFRS level numbers. free that in the it this XXXX. the cash does, cash you. - we depends confidence on some flow therefore, flow to what

can Michele. Thank Yes. Matt, take both of you them? you,

you Thank for the questions. Yes.

because the we some first big of moves, ratio, markets one the course saw the of obviously, quarter. the I RBC On during for mean,

we I doing. some active course management. that XX important. had are So up out mostly we negative. percentage by And say percentage quarter of They driven was there. that it highlights about ended commitment to put equity points movements, actions if you that, with were in the being our But the This effective look sensitivities is and at were markets, that management points XX would market much that totaled we pretty there taken. just that about line capital That's what the had our during quite

going management the actions puts operating to were there on very giving on forward. outlook positive a effect are capital there actually, those mainly management the So actions, little and some had the generation - on takes the But RBC - ratio.

quarter that we on managing a So the think during job did capital base. that the good I standpoint,

everyone On minus It's very the expenses from that would remind the funding group flow, definition. free just I and remittances flow, cash level. the holding free it's the simple the the cash at a business units

So These asked of The capital solvency IFRS are the in. or XX? is about it simply question in the how regimes units does relate result one the that answer we're the each to doing when you much IFRS not. of business

you. Thank

We will question BNP Barma now Exxon. take from our go Please David next ahead. from

Thank you, and good morning.

flows. to on your come back Just free cash on - now the that just answer

think So capital margin based then it plan remittance unit you need explain so high continue the Can is targets, question. you're your think to moves think the XXs. on numbers, taking pressure seeing do the That's first in like margin generation gap or it revised to seems the flat we the the I I retirement a And program payout where ratio on X, improve up from? the you segment? the what over future? in this the operating this profitable my to remaining business, see start efforts capital - market do U.S. previous to the more And be between comes secondly, in what either we'll periods. on level - versus When slightly middle

Matt? David. Thanks,

they There to assets. are because right pick is that the flow. to first have I'll capital want execute numbers cash and take to one. got things to goal of the here now, sure sure the the convergence free we can the you've U.S. between the that grow up capital make strategic we operating right sure that our a that's on is business couple the their in especially there that make make Yes, sufficient generation growth businesses, the account. we So initiatives on is into One

improvement that So of still the bit we're is little operational that causes plan there that - investments some making in a are that gap.

want risk. account also deal. take respect to uncertainty with into make a credit That's future to sure big We we that

remaining So in over flow for factoring heightened have kind the in period total, be free risk could a guidance given thought that three-year that target. that cash in of we we the credit are that

that So normal level of we've assumed credit roughly our X.Xx impairments.

are some those of So the reasons.

and converge operating free would we So that expect flow. generation to capital cash

Yes.

And David retirement on so the plan.

we this plans. basis. scale. a actually that the of a more that the And reason in the also market, is case also large We retirement believe do good We for all, first better our is position on So focus where one. margins on our very but to compete that market all existing middle about is in is opportunistic in ability extract middle only market, the market

You over post net that were to that to in we continuously have retirement this able were we seen again even the middle-market last segment. - our And quarters quarter space. grow the plan in quarter, able in market deposits

in So this new flows go, scale months. of is currently X,XXX position of is we expect course, the customers, we've of roughly XX And cases going the terms as we market as a getting in full. more in will through come and in new top plan step-by-step and which where that improving periods in operate chosen segment, it last strength onboarded middle to that coming in a number five provider retirement of the market the of

to but to the improving. seen consistently up continue So need our growth which, in we we question. space, drive doing again, well, scale a the by market middle way, And over we're have last it's quarters the

you. Thank

will We our now Michael take from Please Berenberg. Huttner next question ahead. go from

to Fantastic. I X.X, questions. you cut it maybe two. so you have much. so will two Thank

first is mortality. on The one

profit you positive. relates and this €XXX how million please, we second say budget, and net give million So bit the if North don't ex-rates to various wondered million is sorry. more numbers. or are have so whether Sorry, level, for are the wondered And what - I just or the more as - is relating half? costs or trends the can €XX less it's mortality color of the America. to can a the have think you see I one-off I half, there to was reinsurance second moment just charges And hedging buybacks? the little we second in These the the mortality assumption in balance it changes can interesting. but you €XXX amazing at for know, items I in the the in just

for for and the suggestion, you Thank you thank Michael, the compliment.

You are Michael. right,

in the So was second actually quarter mortality pretty the good.

more see So obviously on and coated number XXX,XXX U.S. the claims first in the the quarter. quarter. based reduced dramatically about related By way, the reduction to a had that in the population down XX,XXX that in deaths course second quarter, that we from million of was $XX during than

really we effects real on So down. COVID the see coming mortality of

XX,XXX $XX U.S. the goes year of Our the experience is actually the let's the outlook see the rest population But into the adverse that two quarter, balance of U.S. the million for translates I good. about that in the again, for perhaps it, for they had a something of And quarter second deaths mortality. like COVID to in the were mentioned. how charges mortality touch But you claims maybe for on remainder due pretty

that the blocks increase that to business rates by reinsured million or was of an our reinsurers action - with key them. business that our one, why of first significant €XXX we block one reinsurance to of had related The a reinsurance significant on

per actually does - time the related getting So of matures. assumption related what were that was ongoing €XX on better, reinsurance one. RBC And charges is then. to drag we're second back book has U.S., were experience. and was in in going in very policies now will ratio that - the they it written this expectations million mortality have mortality year. the little books, quarter or that's one very That quite or say, our let's over decades on generation That That statutory than capital to was the the the you're different but in operating are ago. The modest. it update this where about the purely impact where the assumption And as an in charges decline agreements on back

I generation, mix mentioned And on think, business. impact the on the solvency €XXX operating little a IFRS actually basis, an very things. million ongoing on number, very for impact ratio it of has little U.S. you it capital was

that saw contracts say, life-type paying for I premium be, persistency We account assumptions. were very small. premiums we example lower example, universal people think when They're XX-some-odd value. would updated for, we on had updated maybe let's they higher contracts. One where

it the for in contract longer. keeps So force

one one to One did not the be thing mortality do would not was insurance the that do that did had we've during with example that what that during the we know we example of during the of look COVID-XX course Most quarter it. at made. really updates don't the the one experience experience had companies of we So pandemic. - of

So not other assumption things, we're answers many the the population to and mortality. that set but was hope basically I question. your data generally related throughout

really you. That's helpful. Thank

question from next from Please will take van den We Robin ahead. Mediobanca. our Broek go now

Yes. follow-up It's free Thank den on question Robin A van Broek. you. cash flow.

you if €X.X it years, down the think I billion. it's break over

level of per to I think annum. an you're equal sort getting

on which is appreciate bps impact the you €XX X.Xx impairments, made I XX a level commentary on Craig our the So normal of book. billion

OCG, I follow-up only Then question. you conservatism? feels something moving at assume that's give €XX So level XXXX for so just maybe but on bridge we the parts us of it Can you're if back. on is could was far. That's million, a like that holding wondering still least a

so which get had life. OCG universal falling of quarter-to-date negative more there. course, lot around movements is on secondary guess, you macro I some a out for And the reinsurance guarantee repricing, impact, very look helpful be You to second a year of the next that and question will mentioned visibility that

if changes explain that wondering the you that study, Thank for could your be think and yourselves? peers on of that I action I a future One back extent was you. to what what private the relation to book. could entails a in in made some to just of U.S., assumption

first the Take one.

expect your that have built strategic still going the we on just we One is it we of think that growth. number. a billion on business would them bit stable, I conservatism to important in guidance, so have Dutch assets would the also to the because into free the one capacity we their be that is there the we was a Life of - able let dividend. organic question What what €X.X do let's an a So I up, you capital U.S. in remain do thing will is to remittances trying and really, propel know, expect generation flow have part invest we're dividend. the is to to assumed growing say growing we cash pay What say, and U.S. would this that can see is pay business that,

So that's thing. key a

think mentioned some the of out we any dividends and primarily getting that the for companies, material the is one special had things TLB, of out the first I special half U.K. the - have benefited of other of I of the The that year. from balance that we in baked not had but the we're from of kind year

know would into have that's what guidance. if call you the or just billion don't conservatism €X.X the that I So north we of baked

you billion tried for units. into to XXXX as capital of to account there that get capital some a in generation XXXX. the goes, that would €X.X are say for far of XXXX guidance give parts And moving As you we generation business need take to couple so to we about operating operating for

I relative So of the in the under is, the point each year. with ultimate next from a that we've decline this, up basis in forward to UFR, one year, that giving million familiar suffering ends not is decline And year. II been that XXXX this you're and to XX benefit operating about going first €XXX capital Solvency think rate

those holding expect quarter through more detailed what that given nonrecurrence not macroeconomic XXXX stuff are tune a €XXX we providing the we've offset units, fact be to at for a a about the And for it's and and comes that talk others. those like successful completion plan example, initiatives things. What ultimately, is generation. that this this in And doing of of saw, the have lot OCG capital operating these operational the the of among that's seen in in we by all we improvement a outlook of lot favorable Additionally, would moment that uncertainty, to in we from million. that have other important Netherlands, XXXX, and for about we initiatives of the some you savings number experience tailwinds XXXX, organically would obviously, we're But but expect we this in on reinsurance, can accelerate strategic previously we XXXX. would that if increases experience whatsoever, negative get thing units say good investments One creating though, it you that a U.S. in maybe to the the remittances of to basis business. of respect we and assets the management million really is expect we rate then growth. that to pay round just just caption is grow for will that claims I planned would of normalization But making between I to expect, so say with a there the opportunities mean, organic what be actions see - mentioned it's in all headwind, to invest lot level YRT to maybe part €XX the competitively businesses operating a we the is and the of the to advantaged relative

The secondary guarantee UL.

tend we lapse actually for them. quarter, we among reason especially assumptions business experience, in no where reviewed our have business. review really type very and rates Based actually of blocks change we So us, assumptions lapse in of this our And fact, matter. to second sensitive saw in low to rates the again the lapse on we

updating for: have on sensitive people three, in then lapse that money, very the phase particularly most age contracts higher you if two, low we blocks granular think recognize and amounts; the a to where time one, modeling close salaries. will and that's these Europe, call older this is have are very - population; rates. I of can assumptions so we business, close that sensitive they're very quite to have for been And actually over have those routinely

is - an is we're is for not updating, the but us. routinely issue this something issue that So this last not

color. great That's Thank you very much.\

from from go ahead. our next Nasib take We Ahmed will Please UBS. question now

taking Thanks my questions. for

€X.X on I one anything but terms XQ, be your U.S. OCG. and appreciate then if book. to the book first in on secondly, are party, great? may again not going internal variable able since third how you the going the update And there's be is the your any would billion say conversations how annuity that So of more process on preparing with

the that by excess of COVID you and Is mortality said that that maybe in correct? billion. Matt, of to about €X.X X, So you million that then . €XXX expecting, €XX times you're and kind there's gets

Thank Nasib. you very much,

from on on of comment this, said share more Let the don't continue all regularly me very an on ownership VA general, transactions And we transparent taking. on in this derisked look the we in we'll this We And it. that we now point. we ranging update would taking of working one this provide we this about that reinsurance are and first that steps We're been book. at We've than have to portfolio. updated the been full take at have options potential if period.

we'll So to get Matt, you. to the to moment we something have share, . back you. over

Yes.

I - less we by in canceled year, And think On of OCG relatively would the thing claims are COVID on to they're small. I actually is frankly, one morbidity that or right for good mention more guidance for out experience. the be expect have the balance to you it XXXX. coming the would be going continued The them

a really not that's factor. So

in the easily €X.X for quite experience get the or to of of year. can You billion sort something second without half factoring north mortality of

you. Perfect. Thank

Bhutra now Société question from Sudarshan take will go from We Please next ahead. our Générale.

Hi.

from and On you're easily FCF holding, one going above be you your my $X.X to all to are given your range. the going side. upgrade cash Just above, the your the levels guidance, €X.X in cash, question - to $X.X billion billion at be excess billion target current easily

take? color on what looking mean the So we the cash? I I actions you could mean that at Any are you. should that? Thank how start surplus

Matt. I'm going Yes. Thank this you take one, to Sudarshan. very much,

that's stockholders then priority which first remains a is the the we policy between buybacks. above and have in and - if there's to the beyond want execute the we've have billion this, a cash of capital what need guidance to know, you form we on buffer And likely most company, we to return keep transformation our time, So cash surplus of done over that how clear you given billion. to €X.X on and for €X.X we as

demonstrated as have commitment program by to I return to seriously, we - underscores the this and this active in We commitment fact announced cash take the and buyback that stockholders. launched that mean earlier buybacks. surplus year, that we the are

program, today. please through which year. will we spend the the the start - the million third And interim October year's of last the million, on stockholders also, announced of will we don't today, and we will tranches final in this and forget of dividend I €XXX We roughly of announced last balance to the dividend that think, €XXX return that payment that two tranche on

you. Thank

ahead. take will We the now next Haywood Steven go from Please question from HSBC.

Good you. Thank morning.

foreign On what's in so was Can you much end and model your of the updates come business comes the exchange much remitting be ratio the significantly? the the a Is from higher operating capital your is mean of quick upfront at flow II bonds And II Do you then higher out I to just versus increase Netherlands, increase Solvency obviously, rates. that anticipate on the waiting obviously How cash too increased to first over quarter? other if Dutch Dutch business this you for contribution U.S. us the OCG position protect the your sale redemptions, bonds from can? liquidity the selling Netherlands. of actual secondly, lower increasing of had Can Thanks. material? going time? selling to dollar was bonds business. the liquidity to indication? explain Or you one, outlook much free here? generation will ratio here? cash mentioned rising give and you Solvency How have moves in And the the to that an in it the than

that? Thank take can you you. Matt,

the me first take Yes, let one.

interest lower that So you is have has basis the quickly do have is rising positions to of means balance. fund the a have derivative interest collateral quarter. we company rising during business to answer Solvency we interest protect there rates the that of on in of II way, lot protect rates. against the the against particularly about so to XXX tune position by to rates, course euro hedging the That the in that need points position land needs out when Life that order this Dutch the the to the We solvency short

billion the because about the on ratio. about bonds. the sold that reduce lose worth impact of solvency those solvency capital increase you an the points during quarter, fact, we requirement And So ratio solvency rate That of or in as bonds. €X you percentage mentioned, the did of eight the course had on

and - insurance was so a that big the story fact, incredibly that in quarter for all is we this we is deal Now well. successfully a have been liquidity by of companies, managing the able way, do have to

to in and place do plans this, able be to we it have We manage well.

of impact with to So had certain of included or that the infrastructure-related model. partial ratio. percentage because ratio updates investments bonds. in It the had having mainly internal solvency Life our about on equity - solvency did increase solvency a reduce Dutch a of Model positive do sale the those the six points

rising an rates done the was movement that the forward. generation the the lot Dutch has the increase Life big So a - outlook level interest for going actually important But otherwise, to of operating during capital quarter.

the the to I do solvency end interest calculation. the of June, very at which which basically, is close curve in hedge rate on we Now rate the interest think curve the - we

basis. operating So business a quite about actually on rate we're a that's capital €XXX And guidance something Life million actually benefit generation of in to looking at us. like the run Dutch

needs liquidity the increase And have rise on able guidance been we've in the in the rates us capture. So interest to to very fact, manage well. enabled the

That - was sorry, our you. ahead. please Thank final go

Matt, one strengthening. U.S. on question dollar had he the

Yes. that. Sorry about

dollar there. change terms. a value X% equates I on roughly is a guess it in in factor U.S. XX% gen every change of in remittance Euro-U.S. they dollar, us cap the the the in operating for the euro So give to that the system about strengthening

run rate the just of OCG you Could say was? again what Netherlands the

what million this is €XXX was.

very Thanks much. Okay.

session. Thank you, operator. today's Q&A This concludes

in then for We're Matt, with Investor us touch you of a remaining participation. and get you like lively Relations. Should behalf the good for any to help. interaction. would on happy questions, to thank Have and do have your thank So you I please in Lard day,

you, and Thank ladies call. will today's conference Thank you. That conclude gentlemen.

You may disconnect. now