Response to financial crisis

To counter the effects of the global financial crisis, AEGON introduced a number of short-term measures in the second half of 2008, aimed at reducing financial risk, lowering operating costs and freeing up capital from the company's existing businesses.

These short-term measures, known collectively as the 'Three Cs' - Capital, Cost and Contingency - significantly strengthened AEGON's financial position, improved efficiency and ensured the company would be well-placed to take advantage of future opportunities.

Capital: Between June 2008 and the end of 2009, AEGON freed up a total of EUR 4.9 billion in capital from its businesses. This capital was released through a combination of different measures, including risk reduction and a more active approach to capital management.

Cost: During 2009, AEGON's cost reduction measures totaled EUR 250 million, EUR 100 million above the company's target for the year. Most savings were the result of efficiency improvements, restructuring programs and expense reductions at AEGON's main operations in the United States, the Netherlands and the United Kingdom.

Contingency: Since the start of the crisis, AEGON has developed a number of 'contingency measures' aimed at protecting the company from any further sharp declines in financial markets. Despite the recovery in financial markets, some of these measures were put into place during 2009 as part of broader efforts to reduce risk and release capital:

• Run-off of AEGON's institutional spread-based business in the United States
• Sale of the company's life insurance activities in Taiwan
• Withdrawal from the group risk market in the United Kingdom.
• The sale of AEGON's funeral insurance business in the Netherlands (2010)