CEO Alex Wynaendts discusses Aegon's social role, investing for the long term and the need for new skills in the insurance industry.
There is a tendency to talk a lot about insurance companies purely in financial terms, but what does Aegon bring to society as a whole?
Our work addresses a fundamental and universal need: financial security. Literally millions of people rely on us. Our customers' future is dependent on us being able to fulfill the promises we've made, and last year alone we paid out close to €50 billion in claims and benefits to them.
Financial security is something that many people lack, which not only has serious implications for them, but for wider society too. We're here to change that. We want to help people throughout their lifetime, enabling them to fund their children's education, to pay their medical bills, and to provide for loved ones in the future. We want everyone to have a long and happy retirement. That work inspired me on my first day at the company and it continues to inspire me today.
Looking beyond customers, how else does Aegon create value for all its stakeholders?
What's also vital is that those who invest in us get a return, that our employees receive competitive salaries and benefits, and that we help our business partners to grow alongside us. Beyond that, we also play an active role in the communities in which we operate, and we leverage our position as a significant investor.
Does the nature of the insurance industry mean that Aegon invests in a different way to other investors?
Yes and no. Like any investor we want to make a return. That way, we can in turn finance our customers' pensions, pay out claims, and internally invest in new technologies and future growth, and so forth. Where we are different to other investors is that we focus more on the long term in order to match our liabilities. We are therefore the ideal provider of long-term financing not only through bonds for governments and other companies, but also to help fund infrastructure projects, such as roads, bridges, wind farms and affordable housing. By doing so, our company plays an important role in the wider economy, stimulating and supporting growth.
Many people lack financial security. We’re here to change that.Alex Wynaendts
How will Aegon continue creating value for those stakeholders in the future?
From a financial perspective we need to have a strong capital position; we need to continue to change the business mix so that we are less dependent on financial markets; and we need to keep growing our business. Looking beyond that, this is ultimately a question of relevance.
It doesn't matter whether it's the insurance, banking, or the travel industry. As a customer if you don't feel you're getting the right service, you can look elsewhere at the click of a button. We have to understand customers better than ever before, and we have to be able to serve them in the way they wish to be served. Being their preferred choice therefore means that we need to keep evolving, keep innovating and keep embracing change.
Was this the motivation behind many of the changes you implemented in 2017?
Absolutely. Last year was a big year in terms of change. First, we continued to transform our business so that we can meet our customers' ever-changing needs, and this work will continue in 2018 and beyond. In our US business, for instance, we recently entered into a strategic partnership that will enable us to improve customer service levels. Second, we worked hard to bring down expenses to bring us closer to meeting our €350 million cost savings while improving returns across the businesses. Third, we worked to restore the capital position of our Dutch business. We were able to achieve this by utilizing resources from other parts of the group. In doing so, we have successfully improved the capital buffer of our Dutch business.
In recent years, new technologies and automation have led to job losses across financial services. Will this trend continue?
There's no doubt that the composition of our workforce has changed, and will continue to change. In order to offer the right services to our customers, we have to have the right skills. On the one hand, some processes are being automated, which inevitably has an impact on jobs. On the other hand, we need new skills. We can achieve that in several ways: bring in experts, for instance, in the fields of data analytics and digital marketing; re-skill existing employees; or work with partners, outsourcing certain functions – just as we have recently done with parts of our US business - and investing in start-up companies.
Given all this change, how do you ensure that Aegon operates in a sustainable way?
For me it's all about embedding responsible business in everything we do. This starts with our strategy. We don't have a business strategy and a sustainability strategy; we have a single strategy ensuring customer needs are always central to all that we do. Strategies are, however, only as good as the paper they're written on unless you also get the culture right.
That's why we've made a concerted effort to ensure everyone at our company really lives the Future Fit behaviors, and by that I mean working in more agile ways, being truly customer centric, acting as one – be it in a team or across the whole company – and always being accountable for what we do.
|Farewell to Aegon's Supervisory Board Chairman, Rob Rout|
|"At this year's annual General Meeting, we're saying farewell to Aegon's Supervisory Board Chairman, Rob Routs, and fellow member of the Supervisory Board, Dirk Verbeek. I'd like to sincerely thank them both for their commitment, challenge and support over the last ten years, and wish them well for the future."|