Generating capitalOur strategy

Thanks to recent changes, Aegon’s businesses are also generating more capital. In 2018, we expect capital generation of €1.4 billion (1) a year, most from the US.

At the same time, recent divestments have reduced our need for capital; the sale of two of our US run-off businesses alone freed up an additional $700 million. Management actions have also helped: switching into fee businesses, cutting costs and risk, and investing more in products and services that don't require so much capital. Last year, we were able to inject €1 billion into our Dutch business; this money came partly from divestments, partly from other units. It's put our Dutch business on a much more solid footing – we're now expecting €300 million in extra capital from Aegon the Netherlands by 2018.

€1.4billion

capital is expected by Aegon in 2018

€700million

freed up by sale of two US run-off businesses

€1billion

injected in our Dutch business

As a result of these changes, we were also able to increase our capital target in 2017. Our aim is to have, at any moment, between 150% and 200% of the capital required under Solvency II – in other words up to double what is necessary to comply with the new rules. At the end of 2017, our ratio stood at 201%, above the upper end of the range and a significant increase from 157% the previous year. A strong capital position protects both our business and our policyholders, particularly in the event of a sharp drop in world financial markets. Under Solvency II, the amount of capital we need depends on both the quantity of risk we have on our books and the nature of that risk. That means measures to reduce risk also bring down our requirement for capital.

1 Not including funding for the holding company or operational expenditure.