The Chairman of Aegon’s Supervisory Board, gives his views on our performance in 2016.
Looking back on a year of low interest rates, as well as political and social uncertainty, what are your prevailing thoughts from 2016?
It was certainly a busy year. Like most financial services companies, we were hit by financial volatility, and as you say, interest rates remained extremely low. In 2016, no matter who you spoke to in our sector, everyone was talking about ‘lower for longer’ interest rates, and they are, despite fluctuations, still at historically low levels.
Aegon’s management team took decisive actions to stay on track to deliver on its 2018 targets. Our US business, Transamerica, made a number of very significant changes, including reducing its footprint, to increase profitability and to connect with customers in the way that they want. In the Netherlands, Aegon is increasingly connecting with customers digitally, and has strengthened its pension solutions leadership. The UK business has been transformed from traditional life insurance into the number one provider in the retail platform market. This fee business is growing fast, in line with our objective to have a substantial part of our revenues coming from fee-based rather than spread business. So, the elements of our strategy are kicking in.
Beyond Aegon, I look back on 2016 as a year of division. If you look at Brexit, and the US elections, there was certainly fragmentation in the world. But in an uncertain world, Aegon can provide the certainty that there will be funds when you retire, that you will be able to pay for care when you are older. For that reason, I look on 2016 as a year in which we continued to show our value to society.
We need our core business to be second to none in terms of operational excellence.Rob Routs, Supervisory Board Chairman
What progress is Aegon making in helping people understand how they can better prepare for their financial future?
It’s not always easy, but is right at the heart of what we do. I’ve seen too many cases in my life where people ended up in deep trouble, with no medical insurance or no house insurance, and lost everything. Painful situations. And that’s the tragedy. All too often the importance of financial responsibility only hits home at the worst of times. We have a huge educational task. Through the annual Retirement Readiness Survey we produce reports which educate the public and open up dialogue on longevity and retirement security. We work with the Leyden Academy on Vitality and Ageing, for example, and we expanded our thought-leadership by sponsoring a retirement research center in Brazil in 2016.
There are a number of new faces on the Management Board. What skills and insights have they brought to your discussions?
This year, we had a number of really good debates in the Nomination and Governance Committee and the Supervisory Board about the membership and structure of the Management Board. This led to the decision to expand the Management Board and bring in four new members with expertise in technology, legal, asset management and talent acquisition. The result is that we’ve got a really strong blend of skills and experience. The new members have different perspectives on the world, and that creates a dynamic that will really help our company.
Looking ahead to 2017, what will the Supervisory Board be focussing on?
We need our core business to be second to none in terms of operational excellence. We have a robust structure, a strong strategy, and good leadership across the business. We’re in good shape for the road ahead. The key for us as a Supervisory Board is to ensure the Management Board successfully implements Aegon’s strategy, that we set ambitious goals, and that we challenge the Executive Board to keep on delivering to all stakeholders.