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Dear reader,
On behalf of the Executive Board, it is my pleasure to present AEGON’s 2004 Annual Report. Throughout the preceding year, AEGON was successful in maintaining its focus on its core lines of business — life, pensions and asset accumulation products — and profitably growing its business in both existing and developing markets.
I am especially happy to report that all of AEGON’s major country units contributed to the favorable results for 2004. The full-year proposed dividend further demonstrates our improved cash flows, AEGON’s strong capital position and our confidence in our business.
Without question, our industry has undergone some dramatic changes during the past several years. Since we last reported to you, market and economic conditions have continued to improve the prospects for AEGON. Although challenges remain, we have been pleased by less volatile equity markets, indications of a gradual rise in interest rates in the US, and lower defaults in the bond market. These conditions have all contributed to a more favorable climate for our business. The increased regulatory environment facing the industry, however, will continue to pose significant challenges. At the same time, these circumstances provide AEGON an opportunity to reaffirm its commitment to sound and transparent business practices for the benefit of all of its stakeholders — our shareholders, bondholders, customers, business partners, and employees alike. In the end, it is trust, reliability and quality in the execution of our business that will help to ensure AEGON’s continued competitiveness and growth as one of the world’s leading life insurance providers.
At AEGON, we continue to see great opportunity for our industry. The need for wealth preservation and asset accumulation products will become increasingly in demand as aging populations look for more diverse pre- and post-retirement solutions. Further, taking into account the post-World War II generation (‘baby boomers’), which represents the single greatest asset-accumulation population pool in history, we see significant growth potential for our core lines of business.
It is our view that we can best claim a portion of this significant potential by continually focusing on what we know and do best, by staying close to our customers and through disciplined financial management.
Relying on a decentralized operating model, AEGON is well positioned to respond to the changes in the marketplace, as well as to the changing needs of its customers through innovative product development. Moreover, AEGON remains committed to seeking a leading position in chosen markets and to maintaining its status as a quality, cost-efficient provider.
AEGON’s broad-based multi-channel distribution network continues to be one of its most notable strengths. This network was further enhanced during 2004 with the implementation of AEGON’s successful strategic partnership with Caja de Ahorros del Mediterráneo (CAM), providing access to one of Spain’s leading bank distribution channels. In France, AEGON increased its stake from 20% to 35% in La Mondiale Participations in keeping with our aim of expanding our presence in the French life and pensions market. Additionally, we were pleased with our increasing participation in the fast-grownng Asian market during 2004. Having secured a license to conduct business in Beijing, China, in October, AEGON signed a national cooperation agreement with the Agricultural Bank of China, further enhancing AEGON’s multi-distribution strategy in this promising market.
In AEGON’s largest country unit, the United States, the important agency channel grew during 2004 and we continued to broaden our relationships with key financial institution and distribution partners. In the Netherlands, our focus during 2004 has been devoted to restructuring operations to better serve the needs of our customers while realizing a broad range of efficiencies in our service and marketing operations. And in the United Kingdom, we believe that our partnerships in the important Independent Financial Advisory (IFA) sector are ensuring that AEGON is well-positioned to maximize the opportunities of the changing distribution landscape currently underway.
We are grateful to the many dedicated staff of the AEGON companies and our distribution partners worldwide who daily help us to carry out our mission to provide better futures for individuals, families, businesses and communities. Thank you for your continued interest in AEGON, its businesses around the world and in our decisions, which are aimed at maximizing every opportunity for continued growth and profitability.
Donald J. Shepard
Chairman of the Executive Board |
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