Download - Aegon

46 Business overview Results of operations the NetherlandsResults 2011 the NetherlandsUnderlying earnings in the Netherlands were impacted by increased provisioning for longevity, whilenet income was affected by business restructuring. In 2011, Aegon initiated actions to make itsbusiness in the Netherlands more agile and better positioned to respond to changing conditions andopportunities in the Dutch market.Net incomeCommissions and expensesNet income from Aegon’s businesses in the Netherlands decreased to EUR 419Commissions and expenses increased by 6% in 2011. Operating expensesmillion. This decrease was mainly a result of a decline in fair value items, primarilyincreased 10% to EUR 823 million in 2011, mainly as a result of restructuringguarantees net of related hedges, to EUR 156 million and other charges ofcharges and investments in the further development of a new online bankingEUR 164 million. These charges related to the restructuring of Aegon’s businesses proposition. In 2011, Aegon initiated actions to make its business in the Netherlandsin the Netherlands of EUR 92 million and a write-down of goodwill and VOBA ofmore agile and better positioned to respond to changing conditions andEUR 75 million related to the distribution businesses. Aegon’s distributionopportunities in the Dutch market. The reorganization program and other initiativesbusinesses in the Netherlands are experiencing pressure on margins and areare aimed at reducing the cost base by approximately 20% or EUR 100 million inimplementing a new operating model following legislative changes related to comparison to the cost base for 2010.commission payments which will result in lower profitability going forward. Realizedgains on investments increased to EUR 269 million and were primarily the result ofa decision to replace equities by fixed income securities and normal trading activity Productionin the investment portfolio in a low interest rate environment. Impairments amounted New life sales increased to EUR 254 million. Pension sales increased 5% comparedto EUR 15 million.with 2010, mainly driven by successful institutional sales during the fourth quarter of2011. Individual life sales declined and amounted to EUR 81 million, primarily drivenby lower recurring premiums as mortgage production slowed down.Underlying earnings before taxUnderlying earnings before tax from Aegon’s operations in the NetherlandsPremium production for accident & health increased 4% to EUR 27 million andamounted to EUR 298 million, a decrease of 23% compared to 2010.benefited from stronger sales in income insurance products. GeneralinsuranceEarnings from Aegon’s Life & Savings operations in the Netherlands remainedproduction also increased 4% to EUR 27 million driven by increased sales for thelevel at EUR 185 million. Favorable mortality and higher contribution frommotor and fire segments of the market.mortgages was offset by higher expenses related to the execution of a programfor product improvements and investments in new propo sit io ns.Earnings from the Pension business declined to EUR 98 million. AdditionalGross deposits decreased 14% to EUR 2.0 billion. The decline is a combination ofprovisioning for longevity of EUR 82 million was only partly offset by theless competitive interest rates on savings accounts offered and the transfer of thirdposit ive im pact of favorable technical results. party pension deposits to Aegon Asset Management as of the second quarter 2011. Earnings from Non-life declined to EUR 6 million, mainly as the result of a lowerrelease of provisions, adverse claim experience and investments made in the business to increase efficiency. Income from the distribution businesses amounted to EUR 8 million, adecrease compared with 2010 as a result of investments in business development initiatives. Also fee income remained under pressure as a resultof the competitive environment.