Profile: Aegon

One hundred and fifty years of providing financial peace of mind.

Origins

• AEGON can trace its origins back to the burial funds that began to spring up in the Netherlands in the mid-nineteenth century. The oldest was the Algemene Friesche, which was created by two civil servants in the northern part of the Netherlands in 1844.
• After 1860, Dutch burial funds began to face competition from new ‘life insurance’ companies. In the Netherlands, life insurance became increasingly tied up with the idea of social reform and ‘self help’. One of AEGON’s predecessors, Olveh, was initially formed as a self-help organization for civil servants and white-collar workers.
• At the same time, another AEGON company – Nilmij – was putting down roots in the Dutch East Indies. Formed in 1859, Nilmij provided civil servants and military personnel in the former Dutch colony with an opportunity to save and invest. For many years, Nilmij had a virtual monopoly on private life insurance in the Dutch East Indies.   
• Strong economic growth in the latter part of the nineteenth century led to a rapid expansion of the Dutch life insurance market. However, the outbreak of the First World War brought severe disruption across Europe, while the years immediately following the fighting were characterized by economic uncertainty and high inflation.

Consolidation

• For the insurance industry in the Netherlands, the inter-war years were a time of consolidation. The Dutch government introduced social reforms, making greater provisions for people's retirement and old age.
• Facing volatile business conditions in the Dutch East Indies, Nilmij began to turn its attention to the Netherlands. Meanwhile, one of the few mergers to take place in the inter-war years was between two of AEGON's predecessor companies: Algemene Friesche and Groot Noordhollandsche.
• The return to war in Europe in 1939 brought more upheaval to the Dutch insurance business. During the war, Dutch insurers were forced to hand over property belonging to Jewish investors. After 1945, many families returned to reclaim their property.

Return to growth

• The end of hostilities in 1945 ushered in a period of strong premium income growth for the Dutch insurance industry as the European economy recovered, US money flooded into the continent and prices rose.
• In 1949, Indonesia won back its independence and eight years later, the government in Jakarta nationalized Dutch-owned assets, including many of the country’s insurance companies. By that time, however, Nilmij had switched much of its business to the Netherlands as rising prices and stiff competition made the former colony increasingly unattractive. 
• The 1960s brought a wave of mergers in the insurance sector. Growing competition, a need to control costs and rising inflation led to a bout of mergers and acquisitions. In 1968, three insurers – Algemene Friesche, Groot Noordhollandsche and Olveh – joined forces to create a new company called AGO.
• A year later, Eerste Nederlandsche, Nieuwe Nederlandsche and Nilmij created Ennia. Between them, AGO and Ennia controlled 20% of the Dutch market. Fourteen years later, they were to form a new force in the global insurance industry: AEGON.

International expansion

• In the years before their merger, both AGO and Ennia took steps to expand their international businesses in both Europe and the United States. In 1979, AGO bought the US life insurance company Life Investors. Two years later, Ennia acquired National Old Line, based in Arkansas.
• The 1980s proved to be a decade of international expansion. In 1986, three years after the merger between AGO and Ennia, the newly created AEGON bought Western Reserve Life in Ohio. A few months later, the Group acquired the Baltimore-based life insurer Monumental Corp. By June 1988, AEGON’s growing US business had been brought under a single roof: AEGON USA.
• AEGON’s international expansion was not confined to North America. The 1980s saw other acquisitions as well – in Spain, Belgium and the Netherlands. By 1986, AEGON had become one of ten largest insurance companies in Spain.
• In the 1980s, AEGON also started listing shares on stock exchanges around the world, giving the Group access for the first time to international capital markets, vital for its continued growth. By the early 1980s, AEGON was already listed in Amsterdam and London.
• In 1985, the Group went one step further and floated shares in New York. At the time, the flotation was heralded, not without a touch of hyperbole, as 'the most important arrival from Holland since Peter Stuyvesant founded New Amsterdam in 1653'. Today, AEGON shares are traded around the clock in Amsterdam, London, New York and Tokyo.

New markets

• The 1990s saw AEGON continue to expand its international presence. At the beginning of 1991, the Group bought Regency Life, a UK insurer specializing in unit-linked products and pensions. Then, two years later, AEGON began its relationship with Scottish Equitable, one of the best-known names in the UK financial services industry.
• By 1998, AEGON had taken full control of Scottish Equitable. The following year, the Group extended its businesses in the United Kingdom even further, buying the life insurance operations of Guardian Royal Exchange. The United Kingdom is now one of AEGON’s three main markets alongside the United States and the Netherlands.
• The early 1990s also saw AEGON take its first steps in two other regions that were to become increasingly significant for the Group in the years ahead: Central and Eastern Europe and Asia. In March 1992, AEGON bought a 75% stake in Állami Biztosító , Hungary’s former state-owned insurance company – the springboard for further expansion in the region, at the time only just emerging from decades of Soviet domination.
• In Asia, AEGON set up a greenfield operation in Taiwan at the end of 1993. Over the next few years, the Group strengthened its position in Taiwan, which, like Hungary, was to play a significant role in helping AEGON push out into new markets throughout Asia.
• Alongside this international expansion, AEGON decided to concentrate more on its core markets: life insurance, pensions and long-term savings and investments. As a result, the Group withdrew from some businesses, including Belgium and Greece, the general insurance market in the United Kingdom and part of the healthcare sector in the Netherlands. AEGON also sold its stake in FGH Bank and its merchant bank Labouchere. The result was a more efficient, better focused Group.

Riding out the storm

• In July 1999, AEGON bought Transamerica, one of the United States’ best known insurers. At the time, the acquisition was the largest ever made by a Dutch-based company overseas and the second largest ever in the US insurance sector.
• With its operations in Canada, Asia and the United States, Transamerica employs some 9,000 people and its California headquarters – the Transamerica Pyramid – still ranks as San Francisco’s tallest building.
• The September 11, 2001 attacks on New York and Washington led to a period of turmoil for many insurance companies as world stock prices plunged and asset values sank. AEGON was no exception. In 2002, the Group issued its first – and so far, only – profit warning.
• In the months that followed, AEGON took steps to strengthen its balance sheet and improve its financial position. The Group has emerged from the post-2001 period stronger and ready to capitalize on the opportunities opening up in both its main markets and in new, emerging economies.

Local knowledge. Global power.

• In April 2002, AEGON entered into a joint venture with China National Offshore Oil Corporation that took the Group into China for the first time. Steps were also taken to expand AEGON’s businesses in Central and Eastern Europe, too. From Hungary, AEGON expanded first into Slovakia, then to the Czech Republic, Poland and Romania.
• AEGON’s international reach expanded still further, with new joint ventures and acquisitions in India, Japan and Mexico. AEGON’s activities in China have grown steadily in recent years. Today, AEGON-CNOOC is present in provinces covering some 300 million people.
• In Europe, AEGON expanded its advice and distribution businesses in the United Kingdom, made new acquisition in the Netherlands and teamed up with La Mondiale, one of France’s leading mutually-owned life insurance and pension companies. In the United States, AEGON bought Clark Inc., an important distributor of bank- and corporate-owned life insurance.
• In 2005, alongside partners La Mondiale in France and HDI Pensionsmanagement AG in Germany, AEGON launched the AEGON Pension Network, dedicated to helping multinational companies around the world manage their employee benefit programs. Since renamed AEGON Global Pensions, the organization today works with international companies in Europe, Asia and the Americas. 
• Today AEGON is a multi-billion euro company, employing 30,000 people and serving over 40 million customers in more than twenty countries. With people in many parts of the world living longer, healthier lives, AEGON will have an increasingly important role to play not only in its main markets – the United States, the Netherlands and the United Kingdom – but also in the new, emerging markets of Asia, the Americas and Central and Eastern Europe.