AEGON N.V. ADR Stock

Good day, and thank you for standing by. Welcome to the Aegon's First Half 2026 Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session.

[Operator Instructions]

Please note today's conference is being recorded. I would now like to hand the conference over to your speaker, Yves Cormier, Head of Investor Relations. Please go ahead.

Thank you, operator. Welcome to this conference call on Aegon's first half year 2026 results. My name is Yves Cormier, Head of Investor Relations, and joining me today to take you through our performance and progress, our Aegon's CEO, Lard Friese and CFO, Duncan Russell.

Before we start, I would like to ask you to review our disclaimer on forward-looking statements, which you can find at the end of the presentation. And with that, I'd like to give the floor to Lard.

Thanks, Yves, and thank you all for joining today's call. I will start by running you through our strategic developments and commercial performance in the first half of 2026 before Duncan will go through our results in more detail.

We delivered strong commercial growth and robust financial results in the first half of 2026. Our operating results increased to EUR 804 million, supported by strong commercial momentum and favorable financial markets. Operating capital generation increased year-over-year to EUR 416 million from business growth and improved claims experience. Transamerica delivered excellent growth in new life sales. World Financial Group continued to grow and perform and written sales in the retirement plans remain strong. Asset Management had third-party flows -- positive third-party flows in our international businesses contributed to growth as well, led by Brazil. Our capital position remains strong, and we have confidence in the outlook of our business. Cash capital at holding reached EUR 1.7 billion, supported by EUR 392 million of free cash flow in the period.

We are increasing the share buyback program for the second half year by EUR 150 million to EUR 350 million. Furthermore, we are announcing an interim dividend of EUR 0.21 per share, up 11% year-over-year. Finally, we continue to move at pace with our planned relocation to the U.S. We announced today that the extraordinary general meeting to seek shareholder approval for the move is targeted to take place on October 8.

I'm now turning to Slide #3 to run through the commercial performance of the Americas in more detail. Commercial momentum remains strong across Transamerica. At World Financial Group, we surpassed 100,000 licensed agents. More agents are producing and average premiums per policy have increased. As a result, the distribution business has delivered 5% growth in life sales and 12% growth of annuity sales compared with the previous year period.

In the Savings & Investments segment, retirement plans continues to perform well. Asset growth in IRA and stable value products, supported revenue diversification and improved spreads. This resulted in an increase in the return on assets to 10 basis points in the first half of 2026. The written sales remained strong, especially in pooled plans, which is our sweet spot. Net deposits were negative in the first half of 2026, largely from a single contract termination following the client's merger with a peer.

Within the Individual Life business, our entry into the instant decision market with a final expense product and now also with an index on a universal life product has been a remarkable success. New life sales increased by 54% in the first half of 2026. In annuity sales increased helped by product enhancements that appeal to customers.

I'm now moving to Slide #4 for an update on our other businesses. In our International segment, new life sales were broadly stable year-over-year. Growth in Brazil, driven by strong demand for individual risk products, was offset by lower sales in China from product repricing. Aegon Asset Management recorded third-party net inflows in both the global platforms and strategic partnerships businesses.

As of 2026, Transamerica Asset Management or TAM for short, is reported under asset management instead of the Americas. This business had net outflows in the first half of the year. The Global platforms operating margin increased by 5 percentage points to 20% compared with the prior year period, driven by lower expenses and higher revenues which were supported by favorable market movements and net inflows over the past 12 months.

Let's now turn to Slide #5. We continue to execute our transition to the United States decisively. We have undertaken several key actions in the recent months. Number one, we announced the sale of Aegon U.K. sharpening our focus on the U.S. market. [ Number two ], we issued a $500 million senior unsecured bond to establish a U.S. dollar yield curve. Number three, we reached an agreement with our largest shareholder Vereniging Aegon, the Association Aegon on our future relationship and presented a proposed U.S. aligned governance framework. On the back of this announcement, we've hosted engagement meetings with investors to gather back on the proposal.

And then number four, we are on track with the implementation of U.S. GAAP and expect to start diets in the second half of the year.

So overall, the transition is progressing at pace, on time and in budget. So far, we've booked roughly 40% of the EUR 350 million expenses we expect in relation to this transition. Looking forward, I'm excited about the next steps in this transition. The next major milestone is the extraordinary general meeting targeted for October where shareholders will vote on the relocation, governance amendments and the new Omnibus equity plan. Our goal is to align Aegon's governance with U.S. market standards and support the company's ambition to become a leading U.S. life insurance and retirement group.

In coming weeks, we will publish the AGM meeting agenda and other relation documents such as the SEC F filing. We strongly encourage our shareholders to read these documents once they become available and to vote at the general meeting.

Let's turn to Page 6. Looking beyond the AGM, there is more to come. We selected New York City as the future location of our head office. I will personally be moving there in January 2027 to lead the transition of our company from its new center. I'm excited that the Board has extended by mandate through 2030 and the shareholders have approved that to ensure continuity of management in this major transformation of the company. We are implementing the necessary leadership and organizational changes to support the future group structure. [indiscernible] role within the group has been broadened and he will become President and Chief Operating Officer of Aegon as of January 2027 and this is in addition to his responsibilities as CEO of Transamerica. Over the coming year, we will push forward the transition plans, gradually building the head office setup and processes until the end of 2027.

We are moving at pace within a controlled and well-thought-through manner. I will now hand over to Duncan to discuss our financial performance in the first half of 2026 in more detail.

Thank you, Lard. I will walk you through the financial results for the first half of 2026, starting on Slide 8. We've announced a robust financial results. The operating result increased by 9% over the prior year period to GBP 804 million with all of our units delivering higher results. Operating capital generation after holding and funding expenditures increased by 27% year-on-year and free cash flow amounted to EUR 392 million. As a reminder, we have excluded Aegon U.K. from the operating results, OCG, CSM and free cash flow as the businesses held for sale.

Cash capital at holding increased to EUR 1.7 billion as the remittances were only partly offset by share buybacks. As a result of the lower share count and business performance, valuation equity per share increased by 4% in the reporting period. Our financial position remains extremely bust. Gross financial leverage increased slightly to EUR 5 billion. This increase was driven by the issuance of a new senior unsecured note in April, exceeding the results of the tender offer on our subordinated notes. The group solvency ratio stood at 169% and for June 30, 2026. The decrease compared with the year-end 2025 was largely driven by the loss of capital eligibility of perpetual cumulative subordinated bonds as we had previously flagged.

Moving to Slide 9. Transamerica's operating result was $756 million and grew by 14% in local currency after correcting for the transfer of TAM which moved to Aegon Asset Management. The operating result came in within the guidance we provided at the 2025 Capital Markets Day.

Within Transamerica, we saw some positive developments Distribution had an improved operating margin on a higher level of commissions, and it explains a strong operating result there. The savings and investment results benefited from higher fees on assets under administration which increased and from margin expansion in our general account stable value product. And Protection Solutions results have benefited from the growth in the portfolio, which drove CSM release which more than offset higher onerous contract impacts.

Financial assets improved from materially more favorable experience variances when compared with the first half of 2025 and overall, continues to produce a financial return consistent with our previous guidance. The International segment benefited from growth in Brazil and favorable persistency experience in TLB.

And Aegon's Asset Management's operating results, excluding the transfer of TAM, increase from an improved global platforms operating margin and higher revenues in strategic partnerships. This was a strong performance from the business, reflecting the efforts of our management team and staff.

On Slide 10, we show the net result, which amounted to EUR 608 million, broadly in line with the prior year. There are a number of moving parts here. We had a release of ECL reserves following the full repayment of the more loans related to the Transamerica Pyramid complex in San Francisco as well as releasing ECL this repayment has removed the concentrated exposure in our CML book.

Other charges include the positive results of Aegon U.K. and from the stake in ASR. The other charges reflect the unfavorable impact of the annual model and assumption review in Transamerica. The overall impact from this on our valuation equity was EUR 231 million net of tax of which EUR 294 million pretax for the U.S. is reflected in the other charges and the rest is either an OCI or CSM. There is some complicated geography around where the assumption changes are booked. But overall, the predominant driver of the review is updated assumptions around policyholder behavior, addressing variances we have seen in recent reporting periods.

Turning to Slide 11. Valuation equity increased on a per share basis by 4% in the reporting period, standing at EUR 9.42 per share as of the period end. Note that the valuation equity includes the yet to be booked, estimated shareholders' equity accretion related to the sale of Aegon U.K., which more than offset the exclusion of the Aegon U.K. CSM after tax subsequent to the announcement of the sale.

I also want to highlight that this is the first time the addition to CSM from new business in the United States exceeded the amount released from the existing portfolio. This is pleasing. It indicates that the Life business in aggregate is once again in a position where future profits are structurally increasing and is an affirmation of the success and effort of our commercial strategy.

On Slide 12, we see that the OCG increased by 27% compared with the first half of 2025. OCG from the Americas increased by 35% in local currency with higher contributions from both strategic and financial assets. The main thing to highlight is that the large increase in new business strain, reflecting the growth in our business, whereby new life sales grew by 54% year-on-year. is offset by a repositioning of certain savings and investment portfolios from an RBC regulated entity to a Bermuda subsidiary to improve capital efficiency and the release of EUR 43 million of required capital from the Pyramid mortgage repayment.

We have accepted the increase in new business strain coming from the higher sales, given the return profile we expect to achieve on these. And going forward, should sales levels persist above the 2025 ambition level, we will manage OCG to the targeted level by accelerating earnings on in-force from other portfolios and over time by benefiting from the incremental OCG from these new sales.

Aside from this, earnings on in-force grew from business growth and strategic assets, the SGUL reinsurance transaction announced in December 2025 and improved claims experience in the financial assets. Claims experience was in aggregate EUR 11 million favorable in the reporting period. In the International segment, OCG decreased year-over-year, impacted by EUR 20 million of unfavorable items, mostly from the adverse impact of new business in China as well as unfavorable claims experience in Spain and Portugal due to the storms. In addition, the joint venture in China remains a drag on OCG, as previously guided. Asset Management OCG reflects the developments I outlined previously on the operating profit.

Turning now to Slide 13 to address the U.S. RBC ratio. It decreased by 4 percentage points to 420% in the first half of. This is a healthy position relative to our operating level of 400%. The contribution of OCG to the ratio from RBC regulated entities more than offset the impact of remittances. In first half 2026, around 40% of the remittances from the Americas were sourced from surplus at nonregulated entities, reducing the unfavorable impact on the capital position of the regulated entities. Market movements had a 12 percentage point unfavorable impact, more negative than implied by our published sensitivities. This is explained by movements in the period not fully captured in our single shop-based sensitivity approach such as lag in performance of private equity investments and energy-related assets, fund basis risk impacts and cross effects between asset classes in the variable annuity book.

Onetime items negatively impacted the RBC ratio, and most of the impact came from the assumption update, which had $164 million negative impact, less than under IFRS due to accounting differences.

I'm now moving to Slide 14. Cash capital holding increased to EUR 1.7 billion. Free cash flow amounted to EUR 392 million and includes remittances from the units as well as capital distributions from a.s.r. Remittances received from Aegon U.K. are recorded as cash flow and divestitures and will be deducted from the cash proceeds from Standard Life at the close of the transaction.

In the reporting period, we executed a pot EUR 227 million of share buybacks, of which $27 million were first share-based composite plans. The other items largely reflect the net cash proceeds from the senior bond issuance and the tender offer, both executed in the second quarter of 2026. Note the coming maturity of a trust pass-through security in December will partly offset this. We remain committed to ending 2026 with approximately EUR 1 billion of cash capital at holding. Given our healthy position, we have announced today an increase to the total amount of share buybacks to be executed in the second half of 2026 by EUR 150 million to EUR 350 million. So as to ensure that our target of around EUR 1 billion is met.

I'm now moving to my final slide, #15. The first half of 2026 demonstrated continued commercial momentum and strong financial performance, while the quality of our balance sheet remains strong. The results reinforce our confidence in delivering on our medium-term ambitions. On this, you will also find updates of all the financial ambitions provided at the Capital Markets Day last year to take into account the sale of Aegon U.K. and the transfer of Transamerica Asset Management to Aegon Asset Management at the beginning of the year. All of these changes are mechanical and none of the underlying assumptions have changed. We look forward to connecting with you at the EGM targeted for October 8.

And with that, I will hand over to Lars for final comments.

Thank you, Duncan. I would like to say a few words about the other announcement we made this morning. As you know, as part of the planned move to the United States, we aim to have a fully operational executive team. Based in the U.S. by the end of 2027. The CFO will be a key member of that team. Obviously, we discussed this with Duncan and for personal reasons, we have decided not to make the move to the U.S. leading to the announcement that we made today. We will therefore begin the search for a new CFO, and we will keep you updated as that process progresses.

On a personal note, this is a significant announcement for me. I've had the privilege of working alongside Duncan for over a decade, benefiting from his business acumen and strategic and financial insights and that unique partnership will come to an end in the course of next year. Duncan is an exceptional colleague and a trusted friend and confidant. Duncan will continue to work with me on the move to the group to the U.S. The implementation of U.S. GAAP, the closing later on of the 2026 annual accounts, and we will facilitate an orderly transition to his successor.

I would now like to open the call for questions. Please limit yourselves to 2 questions per person.

[Operator Instructions]

And our first question will come from Farooq Hanif from JPMorgan.

I think I'll make the most of Duncan while he's here. So 2 financials based questions, if that's okay. So could you possibly explain a little bit more about the repositioning of savings and investment portfolios what that means and how that can be a tool for the future?

And secondly, can you talk a little bit more about the assumption changes that you made below the line. I mean, they do seem to be obviously nonrecurring in nature, but they always get a lot of attention. So it would be good to just understand what was different from expected and why made those changes?

I'll deal with the assumption update first. So as you know, we review assumptions every year in the second quarter. And during 2025, we were seeing some negative variances related to policyholder behavior coming year through the P&L and the variance line or onerous contracts and some to the balance sheet and the CSM. And so we decided to address that with this update, further improving the quality of our earnings and ensuring that our balance sheet remains up-to-date and strong. In short, they mostly related to policyholder behavior. In 2 areas, the first is on our variable annuity book, where we updated assumptions around behavior at certain money net assumptions, whether that is lapses for in the money [indiscernible] products or utilization for -- lapses or out of the money, VA or utilization for in the money and that had a slight negative impact. And the second was around the efficiency of premium paying on our life insurance products, which reflect to you in our results last year.

So it's really related to the variances we saw during 2025 and philosophically wanting to make sure that we remain ahead of that. That's that.

The first question was related to -- okay, the repositioning. So well, the good news is that the OCG -- sorry, the good news is that the commercial strength of Transamerica is really coming through. As I've mentioned in my speaker notes, this is the first half year where the net contribution to the CSM from new business for the life company as a whole, was higher than the release of CSM. So historically, we've seen strategic assets doing well. But the financial assets obviously reducing over time. But now in aggregate, the life company is actually increasing the pool of future profits, which I think is a big positive and reflects the work of the team there. That obviously comes with a negative from a capital position, which is strain, which was running high.

And in order to manage that and bridge the period whereby we are investing in new business to structurally increase earnings, we are looking at ways to accelerate earnings on in-force. In this case, we repositioned the portfolio to a Bermuda entity in order to increase capital efficiency and support OCG. That's something we'll continue to look at if strain remains high because we want to keep our OCG at a healthy level. And we have plenty of tools to be able to do that going forward.

And our next question will come from Nasib Ahmed from UBS.

So 2 questions from me as well. Firstly, on the financial assets, the locked in capital that's reduced, I think, because of markets and one of you've still got the EUR 2.2 billion target. So Duncan, if you could kind of give some guidance on -- does the runoff get you there? Or do you need to more transactions? Of course you'd expect -- I'm asking the question because there have been a lot of backlog transactions here again.

And then the second question on the U.K. proceeds from the sale. It feels like you're replacing the free cash flow with the cash that you're going to get from Standard Life you're going to see on Mon the 30th of November. So the interest cover on the debt probably stays the same because you're not really losing any cash. is there really any need to pay down debt? I know you did say that the proceeds are going to be used for both buybacks and debt. But has your thinking kind of changed given that the cash is similar, there's no change to the cash. That's my 2 questions.

Duncan, can you take them?

Yes. So the -- on the financial assets, so you're right that the capital employed came down further in the half year. It came down to $2.4 billion compared to $2.7 billion at the full year and is pretty close to the target of $2.1 billion. So [indiscernible] by about $300 million. About 1/3 of that is driven by the favorable market impact on variable annuities, where what happens is we see reserves becoming more prudent, more fraud reserves, and that reduces required capital. So that is a bit sensitive to markets, but it's been helpful. And then the rest is spread across the other products where we had largely due to runoff books and asset allocation choices.

Our philosophy hasn't really changed. So this is something where we have an active team looking at actions we can take unilaterally bilaterally and also assessing tractions. So we're going to continue to look at ways to bring down capital over time, obviously with an economic approach as well.

In terms of hitting that $2.1 billion, well, the gap is pretty small now. So I feel pretty confident that we'll be able to hit that number either through our unilateral or bilateral actions and if needed, transactions. But we will, of course, look at all our options to release the portfolio.

U.K. proceeds?

U.K. proceeds, no change there. So we do -- you're right, though, to point out, we do look at our leverage and relative to our cash flow. But no change at this point in time into how we're looking at the proceeds, which will be used for a combination of share buybacks and debt reduction.

Our next question will come from Farquhar Charles Murray from Autonomous.

Just 2 questions, if I may. Firstly, coming to the kind of individual you say were remarkably strong. I just wondered if you could explain what's driving that. It does feel like you kind of have a sweet spot, and you did mention kind of product enhancements. And also just to give us comfort on the quality of those sales. Do you outline what the IRRs and payback periods are on the new sales at present.

And then secondly, coming back to the comment you made about accelerating in force earnings given a constrain. My question actually would be, would you be seeing a similar tension between U.S. GAAP earnings and that managing those life sales as you're seeing with the OCG number?

Yes, very good, Duncan, I'll hand over to you in a second. But maybe on the Life sales, Farquhar, we have -- this is mainly driven by a couple of factors. The first one is that we launched first in the final expense later on in index universal life, a instant issue digital-enabled -- digitally enabled process that allows brokers and agents to really speed up the process around underwriting and decision making and finalizing a policy. To give you an idea, before we launched this, we -- you would take a couple of weeks to get the paperwork done. This is now under 12 minutes. And that, of course, is a massive service improvement that is driving the sales growth in these various segments.

Secondly, we have seen other than that, of course, the growth in the World Financial Group producing agents and the size of that. And we've also seen higher growth of other live traditional life products not done for a model and -- but that was more muted. So really, I would say, it's to a large extent, driven by the launch that we did over the last 18 months of various -- of various products. This new process is enabled process.

But Duncan, can you comment -- can you continue on this on the other financial aspects of it, IRR payback periods?

Yes. On the [indiscernible] simplified issue product that Lars is talking about, we earning an IRR of over 12% and a payback of around 8 years that's on a fully cost loaded basis as well. So with all costs allocated to it. So we think the returns are fairly attractive.

And on your second question on strain and your gap, I can't really talk about that because we don't have U.S. GAAP and we've also commented that at Capital Markets Day we weren't really going to get into any details of the GAAP until we have progressed much further in the project, which, as Lars mentioned, is making good progress, and we expect to have the trend sometime in the second half of this year. Well, of course, still be under the RBC framework growth. So managing will remain an important metric for us.

[Operator Instructions]

And our next question will come from Michael Huttner from Berenberg.

Fantastic. I had 2 questions. One is when you're going to change your name, presumably, Aegon, which is -- it's a Dutch name, right? I can't remember, it's [indiscernible] and something else was clearly you have an established brand in the U.S. So that would be one. And then the second one is, on the new business and you kind of said yes, funding new business key aspect. In the first half year, you clearly used the mechanism of the Bermuda transfer and you had the release from the mortgage capital requirement. How much more buses do you have to release to kind of offset this lovely new business growth, and it is nice to see your business growth?

Thanks, Michael. I'll take the name change, then later on Duncan will get to the other question you had on the. Yes.

So we're going to change on into Transamerica as a holding company. So we currently Aegon and the operating company's name in the U.S. Transamerica, and we will align those as we move to the U.S., and that will happen at the moment our legal seat moves which is expected in the very early part of 2028. By the way, just for your historical reference, Aegon was a name that was created with [ AGO ] and [ ENNIA ] were merging. But it was AGO, ENNIA and then I think a lot of marketing people did a lot of work to make that into an acronym that would stick and that is Aegon. But in the U.S., I do want to say that apart from the institutional relationships that we have, we know us the main brand has really always been Transamerica. So we're mainly aligning it, and we will do that, as I mentioned earlier, as our legal seat moves in the kind of the first weeks of 2028. Duncan?

Yes. So Michael, the question was around buffers and funding new business. So I'd say, over the last years, the financial position Transamerica has dramatically improved. Thanks to the actions we've been taking on the in-force blocks. Our expense base and also writing profitable new business. So we feel that we have a very significant amount of flexibility it on our balance sheet, which allows us to take the sort of actions we took in first half. If you take a step back, as tough first half was an acceleration of our new business strain. The returns we anticipate catering on that invested capital, we hope will be attractive. And meaning that over a period of time in the coming years, that will lead to higher level of earnings on in-force. Of course, you have to fund that.

And so the action we took in the first half was one of the means we looked funded and it needed. And if the strain remains high, we'll continue to do that. That's in the coming periods.

Our next question will come from Henry Heathfield from Morningstar.

I was just wondering if you could give an update on the number of multi-ticket agents that you have in WFG. And then second within retirement, I was wondering if you might give an update on the large and midsized retirement plan balances.

The multiticket is no longer something which we are disclosing, Henry. You disclose that we've grown our agent base now to over 100,000 licensed agents, and we're continuing into target to reach around 110,000 licenses agents by 2027. And within that larger agent force, [indiscernible]. Agent, productivity improving and increasing, but we're no longer giving the exact KPI metric.

Our next question comes from Nasib Ahmed from UBS.

So a couple of quick follow-ups. Duncan, I remember you -- we've hedged base fees by 20% on the [ beer ] block. And I think last time we spoke, you said you could potentially do more. And given equity markets have done well, would you look to lock in the good returns that you've got already? And I guess the second question on, if you could kind of bridge the OCG for the second half, of course, good numbers in the first half, but you haven't upgraded the guidance for '26. So what are the pluses and minuses in the second half?

Okay. On the base fees, you're right, we hedged about 25% of that panning markets are still at an attractive level. So that is something we could consider. Our main constraint there, to be honest, is that -- we have the [indiscernible] reserve issue topic and you see that in incentive these around capital. It's quite a good problem to have because it means that as equity markets go up, we are creating more prudence in our reserves naturally, which provides a hedge if equities go down. So we're kind of creating our own self-hedge anyway.

And the floor reserves at the end of the first half were just under $500 million, which is a pretty high level. So base hedging thing we'll continue to look at and if we decided it makes sense. But irrespective of that, the balance sheet keeps getting more prudent as equity markets go up on the VA.

Your second question was around OCG. Well, the guidance we gave at the Capital Markets Day was a very multiyear period. And I don't really want to get into ticking and tying it every half year because there's so many moving parts. But obviously, financial markets were helpful and will continue to be a benefit against that. We did the assumption update, which will be a small drag. So we're going to keep our -- a strain will, I think, likely remain elevated in the second half of the life sales. So we're going to keep in just giving you the big picture guidance of what we provided at the Capital Markets Day.

Our next question comes from Farquhar Charles Murray from Autonomous.

Again. So just a follow-up question from me. One here, basically. And on the accelerated shift towards the aggregation approach on group solvency, can you just give the reason for making that move. It seems a little bit earlier what the consequences are of the looks like it obviously kicks up a slightly better outcome on the U.K. And was there any risk of that group obviously becoming an issue in the absence of maybe accelerating.

Yes. No, there's nothing to read into that, Farquhar. We we've got a huge agenda in terms of workload and transitioning this group out of the Netherlands into the U.S. implementing U.S. GAAP, et cetera, et cetera. And so the design to accelerate the transition to the reporting under the aggregation approach was something we discussed with the BMA in order to [indiscernible] will allow us to simplify our own calculations and reporting and basically reduced operational complexity across the group. Nothing more than that [indiscernible] bonus we make progress to moving to the U.S., we're looking to make a larger deal as possible from a perspective.

And we don't anticipate any change in the outcome of the ratio other than what we flagged in the U.K., which is now going to have, we think, a positive 10 points or so versus the minus 5 points also we guided for previously.

Our next question will come from Michael Huttner from Berenberg.

Fantastic. 2 questions. One, so you've done lots of adjustments and reviews and stuff on your life book. I haven't seen anything you mentioned of long-term care, which for me is still the biggest chunk of capital still locked up in the financial assets. Can you say where you are here? You used to, I think, to provide a graph where you say you're 100% or whatever expectation and there's some rate rises coming.

The second, I don't know if I'll ask it politely, but I did say that the new business growth is fantastic. The word instant in the disclosure makes me a bit nervous, it reminds me of what happened when we had the mortgage crisis in the U.S. and people self-disclosed [indiscernible] wasn't always as expected. How confident are you that this which I guess is the alternative risk here is properly kind of covered.

Michael. So long-term care, you're right, the within our financial assets required capital now just under 50% of the total required capital. So it's a large part of it. And it's quite a long duration book. You recall the reserves will peak sometime in early 20 -- early 20, 30s. So is a meaningful part of the required capital. We're making good -- we continue with our strategy, to be honest, which is proving successful. So where we see adverse outcomes, we implement actuarially justified premium rate increases. We are also looking at other options for reducing the burden for policyholders and in an actuality justified way. So we're implementing the strategy, which has been so far I think quite successful.

And where -- and you'll be aware, obviously, that there's been some transactions in the market, which is a positive because that means that counterparties are starting to get comfortable with stand-alone LTC. That's something which, of course, we do look at and we will continue to look at as we go forward. And we'll assess that as we do any transaction, which is on an economic basis.

Your other question was around oh yes, the -- the good thing is that obviously -- just to reassure you, the pricing of new business and the returns we earn on new business is something which is kind of fundamental [ at Aegon ] and it's something which we spend a huge amount of time on both locally with the U.S. management and the group. As I mentioned, we believe we're achieving an IRR of around 12% to pay back 9 years or so. And it's something which in that market, we actually get a lot of fee ball relatively quickly. So we see policyholder behavior. We see lapses. We see claims relatively quickly, and we got a lot of data, and we're able to adjust on the back of that, which is a big positive, and we do, do that. And then in terms of underwriting, there's no reactation in our underwriting side is if anything we are utilizing also additional information to price the risk which we take on.

We have no further questions. I would now like to hand the call back over to Yves Cormier for any closing remarks.

Thank you, operator. This concludes today's Q&A session. Should you have any remaining questions, please get in touch with the Investor Relations team. On behalf of Lars and Duncan, I would like to thank you for your attention. Thanks again, and have a good day.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Ladies and gentlemen, my name is David Herzog, and I am the Chair of the Board of Directors of Aegon Limited. On behalf of Aegon, I welcome you to Aegon's 2026 Annual General Meeting of Shareholders. I hereby open the meeting. I'm pleased to welcome our shareholders participating in this meeting today.

Let me introduce the people present with me here at the table. Mark Ellman, Chair of the Compensation and Human Resource Committee; Lard Friese, Executive Director and CEO; Duncan Russell, our Chief Financial Officer; and Bieke Debruyne, Company Secretary. The other members of the Board of Directors as well as Director nominee, Ms. Leni Boeren are present here as well.

Also present here today, Onno Van Klinken, our General Counsel; Yves Cormier, Head of Investor Relations; and [Sonya Natia], the principal representative of the company. I hereby appoint Bieke as Secretary of this general meeting. She will keep minutes of today's meeting. Before we continue, I would like to make a few remarks. Shareholders who have been registered through the e-voting portal prior to the start of the meeting and who are participating in a virtual manner have been directed automatically to the Lumi environment, in which they can vote and ask questions. To accommodate live voting and keeping in mind a short delay in the live stream, the voting is now open and will remain open until the last voting item on the agenda.

Voting results will be shown at the end of the meeting. To ensure a constructive dialogue with all our shareholders, we have enabled a chat function as well as a live video connection in the Lumi environment. I have appointed our Head of Investor Relations, Yves, to moderate the questions that will come through the Lumi system.

Shareholders who wish to ask their questions through the video connection during the meeting will be directed to the meeting by an operator. I hereby establish the following. This meeting was convened in accordance with Aegon's bylaws and the Companies Act of Bermuda and the legislation that is applicable in connection with Aegon's Dutch and U.S. listings.

The attendance list for this meeting is currently being drawn up. We'll come back to that in a few moments. I wish you all a good and interesting meeting. We will now move to agenda Item 2, the annual report and annual accounts for 2025. Lard, our CEO, will give a presentation on the course of business in 2025, including the financial results. The company's 2025 annual accounts have been approved by the Board of Directors and are presented here for information. Lard, the floor is yours.

And share the next step in our transformation. And while 2025 was a strong year, our focus is on what comes next. 2025 was a year where we did what we said we would do. We met or exceeded just over EUR 500 million worth of share buybacks, plus around EUR 600 million of dividends.

And as announced at our Capital Markets Day in December 2025, we are entering the next chapter in Aegon's transformation. We want to become a leading U.S. life insurance and retirement group. And to enable that ambition, we are relocating our head office and legal seat to the United States.

At the Capital Markets Day in December and as part of our sharpened U.S. focus, we also announced a strategic review of Aegon U.K. to determine the best long-term ownership for this business. That review has since been concluded and has resulted in the recently announced sale of Aegon U.K. to Standard Life plc for a total consideration of GBP 750 million and 181.1 million shares in Standard Life at the time amounting to GBP 2 billion.

Now let's turn to our results. In 2025, we delivered on our strategy and commitments, meeting or outperforming all the financial targets set for the year. We generated EUR 1.3 billion of operating capital ahead of our target of around EUR 1.2 billion. We delivered EUR 829 million of free cash flow, consistent with our target of around EUR 800 million. And we have grown dividend per share by double digits to the target level of EUR 0.40 per share.

We also kept the group leverage stable at our target level of EUR 5 billion. We reduced capital employed in our low-return financial assets in the U.S. and put more behind our strategic businesses with higher returns, which has resulted in a material improvement of Transamerica's profile since 2020. 2/3 of our capital in the United States is now employed in our strategic assets.

At the holding, we ended the year with EUR 1.3 billion of cash capital. Given our ambition to bring the level of cash capital to around EUR 1 billion by the end of the year, we have announced a new share buyback program of EUR 400 million, evenly split between the first and the second half of 2026. Furthermore, our operating result increased to EUR 1.7 billion, reflecting, amongst other things, business growth across all units.

Now those are solid results, and this clearly shows we're upgrading the quality of the business. What matters most is what sits beneath the numbers. The business is becoming more predictable and more focused, more discipline in how we allocate capital, and that discipline is translating into commercial momentum across our business units.

So let me show you what that looks like in practice. In the Americas, we're building real momentum. We are growing our strategic assets, expanding distribution through World Financial Group, now close to 96,000 licensed agents and other distribution channels while lifting productivity across the board.

The result, new life sales up 30% -- we also recorded strong written sales in our retirement business. And as you know, that is a leading indicator for future performance. At the same time, we're reshaping our balance sheet by reducing the capital employed by the financial assets, and we are ahead of target, in part through management actions as the reinsurance transaction announced at our Capital Markets Day in 2025. We're seeing that momentum beyond the U.S. as well. In 2025, we delivered robust results across our other businesses.

Our international businesses continue to perform well, leveraging their strong local partnerships. And our asset management business delivered solid net third-party inflows. At our Capital Markets Day in 2025, we also presented our plans to further strengthen and improve the profitability of our asset manager.

Now let me turn to our purpose, which guides how we grow and how we do business. At its core, it's simple. We aim to help people make better decisions about their future. This guides us in how we serve customers, how we design products and how we expand access, especially in the United States, where the need is clear.

As a provider of protection, retirement and investment solutions, we act as responsible stewards, managing risk, allocating capital with discipline and keeping the broader environment in mind. Over the past year, we have made our sustainability approach more data-driven and more focused. In 2025, we completed a new double materiality assessment required by the EU reporting standards. This helps us identify the topics that matter most to stakeholders and to our long-term performance.

For us, those material topics are customers, business conduct, human capital and climate change. In addition, financial empowerment emerged as a material topic directly linking our societal impact to our purpose and our products. Lastly, we're seeing external recognition for our approach. In 2025, MSCI awarded Aegon its highest ESG rating, AAA.

And that greater transparency also contributed to our inclusion in the S&P Sustainability Yearbook 2026 and in the FTSE for Good Index. Before discussing the next frontier, let's take a step back briefly and see how far we've reshaped Aegon since 2020.

Today, we are a more focused and stronger group with a strong U.S. core and selective international partnership, a global asset manager and TLB. In addition, we also have important minority stakes in a.s.r. and once the divestment of Aegon has closed, also in Standard Life in the U.K. We have delivered on our strategy and improved the performance of the group, and that sets up the decision I'm going to talk about next. Relocating our corporate head office and our legal seat to the United States to align our structure with where we do most of our business. Since the a.s.r. transaction closed and our legal seat move to Bermuda in 2023, we have taken the time to assess our strategic options. And the conclusion is clear.

Our future is in the United States. The U.S. is the largest and most dynamic life insurance market in the world. It is where around 70% of our operations are today, and we are well positioned to capture significant growth opportunities in life, protection and retirement solution.

Now this is not just about geography. It's a strategic step to align our structure where most of our business is. And it supports our ambition to build a bigger, broader and more profitable U.S. life insurance and retirement leader. We see the opportunity, and we have what it takes to capture it. The foundations, the execution muscle, the talent and the financial flexibility.

And as we take this step, we will continue our journey under the trusted Transamerica brand once the redomiciliation is completed. Now I recognize that this is an identity-defining decision. Aegon has strong Dutch roots and 180-year history. But our business today is U.S.-led. This move allows us to put our leadership and our resources where the business is while maintaining our international insurance and asset management businesses.

Our largest stockholder, the Vereniging Aegon considers the move an important and positive step for Aegon as is showcased by the recently announced agreement with the association on its future structure as well as their support for a proposed new governance structure for Aegon aimed at aligning Aegon's governance with U.S. market standards.

David will address this topic in some more detail as these proposals are for an extraordinary general meeting to be held later this year and not part of today's agenda. Now let's move from the why to the how, the road map, the milestones, the timing.

We expect the relocation process to be completed at the beginning of 2028 with a number of clear milestones along the way. We are already making good progress and remain on schedule. U.S. GAAP accounting implementation remains the largest product -- project on our radar, and we have significant resources working on this. From an operational perspective, we are formulating granular plans to gradually shift tasks from Amsterdam to the U.S. in a controlled manner. Our employees are key in this, and I'm extremely impressed by the professionality with which they are contributing to this complex process.

The Board and myself wish to express our sincere gratitude to our wonderful staff. From where we stand now, we will engage with our shareholders ahead of the Extraordinary General Meeting of Stockholders later this year. From there, we will continue to implement U.S. GAAP with the aim of reporting on that basis for the full year 2027.

At the same time, we will effectively transition the headquarters to the U.S. so that we are ready to complete the relocation around January 1, 2028. At that point, the holding company will be renamed Transamerica Inc. We will be subject to U.S. insurance supervision and report under U.S. GAAP.

We will become a U.S. tax resident, all while maintaining dual listings on Euronext and the New York Stock Exchange with shares trading on both exchanges and aiming for inclusion in U.S.-focused indices in due course. This is a significant step and the logical next step, reflecting where the majority of the business of the group already is today. We will manage it with transparency and discipline, and we will keep you updated as we progress. Let me close with 3 takeaways.

The first, 2025 was a year of delivery on strategy, our commitments, results and capital discipline. Second, we're seeing momentum in the business, led by the U.S. Third, we're taking the next step in our transformation, our planned relocation of our head office and legal seat to the United States with a clear time line and clear milestones.

We will execute with discipline, keep you informed as we progress and continue to deliver for customers, colleagues and you, our stockholders.

Thank you for your continued trust. We look forward to engaging with you at the EGM later this year. And with that, I'll hand back to you, David.

Thank you, Lard. Before taking your questions, let me outline for you what you can expect between now and the EGM later this year. This slide provides an update on the steps taken since the announcement of our redomiciliation to the U.S. on December 10 and the path towards the EGM expected in the fourth quarter of this year. Since that announcement, the Board has undertaken a structured and rigorous process, including development of U.S.-aligned governance.

A key milestone in this process was the press release published on May 28. In this release, we announced an agreement with the association Aegon on the future relationship and presented a proposed U.S.-aligned governance framework designed to support our ambition to become a leading U.S. life insurance and retirement group.

We encourage shareholders to review this announcement, and we look forward to engaging with shareholders on this governance proposal in the coming months. At the EGM later this year, shareholders will be asked to vote on 2 agenda items.

First, the approval of the redomiciliation to the United States, including the future governance framework post redomiciliation and the interim governance arrangements for the period between the EGM and the completion of the redomiciliation. If shareholders approve these proposals, the common shares B will be converted. The second item for approval at the EGM will be the approval of a new Omnibus share plan. This plan is part of a transition and intended to attract, retain and incentivize key executives and nonexecutive directors and support the establishment of the company's headquarters in the United States and its full transition to U.S. issuer.

Finally, engagement with shareholders is a key priority with multiple possibilities for engagements heading up to the EGM. We look forward to a constructive dialogue with our shareholders, obtaining your support for what we believe is a balanced and well-considered proposal supporting the company's next phase.

Our IR team remains fully available to answer questions and to facilitate additional meetings with interested shareholders. Before we address your questions, I would like to inform you that today's attendance list meeting is ready.

Based on the attendance list, I hereby establish that 68% of the issued and outstanding capital is present or represented at the meeting, and thus, the quorum requirements have been fulfilled and that we can proceed with the meeting.

Now we will address your questions regarding agenda items 2.1 and 2.2. Tom de Kuijper, partner with independent auditor, EY, is available to answer any questions you may have regarding the audit of the 2025 financial statements and services provided by EY. Shareholders participating virtually can either enter their questions in the chat function or they can choose to ask their questions through the live video connection. The operator will be available to assist you.

Please note, this might take a couple of seconds. Before we start, may I please remind you that the questions should be related to the agenda item. I now invite shareholders to ask their questions, please make sure you state your name clearly for the minutes. Moderator, are there any questions from shareholders via the chat or the video connection? Okay. Thank you. We do have a question. No. Okay. Thank you. We now move to agenda Item 2.3. Mark Ellman, the Chair of the Compensation and Human Resource Committee, will present the 2025 remuneration report. Mark, please go ahead.

Thank you, David. Ladies and gentlemen, before we ask you to cast your advisory vote on the 2025 remuneration report, I would like to share a summary of what was disclosed in the 2025 report and answer your questions. The report included 4 sections, which described our business and remuneration highlights, our approach for the general population for the nonexecutive directors and for the Executive Director.

We will first look at the remuneration of the nonexecutive directors. For 2025, the cash and share retainers for the different Board and committee memberships remain the same as for 2024, and there were no deviations from the policy during 2025. Where required, Aegon paid the employer social security contributions in relation to these Board retainers, which are disclosed above its benefits.

Before we saw -- because we saw 2 Board members leaving during 2025 and 3 new Board members joining, the total remuneration for our nonexecutive directors increased from approximately EUR 1.8 million in 2024 to EUR 1.9 million in 2025. Turning to the CEO's remuneration, Mr. Friese's target compensation package for 2025 also remained the same as for 2024. He was allocated EUR 1.365 million in base salary and EUR 3.5 million in total compensation without deviations from the policy. This included a short-term incentive of EUR 1,869,000, which was 137% of target on a performance scale with 100% as target and 200% as maximum. This outcome was mostly driven by the above-target results on the financial performance metrics and a maximum result on the weighted average carbon intensity reduction metric.

The 2025 remuneration amount did not include the open cycle long-term incentive for 2025 to 2027 yet as the performance period is still ongoing. Looking at the current performance year, Mr. Friese's 2026 compensation package was increased to the market median of Aegon's global peer group, and that's consistent with directors' remuneration policy.

The increase consists of 2 changes. Mr. Friese's base salary was increased with 8% to EUR 1,474,000 as part of the annual salary review. The last change to his base salary was 2 years ago in January of 2024. And his target long-term incentive, or LTI, was increased from 175% to 250%.

This change was made after consultation of stakeholders and compensation consultants to reflect the change in the scope and complexity of Mr. Friese's role because of Aegon's strategic announcement to become a leading U.S. life and retirement group and move its headquarters -- its head office and legal seat to the U.S. I want to elaborate a little more on the change in scope and the Board's consideration on this topic. This decision to proceed with the preparation for the redomiciliation on top of managing the normal course of business has led to a material increase in both the scope and complexity of Mr. Friese's role as CEO.

Following from this increase in scope and complexity, the Board determined it would be appropriate to bring Mr. Friese's remuneration up to the median of our peer group, consistent with the directors' remuneration policy and as originally intended in 2024.

To be clear, the long-term incentive is performance-based and further strengthens the alignment of the CEO's compensation with the long-term company shareholder and stakeholder interests.

And note, no changes were made to the peer group. Lastly, we disclosed the at-target grant levels of the 3 open cycle long-term incentive plans, of which the first vesting is expected in 2027. Back to you, David.

Thank you, Mark. We will now address the questions regarding agenda Item 2.3. Moderator, are there any questions from shareholders via the chat or video connection? Okay. Hearing none. Let's move on to the next agenda item.

Let me briefly explain how you can vote. Item 2.3 is an advisory vote. The voting app displays the following options: for, against or withheld. After you vote, the display will show your vote.

If you want to change your vote, you can do so until the voting is closed. The voting results will be shown at the end of the meeting before any other business. We have now moved to agenda item 2.4, the approval of the final dividend. Let's go ahead and -- is it related to 2.3? Well, then let's take the question now.

[indiscernible] in the Netherlands. My question relates to agenda Item 2.2, and I understood that it's still possible to ask my questions.

Please do.

They relate to the sustainability strategy of Aegon. Thank you for the opportunity to ask them virtually. So my first question is that in your 2025 annual report, you state that sustainability remains very important also when Aegon relocates to the U.S. Can you explain how the planned relocation would affect your sustainability oversight?

And how will you ensure consistency in your ambitions, reporting quality and governance across jurisdictions? And secondly, you're a member of several frameworks and international collaborations, including the Net Zero Asset Owner Alliance.

Can you confirm that you will indeed stay a member of these organizations as this would give us some comfort that sustainability ambitions will remain intact? My second topic that I would like to ask about is your climate change target.

You've shown very strong progress in the 2030 climate targets. You have clear net zero ambitions for 2050. Several targets were already met or you're ahead of schedule. How will you ensure that your targets remain sufficiently ambitious? And do you consider expanding their scope to additional asset classes?

And the third topic that I would like to ask you about is your customer strategy. You focus on Main Street America. These are middle-income households and SMEs that are often underserved in terms of financial advice and retirement preparedness.

We recognize this is a good commercial opportunity. It's also an area where you can contribute to improving financial resilience.

You have identified financial empowerment as a sustainability topic currently without a dedicated KPI or differentiation across customer groups. So I have 2 questions. Do you plan to develop such a KPI focusing on financial resilience for middle-income households?

And secondly, do you plan also to reach more financially vulnerable customers? And for that segment, do you see any risk when it comes to product complexity, limited financial literacy or misselling? And how is that being addressed? Thank you very much for your attention.

Thank you for your questions. Lard, please?

Yes. Thank you, David, and thank you very much for being at this meeting again. It's good to see you again. The -- let me take them one by one. So as you've asked them, does sustainability remain important to Aegon? The answer is yes.

As a provider of protection, retirement and investment solutions, we recognize responsibility to address issues that affect a broader range of stakeholders and influence the future of society, the environment and our business performance. And that is also in line with our purpose, helping people live their best lives.

So yes, sustainability remains important to us. And we will continue to monitor the developments in all geographies where we operate and aim to create genuine value through clear, attainable sustainability goals and an evidence-based transparent and data-driven approach to sustainability. Now pertaining to the question -- the sub-question to the reporting quality, et cetera. As long as Aegon is listed in the European Union or has a significant presence, Aegon will be subject to CSRD and ESRS and published CSRD compliant annual reports. We intend to continue to report according to the CSRD requirements and obviously follow the standards and the guidance in the current form until any future changes are implemented as you probably know that this is highly debated in the European Union itself.

Our overall commitment remains to create long-term value for the company and our stakeholders while contributing to a more sustainable future in line with our purpose of helping people live their best lives and to be a fair and inclusive company where our employees can thrive and build business value.

When it comes to your second question, that has to do with the targets that we indeed have set out and regularly, by the way, review and update. We believe that our targets are ambitious yet realistic. They reflect the markets in which we operate, and they get us where we want to go in terms of Paris aligned reductions.

Our priority in the coming years will be to maintain the achieved reductions while the company focuses on delivering the new strategy communicated at the Capital Markets Day. We are considering the phase-in as per your question, the phase-in of additional asset classes, which may impact potential future updates to the company-wide emission reduction targets.

And examples of that would be commercial mortgage loans, private credit, private debt and other asset classes. And we are reviewing that as we speak. Then your third question pertained to financial empowerment. For Aegon, financial empowerment is central. Without the ability to plan, to ensure and invest with confidence, opportunities can remain out of reach for customers.

And by offering solutions to customers that support financial security and flexibility, we help people make choices that fit their circumstances. In the U.S., Transamerica continued to expand access to protection and retirement solutions for middle-income families.

Transamerica's distribution network, World Financial Group grew to over 95,000 agents, helping more people in Canada and the U.S. gain access to affordable protection, guidance and tools to build financial resilience. In Brazil, our joint venture, MAG Seguros launched an initiative to provide life insurance to the country's 18 million residents of the Favelas. Those are often people for whom insurance has not often been an option. The opportunity identified for financial empowerment is highlighted by widespread gaps in protection, emergency savings and retirement readiness in Aegon's core market.

68 million households, for instance, in the United States. This signals a meaningful opportunity that we aim to realize through increasing our market share and by growing the customer base of middle market families as well as medium-sized companies, by the way, where employees work to make sure that they also have access to appropriate planning for retirement.

So we are taking financial empowerment very seriously. We have a lot of tools, availability, access that we offer to customers. The specific program I mentioned in Brazil and the Favelas is a very important example of that.

But also, we're simplifying our product offering also to simplify the issue, meaning that you can have with very few questions through an automated underwriting process, have access to simple products. And this all helps and all the toolkits that we offer help people to become financially more empowered. So with that, I would like to give back to you. Mr. Chairman?

Yes, we have one more question.

Good morning to all of you. Gerben Everts representing the Dutch Shareholder Association. Many thanks for the presentation, Mr. Herzog and Mr. Friese. Aegon presents the redomiciliation to the U.S. as a way to align the company more closely with U.S. life insurers. And my question is, -- what concrete improvement in capital market positioning does the Board expect? What operational improvements are still needed for Transamerica to be generally comparable with U.S. peers? And how will Aegon measure whether this improved positioning has actually been achieved?

Well, then another question, if I may. With the redomiciliation, some historic ties are cut, for instance, at Eastern part with, as mentioned, the Vereniging Aegon. I understand that we'll have an extraordinary AGM on this, but please allow me to raise one more general question here now. How does retaining Vereniging Aegon Americas as a large shareholder with an approximately 18.4% stake fit with the ambition to make Aegon simpler, more simple and more American?

And how will Aegon prevent this position from being seen as a protective structure that conflicts with -- potentially conflicts with the desired U.S. capital market positioning? And does Aegon see the Vereniging Aegon Americas as a temporary transition structure that eventually would be wound down or a permanent shareholder that will remain part of the Aegon Transamerica structure in the longer term.

I have a few more questions, but please, I hold it here. And if you have more time, please give me the floor again.

Okay. Thank you very much. Lard, would you like to...

I can...

Comment, please. Thank you.

So Mr. Everts very nice to see you again. Thank you very much for being here. Let me start with the association Aegon. As mentioned by my Chairman earlier in the conversation today, we announced a couple of weeks ago, 2 weeks ago, a change in our relationship with the association Aegon.

And while there's many components to it, there are, I think, a couple of things that are pertaining to directly to your question. The first one is the protective element of it. Actually, what we have announced is that the association in the context of an agreement, which has many, many components and under the condition that our stockholders at the AGM would agree with the new bylaws would relinquish its shares B. which are the core component of their protective structure today in combination with the bylaws, voting requirements and thresholds of 2/3 majority.

I mean the combination of both would cease to exist at the time that the bylaws that we propose to our stockholders are going to be agreed at the EGM, and we'll discuss that at that point in time. So that's number one.

Number two, this makes sure -- this actually ensures that the association as a whole becomes a common stockholder, a normal common stockholder like any common stockholder in the company. However, they -- and they own roughly 18%. So they're a large stockholder. But they're a normal stockholder if this all is completed.

And that is something that in the U.S. is actually not particularly new. I mean there are many companies that have large anchor stockholders in the United States, not only in general in the United States, but also in our industry. So having a large normal common stockholder that has a large stake in the company, in this case, 18% roughly is actually not particularly different. And as a result, basically provides the normal anchor shareholder, if you will, stability for the company moving forward. So for all the remaining details around this, indeed, we will discuss that at the EGM at the right point in time, but I just wanted to make sure that those 2 points came across to you.

Then going back to your first question. Transamerica, over the last 6 years, we've done a lot of work to make Transamerica a very strong and well-positioned company. And if you look at the numbers, so the way the company has developed its operating earnings, its capital position, its commercial momentum, its market position, you will see that step by step over the last 6 years, this has materially improved. And if you look at the last year in 2026, you saw that they were firing on all cylinders.

What are the key tenets and foundational elements of success of Transamerica, which are the key launchpad for us moving forward in the U.S. Number one, it's access to an underserved group of customers in the United States, 68 million households, middle market America, average families, average Americans. The market there is underserved because most of the financial services industry has really focused for decades on the high net worth individuals. That is not the case here. We are really focused on American families, and we have access. We have access through one of the second largest distribution platform in the U.S. with 95,000-plus agents, and that is quite unique, a unique capability. In addition to that, we have a big manufacturing capability of life insurance products, a full range of them, annuity products and a retirement business that is very well positioned also in the middle market of the U.S.

We have improved materially our service levels. We have improved our technology platforms materially. And I recall the questions you asked last year on this. If you go back, you see that all those investments that we did because those have been quite material investments have overall improved materially the company's profile.

Final point, we made a clear distinction between what we call financial assets. Those are blocks of business that are low returning, and we aim to decrease the capital employed and shrink those businesses and then reallocate capital to strategic assets that are high returning and that we've done that over the last 6 years. And if you look at the profile today, the more than the majority of capital is now employed in strategic assets, which are higher returning. And as a result, we see that the company is very well positioned to be the -- well, to be the foundation of the future success of the company.

There is one follow-up question.

Yes, there was one final point Mr. Everts. What is needed more for the future? What is needed more for the future is that we aim to shrink those financial asset books and the capital employed in it more.

We have a target for that of EUR 2.1 billion capital employed at the end of 2027. We are on our way. We are slightly ahead, but there's more work to be done there. And obviously, we will continue to launch new products, continue to build our distribution to make the commercial momentum even stronger and more pronounced than it is today.

Thank you, Lard. Yes, you said you had a follow-up question. Thank you.

Yes, please. Many thanks, Mr. Friese, for answering my question and full support for the strategic direction. You referred to the underserved customers. So that coincides with the World Financial Group. Then I have one follow-up question and also the technology platform and maybe if time allow some other questions on other topics as well.

But here to chip in on your response, within the World Financial Group, agents can earn more compensation, not only by selling products themselves, but also by recruiting new agents, building teams, receiving compensation linked to sales generated by agents below them in the network.

So -- how does Aegon assess the risk that these incentive structures shift the focus towards recruitment, team growth, sales pressure rather than suitable customer advice. And I'm sure that you want to provide suitable customer advice to the clients of Transamerica. So what controls are in place to ensure that customer interest remains the priority? And how does Aegon check whether the WFG agents provide customers with sufficient explanation about the operation, cost deductions, risks of more complex products, for instance, indexed universal life. So that is a follow-up question. And one more on the technology platform, you referred to that. So then, of course, the word artificial intelligence pops up. That's the big game changer also in the insurance industry. So where does the Board believe Transamerica still lags U.S. peers technologically?

And what investments are needed to close that gap? And does Aegon have sufficient skill, data, investment capacity to implement AI effectively? And is there a risk that larger U.S. competitors can move faster? So those are follow-up questions. And if time allows, I have some other questions on the U.K., on the financial assets and also on the remuneration, the follow-up topic.

Okay. Lard, please.

Thank you very much, David. Yes, Mr.Everts. So let's continue indeed the dialogue. On the large network of agents. I think a couple of points are, I think, important to get across to you. The first one is that actually the agents don't make a lot of money on recruiting. So they -- if agents are recruited, they need to pay a small amount of money, and that is used to embark them on the platform and to make sure they have access to training manuals and they can actually become licensed. So it's more of a -- it's, I think, something like -- a little bit more than $100, $150, I thought, that is to get trained. So it's not that World Financial Group, our distribution company makes money on recruiting.

The money is being made by advice and the resulting sales that are conducted. And then, of course, commissions are being paid, and that's the source of income for the agents. So that's how it works. We have a number of controls in place. First of all, I'd like to point out that World Financial Group, so the distribution company -- they do not only sell Transamerica products.

It's an open architecture network where also we work with many other insurance companies. Compliance rules exist in the U.S. to ensure that the products, but also the sales processes are compliant.

And one piece of comfort you can take from the model in itself is that you have multiple eyes looking at this, not only our company, but also the other insurance companies that work with this network. That's number one. Number two, all these agents are licensed. And those licenses, depending on what kind of products they offer, they can have insurance licenses. But if they also advise on investment products, they need to have licenses of -- from the SEC, or security licenses. Those are very tightly controlled by regulators. And that's another, I think, measure that's important.

The third measure that I think is an important thing to understand, and it's very different than in Europe, is that the products need to be approved by each regulator in each state. So the product is approved by each regulator in each state. Number three, the materials that are being used by the agents for the needs-based analysis that they do, but also the product materials, they can only use product materials that are approved.

Now in the agency network, we work with 75 languages. So there is a prolific training in that, but also the use of the materials is prescribed on what they're allowed to use and whatnot. We have -- on top of all this, we have compliance procedures in place.

Those compliance procedures are in systems that the agents use to ensure they use the right documentation and that there is also verification that the documentation has been received by the customer before they are being paid. So there's a lot of checks and balances in place to ensure that this happens. The -- in addition to all that, we have another layer of, let's say, compliance rules and checks and balances that we do. And those are mystery shopping that we do by outside consultants to ensure that the sales practices and the advice practices are suitable and well done.

But there's also a reality here. This is a 95,000, 96,000 people organization. So your response to those people that are not observing to the right practices needs to be zero tolerance, and we have a zero tolerance response, meaning that if people do not comply, they're out, and that's how we operate this. So this is just to give you a bit of a feel of all the compliance around this.

Then your next question is about artificial intelligence technology. We can spend days on this, by the way, it's a fascinating topic. Artificial intelligence is, as we all know, technology that is in great -- is moving and changing with great pace. And as a result, what have we done as a company to deal with this and to capture the benefits, the opportunities, but also to protect ourselves of the threat of this new technology. A couple of things. First of all, we created an infrastructure where the tooling, the AI tooling for the various parts of the company can be used in a safe environment so that our customer data is always safe. And that environment is the first thing that we built. The second thing is our approach to it. Some companies focus on 1 or 2 AI tooling providers. We do not do that. And why not?

Because we don't believe that we can, at this point in time, judge who the winners will be. Will it be Anthropic, Will it be OpenAI? Will it be something else or that we just need to be able to work with many different vendors to make sure that we can use the AI tooling that we really require per use case. and that's the environment that we created. That's number one. Number two, adoption.

We've done a lot of adoption work to ensure we still do that to train our people in the use of AI tooling. Number three, we have, as an example of that, launched a Wharton design special program. Wharton is a highly reputed business school in the U.S., where our top 100 leadership has been trained to think about how to manage agentic processes and how to develop them and how to reinvent a lot of your processes.

We have a lot of use cases, and we'll not bother you with all of them, but we do from Brazil to the U.S. to Spain and Portugal, where we use artificial intelligence capabilities in distribution. We use it in underwriting. We use it in claims management, and we use it in call centers and in many other areas. And this is something that we spend a lot of time on in the Board meetings. We always do use cases of those to make sure that this technology is followed very closely.

There are also, of course, concerns around this technology, particularly around cyber risks. And we have spent a lot of time over the last years to build a very solid and secure cyber risk environment, where, of course, with the ascent of this technology, we are stepping up our game and also stepping up our entire response mechanism that we have around cybersecurity.

So I would say -- we're all learning every day in this technology. I'm not pretending that we are ahead of the competition. I think everybody is trying to learn, accelerate, adapt, use it, work with it and make sure that our customers have a better service, a swifter service and a more bespoke service for them.

Thank you, Lard.

If I may Mr. Friese, yes, your answers are giving more information to shareholders, which is very good. And also, I think the takeaway some questions we have, and it confirms that you're on the right track. And if there's no one else in the queue, I'd like to raise a few more questions. Is that okay?

Yes, please do. Thank you.

Yes. Okay. On financial assets derisking on the U.K. -- the sale of Aegon U.K. For the reinsurance of the old SGUL portfolio, Aegon transferred approximately EUR 800 million of capital to the Americas. My question is, how does Aegon assess the balance between this capital injection and the benefits of the transaction for shareholders? And when should it become clear that this investment has actually created value and which risks remain with Aegon after the reinsurance. So what cost losses, additional capital injections does Aegon still expect in further reducing old portfolios and risk?

And when does Aegon consider the runoff of these old risk to be sufficiently completed? And should this largely be done before the legal seat and head office are moved to the United States. So that is the question -- the questions we have on the derisking of the portfolio.

On Aegon U.K., if I may, the question is why did Aegon choose the consideration that consists to a large extent of Standard Life shares rather than a larger cash component? And does Aegon view then 15.3% stake as a temporary financial interest?

And what is the intended exit strategy for Aegon? So those are the questions I'd like to raise. And if then time allows, I have a question on the remuneration and also for the auditor because Mr. Duncan Russell is, of course, not present for the sake of it. So he deserves a question as well.

Thank you. And he is available for a question, so we'll be sure to tee him up. So first, Duncan, the first question on SGUL.

We announced in December a reinsurance transaction on a legacy life insurance block, which you refer to as SGUL. That transaction, if you recall at the time, was executed at a price fairly consistent with our view of the risks of what we would call the economic price, which we measured versus the valuation equity of the group.

So we took a small charge against the transaction, which indicated that the price we achieved on derisking that portfolio was consistent with our view of the best estimate of that portfolio. However, there have been some legacy funding of that block of business in the U.S., and that required a capital injection, as you pointed out, of roughly EUR 800 million, which we put into the company in the fourth quarter.

When we assess that transaction, we compared it against our alternatives, most notably returning that GBP 800 million to shareholders in the form of additional buybacks. And also, we compared it to the funding cost of the GBP 800 million, which, if you recall, we monetized a portion of our shares in a.s.r to pay for the deal.

And on that basis, we concluded that the return we will make on that transaction via additional free cash flow coming out of Transamerica was just superior than the dividend we were receiving on a.s.r. -- and also on the improvement in free cash flow per share we would have achieved had we bought back stock.

In terms of the pathway forward, we have a target for 2027. We were slightly ahead of our target as of 2025. We will continue to take action in the coming 2 years to hit the 2027 target, which could be a range of what we call unilateral action, which we can do ourselves, bilateral action, which requires some sort of engagement with the customer or further transactions.

If we do further transactions, again, we will assess it on exactly the same basis, which is that we would expect the return on investment to be higher than the alternatives of most notably a share buyback.

Okay. Thank you. Lard for U.K.

Thank you. So we launched a strategic review of our ownership in the U.K. business in the context of the decision that we communicated in December to move the group to the U.S. and to focus our ambition on becoming a leader in the U.S. life insurance and retirement market.

The key objective of performing a strategic review in the U.K. was to assess, number one, whether we were the best long-term owner of that business in the U.K.; and two, the best way to create long-term value for our stockholders. So we ran a process. We had a lot of discussions with a lot of different people.

And as a result, we landed on the deal that we announced, which is a deal with Standard Life, where we combine our business with Standard Life and the consideration for this is a cash consideration of GBP 750 million and then 181.1 million shares. At that time of the announcement, the total value was GBP 2 billion. But if you look at the share price today of the stake that we will have in the company, it's gone up since the announcement. So actually, it's closer to GBP 2.2 billion right now. Now we are familiar with that structure, as you well know. with a.s.r we have seen how much value was created if you combine a company that you know very well with another company that you have board seats and that as a result, to protect the stake and as a result, that the synergy extraction that comes in the consolidation through in the years of implementation that stockholders can contribute -- our stockholders can benefit from that.

Now in the U.K., there are also consolidation dynamics. So this deal structure that we have in the U.K., which is just the result of the process that we run, that deal structure will also allow our stockholders to benefit from this in-market consolidation move and the synergies that will be extracted by Standard Life over time.

We also have a Board seat that we right for a Board seat in this transaction as well. The size of the stake is 15.3%. We need to close it first. So we will only get the stake at the time of closing, which we expect to be at the end of this year.

And yes, from that point onwards, we need to see how the synergies will be extracted over time. When it comes to how much -- how do we think about owning these stakes? And as we have said, we're taking the same view here as we have with the a.s.r. stake, which is that we will only consider monetizing the stake if we believe that the intrinsic value of the combined company is appropriately reflected in the stock price or if we have another opportunity to allocate that capital embedded in the stake and put it to work in an accretive manner.

Now for Standard Life, there is a lockup that we agreed with them. And the lockup is agreed as follows: that, first of all, we need to close the transaction. But as that moment of closing, it's a lockup of 18 months or the earlier moment for 18 months that we move our company to the U.S.

So it's the earlier of 18 months after closing or a move of our legal seat to the United States. I hope this helps.

That certainly helps. Perhaps a very quick follow-up question. The impact of the sale of the U.K. on the earnings per share, that is something that the shareholders would like to hear. And at the announcement, it was mentioned that the transaction was expected to reduce the group solvency ratio by 5%. Is that a structural impact? Or will it be a temporary impact?

Duncan, please?

That's a structural impact from the disposal of the U.K. business. And then on the earnings per share will partly depend on what we do with the proceeds, which as you recall, we intend to use for a combination of debt reduction and share buybacks.

Okay. Thank you. There are no other -- none in the queue -- because -- then I'd like to raise a question. I have a question for the auditor. If I may?

Please do. Yes, please proceed.

Okay. So -- and it's a logic component of all the decisions you need to make to you step from IFRS to U.S. GAAP. We understand that, but it has an impact, of course, also for the audit. So my question to Mr. de Kuijper of EY. Which of Aegon's key value drivers could become less visible or presented differently and the U.S. GAAP compared to the IFRS? And what can we expect to receive there and hear there and read there as our shareholders?

And how does EY view the magnitude of the negative impact of the EUR 550 million from changed nonfinancial assumptions? And does EY see this as a normal update of insurance assumptions or does the size indicate that investors should be extra alert on the sensitivity of Aegon's results to manage assumptions?

And the third question for the auditor. What additional disclosures does EY believe are needed to prevent investors from misreading Aegon's underlying performance during the transition period because that's, of course, always where we need to be more cautious?

Okay. Tom, are you available?

I am available, David. And Gerben, good to see you again. Maybe first question on U.S. GAAP versus IFRS. U.S. GAAP is a very different framework than IFRS, of course. I do like to mention that LDTI or the targeted improvements that basically was implemented in the U.S. does, in my view, at least, give you also sufficient insights in the performance of the type of products that Aegon sells. So I don't believe that there are specific values that are differently hidden, let's say, once the company moves to U.S. So maybe to start with, but they are very different frameworks. You cannot compare -- and there is -- there were attempts to basically convert the 2 standards but that didn't happen. So but I don't think you can compare those 2, Gerben.

Secondly, maybe on the assumptions. Assumptions of -- is of course, as you can also read our opinion critical for our audit and our employee experts, actuarial experts actually that assist me in the evaluation of the assumptions that the company applies. But also we look at the controls that the company has put in place over the assumption setting process and the controls are highly effective and I don't think that the assumption change is in the normal course of the business and doesn't worry -- warrant any additional attention of the shareholders.

And then your last question, Gerben, you need to help me. I failed to [ write ] it down so quickly. So what was your first question, Gerben?

Yes. This -- you have the transition period. So what additional disclosures the U.S. and auditor believe are needed to prevent investors from misreading the underlying performance of Aegon during the transition period?

I think IFRS is a very capable framework. And I think the disclosures as they are sufficient, and I don't think you need additional disclosures as an investor to understand their journey. And I think as pointed out earlier in the presentation of Lard, the company will provide updates along the way in relation to the journey to the U.S.

I hope I answered your questions, Gerben. Back to you, David.

Yes, it certainly does. I understand you as an auditor, you have to audit, but as a recommendation from our part in a transition from IFRS to U.S. GAAP and vice versa, not that often, but it happens as well. It's always good to keep an extra keen eye on that not all shareholders can interpret the differences between the 2 large building blocks in terms of financial reporting. So a bit more explanation about how to interpret might be helpful, but from the CFO perspective of Aegon or then from the auditor perspective. So -- yes, help the interpretation -- that will help the interpretation of the shareholders a lot.

Duncan, please, respond.

There will be no deterioration in the insight we provide on the business during the transition period or once we're in the U.S. either. And on the transition from IFRS to U.S. GAAP, we are working on U.S. GAAP now. So there's no explanation to provide because we haven't provided any numbers on U.S. GAAP yet. Once we have those numbers during the course of 2027, we do intend to hold an investor update. And there, we will, for sure, help investors to understand the movement from one accounting standard to the other.

That is much appreciated. Many thanks. That will end my questions on agenda 2.2, but 2.3 was already -- had already started. I have just a very short question on that, if I may.

Please proceed.

Yes. The remuneration report, for shareholders, at least in the Netherlands, is common saying that you have to spend money to make money. Hence, my question. Why was a transition expense metric chosen -- I hear an echo for that. 2026, 2028, LTI that mainly measures cost control rather than also including a measure on the returns of value creation from the redomiciliation.

And the second question, how will Aegon prevent management from being rewarded for executing the move with within budget? Well, it has not yet been established, whether the redomiciliation also creates value for investors because -- like I said, you have to make money as well. And we like, of course, to see that reflected in the LTI considerations as well.

Okay. Thank you. Lard, please.

Thank you for that question. So you're right, we moved to -- from 2 metrics in the LTI, which were total shareholder return and return on regulatory capital, we felt it was critical to have a metric that measured our progress along the way to what is obviously the most important strategic decision we've taken.

And so we did spend a lot of time looking at what are the options. And I think you correctly identified this measure could sets an item that is something we can measure. It's something we can control. But we also recognize that we could result in behavior in order to make that metric work. So we are monitoring that. We are briefed on it.

Many of the other metrics we considered also had, for example, timing metrics, also had risks of -- that we wanted to mitigate. So we have extensive reviews on a regular basis. We have risk overseeing and reviewing the progress.

In terms of the creation of shareholder value, obviously, that's all of what we want to accomplish. And clearly, the TSR element will continue to measure that and -- but to measure an additional valuation measure over and above that, we felt it was more important that we actually had something we could monitor, track and have risk review in order to measure our progress to this very important goal.

All right. Thank you very much. We greatly appreciate your engagement with us here today.

We will now move to agenda Item 2.4, the approval of the final dividend for 2025. This is a voting item. As indicated in the 2025 annual report, we propose a final dividend of EUR 0.21 per common share and EUR 0.00525 per common share B. If approved and in combination with the interim dividend paid over the first half of 2025, Aegon's total dividend over 2025 will amount to EUR 0.40 per common share and EUR 0.01 per common B.

We'll now address your questions with regard to Item 2.4. Moderator, are there any questions from shareholders via the chat or video connection on this agenda item?

Okay. There are no questions. Thank you.

Let's move to the next topic. We will now move to agenda Item 3.1, the proposal to appoint EY as independent auditor for the annual accounts of 2027. In accordance with the Bermudian legislation, the accountant must be reappointed annually. We ask shareholders today to reappoint EY as the auditor for the 2027 annual accounts. Are there any questions from our shareholders on this topic?

Okay. Thank you. We will now move on to agenda Item 4, the composition of the Board of Directors. Let me first address all proposals under this agenda item before taking your questions. We propose that Lard Friese's term as Executive Director be extended until the end of the AGM to be held in 2030. This will provide leadership continuity as the company relocates to the U.S. and implements its ambition to become a leading U.S. life insurance and retirement group. More information about Lard is available in the agenda in Annex 1. To allow for the proposed extension of Lard's term, it is proposed to alter bye-law 21.2. The proposed alteration can be found in the Annex 2 to the agenda. We ask the AGM to -- the proposal to alter bye-law 21.2, and the extension of the term of Lard as Executive Director until the end of the AGM in 2030.

We will now move to agenda Item 4.2. We propose to elect Ms. Leni Boeren as Non-Executive Director of the Board of Directors for a term of 4 years until the end of the AGM to be held in 2030. More information about Leni is available in the agenda in Annex 3.

We will now address your questions with respect to these proposals. Moderator, are there any questions from shareholders via the chat or video connection?

Okay. One moment, we have a question coming in.

Yes. Gerben Everts from the Dutch Shareholders Association. A question on the change of the bye-law. It's kind of an exceptional issue on the agenda. So the question is, why is it necessary to extend Mr. Friese's term to 2030 now rather than reassessing his performance and the progress on the U.S. repositioning in 2028 when his current term lapses?

And second question was the extension to 2030 a precondition for retaining Mr. Friese? We like him as a CEO, but you could have waited maybe. But was it precondition? And are additional arrangements made on remuneration, retention departure. Any response to that would be appreciated.

Okay. Thank you. I'll take the first couple of questions. Mark, you can comment on any compensation related part of the question. The Board -- well, first of all, with the bye-law change in order to extend his term, it was necessary to alter the bye-law. So the two go hand-in-hand. And so the primary consideration here is continuity of leadership. And the company is undertaking a very complex but yet very important evolution. And to do that, we believe that the Board that it was necessary and it was appropriate to provide for that continuity and that continuity starts with Lard.

He has shown great vision and great execution skill and we think it's vitally important that he remain in that job, and it is -- it will be a complex job, not just till '28 at the redomiciliation but beyond that. And so the work to be done now as he assembles the team and moves the team from Amsterdam to the United States, having that singular continuity of leadership was vitally important.

So Mark, do you want to comment on any question, any compensation related part of that?

So going forward, the 2024 directors' remuneration policy remains in effect. We are not -- at this AGM, we are not addressing that. At the EGM, as David and Lard has said, we will continue with the process and we'll ask the EGM to make some additional byelaw changes, and as we said before, adopt an Omnibus share plan, which is very customary in the U.S. But no changes have been decided today. If there are changes in the future, we will disclose those appropriately. David?

One question on the last remark. Is any outreach done to shareholders on those in the preparation of the EGM, and in other words, we would certainly like to be included and we understand that it's going to be a U.S. firm. So the Dutch culture will change a bit, but I think it's good not to have any surprises at the EGM. And to reach out to shareholders in advance might be helpful from both angles.

I'll jump in, but you can finish. We would like no surprises as well. We would certainly reach out -- expect shareholder engagement. We would -- this will be totally transparent in the lead up to the EGM.

I completely agree with that, and we look forward to engaging with all of our shareholders on this very, very important undertaking that the company is going through. So we will be available, as I said earlier, our Investor Relations team will be available, and we will make ourselves available to shareholders that want to talk about all of the important aspects to this. So thank you. We really appreciate that question. That's terrific.

Okay. Thank you very much for that question.

We're going to now move to agenda Item 5. The exclusion of preemptive rights and the acquisition of shares. Let me briefly cover all 3 proposals in Item 5 before taking your questions. We propose that shareholders authorize the Board of Directors to restrict or exclude preemptive rights in connection with the issuance of common shares of less than 10% of the company's issued share capital as described in the agenda. Upon adoption, this resolution will replace the authorization granted at the 2025 AGM. The proposed authorization will allow the Board of Directors to be flexible and to react quickly to circumstances that require the issuance of common shares.

Now we'll move to agenda Item 5.2. We propose that shareholders authorize the Board of Directors to restrict or exclude preemptive rights in connection with the rights issue in excess of 10% of the company's issued share capital as described in the agenda. Upon adoption, this resolution will replace the authorization granted at the 2025 AGM. The proposed authorization will allow the Board of Directors to be flexible and to react quickly to circumstances that require the issuance of common shares.

The Board will only use its authority for such issuance to protect the company in exceptional circumstances of financial distress. And lastly, we propose that shareholders authorize the Board of Directors to acquire shares in the company. The number of shares that may be so acquired will not exceed 10% of Aegon's issued share capital at the time the authorization is used.

Common shares and common shares B may only be acquired at a price not higher than 10% above the actual market value of the shares immediately prior to the acquisition and provided that the number of shares Aegon may at any time hold in its capital may not exceed 10% of its issued share capital at the time the authorization is used. Upon adoption, this resolution will replace the authorization granted at the 2025 AGM.

We will now address questions for agenda Items 5.1, 5.2 and 5.3. Are there any questions from shareholders via the chat or video connection?

There are no questions. Thank you.

Item 5 was the last voting item on the agenda. Within a few moments we will close the live voting. Please submit your votes and do that now if you haven't already done so.

[Voting]

The voting is now closed. Within a few moments, we will show the voting results for the agenda items.

On your screen, you now see the voting results for each agenda item. I establish that the meeting has granted an advisory vote in favor of the remuneration report for 2025 and approve the final dividend for 2025. I further establish that the meeting has appointed EY as the independent auditor for the annual accounts of 2027. I establish that the meeting has approved the alteration of bye-law 21.2, and the extension of large term as Executive Director of the Board of Directors until the end of the AGM of 2030.

I further establish that the meeting has elected Leni as Non-Executive Director of Aegon's Board of Directors until the end of the AGM in 2030. Lastly, I establish that the meeting has authorized the Board of Directors to restrict or exclude preemptive rights in connection with the issuance of common shares and to acquire shares in the company.

We now move to agenda Item 6, any other business. Before we come to the conclusion of the meeting, I would like to ask if there are any other business to be brought before the meeting.

If there are no further topics to be addressed, we will move to close the meeting.

I would like to congratulate Leni for her election to the Board of Directors. Congratulations and welcome. We look forward to your participation. I would also like to congratulate Lard on the extension of his term. The Board has full confidence that you, together with the executive committee and your colleagues across the company, will continue to execute Aegon's strategy with discipline, consistency and pace, creating sustainable long-term value for all stakeholders.

And the last note before we officially close the meeting, I would like to thank both Karen and Corien for their valuable insights that many important contributions over the past years and for their commitment to Aegon. We wish you both all the best for the future.

Ladies and gentlemen, this concludes Aegon's 2026 Annual General Meeting of Shareholders. On behalf of the Board of Directors, I would like to thank you very much for your attendance and your continued support. I now close the meeting.

Good day, and thank you for standing by. Welcome to Aegon's Second Half 2025 Results Conference Call. [Operator Instructions] Please note that today's conference is being recorded.

I would now like to hand the conference over to your speaker, Yves Cormier, Head of Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. I would like to welcome you to this conference call on Aegon's second half year 2025 results. My name is Yves Cormier, Head of Investor Relations. Joining me today to take you through our progress are Aegon's CEO, Lard Friese; and CFO, Duncan Russell.

Before we start, I would like to ask you to review our disclaimer on forward-looking statements, which you can find at the end of the presentation.

And with that, I would like to give the floor to Lard.

Thank you, Yves. Good morning, everyone. I will start today's presentation by running you through our strategic developments and commercial performance in 2025 before Duncan will go through the results in more detail.

So let me start with Slide #2 with the key messages for the year. Our results over 2025 demonstrate the strength of our strategy and our ability to consistently deliver upon our ambitions. We have either met or outperformed all our financial targets for 2025. Operating capital generation before holding and funding expenses increased year-over-year to EUR 1.3 billion ahead of target. Our operating results increased by 15% compared with 2024 to EUR 1.7 billion. This increase reflected business growth across all units, stable market impacts, and improved experience variances in the Americas and international businesses.

Free cash flow for the full year 2025 was at EUR 829 million, consistent with our target. On the back of our strong capital position and financial performance, we proposed a final dividend of EUR 0.21 per common share, resulting in a full year 2025 dividend of EUR 0.40 per share, in line with our target and up 14% from EUR 0.35 per share over 2024. Furthermore, we executed EUR 400 million of share buybacks in the second half of 2025. And we are currently executing the first half of our new EUR 400 million buyback program for 2026, as announced at our Capital Markets Day in 2025.

Commercial momentum remains strong in 2025. In our U.S. strategic assets, we continue to grow WFG as well as our new life sales and our retirement plan assets. At the same time, we continue to reduce our exposure to financial assets. The capital employed in this segment was $2.7 billion at year-end, ahead of our target. We also reported solid results in our other business units in 2025. Our asset manager delivered net third-party inflows. Our U.K. workplace platform generated healthy net inflows. And our international business continued to perform well.

Finally, we are making progress with the preparations for our proposed relocation to the U.S. as announced at the Capital Markets Day. U.S. GAAP implementation is still at an early stage, but is progressing as planned.

I'm now turning to Slide 3 to run through the commercial performance of the Americas in more detail. As we discussed at our 2025 Capital Markets Day, progress in the Americas remains strong. Starting with World Financial Group, we remain on track to grow the number of licensed agents to around 110,000 in 2027. As of year-end 2025, the number of licensed agents amounted to nearly 96,000, an 11% increase on the previous year.

Initiatives to improve agent productivity have led to a higher number of producing agents. In addition, producing agents also sold a higher average number of policies at a higher average premium per policy sold. As a result, new life sales increased by 10% compared with 2024, while sales of annuities increased by 6%. The productivity gains in WFG were one of the key drivers of the 30% increase in new life sales in our Individual Life business.

We also recorded strong new life sales of the final expense product that we offer in the instant decision market through a fully digital underwriting platform. Furthermore, we continue to successfully grow our RILA sales. We achieved a 45% increase in indexed annuity net deposits in 2025, thanks to higher gross deposits from further improvements in wholesale distribution productivity.

In the Savings & Investments segment, the midsized retirement plans business reported net inflows in 2025 on the back of our strong positioning in the pooled plan space and supported by a large takeover deposit earlier in the year. The level of written sales remains solid, which should support gross deposits going forward. We also generated further growth in both general accounts stable value and individual retirement accounts as we work to increase profitability and diversify revenue streams of the retirement plans business.

I'm now moving to Slide 4 for an update on our other businesses. At Aegon U.K., we continue to be well positioned in the Workplace Platform business. Net deposits during 2025 were driven by both the onboarding of new schemes and members and regular contributions from existing schemes. For the Adviser Platform business, net outflows in 2025 reflected ongoing consolidation and vertical integration in non-target adviser segments. As announced at our 2025 Capital Markets Day, the strategic review of the Aegon U.K. is ongoing.

In our International segment, new sales continued to contribute to the growth of the book in 2025. Our joint venture in Brazil reported higher new life sales, particularly in credit life products as did our activities in Spain and Portugal. In China, new life sales were negatively impacted by changes to product pricing to reflect the new pricing regulations and the current economic environment.

Aegon Asset Management generated positive third-party net deposits during the year in both global platforms and strategic partnership businesses, although at a lower level than last year. In global platforms, net deposits were mostly driven by fixed income products and more than offset outflows from the SGUL reinsurance transaction that we did last year. In strategic partnerships, net deposits were driven by our Chinese joint venture, AIFMC. We are implementing the plan for asset management as presented at the 2025 Capital Markets Day. For instance, we recently expanded our CLO warehouse capacity in the U.S. and Europe in line with our ambition to grow our higher revenue margin third-party business.

Before handing over to Duncan, I would like to take a step back and reflect on the outcome of the plan we presented at the 2023 Capital Markets Day using Slide #5. First, as I mentioned, we either met or exceeded our financial targets in terms of operating capital generation, free cash flow, dividend and leverage. Second, at the same time, we have significantly transformed our business. We finished the year ahead of our target in terms of capital employed for the financial assets at $2.7 billion, and our U.S. strategic assets now significantly outweigh our U.S. financial assets, both in terms of CSM and capital employed. This is quite a remarkable shift.

These are not only great achievements, but they also lay strong foundations for the next steps of our journey as we relocate to the United States while continuing to increase the profitability of the group and return capital to stockholders. I am very proud of all our colleagues across our businesses for contributing to our success. Well done, everyone.

I will now hand over to Duncan to discuss our financial performance in more detail. Duncan, over to you.

Thank you, Lard. I will zoom in on our second half 2025 results, starting on Slide 7. The operating results increased by 11% year-on-year to EUR 858 million, with all of our businesses delivering higher figures. Operating capital generation increased by 8% with strong figures from Transamerica. Free cash flow in the second half of 2025 amounted to EUR 388 million, and we received remittances from all units. Cash capital at holding decreased to EUR 1.3 billion at the end of 2025, mostly because of capital distributions to shareholders in the form of dividend payments and share buybacks.

Valuation equity per share increased by EUR 0.60 with a positive contribution from both shareholders' equity and the CSM balance after tax. Gross financial leverage was stable at EUR 4.9 billion. Finally, the group solvency ratio remains robust at 184%. As announced in May last year, the eligibility of the perpetual cumulative subordinated bonds in our capital stack ended as of January 1, 2026. These bonds contributed 7 percentage points to the group solvency ratio as of December 31, 2025.

Now using Slide 8, I will address the development of our operating results in the second half of 2025. Starting with the U.S., the operating result increased by 5% in euros or 14% in U.S. dollars, thanks to a combination of growth and more favorable variances. The operating results of strategic assets increased by 10% in local currency and benefited from business growth, notably in the individual life and retirement plan businesses, partially offset by a lower operating margin in the Distribution segment.

In financial assets, the operating result increased because of more favorable experience variances compared to the second half of 2024. On the other units, the operating results of the U.K. increased, benefiting from business growth and favorable markets, which led to both a higher CSM release and increasing non-insurance revenues in the second half. In the International segment, the increase of the operating result was also driven by business growth and a one-time item in China. Furthermore, the results from China benefited from a true-up related to the local implementation of IFRS 17, which is booked in the second half.

Aegon Asset Management's operating results improved in the global platforms business mostly from the impact of favorable markets on revenues and from an improved operating margin. Looking forward, as mentioned at our recent Capital Markets Day, over the 2026 to '27 period, we aim to grow the operating result of the group by around 5% per year from the EUR 1.5 billion to EUR 1.7 billion in run rate in 2025, taking into account an assumed euro-dollar exchange rate of 1.20.

I now turn to Slide 9. Here you see our IFRS net results for the second half of 2025. Non-operating items were unfavorable in the period and were largely driven by realized losses on assets transferred in the context of the SGUL reinsurance transaction. These realized losses were taken in the P&L, were fully offset in other comprehensive income and therefore, had no impact on the development of shareholders' equity. Net impairments reflect an ECL reserve increase from new investment purchases as well as a small number of downgrades and defaults of bond investments. Fair value items were negative mostly from revaluations of solvency hedges in the U.K. and other charges were mostly driven by various items in the U.S. and U.K. and partially offset by the positive result from the stake in ASR.

I am now on Slide 10. In the second half of the year, our shareholders' equity grew by 2%, and our CSM balance increased by 4% over the same period. The increase in the CSM was largely from business growth in the U.S. strategic assets, which saw a 24% increase in CSM in the second half, thanks to profitable new business, favorable assumption changes and experience variances.

The CSM of our financial assets decreased due to the runoff of the book as well as the impact of the SGUL reinsurance transaction. These developments mean that the CSM balance of our strategic assets now accounts for 57% of total Americas CSM. Outside the U.S., the changes to the total CSM balance were limited. Overall, valuation equity per share, which represents shareholders' equity plus net of tax CSM increased by 7 percentage points over the second half of 2025 to EUR 9.06 per share.

Moving now to Slide 11. OCG before holding, funding and operating expenses increased by 8% compared with the second half of 2024. OCG from the U.S. increased by 19% or 27% in U.S. dollars over the same period with a higher contribution from both the strategic and financial assets. Mortality and morbidity claims experience was favorable in the second half of 2025, while it was unfavorable in the prior year period. OCG benefited also from a favorable release of required capital from the investment portfolio actions and a reduction in short-term financing. This was partly offset by a higher new business strain from growing our strategic assets.

Adjusting for favorable items, the U.S. OCG in the second half of 2025 fell within the guidance of $200 million to $240 million per quarter. In the U.K., OCG decreased mostly because the second half of 2024 includes some favorable items, while the International segment reported lower OCG. At Aegon Asset Management, OCG increased due to favorable markets and an improved operating margin compared to the prior year period. Holding, funding and operating expenses were largely unchanged year-over-year at EUR 142 million, bringing the total for full year 2025 to EUR 295 million. As a result, OCG after holding, funding and operating expenses for the full year 2025 amounted to EUR 992 million.

I'm now turning to Slide 12. The capital positions of our business units remain strong and well above their respective operating levels. The U.S. RBC ratio increased by 4 percentage points compared to June 2025 to 424%. The increase was driven by OCG from the operating entities applying the RBC framework. This is partly offset by remittances to the holding. One-time items and management actions negatively impacted the RBC ratio by 3 percentage points during the period. The negative impact on the RBC ratio of the SGUL reinsurance transaction was offset by capital investment into Transamerica from the group.

Market movements had a limited impact. In the U.K., the solvency ratio of Scottish Equitable decreased by 2 percentage points to 183%. Operating capital generation in the period was offset by remittances to the holding and investments in the business. Market movements here also had a limited impact.

On Slide 13, you see that cash capital at holding has come down in the second half of 2025 to EUR 1.3 billion. This development is consistent with our aim to reach the midpoint of the operating range for cash capital at holding around EUR 1.0 billion by the end of 2026.

Free cash flow amounted to EUR 388 million in the period and included remittances from all our units as well as dividends received from our stake in ASR. For full year 2025, free cash flow amounted to EUR 829 million, consistent with our target of around EUR 800 million for the year. We returned nearly EUR 1 billion of capital to our shareholders through dividends and share buybacks in this period.

Consequently, our share count ended 2025, 5% lower than at the start of the year. Capital injections into the businesses amounted to EUR 751 million and mostly related to the investment in Transamerica to offset the impact of the SGUL reinsurance transaction. This was funded by the disposal of part of our ASR stake, 12.5 million shares, as indicated at our Capital Markets Day. The remainder mostly related to investments in our international investment management businesses and in Aegon Asset Management.

We have already launched a share buyback for the first half of 2026, totaling EUR 227 million and expect this to be completed on or before June 30, barring unforeseen circumstances. This share buyback covers both the first half of EUR 400 million program for 2026 announced at the Capital Markets Day and EUR 27 million related to share-based compensation plans. After completing this first part, we expect to launch the second half of the EUR 400 million program.

I am now moving to my final slide, #14. To conclude, the results over the second half of 2025 were strong, and we are confident we are well positioned to meet our growth ambitions for 2026 and 2027. As discussed at our 2025 Capital Markets Day, the next time we present our results will be in August with the first half figures. We will also move the timing of our results conference call to 2:00 p.m. Central European Time to accommodate U.S.-based investors.

With that, I would now like to open the call for questions. Please limit yourself to 2 questions per person. Operator, please open the Q&A session.

[Operator Instructions] And our first question today comes from the line of Farooq Hanif From JPMorgan.

My first question is on the operating profit in the second half of the year, which was kind of at the upper end of your guidance range. Having looked at the detail and discussed with the IR team, it feels like it's a reasonably clean number. But obviously, it's towards the upper end. So I'm just wondering about the sustainability of that, given the growth in CSM, the strategic assets that you talked about. So if you could comment on that, that would be helpful.

And my second question is on, I mean, the ASR stake. I know you've been reluctant to really give much update on it in the past. But I was just wondering, sort of philosophically, is this something that you would want to or could or would be happy to own once redomicile to the U.S.? And to what extent do the proposed tax legislation in the Netherlands impact your decision around that?

Thanks, Farooq. Duncan, can you take both?

Sure. Farooq, you're right, the second half operating result was, once you adjust for favorable or unfavorable items, I think, is a reasonable representation of the underlying figure. It benefited obviously from strong markets, which we saw in the second half of the year. But it leaves us in a good place with our ambition to hit the targets we outlined at the Capital Markets Day in December.

On ASR, no change there. So that's a shareholding which we're happy with. We've given guidance in the past that there are 2 reasons we would sell that. One is that we feel that it hits intrinsic value and/or we have an alternative use of the capital. Our redomiciliation to the U.S. has no impact on our ownership there.

What about the tax, is that something you've considered?

Again, I think, at the Capital Markets Day, I said that I didn't see tax having an influence on our ownership position with ASR.

Your next question comes from the line of David Barma from Bank of America.

Firstly, on OCG, which is tracking towards the bottom end of your quarterly run rate in Q4. What conditions do you need to see for you to be closer to the top besides currency movements? And in particular, on new business strain, which was particularly strong or high in Q4, what kind of strain are you expecting for the coming years?

And then secondly, on WFG, results came down in 2025. I'm looking at the first profits here. And if I look at agent productivity or cost income, they both seem to have deteriorated in the period. So are you able to give some color, please, on the trends there? And maybe if you can quantify the investment program that I think is going on at WFG in '25?

On the first question, on OCG, you know, we had a very strong quarter in OCG. Our reported OCG was actually very healthy. We highlighted three things in there, which supported it in the fourth quarter. The first was, we had positive mortality and morbidity variances. As you know, that can move around quarter-on-quarter, but this quarter, it was pretty favorable. Secondly, we had high new business strain versus the guidance we gave during 2025, and that reflects that we had a very strong commercial performance on the life insurance side.

And then thirdly, we had a high release of required capital, which was high versus prior quarters. Although if you look at our history there over the last 2 years, you do see that can move around quite a bit, and does tend to spike in the second quarter and the fourth quarter as that's the quarter we paid dividends out of Transamerica. So net-net, it was a strong quarter.

Once you adjust for all of these favorable items and also take into account FX, we think we were at the bottom end of the kind of underlying run rate. And if you go back to our Capital Markets guidance, which we gave in December, we feel in a good place with achieving that for 2026 and 2027.

So on WFG, we have a lower margin on the back of very strong sales growth and also productivity growth. So there's more producing agents producing also higher premium per policy sales. But the reason why the operating result is lower than last year is that we're investing in the business in a number of areas. It's in leadership and governance of the company as a whole because the company is growing quite a lot, don't forget that, from 56,000 agents a number of years ago to 96,000 now.

Also, technology initiatives to strengthen the sales process, a lot of training that we did to improve productivity and making more agents that are licensed producing quicker and compliance and field support for the growing number of agents. So that's the reason -- that's the investments that we are having in the business. Duncan?

And maybe just to add on that. So if you go back to the Capital Markets Day, we flagged that we saw our strategic assets in the U.S. growing by around 10% per annum over the coming years. For Distribution segment, we flagged also that we expected the operating margin to remain at the lower end and the growth in the profits to be mostly driven by revenue growth.

Your next question today comes from the line of Farquhar Murray from Autonomous.

Just 2 questions, if I may. Firstly, on the legal settlement. So I suspect in terms of magnitude, the most we're going to get is that it's part of the $230 million of charges in the U.S., which I can understand. But maybe you could give us some color on those cases where this settlement takes us in terms of the uncertainties around that and maybe what's the process for finalizing this?

And then secondly, on the U.K. strategic review, if this ultimately does come to a sale towards the summer, could I ask how you will approach any decision between cash and equity within the offers made around it? And is there any preference or what are the criteria and considerations from your side?

Farquhar, this is Lard, I'll do both. So let's start with the legal settlements. They are pertaining to 2 cases, which we settled. The detail of that, it's quite technical. So I will refer to a page, which is Page #269, 2-6-9, of the annual report. It's the first 2 paragraphs under the section proceedings in which Aegon is involved. And if you read those 2 sections, you will find those are the 2 cases that we're talking about here. They are indeed included in the other charges of USD 230 million, as you pointed out yourself. So they're included in that alongside other items in that bucket.

As pertaining to the process, we settled those cases, they now need to be approved by the courts, and that's a process that will take a bit longer. Then when it comes to the U.K. review, we have launched it, as you know, at the Capital Markets Day on the 10th of December. It's early days, so we will not give any comments on this until such time as we have an update for you. We expect that update to happen somewhere before the summer, let's say. That's what we aim to do.

[Operator Instructions] And our next question today comes from the line of Michael Huttner from Berenberg.

I had 2 questions. One, in the past, Duncan, you've given us the kind of waterfall to the underlying OCG. I just wondered if you could do that, for my benefit, I imagine my competitors are much more shrewder than I am, but that would be really, really helpful for the year.

And then the second question, which kind of relates to it, but maybe a bit differently. I'm always obsessed by mortality, and there's that lovely Munich Re update, I think, this week on GLP-1s and stuff. Can you talk a little bit about the improvement in mortality you've seen? So year-on-year, the variance is better, but is there any trends here we should be thinking about?

Michael, thank you. So we think that the clean 4Q OCG was around EUR 294 million for the group compared to the reported OCG of EUR 372 million. And if I break the movement from one to other down, we had a positive impact of around EUR 47 million in the U.S. from favorable items. And within that, there was EUR 36 million attributable to favorable claims experience. The majority of that was mortality, EUR 29 million was mortality, EUR 7 million was morbidity. So that's good.

Against that, we had new business strain, which was EUR 34 million higher than the guidance we gave at the start of 2025, and that's reflecting strong sales. And then against that, we had relatively elevated release of required capital against the guidance we gave at the start of 2025 of around EUR 45 million, and that's reflecting normal ALM activity. And as I noted, we do tend to see that spike a bit in 2Q and 4Q as Transamerica pays dividends.

Then in the other units, we had overall positive favorable items of around EUR 31 million, of which about EUR 20 million was in international, split equally between China and Spain. And then around EUR 7 million in the U.K. and EUR 4 million in Aegon Asset Management.

On mortality, we saw this quarter favorable severity. We saw that particularly in younger ages and very old ages. You know that number can move around in any single quarter, given the size of our book. But if I take a step back and look at our mortality experience since we made the updates, about 1.5 years ago now, we're happy with how it's performing versus our best estimate.

Our next question today comes from the line of Nasib Ahmed from UBS.

First one on financial assets. At the CMD, you did the universal life deal. And it seems like you've got the SPV set up. So are you going to chip further away at the $2.7 billion this year? Do you have anything in the pipeline in terms of reinsurance transactions or anything else? Any more color on that, Duncan, would be appreciated.

And then secondly, I noticed you're focusing a little bit more on IFRS in the presentation slide. You removed the bridge of the OCG where you show the expected in-force and the release of capital. Just wondering why the change? Is it because U.S. GAAP is closer to IFRS? How should we think about U.S. GAAP, is it more closer to OCG or IFRS?

Duncan, 2 questions for our CFO.

So on the reinsurance deal, you're right. In December, we announced at the Capital Markets Day, I think a very innovative transaction on our part, whereby we reinsured a significant part of our secondary guarantee universal life exposure in the U.S., and that brought our required capital down to $2.7 billion.

Actually, if you take a step back and look over the last 4 years, I would argue that we've done a huge amount of management actions across all of our books. And we're actually positioned as one of the more innovative parties in the market with the recent transaction, I think, giving us even more optionality because we've established this reinsurer.

We continue to look for ways to bring down the $2.7 billion to our targets in 2027. That will be done through a range of actions, management actions we can take ourselves, actions which we engage with policyholders on and then also potentially third-party actions. I think the main message I'll give you is that we're confident we can hit our targets. And we've demonstrated, I think, that we are at the forefront of innovation in dealing with these legacy blocks.

On the shift from -- on the emphasis on IFRS, I think we've always placed a great deal of emphasis on IFRS. We've historically run 2 frameworks, OCG and our accounting framework, which is IFRS 17. We are trying to simplify our communication. We took a step of that with the Capital Markets Day, where we have given targets, which I think are simple to understand and simple to track. And so that's how we're going to manage the next 2 years.

You know that we're in the early phases of implementing U.S. GAAP. I'm not going to comment on that on how that's going or what the expected outcome of that is. But over the coming years, we will update the market when we have U.S. GAAP figures and eventually transition our disclosures to that of a normal U.S. company.

[Operator Instructions] And our next question today comes from the line of Farooq Hanif from JPMorgan.

So just following on from Nasib's questions. You mentioned at the CMD that the reserving on a stack basis, you're happy with across most of your books, but LTC is the one that stands out. Is your position still that it's hard to find market deals that economically make sense to you right now? Is that still your position and that you can deal with it kind of internally through your internal management actions on pricing?

And secondly, this is a slightly kind of open-ended question, I guess, but just, I mean, you consistently have lots of positive and negative experience variances on an IFRS basis, for example. And I see quite a lot of assumption changes again in CSM. I'm just kind of wondering to the best of your knowledge, do you feel like you're getting closer to dealing with these variances going forward? Or are there any items we should watch out for going forward in earnings that could still remain volatile under IFRS?

Both questions for you, Duncan?

Okay. On the financial assets, so what we tried to give at the Capital Markets Day was, firstly, a framework whereby we said that we look at third-party transactions on an economic basis, and we referenced our valuation equity and also free cash flow per share, so both cash and economics. So that's the framework when we assess transactions. Second thing we gave was, we stated that our statutory reserving in aggregate for the financial assets was now comparable to on an IFRS basis. But within that, there are obviously blocks which are stronger and blocks which are lower. And we did indeed say that long-term care was lower.

If we look at third-party transactions, actually, I think the binding [ constraint ] is more the economic price. And if you look at long-term care, the reality there is that there are a lot of -- it's a relatively more sensitive block because it's long duration. The peak reserves are not until sometime in 2030. And that makes it a bit more sensitive to various policyholder and behavior assumptions. And therefore, we've so far taken a view that we are the appropriate owner of that block and our approach to managing that liability is through rate increases and other options we give to the policyholder to manage exposure. And I think that's probably the base case for the coming period.

On variances, well, we gave a range of around EUR 100 million within our operating profit, which I think should be enough to cover positive and negative variances in a half year period, both from experience variances and onerous contracts. There will always be variances. This half year, we had positive mortality. We had some negative on premium persistency and expense on onerous contracts. So there will always be a number, and that simply reflects the leverage of the balance sheet to the P&L. But I believe that the operating range we give, which is EUR 100 million range, so plus or minus EUR 50 million should be enough to cover those variances on a go-forward basis.

Your next question today comes from the line of Iain Pearce from BNP Paribas.

Just one. In the presentation, you flagged some impacts from downgrades and defaults. I was just wondering if you could give us any more details on what this relates to, if there's sort of concerns about further downgrades in the investment portfolio? If it has anything to do with any of your private credit holdings as well? And I assume these are U.S. related as well. Just any details on what's driving that because it's not something we've really had flagged before.

I can take that. That's a good question. So as you know, under IFRS, we have the ECL. And if you look in our statistical supplement on Page 15 you'll see the movement in the ECL and there you'll see transfer between stages, which we saw some movement from stage 1 to stage 2 and some movement from stage 2 to stage 3, relatively small. I would say, still fairly benign. And that was across a range of bond holdings we have, ABS holdings we have, et cetera, but still pretty benign, to be honest with you, not a meaningful number yet, but it is something we track. On our asset portfolio, in general, it's performing very well, and you can see that in the movement in the ECL.

And your next question comes from the line of Jason Kalamboussis from ING.

Two quick follow-up questions. The one is in the U.S., plus 14% on local currency is above your -- which you're indicating as guidance. Do you think that this was supported mostly by the stronger markets we saw in the second half? Or do you find that there is a good momentum that could be carried in 2026? And also incidentally, I mean, if you could comment on the fourth quarter, how was it compared to the previous 3 quarters in the U.S. in local currencies?

And the second thing is just for my understanding on the U.K. sale process, I understand that you are not going to comment on it, but I was looking just to understand how it works. So you are looking at bids for the whole of the U.K. But within it, do you also take or do interested parties show an interest for part of it and give a price or they have to actually look at it as one piece. And if you want afterwards to sell it in two different pieces, for example, because you're not happy with the price you get for the whole piece, then they have to resubmit, and you start discussions on that kind of second process. Essentially, is it a 2-stage process? Or is the second one folded partly in the first one. So I would be just interested if you could share any thoughts on this.

Jason, this is Lard. I will do the U.K. piece and then I'll hand over to Duncan for your first question. On the U.K., as I mentioned, the strategic review that we launched pertains to the insurance business and pertains to the platform business. It does not pertain to the asset management office that we have and business that we have in the U.K. So that's something I want to make sure it's clear for everybody. Secondly, it's in the early stages, and we aim to give an update when appropriate, and we hope to do that before the summer of this year.

On the operating profit in the second half, what tends to drive -- or what drove a lot of that growth, Jason, was the variances. So in the second half of 2025 for the U.S. on a U.S. dollar basis, we had a positive experience variance on claims of $129 million linked to mortality and morbidity comment earlier, whereas last year in the second half, that was only $33 million. So there's a big swing from variances, which are always going to occur, but hopefully should be captured in our range.

If we look forward, the guidance we gave at the Capital Markets Day was that we would expect the operating result run rate to grow around 5%, driven by around 10% growth in strategic assets and shrinking profits and financial assets. As you know, the strategic assets profits are driven mostly by CSM progress and then our noninsurance profits. You see that our CSM is progressing really nicely. So our CSM on Protection Solutions ended the year at $4.3 billion and the half year it was $3.6 billion. So good progress there, which I think is supportive of the growth ambitions on the insurance side.

And I just flagged earlier that on distribution, we expect a continued lower margin but good revenue growth. So that should support the overall roughly 10% growth in strategic assets. Against that, the financial assets will continue to run down. You note there that the CSM ended the year at $3.2 billion, began the year at $3.8 billion. So as that runs down, there'll be a lower release from CSM and hence shrinking operating profit over time. And the dynamic of those two things should get you the roughly 5% growth in operating profit.

And the next question comes from the line of Michael Huttner from Berenberg.

It was on the net inflows rather than -- so what I noted from speaking to your excellent IR, but I wanted to have some comments on how you see it developing. In the second half, net outflows in retirement plans in the U.S. was $0.6 billion. I think that's the retirement of baby boomers. I just wondered what the outlook is there?

And then in the U.K., we had GBP 273 million net inflows in H2, which is well below what we had in H1, I think GBP 1.9 billion or something. So I just wondered how you see the run rate here. Then finally, on asset management, EUR 1.3 billion net outflows, I think, again, second half. And I just wondered how you see that developing?

These are different business lines. I will go one by one. First of all, our plan assets in the U.S. have gone up by 13% year-on-year. And the net outflows you're reporting, so the business itself is in very good shape. And especially when you look at the written sales, the new plans, the pool plans that we're getting, actually, the retirement business is doing very well. The outflows are indeed something that is in line with what the market sees overall in the U.S., which is baby boomers taking their -- taking some of their money out. But also given where the stock markets are, people taking a little bit of money out. And that's what you're seeing there. Nothing else driving it.

If you look at the U.K., the outflows we're seeing there is stemming from the same trend that we've been seeing for a longer time, which is a combination of a couple of things. And in the second half, there was one additional thing that I want to mention as well. So first of all, we target, as you know, a target segment of 500 advisers. Beyond that, in the non-target segment, there's quite a lot of vertical consolidation and that drives where people are buying platforms and as a result, move assets away from it. So we've seen that for quite a number of quarters, and that has not changed.

What we also saw in the second half of the year, there was quite some jitters in the U.K. on the budget. It's now settled because the budget is clear. But before that, there were concerns and as a result, clients took some money out because there were rumors that the tax-free pickup of pension money would not be possible anymore. And as a result, that led to a little bit of that. We have good progress actually on the technology improvements that we're making with target advisers providing positive feedback on that. But unfortunately, the commercial result of that is not yet visible.

If you look at the AUM flows, so first of all, third-party flows were up. So they were worse than last than 2024. '24 was a record year, by the way, for that. But they were much lower than 2024, but they were positive. So we have positive flows driven -- so both on global platforms, which is our own platform as the strategic partnerships. And in terms of the outflows, we saw 2 main things happening; one client in the U.S. redeemed from our U.S. high-yield fund; and then we had the ASR, so they had some allocation changes in their general account. And as you know, we have a partnership with them on that. We noticed that in our asset management results. That is what we've been seeing.

However, bottom line is, the retirement business in the U.S. is doing very well as is demonstrated by the set of numbers here. And the U.K., the workplace business is also in a very good place. It may not have been as high as the previous year because that was like a record year. This one is the second best year that we had, so it's still in a very good place. And on the adviser platform, I gave my views. And on AUM in total -- sorry, on asset management in total, we had positive flows, as I mentioned earlier. I also want to point to the margin improvement that we saw, by the way, in the asset manager, it nearly doubled this year to 17%.

And the next question comes from the line of Nasib Ahmed from UBS.

Just one question. Lard, you mentioned the legal proceedings on Page 269. I had a look, and there's a paragraph, the third paragraph, which has been there for a while around distribution. Just wanted to understand what that's related to? Is that WFG related? Or is it something else?

Well, the two that I was referring to are the cases that so one is about -- has to do with an old block of business and bonuses that were paid on that on universal life policies. Again, it's more eloquently described in the first paragraph of that section in Page 269. And the second one had to do with the topic of the MDR, so the monthly deduction rates that were increased. And also that is described more wholesome in Page #269. Those two cases have been settled. That's good news. And now we await the confirmation. Now, then what you're referring to, the third paragraph, they're not WFG related. So the first two cases -- so the cases I mentioned that we settled are not WFG-related.

Sorry, I was asking about the third paragraph where it says, there's some legal action going on around agents that might be considered independent contractors as opposed to employees. So I was asking about that one, whether that's WFG related?

We'll follow up with you on that. But I think you're referring to a case that we mentioned half a year ago, already in our half year disclosure. We'll follow up. IR will give you a ring.

And the next question is a follow-up from Michael Huttner from Berenberg.

Sorry about that. On the number of advisers at WFG, the total number is up, which is wonderful. The dual or the multi-ticket number is up, but it's kind of much slower growth. Can you talk a little bit about that? I think it was a question a couple of years ago, and I think the implication was that it didn't worry you too much, but it's the multiticket is obviously the higher value part, I don't know. Any comment would be helpful.

You may recall in many of the discussions last year that we wanted to improve productivity, right? And I've mentioned in a number of earnings calls that we were running programs to indeed improve that productivity. Now what has happened is that through our training and through our field support, we have been able to make more agents because the agency sales force has grown quite a bit. So the agents that become fully licensed agents, then also need to learn and to get productive and to become sellers. And that's what you're actually seeing in the numbers. We were able to improve the number of producing agents.

Then the second thing that happened is they also sold insurance policies with a higher premium amount. And that also drives the metric of productivity up. That's all good news. So the agency network has become stronger, has become bigger, has become more productive and that bodes well for the future, and we will continue to strengthen the network.

I mentioned that we are doing investments supporting the field force training, all these good things to ensure that, that massive sales force that we have, which is the second largest in the U.S., and that goes to the underserved mainstream American family class and help them with our protection and retirement plans, et cetera. So yes, it's a good progress that we're making there.

Thank you. We have no further questions. I would like to hand the call back over to Yves Cormier for closing remarks.

Thank you, operator. This concludes today's Q&A session. Should you have any remaining questions, please get in touch with us at the Investor Relations team. On behalf of Lard and Duncan, I would like to thank you for your attention. Thanks again, and have a good day.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

All right. Good afternoon, everybody, and welcome to Aegon's 2025 Capital Markets Day. My name is Yves Cormier. I'm the Head of Investor Relations. And on behalf of the entire team, I would like to welcome you today in the room and online.

Our schedule for this afternoon is the following. So first, our CEO, Lard Friese, will present the group strategy, and he will also share the outcome of the review on the potential relocation of the group to the United States. Then our CFO, Duncan Russell, will share with you the details of our financial plans for the coming years. After that, we'll have a first Q&A session with Lard and Duncan. Then we'll have a short break. And then we'll come back to listen to first Will Fuller, CEO of our U.S. business, who will update you on the strategy of Transamerica. And finally, Shawn Johnson, CEO of Aegon Asset Management, who will take you through the Asset Management strategy. And then we'll have a second Q&A session.

Before we start, I would appreciate it if you could take a moment to review our disclaimer on forward-looking statements at the back of the presentation. And with that, over to you, Lard. Thank you.

Yes. So good afternoon here in London. It's great to see all of you here. And hi to everybody, all our colleagues on the webcast and other investors and people who are watching. Good afternoon to all of you as well or good morning or wherever you are. Sorry to dump so much information on you this morning, so early. It's a bit of a long press release, and we have a lot to go through, so I suggest that we dive in immediately.

So fellow stockholders, colleagues, investors and analysts. Today is an important milestone for Aegon. We are announcing a set of coordinated actions that will shape the future of our company. These decisions demonstrate our commitment to progress and our focus on delivering exceptional value to all stakeholders. I look forward to sharing these actions with you and to discuss their significance for Aegon and our stakeholders.

So let me now take you first through the key announcements of today. Our ambition is clear. We want Aegon to become a leading force in the U.S. life insurance and retirement industry. This strategic objective sharpens our focus and supports our continued growth. We are redomiciling our headquarters and legal seat to the U.S., which is a pivotal moment in Aegon's history, and it positions us at the heart of the world's largest insurance market where we already have a strong and growing franchise.

After the re-domiciliation to the U.S. is completed, we will rename the company, the holding company, to Transamerica Incorporated or Transamerica Inc. We have defined Aegon Asset Management strategy, and it is now fully aligned with our U.S. ambitions. Our leading U.S. life insurance and retirement company will be supported by a global Asset Management business. Shawn Johnson, the CEO of Aegon Asset Management, will explain more about this later today.

We will continue to focus on the profitable growth of our international businesses. These are mainly joint ventures with strong local partners that are increasing in value as their growth plans unfold. On Aegon U.K., we are launching today a strategic review to determine how to maximize its value. Every option is under consideration as we pursue optimal outcomes, including a potential divestment.

We are building the foundation to execute Aegon's U.S. strategy via an $800 million investment into Transamerica and a reinsurance transaction to derisk Transamerica's secondary guarantee universal life portfolio, which will reduce capital employed within Financial Assets by USD 300 million. The free cash flow per share will increase post the transaction, both relative to the situation we had pre-a.s.r. disposal and relative to an alternative of using the EUR 700 million to buy back shares. Duncan Russell, our Group CFO, will elaborate on this topic in his presentation later this afternoon.

I'm proud to share that we are achieving all our financial targets for 2025, and we are communicating new financial ambitions today, including a dividend growth of over 5% per annum. This is supported by growth of free cash flow of around 5% per annum and growing OCG of between 0% and 5% per annum. Aegon's operating result is expected to grow by around 5% per annum as well. For the next year, we announced the intention of a new share buyback program of EUR 400 million, EUR 200 million of which will be executed in the first half of the year.

For the onetime implementation of the relocation and the associated introduction of the U.S. GAAP accounting standard, we are setting aside a budget of EUR 350 million over the next 3 years. This investment is a commitment to our future, enabling us to operate with greater agility and comparability to peers. But to appreciate these steps fully, I believe it is important to place them in the recent transformation journey of this 180-year-old company. So let me take you back to -- back to 2020.

Exactly 5 years ago, I stood before you to share my vision for Aegon, its potential, its challenges and its future. At that time, Aegon was a structural underperformer. Our strategy was unclear. Our global presence was sprawled across 20 markets, and we faced significant headwinds, a lack of strategic focus, suboptimal capital allocation, a volatile and leveraged capital position and a culture that was struggling with execution. We recognize the need for change. We set out to transform Aegon into a high-performing group of well-positioned businesses anchored by a solid balance sheet, exceptional customer service and engaged, well-trained employees operating in a select number of markets.

Our transformation plan was bold and decisive. We focused on three core markets: the U.S., the Netherlands and the United Kingdom, alongside three growth markets: Iberia, China and Brazil and our global asset manager. We reallocated capital on a massive scale. We reduced exposure to low-return financial assets, and we increased investments in strategic assets with attractive returns. We acted decisively on subscale businesses or exited those in small markets. We substantially reduced group leverage, lowered our risk profile and built a rock-solid balance sheet. We aligned our organization with our strategy, building an execution muscle through a highly granular operating plan. And we installed and maintained a rational and disciplined decision-making process.

Today, 5 years later, we can proudly say we have delivered or outperformed on all of the targets that we set and communicated at our Capital Markets Days in both 2020 and 2023. Aegon is now a much better performing company. We have wholly owned businesses in the U.S. and in the U.K., joint venture partnerships in Brazil, China and Spain and Portugal, a niche high net worth business in Singapore and Hong Kong, and the global asset manager. In the Netherlands, we contributed our businesses to a.s.r., creating a national champion in which we now hold a 24% stake. Our capital employed in low-returning financial assets has decreased significantly, while our capital employed in strategic assets where we generate attractive returns has increased.

We reduced group leverage from EUR 6 billion to EUR 5 billion. We hold EUR 1.9 billion in Cash Capital at the holding, exceeding the high end of our target range, and we have grown dividend per share by double digits every year. By combining our Dutch business with a.s.r., we have created substantial additional value. We have used proceeds from this transaction to reduce group leverage, strengthen the balance sheet, reduce the share count and participate via our stake in the synergies that are created. The management team at a.s.r. is doing a great job in integrating Aegon's Dutch operations with their business. Since the transaction, our total shareholder return on the stake in the combined company was more than 50%.

With the integration largely complete, I can announce today that I will step down from the Board of a.s.r. as soon as a successor nominated by Aegon is appointed. This will give me the time needed to focus fully on Aegon's further transformation and on our relocation to the U.S. Our business units are structurally well above their operating capital ratios. We are growing where we want to grow, and our overall returns are steadily improving. Over the past 5 years, our businesses have generated a cumulative cash flow net of capital injections of EUR 2.7 billion, and we have earned EUR 3.7 billion proceeds from making our company more focused. We returned the lion's share of this capital to bond and stockholders through leverage reduction, dividends and share buybacks, totaling around EUR 6.1 billion.

We have remained rational and disciplined in all our decision-making, even when the decisions are difficult. We have always put our customers, employees and stockholders first. We have adapted the company to whatever change was required, such as moving the group's legal seat to Bermuda, adopting new governance and working with a new group regulator, the Bermuda Monetary Authority. Now we're ready. We're ready for our next step, our next frontier. Since the closing of the a.s.r. transaction and the subsequent move of the group to Bermuda in 2023, we have taken the time to evaluate our strategic options. And we have concluded that our future of our group is in the United States.

In the world's largest and most dynamic insurance market, we are positioning ourselves to capture significant growth opportunities in life, protection and retirement solutions. This relocation is not just about geography. It's about ambition. We aim to build a bigger, broader and more profitable U.S. life insurance and retirement leader. And we want to enable this ambition by relocating our head office in legal seat to the U.S. as we want to be physically close to our main business. We want to simplify our setup and fully embrace everything we need to do to deliver on that ambition. We see the opportunity. We have the foundations. We have the execution muscle, the talent and the financial flexibility to make it happen.

Once we have established ourselves as a domestic insurer in the U.S., we will continue our journey under the trusted Transamerica brand. We will seek shareholder approval for the domiciliation at an EGM to be organized in the fourth quarter of 2026. Our largest stockholder, the Vereniging Aegon, the Association Aegon, has taken note of the CMD press release this morning and considers the decision to relocate Aegon Limited to the U.S. as an important and positive step for Aegon. Ahead of the EGM, the association will review and constructively consider any forthcoming proposals in relation to the impact on the association of the proposed relocation to the U.S.

Let me now explain the rationale for this decision and then discuss its implications for our company. So why the U.S.? The United States is the most innovative and vibrant economy in the world with structural incentives for economic growth. Through economic cycles, the U.S. economy has consistently proven to be more resilient than others. The U.S. life insurance market is the largest globally and the underlying trends favor our business. People live longer, protection gaps are widening, and there is much more work to be done to help American families prepare for retirement. American families need to save and invest more, not less. Millions of Americans are uninsured or underinsured. More families need financial protection and must ensure financially secure retirement. There is a $7 trillion gap between what Americans have saved for retirement and the amount they will ultimately require. And this presents a significant and compelling opportunity for us. Our customers have a growing and substantial need for financial planning and for advice.

Now with Transamerica, we have a large and attractive business in the U.S., representing around 70% of Aegon's operations. We are a strong life insurance player, a selective annuity provider, a profitable midsized retirement player, and we own the second largest retail distribution force in North America with over 92,000 agents. Transamerica is growing, and we have made substantial progress in decreasing financial assets and increasing capital in strategic assets. We are well positioned to serve an underserved and large segment of the U.S. marketplace, American -- average American families and small- and medium-sized companies. Our broad distribution capability through our own network, WFG, banks, brokerage and third-party channels gives us unique access.

Over the past 5 years, we have built a strong, experienced and execution-focused management team that is delivering on its plans. Will Fuller, the CEO of our North American businesses, will update you today on our organic plans for growth and value creation in the U.S. He will show you that we are on the path to become America's leading Main Street life insurance and retirement company. We are leveraging our strong brand, our unique customer access points and our top-tier distribution network to reach more families and businesses than ever before. In the coming years, we will further develop our distribution engine, grow the network of WFG agents and expand relationships with third-party providers. We have plans to modernize technology enabled by AI to meet evolving customer needs while maintaining a relentless focus on productivity.

Leveraging our modern life operating model, we are expanding our product offering, scaling our franchise and increasing profitability. We will benefit from what we call compounding economics, and we will explain that further, building on our advanced distribution and broad product offering. Our retirement business has good momentum. We are leaders in pooled plans and stable value solutions, and our ancillary product strategy is delivering diversified, sustainable and growing revenue streams. We have taken decisive actions over the past years to reduce exposure to financial assets, including the Secondary Guarantee Universal Life reinsurance transaction announced today, which has significantly lowered risk, freed up capital employed and reduces results volatility. Our disciplined approach to managing legacy blocks ensures we remain resilient and focused on the future.

Now while our focus is on our organic path, we will evaluate inorganic opportunities as they arise while maintaining the financial discipline and rational decision-making that you are used to get from us. The implications of our decision to focus on the U.S. are profound and are touching three key areas. Our portfolio, the organization and setup, and capital management. I will now outline the implications for each area, and I will start with our portfolio. While Transamerica is our core business, we will continue to create value from our other businesses. Aegon Asset Management will outline its strategy in more detail today. It is an attractive, growing medium-sized asset manager with around 70% of its assets generated from third-party mandates and joint ventures in China and France.

We aim to grow Aegon Asset Management size and margins through efficiency measures, growth and a shift in mix to higher revenue margin strategies. This is expected to lead to a growing contribution to the group's operating results and steadily increasing remittances. Our U.K. team has presented its plans to build a leading digital savings and retirement platform in the U.K., and they are making good progress. But as mentioned earlier, we will -- we announced today a strategic review of our U.K. business to determine how we could accelerate to maximize its value. And all options are on the table. Aegon's 24% stake in a.s.r. is a testament to our strategic vision and ability to create and maximize value. We will hold this investment until the share price reflects the intrinsic value of the combined operation or use it as a meaningful part of our financial flexibility when value-creating opportunities present themselves.

Our portfolio of international businesses in Spain, Portugal, Brazil, China and the high-net-worth business, TLB, they are profitable strategic investments that are increasing in value as their growth plans unfold. These businesses, mostly joint ventures with strong local partners, operate in some of the most promising markets in the world. They contribute, as you can see, significantly to our group with steadily growing operating results and remittances. Gross written premiums have grown consistently over the past 5 years. We will continue to support these businesses in their profitable growth plans built on product innovation, customer service and expanding distribution. In Spain, we plan to grow the business, leveraging the large network from Banco Santander, focusing on servicing our customers with excellence and attractive products.

In Brazil, we want to continue our successful growth path as a top 3 independent life insurer. In China, we strengthen and expand our distribution with our preferred partners in this vast market while optimizing and preserving our capital position. At TLB, we are uniquely positioned to serve the high-net-worth community in Asia and the Middle East. We aim for a continuing increase in value of these businesses in the coming years. Let's go to the organization and setup. And let me share with you the organizational implications of the relocation to the U.S. as they are significant and they are identity defining. Aegon has always been an international group with strong Dutch roots deeply ingrained in our 180-year history.’

With the decision we announced today, Aegon fully embraces the reality of its business and prioritizes resources to build a leading franchise in the U.S. When the re-domiciliation process is completed and our legal seat moves to the U.S., Aegon Limited will rename itself to Transamerica Incorporated or Transamerica Inc. and become an American life insurance and retirement group with international insurance and Asset Management subsidiaries. This transition to the U.S. will simplify Aegon's profile and create a leaner, simpler and more focused enterprise.

We will move our head office to the East Coast of the U.S., which is likely to be in New York and Philadelphia, where we already have offices. We expect our legal seat to move to Delaware in 2028. We will be subject to U.S. insurance supervision and become a U.S. tax resident. We will implement U.S. GAAP and aim to report on that basis as of the full year 2027, aligning our disclosures with the U.S. peer companies and facilitating easier comparison. We expect to move to quarterly disclosures as of 2028. To facilitate this process, which will take a lot of work, we will stop trading updates in 2026 and '27, limiting ourselves in this time to comprehensive half year reporting. We will maintain dual listings on Euronext and the New York Stock Exchange with common shares trading at both exchanges and aim for inclusion in U.S.-focused indices.

U.S. investors are already a significant part of our register with 16% of common shares held in the U.S. dollars today and more than 1/3 of our shareholders being based in U.S. Today, around 9% of our outstanding shares are held by U.S. index investors. We are aiming to be included in more U.S.-focused stock indices once we are established as a domestic issuer in the U.S. We anticipate a gradual shift of our investor base to become more U.S. focused, which we expect to be accompanied with an increase in trading volumes in the U.S. over time. The relocation process will take 2 to 3 years with key milestones along the way. And I highlight our plan to call an EGM in the fourth quarter of 2026 to seek shareholder approval for the move to the U.S. We will give you regular updates on the time line on the way.

In the second half of 2027, we plan to be ready to become a domestic issuer. At that time, we also expect to give you an update on our plans and ambitions for 2028 and the years beyond. Our aim is to report the full year 2027 results using the U.S. GAAP accounting standard for the first time. So let's move to capital management. In this transition, our overall approach to capital management will not change. We want our operating companies to be well capitalized and to maintain Cash Capital at the holding at around the midpoint level of the operating range of EUR 1 billion. Any excess capital will be returned to stockholders over time unless we can invest it in value-creating opportunities. This includes M&A with priority in the U.S. We will remain financially disciplined and rational in our decision-making when we assess acquisition opportunities.

Within this policy, we are investing in future earnings power by growing our profitable product portfolio and accepting the capital needs associated with this growth. As such, we will continue to increase capital employed in strategic business lines with attractive returns and reduce capital in low-return financial assets. We will allocate capital to value-accretive opportunities and to initiatives that reduce our cost of capital. As we assume our new identity as a U.S.-based life insurance and retirement group over the next 2 to 3 years, we remain dedicated to our customers, providing the best products and services. We remain committed to rational decision-making, improving and growing our businesses. And we continue to be dedicated to the communities we serve to responsible stewardship of the resources entrusted to us and to maintaining a diverse and healthy workplace where everyone feels valued and can thrive. In the past 5 years, our objective was to focus, simplify and grow, and we delivered.

Now we're moving to the next stage, our new frontier. Our financial ambitions are both bold and purposefully and fully aligned with the transformative strategy we have set in motion. In 2026 and '27, we aim to grow free cash flow and operating results by around 5% per annum and to increase the dividend per share by more than 5% annually. Our focus remains on accelerating profitable growth in our strategic business lines, investing in technology, distribution and product innovation. And as we grow our new sales volumes, we accept a higher new business strain, which is expected to result in 0% to 5% growth of the operating capital generation. These targets reflect our confidence in the strength and resilience of our business as well as our commitment to delivering superior value to our shareholders. And just as before, we will continue to sharpen our focus, to simplify further, to execute relentlessly and to grow. And by doing this, we are convinced that we can continue to deliver superior returns for our customers and for our stockholders.

Now before I close, I would like to use the opportunity to express my sincere gratitude to our staff, and many of you are on the webcast today. You, they make it all happen. And I realize that the announcements of today have impact. But amid all the changes, the transformation of Aegon requires, our customer service levels continue to improve and our employee engagement is strong. So stay with us or join us on Aegon's remarkable journey to become a U.S. life insurer and retirement leader. Thank you.

Good afternoon, everyone. Thank you for joining us today. I will walk you through our financial philosophy, discuss the U.S. financial assets, including the latest transaction announced today, share our financial ambitions and lastly, explain what you can expect from us during the upcoming re-domiciliation. I hope these insights will give you a clear picture of where we stand and where we're headed. And of course, I'll be available at the end for any questions you may have.

Whilst there's no doubt that Aegon is going through a period of significant change, our commitment to value creation for our shareholders remains the same. We have a simple philosophy. We need to earn returns on our capital that adequately compensate us for the risks we take. This is embedded in our pricing, our management actions, our investments in new propositions and of course, in our M&A considerations. And if we cannot deploy capital at attractive risk-adjusted returns, we will return it to our shareholders. This is evidenced by the fact that our share count has fallen from 2,058 million in 2020 to 1,532 million as of today, a 25% drop, while at the same time, improving the level and quality of our capital stack over that time.

With our balance sheet in a good place, we are focused on improving the level and quality of our earnings. And as you know, over recent years, we have strengthened our actuarial assumptions and invested heavily in our business capabilities. We are doing this so as to drive up the sustainability and quality of our earnings power. Today, we confirm our move to the U.S., which will introduce new requirements that we will deliver over the coming 2 to 3 years. This is a significant undertaking for us, and therefore, we will create some operational space by moving to half yearly reporting until U.S. GAAP is introduced with no more quarterly trading updates. In the meantime, we anticipate that our disclosures will be stable, centered on our IFRS earnings and balance sheet and our capital generation and free cash flow.

Finally, on U.S. GAAP, we will not provide commentary on the expected impact until 2027 as we will be in the midst of its design and implementation in the coming 12 months, and therefore, we will not be in a position to provide reliable guidance until that phase is complete. Please bear that in mind also during the Q&A. The next slide will be familiar to many of you. The combination of strongly capitalized units and readily available Cash Capital at the holding is central to our capital management philosophy. This structure gives us the ability to fund growth, execute upon change and withstand stress events and market cycles. As you know, we have an operating range for Cash Capital of EUR 0.5 billion to EUR 1.5 billion and have historically wanted to be at the top end of that range due to the extensive restructuring within our business units. But we plan to bring that down to the EUR 1.0 billion mark or the midpoint by the end of 2026. And later, I will explain exactly how we do that.

Our debt is at a healthy level. Given the announcement today of the U.K. strategic review, I am providing you with an allocation. Approximately EUR 0.7 billion to EUR 1.0 billion is assigned to the U.K. and approximately EUR 1.0 billion to EUR 1.3 billion is assigned to the 24% shareholding in a.s.r., with the remainder allocated to the U.S. And finally, there's no change in our philosophy on our stake in a.s.r. We continue to be a patient shareholder, and the shares provide us with a healthy cash flow to support our own dividend and interest costs. Let's now turn to the next slide.

We know that risk drives our cost of capital. And historically, Aegon's cost of capital has been somewhat elevated. Over the past years, we've strengthened our processes, both in the businesses and between the businesses and the holding company. We will remain vigilant during the coming 2 to 3 years as we execute upon the move to the U.S. On market risk, our general account, which is mostly in the U.S., is diversified and is something we feel comfortable about. Compared to peers, we are overweight investment-grade corporates and treasuries and have lower allocation to structured credit. In terms of our exposures, we have a commercial mortgage lending book, which is around $11 billion in size, but is prudently set from a credit, geographic and refinancing maturity profile. This book is performing well, and we do not have significant refinancing period spikes in the coming years.

Our corporate bond portfolio is $41 billion. And as mentioned, we are more heavily weighted when compared to peers to this form of unsecured credit. Within this, 97% is classified as investment grade. With respect to industry exposures, around 30% is in financials, 60% in industrials and the rest in utilities. We have some non-housing ABS with an exposure of around $7 billion, but this is senior in nature and diversified across collateral types. Finally, we have a small reliance on smaller rating agencies for our processes with 3% of assets using KBRA, DBRS and we have 0 reliance on Egan-Jones.

On biometric risk, over the years, we have been updating actuarial assumptions in order to improve the quality of our balance sheet, in line with our experience. Our mortality tables have been dramatically simplified and our assumptions around mortality improvements are supported by external testing. We closely monitor our actual to expected performance, which since our major mortality update has trended well. We are equally comfortable with our assumptions around long-term care. We made the decision to remove morbidity improvements in 2023. We continue to apply mortality improvement for customers who are not in claim, and we have updated our morbidity incident rates to match recent experience. We also continue to implement actuarially justified rate increases when needed.

Moving on to the next section on financial assets. I'd first like to highlight that this is a large block of business that has some market and actuarial sensitivities. However, it is mature and supported by a rigorous assumption setting process. We expect this block of business to generate positive OCG and positive IFRS operating earnings in the coming years, thereby contributing to the dividend-paying capability of Transamerica. Second, we have announced a clear and ambitious plan to take our capital employed down to $2.2 billion by the end of 2027. We have made very good progress on this, and we will continue to reduce capital employed hand-in-hand with lowering risk sensitivities. And finally, how we look at the financial lens. Well, today, we announced the transaction on our Secondary Guarantee Universal Life block, which I'll explain in more detail in a few minutes. But as we assess third-party transactions, we're looking for two things: the price compared to our valuation equity, which can be seen as our view of the economics and an overall accretion to free cash flow per share.

Let us now look at the financial assets in detail on the next slide. Here, you can see a breakdown of the capital employed, statutory versus IFRS reserves and key risk exposures by segment. My main message is that the level of reserving in aggregate between our best estimate view under IFRS and our capital framework is similar, and that strengthened further after the transaction announced today, although, of course, there can be differences between the blocks. On our capital employed, where we have made good progress in reducing the level over the years, the majority remaining is concentrated in the Life block and the long-term care segment. You will note that there is relatively limited capital deployed on variable annuities, and this reflects the conservatism on the reserving. You can see that a significant portion of capital is dedicated to supporting long-term care. The capital requirements for long-term care are largely determined by the asset exposure back in these reserves. As our statutory reserves are projected to grow into the early to mid-2030s, we anticipate that the capital needed to support this segment will also rise over time, all else being equal.

With the statutory reserves lower than the IFRS reserves for long-term care, something which is relevant when considering third-party transactions, but will reduce over time as we build statutory reserves, we expect minimal OCG contribution from this block of business, although continued positive IFRS earnings. The capital needed on the Life side is also driven by the asset exposure. But here, we would expect a gradual reduction as the book naturally runs off. Post the transaction announced today, the overall statutory reserves are aligned with the IFRS best estimate and earnings emergence will therefore be driven by the claims profile.

The VA reserves on the statutory side are healthy, thanks in part to the reserve flooring that is in place and that you know about. And this explains why the capital need is smaller as there is a strong interaction between reserving level and capital level for variable annuities. For example, should markets correct by 10%, then the capital employed would be expected to increase by around $150 million and the reserves would fall by a similar amount. So for VA, capital and reserves need to be looked at hand-in-hand. And you are aware of the thorough hedging approach we have on the variable annuity book. This is managed by a well-established team with decades of market experience. Pro forma of the Secondary Guarantee transaction we announced today, our capital employed stands at USD 2.7 billion, and that is ahead of our 2025 target of USD 2.9 billion. Later today, Will Fuller will cover the numerous actions we have taken to reduce our exposure in financial assets over the years.

So let me now walk you through this transaction. We've reinsured our Secondary Guarantee Universal Life contracts and removed 10 billion of net face value from our legacy life blocks. Consequently, we have now reinsured approximately 80% of the gross face value of our SGUL portfolio. This block, as you know, has historically been a drag on OCG for Aegon and causing volatility. And we are transacting at a small premium to our IFRS best estimate liability, meaning that we believe the price we are achieving is similar to our view of the best estimate cost, while we are also removing through the transaction, the risk of variance in that liability. You can see this on the chart with a small hit to valuation equity of USD 0.1 billion.

Next, we have the impact from the difference between statutory and best estimate reserving, which when combined with the release of required capital, explains a hit of USD 0.2 billion. As mentioned, this block has significant reserve financing in place at the statutory level, common in the industry and is a reason why we have had a large negative drag on OCG. And then finally, realized losses on investment assets disposed in association with the transaction and constraints on DTA recognition also hit the capital on day 1, the latter being a timing issue. Adding up the combination of the economic price impact, the statutory to economic differences and the impact of realized losses and DTA gives an overall large EUR 700 million hit to statutory capital. To neutralize this, we will inject EUR 700 million of capital, essentially the proceeds from the sale of our a.s.r. shares a few months back.

On this injection, we expect additional OCG and remittances to the group of around USD 75 million per annum. And this means that the free cash flow per share of Aegon Group will increase post the transaction, both relative to the situation we had pre the disposal of a.s.r. shares and relative to the alternative of using the EUR 700 million to buy back stock. The combination of dealing with legacy issues, improving Transamerica's balance sheet and cash flow quality and increasing the free cash flow per share of Aegon while removing tail risks for a price comparable to our best estimate makes this an attractive transaction for our shareholders.

Let me now turn to the next section, where I will share our financial ambitions during the transition period. We will focus on four key metrics to drive our financial performance. These are IFRS operating results, OCG, free cash flow and dividend. Our forecasts are built upon individual business unit run rates that we have given for 2025. We have then adjusted these run rates for the impact of the SGUL transaction and aggregated them using an assumed euro to dollar FX rate of 1.20. We then apply the expected growth rates across the businesses, and these determine our group ambitions.

For Transamerica, our starting point is the 2025 run rate pro forma for the SGUL derisking transaction. Starting with IFRS, in the first half of 2025, I provided you with an operating result guidance of $700 million to $800 million for the half year, which is equivalent to $1.4 billion to $1.6 billion for the full year. The operating results are expected to grow by around 5% per annum, and this is not impacted by the deal. This growth is driven by underlying growth of our strategic assets, which are forecast to grow by more than 5% per annum. And this will be shown in Will's presentation later. And this means that as the financial assets run down, the overall business growth rate is expected to increase as the financial assets have a slower rate of growth than the strategic assets.

For operating capital generation, the quarterly run rate of $200 million to $240 million for 2025 is expected -- is equivalent to $800 million to $960 million for the year. Pro forma of the USD 75 million uplift from the SGUL transaction, this results in an annual run rate of $0.9 billion to $1 billion. The OCG growth rate of 0% to 3% reflects our investment in new business growth in line with the strategy to date. On remittances, the USD 675 million pro forma run rate for the SGUL deal is expected to grow at around 5% per annum, unchanged from the previous guidance at the 2023 Capital Markets Day. This reflects our desire for stable growing remittances from the business units, reflecting underlying development in capital generation and earnings power.

Moving to the other businesses on the next slide. For the U.K., our operating results, OCG and remittance guidance are consistent with what we communicated at our webinar last year. Shawn will outline the strategy and financials underpinning the Asset Management business, which is expected to show steady growth, coupled with remittances growing by more than 5% per annum. And our international businesses are also expected to show steady growth, although we expect some drag on OCG from China, which also does not pay dividends given its capital position.

Remittances from the international businesses are expected to be largely flat as TLB gradually reduces its dividend after distributing excess capital over the past years. Turning now to the group consolidated view. As mentioned, we have based all of our numbers -- we have rebased all of our numbers for both the SGUL deal and an assumed euro-dollar FX rate of 1.20. In this context, we expect our operating results to grow by around 5% per annum, OCG to grow by around 0% to 5% and free cash flow to grow by around 5%. And this means a growth in dividend per share of more than 5% per annum.

Moving to the next slide. I would like to confirm that we are on track to deliver our Cash Capital holding target of EUR 1 billion by the end of 2026. To support this, we have today announced an intended EUR 400 million share buyback for 2026, of which EUR 200 million will be completed by the end of the first half. Now Slide 34. I would like now to move to the last section of my presentation on the implications of our relocation to the U.S. This is a major -- the relocation is a major piece of work for Aegon and it's something we will navigate with prudence.

We anticipate onetime implementation costs of around EUR 350 million, driven by the U.S. GAAP implementation and restructuring of our head office in the Netherlands and building up a head office in the U.S. U.S. GAAP implementation constitutes around 40% of the onetime cost and around 60% of the total cost will be booked in the holding, and it should be factored into your Cash Capital projections.

Post the relocation, we expect overall cost neutrality on a run rate basis. And this is because we anticipate some cost and tax synergies, but also expect some higher costs from the generally higher cost environment present in the U.S. On taxes, we do not anticipate any material tax liabilities emerging from the relocation. And on our debt, no refinancing is required because of this move, and we will continue to assess these on an economic basis. That means, put simply, we will compare the cost of our debt versus what we can achieve in the market if we were to issue new securities. And there could be some different tax treatment on certain instruments, which may factor into this economic assessment in the medium term.

On regulatory oversight, this will likely shift to the Iowa Insurance Division. And under U.S. group supervision, we do not expect a public group solvency ratio or regulatory intervention level. And that brings me to my concluding slide. With the SGUL transaction announced today, we have strengthened our balance sheet, improved our risk profile and created a cash accretive position for our shareholders. Our financial ambitions for 2026 and 2027 are clear, and we aim to grow our operating run rate by around 5% per annum, grow OCG run rate by 0% to 5% per annum, grow free cash flow run rate by around 5% per annum and finally, increase our dividend per share by more than 5% per annum. And with this, I will hand back to Yves for the Q&A.

All right. Thank you, Duncan. So before we start the Q&A session, just a few rules. The Q&A is for the people in the room only. Obviously, people online can listen in. I'm going to ask Lard and Duncan to join here at the table. I'll be moderating the session. [Operator Instructions]

So we can start with Cor.

Good Afternoon, I’m Cor Kluis, ABN AMRO, ODDO. Thanks for the presentation and an intensive morning with so much information. A couple of questions. Maybe first question is about the Cash at Holding. You now are targeting mid-end of the range by the end of next year. However, the company is changing a lot. You reduced the risk a lot by injecting and doing the transaction in the U.S. and also the move to the U.S., where the U.S. will be the key base. Might it be possible that at a certain moment, you go lower than the EUR 1 billion targeted range? And what is required to go to a more normal level, given the interest and all the cost, it's quite good coverage ratio if you would have EUR 1 billion there. So that's the first question.

Then the second question about the U.K., the decision to revise the options, including a potential sale. How far are you? How do we have to -- no, how did you come to the conclusion? And when might -- if a sale, which you put on your own slides would happen, what's the timing of that? Is it mid next year or '27 kind of moment for that?

And the last question is about the growth, the growth in the U.S., of course, if you look to the top line, you talk about 10% growth, 15% growth for protection. Well, if we look to the OCG, it's more 0% to 5%, dividends 5%. Can you give that bridge? That has to do with new production probably, the Financial Assets, but could you help us a little bit to show that bridge? That's my -- that were my questions.

All right. Thank you, Cor. So I suggest Duncan takes the first question on the Cash Capital at Holding. U.K. strategic review is probably from Lard. And growth in the U.S., can start with Lard and Duncan can add after that.

So first, the U.K. I want to make one thing clear first. When I talk -- when we launched the review of the U.K., this is about the adviser platform business about the workplace business and the Insurance business. This is not the Asset Management activities in the U.K. So again, the Asset Management activities in the U.K. are not part of the strategic review. That's number one. Number two, the reason why we took the decision to have this review is that we said moving to the U.S. and being very clear in our ambition. I mean, we're very clear on our ambition. We want to move our head office and the entire company to U.S., renamed the company Transamerica. Why? Because we believe the U.S. market has a huge amount of opportunity. We want to lean into that reality. We want to support Will Fuller and his team optimally in growing this business profitably, and that's going to require a lot of our focus, including the move itself and making sure that, that is done in a good way.

So then we reflect and then said, okay, if you look at the U.K. business in the scope that I just mentioned to you, they have announced their plans at their Teach-In in 2024. It's a big transformational effort. So why don't we use this moment to say, take a step back and ask ourselves, how can we find ways to accelerate or to maximize the value of the U.K. business? And given the additional focus we're going to have on the U.S., is this not the right moment to take a step back and have all options on the table, including a potential divestment and enter into that review. We decided to do that. The review is launched today. So from now on, that review will start to take place, and we expect that review to be concluded in the first half of 2026.

Okay. On the Cash Capital. So in my speech, I mentioned that the purpose of the Cash Capital is to cover potential market stress events, allow us to manage through cycles and to take advantage of any opportunities. And historically, we've wanted to be at the top end of the EUR 0.5 billion to EUR 1.5 billion range because we're going through quite a lot of change. And we brought it back down to the EUR 1 billion as we've executed upon quite a lot of restructuring. The next couple of years, we're also going to go through quite a bit of restructuring. So I think it's likely it will remain around the midpoint for the next restructuring phase. But thereafter, there may be potential to bring it back down -- bring it down further towards the bottom end.

The second question was -- how do you reconcile it? Okay. So how I think about it is the earnings power of our businesses are going to take the U.S. as an example, will grow by around 5%. Within that, as you noted, the strategic assets are growing quite a bit faster. around the 10% sort of range. And the financial assets are shrinking. And that's how you get to the 5% in terms of earnings power -- underlying earnings power. Over time, because the strategic assets will become larger and the financial assets become smaller, that means that, that 5% sort of earnings power for the business should increase mathematically.

As we move from earnings power to OCG, there's one major difference, which is the treatment of new business. And in the near term, because we're going to continue to grow our sales, both in the Life business plus in some of the new products we launched since the 2023 Capital Markets Day, such as RILA and we have a technical -- a slight technical topic, which is lower aggregation benefit than we've had in recent years. That means that the underlying earnings power of around 5% is going to come down to between 0 and 3% on a capital basis. And our targets are only for the next 2 years. So it's really a short-term guidance. Over time, that should converge, obviously. And then the remittances, we were trying to keep a bit more stable, and we weigh up earnings power plus capital generation. We feel confident we can keep at around 5% growth for the remittances.

Alright. Michael?

Free cash flow per share, sleeping beauty and the -- maybe a little bit more insight into the risk implication of the EUR 10 billion deal. Sleeping beauty, so you're giving up not me, but Cor, and all these other guys really clever questions. Your financial discipline, I'm sorry to say, will drop. It's a fact. You will not have market questions for 2 quarters of the year. And I don't understand why you would take that risk. I see that as a risk when effectively for now, you're getting it for free. So that's my criticism today is you're effectively letting go of two reporting periods a year where you really do get a free ride from us guys.

The second guy, and you might not think that, but I know that consultants charge a lot for what we do. The second is on free cash flow per share. Can you say when I had my call with your wonderful team this morning, the starting point remained the same, EUR 0.8 billion. So I can't see how free cash flow per share is increasing and you might say, well, that's the technicality of the exchange rate, but the figure itself hasn't changed. So I'm just struggling to reconcile that. And the last point, could you go through in detail the derisking benefit of a transaction?

Okay. Should I take -- I'll take all three. No, Michael, I share your -- it's not an easy decision to give up quarterly trading updates. We need to do it for the next 2 years because I do agree with you, it's a good discipline, and we debated this heavily internally. But the reality is the amount of work we need to do to execute upon a new accounting system in a space of only 2 years and restructure a corporate center in the Netherlands and build up a new one in the U.S. is significant.

And the reality is that's heavily weighing on the finance community within Aegon, and I need to create some space. So the lesser of the 2 evils is to prioritize the execution, which must be done, whilst also delivering our normal must-do audited numbers and unfortunately, give up spending more time with you, which is not an easy thing to do, Michael.

Then on your next question was a free cash flow. So what we were referring to there is the transaction. So -- and that the mental models, this is not the only lens we looked at the transaction, right? So we -- the primary lens we looked at was, is the price we're paying for the SGUL reinsurance consistent with our view of the economics. Hence -- and that was the 0.1 at the top, and we felt that was in the range of consistent.

Then depending on the type of blocks, and this is a block which had -- for the industry has had a particularly bad history on both mortality and for the industry and ourselves, by the way; mortality, policyholder behavior and is also heavily financed, heavily reserve financed. In this particular block, there's quite a large gap between the reserves we needed to hold under a capital basis and our economic view, and that explains part of the hit.

And then what we did was we said, well, if we need to inject capital, what do we get back for it? And we compared the return we were getting on that capital injection with our alternatives, which if you go back 6 months, would have been keeping hold of a.s.r. or alternatively monetizing a.s.r., reducing our share count, but not getting the free cash flow uplift. And when we weighed all that up, also in the strategic context of the announcement today, plus also a desire overall to strengthen and continue to improve the quality of earnings power coming out of Transamerica, we felt this was in the best interest of our shareholders.

Coming back to the derisking. As I mentioned, this has been a problematic block in the past. Broadly speaking, what are we removing? We are removing mortality variance and mortality exposure. And secondly, we're removing policyholder behavior and policyholder variance. We're fully removing those things. And at the same time, we are unwinding two captive structures associated with a XXX reserving, which is all of the captives we have on our Secondary Guarantee Universal Life.

Okay. So in terms of sensitivity, roughly a 5% mortality shock. If you look at our IFRS disclosures, which I think is the best way of looking at this, the 5% mortality shock will reduce by around $40 million and is in the analyst presentation and similar sort of gearing for policyholder behavior.

All right. Farooq.

I've got questions around the financial assets. So when I look at Slide 28, you're mixing kind of an IFRS effect and a statutory effect. So that's the slide where you're showing the injection of the $800 million versus the impact. So the statutory impact is kind of $600 million, you're injecting $800 million. I mean you're quite materially improving the capital position within the U.S. So I'm just kind of wondering why you couldn't have done a little bit of both, right? So you could -- if you stuck in $600 million to cover the statutory impact, you still would have created additional capital ratio and would have thrown the market a little bit of a toy in the shape of a buyback. So I'm kind of wondering why you did that. That's kind of question one.

Question two is when you look at your USD 2.7 billion of capital employed and the USD 2.2 billion, how much left -- how much organic effect is there that's left? I'm guessing not a lot. And if we take potentially external or third-party transactions that you could do that might be on the table, given what's left and what you've done, is the capital required versus the capital reduction ratio similar? Like right now, you're sort of using double the amount of hit to capital to get a EUR 300 million [reduction]. So it's like a 2:1, slightly higher than 2:1. So should we sort of pencil in that there's going to be quite a significant need for more injection into the U.S. to get to that EUR 2.2 billion target?

And then finally, sorry for these very horrible complex questions, but you did throw a press release this morning. It was very complete. So I feel I'm justified [indiscernible]

It was a lot.

Yes, it was a lot. But when looking at those books that you talked about in the financial assets and the capital employed, I just want to get this right. It sounds like in VA, it's kind of small, but volatile. So long-term care, obviously, is an issue, but you need to find the right kind of buyer for that in financial terms. I was just kind of wondering what actually possibility there is. So VA doesn't sound like it would do much, but it will remove volatility. Long-term care, maybe there is a bigger impact, but it's a more tough to do transaction. So what possibly could you do?

Yes. Okay. It's almost as long as the press release. If we go through it, we don't mix up IFRS and stats. So what I was trying to do in that slide is break down this deal between the economic price. So how do we view the underlying economic price, which is at 0.1%. Then the gap between our economic view of reserves and our statutory reserves, which is 0.3%. And then the gap -- and then the impact of statutory, not technicalities, but additional statutory impacts such as we have a DTA constraint, which is a timing topic. And also when we realize losses on bonds, we need to take it under the statutory framework. So that's what I was trying to do reconciling there, not really mixing IFRS and statutory, just trying to explain a bit how much is due to economics, how much is due to reserving and how much is due to other things.

On a -- if you want to break -- if you want to do like-for-like, the IFRS impacts are broadly minimal. So there's very little impact on our IFRS balance sheet and very little impact on our operating, whereas the capital impacts are large, large impact on balance sheet, large impact on earnings. Actually, in terms of the injection, we injected enough just to neutralize the RBC ratio, but with one caveat. We also -- in terms of how we structured this transaction, we've also become a minority shareholder in the structure. And that explains the gap between the total injection and the amount of capital hit we take. It's roughly EUR 100 million. So we've become a minority investor, which I can expand upon if you want. So that -- there was no strengthening of capital or anything like that, I just neutralize it plus a minority investment.

In terms of moving forward from EUR 2.7 billion to EUR 2.2 billion, well, the good news is we've moved from EUR 4.1 billion to EUR 2.7 billion, and there's only EUR 500 million left, so well ahead of the plan. And we're going to continue to drive that forward. I think we'll explain later, we've done -- you'll see it, we've done a huge amount of actions actually per block of business, some of which are things we just do, some of which we need to negotiate and some of which are transactions. So when I look at the move from here to EUR 2.2 billion and thereafter, I think we have ample management actions we can take, and we can really select what makes most sense for us, again, within the framework of getting an economic price and being free cash flow per share accretive to our shareholders.

If you look at those blocks, you're right, the VA is small from a capital perspective because it needs to be seen hand-in-hand with the reserves, but it's volatile. So that volatility is something we would like to continue to take. LTC, we're going to build the reserves up over time. That's why the OCG is hovering around 0. So over time, the LTC statutory reserves should converge more with IFRS. But there is a lot of actuarial and uncertainty in general within that block. So if we were to do things there, we probably have to pick where we want -- where it makes sense to do it, where there's a bit more certainty. And then on the life insurance side, we've done four transactions, and we'll continue to see what makes sense.

Nasib Ahmed from UBS. Sticking with Financial Assets. Just wanted to understand how this deal compares to what you've got left in Universal Life. So you've got EUR 700 million of locked-in capital, EUR 300 million has been reduced and you paid EUR 800 million for this, and you've said this deal is more complex than the others. So -- and then kind of related to that, OCG benefit, USD 75 million, how much of a drag is left? On my maths, I think it's another USD 75 million from the UL block as a whole. So should we think of kind of if you were to derisk that remaining USD 75 million drag, is it another USD 800 million to go? That's question number one. I guess, subpart, how would you fund it, given that you're at the EUR 1 billion by 2026, you had the a.s.r. proceeds. Is it going to be a.s.r. plus a bundled deal or something of the sort?

Second sub-question, free cash flow versus OCG conversion. It seems like you're growing your OCG in the U.S. much faster than -- sorry, free cash flow is growing much faster than OCG. Is that a drag on your RBC over the next couple of years? And on international, you're paying out more than 100% of OCG. I know you said free cash flow remittances is stable, but how sustainable is that payout ratio?

And then finally, on Asset Management, it's 55%, right? So it's all related to the payout ratio. It's very low. Can that payout ratio increase within the Asset Management segment?

Okay. All right. Okay. The Universal -- the SGUL deal we did today. So we've dealt now with 80% of the SGUL. And as I mentioned, the reserve -- we have no more reserve financing in place. So with this transaction, we're unwinding two captives, both based in Vermont. We have no AAA, XXX captives left in place. So the remaining SGUL we have, the remaining 20%, the statutory reserves are actually a bit higher than the economic reserves.

So again, coming back to that mental model, we transacted more or less close to our economic price, which is reassuring. Then we got a hit because the cap -- the statutory reserves were quite a bit less than the economic and for the remaining block, that's not the case. And in aggregate for the whole of the Universal Life, they're very similar before the impact of releasing required capital. So we feel in a comfortable position in aggregate for the remaining Universal Life and Secondary Guarantee Universal Life blocks.

How much of a drag is left? We'll have to give you some precise numbers, but it really depends, and this is what I said in the speech, it depends on the claims pattern. So within the overall aggregate reserves, which are similar to the economic level, there are certain blocks which are less well reserved and certain blocks which were better reserved. In general, we're less well reserved on older ages. So -- and they tend to die a bit earlier. That's a bit of bluntly. And so that could be why there's a drag in the nearer term on OCG. But over time, it should be okay.

How will we fund things? Well, just to be clear, we're in a position where we're well ahead of our target in terms of reducing required capital. We only have EUR 500 million left to go. We're going to continue to look at options to bring that down and do that as fast as we can. But in order for us to do a transaction which requires a capital injection, if we were to do one, then it would have to do two things. It would have to be at a price which makes sense for us economically, and it would have to lead to free cash flow per share accretion. So we're going to be very disciplined because we want those two things to be met.

In terms of OCG to free cash flow conversion, you're right, although it's not -- because OCG is a higher number than free cash flow, 3% on a bigger number, 5% on a smaller number. Actually, it doesn't deteriorate the RBC at all. And the payout ratio anyway is below 100% for Transamerica, partly because we have restructuring costs below the line, which are going to continue for the next couple of years. On the International segment, don't forget we have China, which is a negative OCG of around EUR 50 million per annum, which will actually increase slightly. So actually, if you do it unit per unit, and China doesn't pay a dividend, obviously. So if you do a unit per unit, we're not distributing more than the OCG. So it is sustainable.

Asset Management payout, why don't we leave that for Shawn this afternoon once he's talked you through the whole plan.

Ian Pearce, BNP Paribas. The first one, sorry, just coming back to financial assets. So with the LTC guidance sounding like minimal OCG and the reduction in the [ULSGE], it sounds like the two big drags on OCG and the financial assets are basically converging towards 0 or hopefully towards 0. And in the past, you've given a sort of split between financial asset OCG and strategic asset OCG. I'm just wondering if you could talk to us a little bit about that because it sounds like the financial asset OCG should be going up quite a bit versus previous expectations. The second one is just some clarifications around transaction costs and what the actual transaction costs you see in 2027 in the OCG and in the free cash flow and how we should think about that in terms of sort of taking those out of the targets?

Okay. The -- in the Financial Assets, so I said that we expect positive OCG from Financial Assets. I think in the past, we gave EUR 100 million to EUR 200 million, probably going to remain in that sort of range in aggregate. We're going to continue to take management actions because we want to bring that capital employed down. But even post those management actions, we expect to keep the OCG in a positive state and probably in the range of EUR 100 million to EUR 200 million. Transaction costs, not entirely sure what you mean. Do you mean the overall cost of the move to the U.S.?

Yes. So, when you are saying 67% [indiscernible]

No. Below the line. Free cash flow, yes. No, no free cash flow, Cash Capital, yes.

[indiscernible]

That also below the line. Yes. So everything is going to be restructuring below the line onetime costs. But it does impact, obviously, Capital and it does impact overall Cash.

It's multiple years?

And spread over 3 years. So roughly 1 to 2 percentage points drag on the RBC in the U.S., for example, per annum.

[indiscernible] from MN, Asset Manager for several pension funds in the Netherlands. I realize for the setting of today, my questions may be a bit unusual, but they relate to nonfinancial factors, but it is something we take into account in -- as part of the assessment of the relocation. I have two questions. What future do you foresee for Aegon's current ESG policy? You have, of course, broadened the, well, quite fragmented or local approach to a more overarching approach. So I was wondering if you attempt to keep that or maintain that policy.

And the second question is on the protection of minority shareholder rights in the new situation does, so in Delaware. Is there anything you can share on that as well?

So on the -- thank you very much for the question. On the last point, we're going to enter now into a process where we will obviously need to present an entire package to our stockholders for approval in the EGM that we're going to convene in the second half of next year, the fourth quarter to be exactly the next year, where we will include all the governance implications in the -- we're moving to a new legal system. We're moving to a new market with a legal seat. That will mean that we need to make adjustments to our Articles of Association, et cetera, et cetera, to comply with the local regulation, also the local environment there. We will present that at that point in time, so I cannot really, at this point in time, comment on that.

The first question you had about ESG, a couple of points there. We have recently on the 30th of -- I thought it's 30th of December, we have put up new targets on our website. You can see them there. And we will continue to report on those. And I want to remind everybody in the room that as long as we have securities listed at the Euronext Stock Exchange, be it equities or be it bonds, listed securities, we will report under the CSRD framework, the progress that we are making towards the targets that we have.

When it comes to our identity and the way we operate and the way we roll, if you will, it's very much ingrained in our DNA that we believe that the company needs to continue to take good care of the communities that it serves and is a very good stewards of the resources that are entrusted to us. And we find that very important, including a healthy workplace, including diverse teams that perform well and including an environment where people feel valued and can thrive. So that will not change, and we'll continue to report on the progress that we're making as per the disclosures that we do and continue to report on the CSRD guidelines on that.

Hadley Cohen, Morgan Stanley. Most of my questions have already been asked, but I still have a couple. So firstly, I guess, for you, Lard, I understand why the U.K. -- you're putting the U.K. business under strategic review and what have you -- can you talk about -- I mean, were the other international businesses under consideration at all to put under review? I guess if I look at a lot of your U.S. peers and focusing on the U.S. and what have you -- they've deemphasized a lot of their non-U.S. operations over the last few years. So how we should think about the scope for that in that context, I guess, particularly within your European businesses?

And then second question, I guess, more for Duncan around, I think within the USD 1.4 billion to USD 1.6 billion guidance for the operating profit for the U.S. this year, around USD 900 million to USD 1.2 billion of that is from strategic assets, which I think delivered around about USD 600 million. So if I were -- in the first half of the year, so if I were to annualize that, we're sort of at the upper end of the range. Is there anything that we should be aware of or thinking about that would suggest that you're not at the upper end of that range for the strategic assets component?

So let me first talk about the international businesses. So we -- the international businesses are all joint venture partnerships. We all have local, strong partners in the local markets, which we co-own the business. That's number one. The businesses are doing well. You saw the chart on the way the operating result increases on the remittances, okay, not China, but the remittance patterns, et cetera. And they continue to grow profitably at a good clip. I mean, most companies are 9% growth for Spain and Portugal over the last couple of years, CAGR; 9% growth on CAGR, on China; a 26% growth CAGR on the Brazilian business to give you an example. So these are profitably growing businesses, which we co-own with local partners. We're happy with them. And we will support to continue their growth because they create value. And we believe that is a good thing for us, and we're happy holders of it. And then, Duncan, I think…

Yes. On the operating results. So I don't want to get into too much guidance in the very near term. I'll just repeat what I said previously, which is on the strategic assets, in particular, if you go on the distribution side, we've been investing in WFG, and we're going to continue to invest in WFG. So the margin has been a bit lower than historically. On the savings and investment side, it's a pretty simple business, driven by AuA growth, we've had good momentum.

And on the Protection Solutions, which is why -- really why we have a range under IFRS, you can obviously get variances [Technical Difficulty] which can be in any 1 quarter depending on who exactly dies when they die, et cetera, et cetera. But apart from that, [Technical Difficulty] pretty consistent with what we said in the past.

Hadley, you'll have the chance to discuss that with Will in the second part of the session.

Jason Kalamboussis at ING. A quick follow-up on Spain, for example, to understand. I mean, is it something that you -- for the moment, the operations that you want to keep and that is over the next 2-year plan. So that's something that you can review there? Or do you find that there is a longer-term aspects in there? And do you find that there is also a risk that some of your partners at some stage say, look, we know that eventually you want to sell. That's the price we're giving. And essentially, you see a slowdown. So you have had, as you highlighted, very good growth over the last 2 years. But do you see that continuing at full speed? Or do you find that there is anything at play that could come and lower that growth?

The second thing is on your a.s.r. stake, could you tell us what are your thoughts when you move to the U.S. if the dividend is going to be taxed? And the third quick question, just in case, I mean, you are showing that you have about 40% of European investors. Do you presumably have looked at your U.S. peers? I mean, how much in the U.S. peers, how many European investors do you have? And do you find that the transition there, some of it will be soaked up. You mentioned, I think, from indexes. But how do you see that evolution basically over the next 2, 3 years?

Lard, do you want to start?

Yes. On the a.s.r., I want Duncan to answer that. I'm still on the Board of a.s.r. As you know, I will step down as soon as a new Aegon nominee is being appointed there. But I want Duncan to -- if you don't mind, Duncan, to comment on that. When it comes to Spain, let me start there, not only Spain, but also the other companies. Again, we're happy with these businesses. And you know what, our partners are happy with these businesses. So we are working in close collaboration with these partners to continue their progression, their profitable growth progression, and they become more valuable over time as a result. So I have nothing other to add than we're happy holders of it, and we keep collaborating very closely with our partners. Then Duncan?

There's going to be -- there could be tax implications for the a.s.r. shareholding. There's going to be, I think, a host of tax items we have to work our way through. Main point is that net-net, we don't anticipate an overall impact on our tax liabilities or run rate tax costs. We think there's lots of ways we can manage things going forward, but this is something we'll have to work through. The other point I'll make is that when we came back to the a.s.r. considerations, I said that the considerations are price to intrinsic value and alternative uses of capital. I didn't mention tax. So I doubt tax will be a driver of our behavior around a.s.r.

Then on your final question, and maybe you want to add to my -- I will start, Duncan, maybe you want to add to that. So the way how I see this will work as we relocate to the U.S., we will continue our listing at the two exchanges. We -- therefore, there's currently Amsterdam Euronext is where most of the volume is being traded. What we expect is that as we move our legal seat to the U.S., we will have a lot of -- the coverage will likely switch to analysts in the U.S. There will be much more coverage from the sell-side in the U.S. That's number one. Number two, we will -- of course, we are already doing a lot of road showing and a lot of investor coverage. The IR team does that, Duncan and I do that very regularly, and we will continue to do so.

But as the entire company moves to the U.S., as we will assume the name Transamerica Inc., as we will focus very much on the growth of our U.S. franchise as the coverage will shift at a certain point, as we will have much more opportunity and many more debates and dialogues with investors. My expectation is that over time, you will see a shift in the stockholder base for that reason, and you'll also likely see a shift in the volumes and where they are being traded. And then over time, we expect that the so-called primary listing, which is often assigned locally to where the volume is highest, will likely be in New York over time. But that will be a gradual process. And we keep the two listing destinations as they are. So shareholders can continue to trade at both locations.

And anything else to add, Duncan?

No.

Farquhar, Autonomous Research. Three questions, if I may. Firstly, on kind of building a bigger kind of broader, more profitable business in the U.S. I just wondered if you think organically, that's where you want it to be at the moment? Or what might there be a need for kind of inorganic options around that? And maybe more at the group. Obviously, I'll ask the same question later to Will directly. But maybe also at the group level, in terms of you mentioned kind of prioritizing financial flexibility towards the U.S. Could you maybe give us a sense of what that's going to mean in practical terms, particularly when it comes to selling the a.s.r. stakes if you do more from here?

Secondly, maybe a detailed question, just on the debt allocations you've allocated to the U.K. et cetera. Could you just maybe give us a bit of a sense of the methodology behind that? And then finally, on Aegon Vereniging in terms of transposed, can that be transposed with the existing kind of share classes and options to an SEC listing? I just wonder what the practicalities of that might be and also the mechanics around the proposals and considerations that will come with regards to that at the EGM in due course.

So we wanted to give you the debt allocation because of the announcement around the strategic review, obviously. And how we looked at that is we look -- we compared earnings power and equity, so both balance sheet and earnings. And what you'll notice is that the allocation of debt relative to equity or valuation equity is broadly comparable. There's slightly more debt allocated to the U.K. on an earnings basis, but on an equity basis, it's broadly comparable. And we didn't allocate debt to Asset Management or the joint ventures. Asset Management businesses don't carry much debt and the joint ventures aren't 100% owned. So we didn't do that.

Okay. So on the two other questions, let me start with M&A. First, the point that we made about financial flexibility will be prioritized to the U.S. That is just meant to say that -- and that's what we hope comes across in the press release that our focus and ambition is really on the U.S. and extracting the value of the massive opportunities that we see in front of us through the organic path that we have. And Will Fuller will take you post the break through an assessment and his plans for the coming years, and we aim to support that. We aim to support that.

And the financial flexibility comment that we made is to make sure that everybody understands that our priority for using financial flexibility is in the U.S. given our ambition that we have in the U.S. So that's the way to read it. When it comes to M&A, our path is always -- and that does not change. We are always focused on our organic growth opportunities. We believe, and Will will discuss that after the break, that we have a franchise that has returned to growth, has unique capabilities and access points to large underserved parts of the U.S. marketplace. And we believe that the dynamics are in our favor and that we have winning capabilities and that we can continue to capture a lot of opportunity and a lot of growth organically.

Now -- as always, if we are -- there is an inorganic opportunity in front of us to accelerate our strategy and to do something that makes financial sense, we act. If we don't, we don't. M&A is just part of the toolkit that we have. And we're going to be very disciplined like you are used from us. We're going to be disciplined. Our posture to rational decision-making will not change. So our focus and our conviction is that over time, on the organic path, we will get there and on M&A opportunities as they arise on a case-by-case, case basis, assessed against very strict financial and nonfinancial criteria.

And then your last point about the Association Aegon, the Association Aegon is a stockholder. I cannot speak for them and they have -- but they have said that they find the announcement that we make today a positive and important move for Aegon and that they will constructively evaluate any proposals that are forthcoming with respect to the governance and the setup and everything else ahead of the EGM that we're going to have in the fourth quarter of the year. Those discussions will, of course, after the decision that we just took, are going to take place in the preparations to the EGM, and I cannot speak for the discussions that we have around [Technical Difficulty] at this point.

Maybe a follow-up on the comment and on the inorganic opportunities, right? So how we should kind of like think about the targeted kind of the return on investment, right? If there is a deployment of this capital inorganically, if I see some of the press release or some of the latest acquisitions done by U.S. players like Voya, shall I be targeting kind of like a similar rate of return?

We -- do you want to talk returns on M&A?

Yes. I don't know exactly what Voya have targeted, but we will look at the returns we can get on any deployment of capital relative to the risks around that and the certainty we have in delivering upon those returns.

So in the SGUL transaction we did today, we've accepted a relatively lower return, I would say, high single digit, 10% sort of mark. Because we are relatively certain about the outcome because we know it's a reinsurance deal and we know what's going to happen on the back of it. If we do M&A with uncertainty and more risk, we need a higher return and vice versa. So it's really case by case depending on what exactly the proposition is and our certainty around delivering upon the execution.

And if I may push a little bit on that one. Is this kind of like will you see this kind of like uncertainty premium around 5, 10...

It depends how uncertain it is. So it is very uncertain, and it will be meaningful, if it's less uncertain, less meaningful. So it really is a case by case.

Ian Lapey from Gabelli Funds. Just a question about Long-Term care, where I'm on Slide 27, statutory reserves lower than IFRS. If you did a reinsurance similar to one you announced today, would it be similar in magnitude in terms of how much you'd have to inject? So you reduced capital employed by EUR 0.3 billion for Universal Life and you're injecting EUR 800 million. Would it be anything like that for Long-Term care?

The way I would answer that is Long-Term care is where we probably have the biggest negative gap between our capital reserving basis and our IFRS reserving basis. So indeed, that's probably the most painful from a capital perspective. It's probably also whether you have the most variance around the economic price because there's quite a lot of uncertainty in the prediction around Long-Term care compared to the other blocks. So more uncertainty about the economic price, more of a gap between capital and IFRS.

So I think, indeed, if we were to do the whole block, not sure if that's possible. But if it were possible, that's probably where you get the biggest variance. Note that we have a pretty successful organic strategy there. So we're building up our statutory reserves every year, been very successful in mitigating changes in the size of the liability with rate increases when they're actuarially justified. And we've been pretty good in managing the claims, claims handling, claims experience. And overall, we're comfortable with our best estimate. But indeed, that's the block where there's the most potential capital variance.

All right. Michael, you can ask your second question.

So one question. It's a fun one. It was the picture. It's not this picture. It's the one about San Francisco. Do you actually own the tower?

No.

Why do you show the picture then?

Well, first of all, the Transamerica Pyramid is an integral part of the -- we don't see it here actually, but it's the integral part of the logo of Transamerica and part of the brand logo. And when we did the transaction to divest the pyramid, we negotiated for 99 years that the pyramid will be called the Transamerica Pyramid and that we would continue to use it in our logo. And we also have access to the top floor for events and the like. So these were the kind of perks that we organized at the time that we divested this piece, not from our real estate portfolio.

And then that's fun, but it's helpful. And then the other question, so...

It's well known by the way, as the Transamerica Pyramid. So we're quite happy that for the next 99 years, it's the iconic building in San Francisco, the skyline defining building, and that is called Transamerica. It's good marketing and we still have it for 99 years.

It makes sense, yes. The other question is, so 2020 to '22, I mean, the first plan, you beat all targets, but massively. So dividend. I mean, it was huge. Here, you're actually kind of in line. I mean, you're beating them a little bit, but you're not beating them much.

So my assumption, and it may be wrong, but here's the question is, you've invested massively in the second period in order to derisk deleverage, not yes, deleverage, but particularly derisk and lots of little actions little, but from point of view of this deal now. I just wonder whether you can give us a number of how much you've invested in that period of 3 years. It's really to kind of I tell you what it says it. Then I can say, oh, this is what they target. But look, last time, if they hadn't done this, they would have achieved so much more.

Yes. So let me -- I'll defer to Duncan later if he wants to add to this. So let me tell you the following. So we're presenting plans today with financial ambitions, right? And we've also looked at the past 5 years, and we have demonstrated how we operate. We are people who operate at scale, and we operate at pace. Don't forget that.

We're financially disciplined. We have made very difficult decisions because they were rationally the right thing to do. And if you look at the future, the coming years ahead of us, look at -- first of all, you'll see plans today from Will after the break and from Shawn and how the group believes that organically, it can grow and operate and do a lot of good stuff to create value with a dividend per share growth of higher than 5%.

But then we have the move to the U.S. We have the review in the U.K. So I mean, we act continuously with a rational mind and we act continuously with a lot of financial discipline, and we act, I would argue, at a reasonable pace. So that is -- that attitude that we have of building better businesses, creating value, being on top of it every day and see what we can improve and do better, how we can make more money, more value, that's the same team.

What I'll do is we'll get you -- where have we invested. We've invested massively in operational capabilities. Hugely, we'll get you that number. I don't know off the top of my head, but there's been significant operational investment. We invested heavily in our balance sheet. So a series of actuarial strengthening. And we've also invested in significant management action on financial assets, I think, over $1 billion. But we'll get you the full split off-line.

Now let's not forget, we just announced a EUR 400 million buyback program for 2026.

Do we have a final question before we break? No. So thank you very much for your questions. Thank you very much for your answers. So we're going to break for 10 minutes before the second part of the afternoon. So it's 14:42 on the screen. So at, let's say, 14:55, we can restart.

[Break]

All right. Welcome back, everybody. So we are now going to start the second part of our afternoon with Will Fuller, CEO of Transamerica and Shawn Johnson CEO of Aegon Asset Management presenting. And like for the first session, we'll have a Q&A session afterwards. So Will, over to you. Thank you.

Thank you, Yves. Good afternoon, everybody. Thank you so much for being here. Thank you so much for tuning in on the webcast. We want Transamerica to be a leading life and retirement company in our chosen markets where we have a right to win. It is a targeted strategy.

And the markets that we view to be most attractive are the markets serving middle to mass affluent customers, which we affectionately refer to as Main Street in America. We have unique advantages to win in this market because we have unique access through our franchises in WFG in retirement.

Now I'll cover a few areas today. First, I'll recap our strategic and our financial ambition. I'll touch on our performance and targets that we announced at the 2023 Capital Markets Day in this very room a couple of years ago. I'll go into a bit more detail on the financial guidance for '26 and '27. I'll touch at a high level on our SGUL transaction. And lastly, I'll share with you a peak. A view and a few other areas that are under development that we believe can bring uplift for value in the future. And the goal here is to give you a clear perspective on Transamerica where we are, where we're headed, okay?

Let's start with where we were 5 years ago. Transamerica has a great franchise, a strong heritage and iconic brand, but it was an underperforming company. At the 2020 Capital Markets Day, we set to restore performance. We set to restore performance by focusing on higher return strategic assets where we wanted to grow, while reducing lower return financial assets. We set targets, we met them. We reconvened that the 2023 Capital Markets Day to offer a view of Transamerica's equity story on a go-forward basis. And we shared that we wanted to build a leading middle market life and retirement company.

Strategically, we committed to building industry-leading businesses in the 3 chosen markets where we had unique advantages in our distribution franchise and our life insurance franchise and in our retirement franchise. And those were built off of WFG in distribution and access to retail customers and retirement record keeping, which is the price to admission to originate retirement savings in the workplace where most Americans save for retirement. That was the strategic set.

The financial set is that through that strategy, we would allocate capital to strategic asset business lines and along with an ongoing reduction in capital employed to financial asset business lines, we would go about improving the balance sheet. And in combined, that would improve the quantum and quality of our capital generation along the way.

And at the time, we set ambitious financial targets. And operational KPIs. So where are we now? We've made considerable progress strategically and financially. We've invested to strengthen our access points to customers in the middle market, you see that in WFG, you see that in retirement. But we've also built out and expanded our third-party distribution in insurance, banks and broker-dealers, so we can reach more advisers and more customers.

We've been able to do that because we've rebuilt our operations and our services that were previously outsourced fully to a third party. From that, commercial results have materially improved across the board, across the board. And you see those commercial results, the planting of seeds of capital today to build earnings for the future tomorrow. You see that fueling the ramp-up in our strategic asset earnings.

At the same time, we've lowered our risk profile. We've strengthened the balance sheet, and we've reduced the capital asset, capital deployed ahead of target. Expenses have been in control. While we've made these changes, while we've made these investments, which will provide us the benefit of operating leverage as we grow. And the quantum and quality of capital generation has improved as a result.

I'd point to our OCG results, and I'd point to our CSM, our contract service margin, which is a measure of future profits. And today, our CSM is comprised of more strategic assets than financial assets, and that will continue to grow. So indeed, measure by measure, progress by progress, Transamerica is indeed growing again, and the driver of that growth is strategic assets.

And you see that in the financial profile. We are becoming a strategic asset profile company, 2/3 of our capital, 90% of our operating results. And if you look at our underlying source of earnings, you see them balanced. And what I'll point to importantly, because it was a key aspect of strategy was the noninsurance result element of our earnings sources are now 34%. That is the earnings sources that is comprised of the distribution results from WFG and Retirement.

So stepping back, it's a higher quality profile, it's more predictable profile and again reinforces that we are becoming, and we are building a strategic asset company. We build earnings by being disciplined and focused on attractive markets where we can write profitable new business. We pick our spots. You'll hear a lot about how big the U.S. market is, how massive it is. Indeed, it is.

But that means there's a lot of segments. There's a lot of segments, products, customer origination sources, it is important to pick your spots, be disciplined and target where you have a right to win and where you compete on your own terms. And that is what we do. This slide shows that we are tracking to most Capital Markets Day targets and in some cases outpacing the industry.

Now I'll start with WFG, our agent and our annuity sales are growing double digits faster than industry, while our life insurance has been quite similar growth rates to industry. As we've gone about restoring our operations and service, which we announced to you at the 2023 Capital Markets Day, and we've completed in the first quarter of this year, as we restore those operations and services and improve the quality of them, we saw the Transamerica share of WFG sales steadily increase. Starting in the low 50% market share, now in the mid 60% market share and holding firm. You see this market share improvement in WFG feed the above-industry growth rates in our life insurance sales.

Now I'll take a point here to acknowledge that life sales are behind our 2025 ambition, but they are catching up. And we have strong growth rates going out to '27, which I'll show you in the past. These strong growth rates are based on our recent run rate trends. And what's behind that? New products in a new market, an annuity product that was built after our Capital Markets Day and entering the new simplified issued life market, which we've done in the past year, and I'll touch on both of these in a minute, and that's what's driving the catch-up.

The strategy to grow retirement assets while increasing penetration in ancillary solutions like stable value is tracking to plan. We've restored net deposit performance to now be in line with peers. We have momentum, and we're positioned to do more. Now big picture, Transamerica benefits broadly from the attractive trends in the U.S. And Lard mentioned, I think the key ones, right? It is the largest market in the world, indeed, for life insurance and for retirement savings.

And there are big trends that are favorable to product demand. The private sector provides benefits to society in the U.S. And when you have the dynamics of people living longer, baby boomers, retirement in masses, I acknowledge this year, I believe, is peak 65, which is the peak of the baby boomers turning 65 is this year, giving you a sense of where the American demographic is. The widening of protection and savings gaps and the record levels of intergenerational wealth transfer, this is a dynamic market.

And when you look specifically and you zoom in to the consumer demographics and you look to the middle class in America, which is -- I would define as the middle market and the mass affluent market. You see that the need -- first of all, the size of those demographics are massive and they have a substantial need for financial planning and advice. But they are historically underserved. And they are not crowded with competition. We have a way at Transamerica to effectively economically reach and serve these customers, and we tailor our solutions to them.

WFG is a unique engine to access retail customers in this market. Our retirement recordkeeping is an advantageous way of reaching customers where they work, which is where they generate primary savings for retirement. And so when I think about these markets and I think about our advantages in them, I see a very profitable space for us with a lot of future runway.

Next, and Lard mentioned this, our philosophy is to have a model that is built around the benefits of compounding economics. And what do I mean by this? Is that distribution, as distribution and as retirement recordkeeping grows, it feeds the product solutions that we create and we manufacture. So for instance, as WFG volumes grow, it feeds our life insurance products, it feeds annuity products.

As retirement assets grow, it feeds our ancillary solutions like stable value. And you see our strategy playing out. We have momentum. We have confidence that there's a lot of potential ahead, and I believe this is further bolstered by Aegon's decision to prioritize the focus to the U.S.

Now stepping back for a minute and offering operating result guidance for the next 2 years. And Duncan mentioned this is to increase by 5% per annum. Well, underlying this are the business segments. The strategic asset business lines are growing at a rate faster around 10%, and they're partially offset with the runoff of financial assets. Now to understand this slide, I would point out that the starting point is a trailing 12-month 2025 run rate adjusted for the SGUL transaction and experience variances.

So let me walk through each of the four businesses. And I'll start with WFG. 92,000 agents and growing, agents that live in the middle market communities that they serve. And then when I say that's what allows us to economically reach and serve those hard-to-reach communities is because of our wonderful agents. Our operating results are driven by sales volumes. So increasing agents and having the agents become more productive is the main focus of driving the business.

The agent force is tracking to the 110,000 ambition that we have, life sales to $900 million in annual sales and annuities to $5 billion in annual sales. And you see these sales levels, and you see these growth rates, reflecting the momentum that we are delivering today. These result in double-digit revenue growth and operating results as we hold margins stable over this period.

Now one area where we see more potential is in agent productivity. And ultimately, it needs to be easier for agents to do business so they can spend more time with their customers and building relationships. Small increments of productivity improvement in this distribution system yields meaningful results. WFG is not a new business for Transamerica. This is a business that we have been associated with and owned and operated for 25 years.

It is a hard business to replicate at our scale. We know this market well. We have a lot of experience, and we have a lot of data with agents and agency leaders and the customers that they serve. And back to the benefit of compound economics, these volumes that you see here, feed the good results of the Protection Solutions division as WFG is the largest originator of our sales.

Protection Solutions. The formula here is to predictably increase earnings from writing profitable new business. We target 12% unlevered returns and payback periods of 5 to 7 years across the life portfolio, with our flagship product IUL, being a bit higher in return and shorter in payback period.

Our top line momentum has us reaching $720 million in annual sales and growing operating results around 10%. The product formula is indeed targeted to middle to mass affluent market needs. We write high policy volumes to younger policyholders, younger insureds, at face amounts that average less than $400,000. It is a protection-oriented value proposition to younger American families. And in this way, we get the benefit of a law of large numbers approach. And we also get the benefit of a higher quality, predictable earnings profile that's rational, it's disciplined.

And again, we know this market well, because we've been writing to this customer profile and risk profile for quite some time. We're a top 5 IUL writer. We're a top 10 overall life write growing at a rate faster than peers. Now why is that? Well, I've already talked about the strength and the advantage of WFG generating consistently reliable sales volumes, but we've also been able to -- after rebuilding our operations and service started to extend into other markets that have the same sort of risk customer profile, return profile that we like. An example of that is the entry into the simplified issue life insurance market, which is adding growth to sales, and we expect that to continue.

Let me step back and explain to you a bit what that is. The simplified life market is a streamlined customer experience. It's a technology-led, digital underwriting experience, compared to the more traditional fully underwritten insurance model.

Customers answer a short questionnaire about their health history, while carriers assess risk from data sources. We draw down information about prescription -- prescriptions that an insured might have. And from those responses and those data sources, we make an underwriting decision. From the customer standpoint, this results in a much more streamlined process compared to legacy underwriting and we price to reflect a simplified underwriting process.

The market is very large. It's a $1.5 billion annual premium market, and it's growing quite nicely. We started with final expense, which is a small policy face amount level. We just expanded to our index universal life, which is our flagship product in the last quarter, and we'll be adding term next year. This expansion is a logical extension and add-on annuity category again, because of the customer risk and return profile being very similar. It is a solution that's sourced from the middle and mass flow market that we know well. We have 6% market share today, and we see a good runway to improve that.

Let me underscore that this market and our success in it would have never been possible when I sat before you 2.5 years ago. But we've rebuilt our operations, our service, our product manufacturing and added a technology partner. And it was each of those pieces that open the door for us to expand and extend how we are reaching and serving customers.

For retirement plans, I think the formula here is actually very simple. We grow record-keeping assets and we increased penetration in ancillary solutions that bring with it higher margins, like stable value and IRAs. And you see that really just come off the page here. It's this combination of these 2 that have led to the ROA expansion that you see here. And this ROA expansion will continue to play out, as you see, going from 6 basis points to 8 to 11.

Recordkeeping is, as I said earlier, the price to admission to access the U.S. workplace where retirement savings are generated. And as our record keeping assets grow, it feeds our ancillary solutions, and that generates the margin uplift. At the last CMD, I shared with you that our financial strategy was for every $1 of record-keeping revenues, we would generate $1 in ancillary solutions. Today, we are earning -- roughly $1.10 in ancillary solutions for every dollar in recordkeeping. We have good positions in all plan sizes and types.

We are uniquely positioned in the pooled plan space, which is where small and medium-sized companies collaborate together. We are considered the leader in that space. We have many large and successful distribution partners in that space that contribute to asset growth. And looking forward, I view operating leverage here to also be a contributor to profitability. So when I look at the ROA results of going to 11 basis points in 2027, we see a clear path. And ultimately, in this business, we expect to reach mid-double digits over time.

Now stepping back on financial assets, this is a mature closed block comprised of universal life, annuities and Long Term Care as we cover today. These contribute positive operating results in OCG, but they decline as these books are closed and they're in run-off. And the strategy is to bring capital down -- capital employed down to $2.2 billion ultimately by 2027, while reducing the underlying risk and lowering the sensitivities.

And let me reinforce, it's a balanced approach where the objective is measured on the improvement in each of these dimensions, not just capital employed. Now how we go about managing financial assets. Now we've done this from the beginning, is through an approach which we frame has a playbook of actions comprised of unilateral, bilateral or third party.

Let me explain to you a bit what that is. Unilateral means these are actions that are within our control, things we can do ourselves. Bilateral are actions that require approval of either a customer or a regulator, and third party with what we would define as transactions. And there has been and should expect a regular cadence of these in-force management actions.

So since we began a few years ago, we've had approximately 25 unilateral actions. Examples of that would be multiple steps in hedging the variable annuity policy experience that we're known to be quite effective and has performed quite effectively, establishing voluntary reserves and updating and strengthening assumptions. We've had approximately 25 bilateral actions, such as Long Term Care actually justified premium rate increases, variable annuity buybacks and a purchasing program for institutionally owned universal life policies. And on third-party transactions, we've executed several including the one that we announced today.

Duncan hit on this pretty well, but the perimeter of this transaction was focused on removing an OCG drag and removing volatility in our earnings. The transaction price was consistent with our view of the value, consistent with our best estimate assumptions, the small impact of valuation equity reflects the price paid to reduce our risk. The risk here is typically mortality risk and policyholder behavior risk, as was mentioned.

In addition, we wanted to unwind captives, and we wanted to resolve all of the reserve financing associated with SGUL. And it is that action that has removed the OCG drag and supports funding net remittance increases of $75 million per annum to the group. So post transaction, 80% of the SGUL book of financial assets has been reinsured 100% of the captive financing for SGUL has been removed. And for the 20% remaining, reserves are consistent with statutory and IFRS and the same is true now for the aggregate of financial assets. We started with capital at our last Capital Markets Day, $4.1 billion.

Our target was $2.9 billion. We're now $2.7 billion. So we have $500 billion more to go to our $2.2 billion. We see a clear path just through our playbook of actions of unilateral, bilateral, third party under the parameters that Duncan outlined earlier.

Now stepping back and offering guidance across our 3 core metrics. I've covered operating results in detail, but as a recap, 5% per annum, strategic asset higher, financial assets lower. So it nets out to $5 million. OCG guidance, 0% to 3% growth per annum. We're choosing to increase the investment in new business that comes with higher strain that's reflected in this guidance. And this supports the growing of our life strategy, commercial strategy, annuity strategy and our retirement stable value business. And our net remits are lifted at $75 million from today's SGUL transaction per annum and then resuming a rate of the 5% growth that we committed to at the last CMD.

So now everything that I've shared with you up to this point are embedded in our current plans, and they're embedded in our guidance. But we have an ambition to do more, to contribute more. Building a leader in the U.S. is not a destination, it is a journey and it's one that we will never be complete with. We will -- it's a verb, and we are building not built. And so you -- we want, as a management team to be looking for ways in which we can improve the value, we can improve the growth trajectory in the future beyond the guidance that I've shared with you today.

So the next couple of pages represent a few areas under development that help power future uplift. And I'll start with the general account. Our general account is $80 billion, and it's growing again. It's growing again because our strategic assets are powering and outrunning the runoff of financial assets.

And as Duncan shared, it's well diversified, 97% investment grade, compared to peers, we have a higher allocation of corporate and treasury. We have a lower allocation of structured credit and less liquid assets. So we believe that there is an opportunity to improve risk-adjusted returns over a full cycle. And as a rule of thumb, for every 1 basis point of portfolio yield, it increases operating results by $8 million. So here again, small incremental improvements can have a meaningful uplift.

So naturally, we've added asset expertise and asset capabilities. We recently appointed a new Chief Investment Officer, and we're building out talent and capabilities in our Chief Investment Office. I expect benefits and uplift from the general account to be realized incrementally and over time from disciplined investing, allocating assets to higher-yielding credit on a risk and capital adjusted basis.

And we'll do this through utilizing a broader set of asset classes while being prudent and mindful of the macro credit environment. I think about this along 2 paths. The first path is new money investing. New money investing is comprised of investments we make to support the sales that we are originating and the reinvestment of maturities. And that's one path.

And the second path would be through selective reposition of the in-force, our first priority is going to be focusing on the new money yields to support our investment programs. And based on our current money yields, we are estimating to be 30 to 50 basis points behind peers with a similar ALM and risk profile. We will then look to prudently expand within our in-force over time.

Aegon Asset Management is our main anchor asset manager partner, and that will not change. But we will complement with select external managers. This will provide a broader and added origination sourcing that complements AAM's core capabilities. This also has the added benefit of sustaining our commercial performance and facilitating the expansion in new products, where yield is more in the competitive equation.

Up until this point, we have operated in products and markets that did not require yields to be at a competitive level. As we look forward, we see that as an opportunity to expand. So building on that theme, we want to be bigger in annuities, but highly selective in the manner we do this.

Since the last Capital Markets Day, we've developed a top 10 RILA position. This is a registered indexed variable annuity. We achieved more than $4 billion in account value by building out distribution in banks, and broker-dealers. So think of it as a financial adviser community as well as WFG. Adding a fixed annuity alongside RILA is a natural and logical extension. It is a solution that's in high demand by middle market and mass affluent customers, and it supports long-term protected, long-term protection and long-term savings. Our distribution channels originate a sizable portion of industry sales.

Take WFG, for instance. I pointed out earlier that WFG is growing to $5 billion in total annual annuity sales. Well, a Transamerica branded product, it's reasonable to assume, would be able to attain 10% to 20% market share. That's $500 million to $1 billion of new sales priced to attractive returns. I'm signaling this as something that we have under development as an add-on extension to annuity.

There's the manner and form at which we will do that, it needs to be finalized. And once it is we will share an update with you. In addition, we plan to further press our WFG advantage. Stepping back, our ambition WFG is big. We want to be a broader financial solutions provider for the middle market and mass affluent customers that we serve.

And that requires developing a business model that is broader than the business model that we have today, that's built on the foundation of productive agents able to activate and engage their customers easily and fully serve their protection and their savings needs. And that's done in a way that's tangible, repeatable and sustainable strategically and from a financial performance standpoint.

And with this ambition realized, we believe that WFG can meaningfully lift future earnings and valuation from where they stand today. To achieve this ambition, a critical centerpiece will be the right technology enablement and capabilities that help agents grow, scale their business and serve their customers. We intend to start adding capabilities to this end next year.

We start to -- expect to do it over a multiyear phase, and we'll provide you details as they're finalized. So once again, these are 3 examples of areas under development that we believe will be additive over time to our future growth and value generation.

Now in closing, I would be remiss to not briefly comment on the implications of today's announcement of the holding company's decision to become a U.S. company. Transamerica was founded 120 years ago with deep roots in U.S. financial services and is an iconic American brand. Over this transition period, over the next few years, what does not change is our focus.

We are singularly focused every single day on building a stronger Transamerica and a better company for our shareholders and for our customers in the largest insurance market in the world. We have 92,000 agents. We have 7,000 employees and a leadership team that wake up every day to build a better company, providing those solutions and services to customers. That is no different today, and that will be no different tomorrow. We have talented colleagues. We have a coast-to-coast footprint.

We have a great culture, thousands of hard-working people that are resilient and tough, and they believe in our company's purpose. They believe in our long-term vision, and they bring it to life every single day. And I want to personally thank them for their commitments, their resilience, their unwavering support of what we are -- what we've accomplished as a company, but more importantly, what we will accomplish in the future.

That will not change. It will be bolstered, fueled and powered up by Aegon's decision to prioritize resources and focus on the U.S. We want to be the industry leader in life and retirement market, bigger, broader and more profitable in the right markets. Aegon and Transamerica fully focus on that same ambition is a powerful combination. Thank you.

I believe I have the distinct pleasure of introducing Shawn Johnson, CEO of Aegon Asset Management. Thank you.

Thank you. Thanks, Will. I'm Shawn Johnson. I'm the CEO of Aegon Asset Management. Nice to meet you all. I joined just over a year ago. I joined Aegon Asset Management after I met Lard, and he explained his ambitions to have an outstanding asset management business to support his aspirations for the group.

I've been in the investment business a long time, and I was convinced after meeting both Lard and Duncan that I could make a difference in leading their Asset Management business. The ability to have a positive impact on AAM is the principal reason I joined the company. I'm very familiar with running a global asset management business with offices worldwide. Since joining Aegon Asset Management, I've traveled to our global offices. I've met with many of our team members, and I've spent time learning and understanding the business.

I was very impressed with the quality of the people I have found throughout the organization. Today, I'm proud to provide a strategic update on our business, our financial performance and our ambitions for the coming years. Aegon Asset Management is a global insurance-owned asset management company with significant third-party clients.

For fiscal year 2025, we forecast revenues between EUR 640 million and EUR 660 million, with an operating result between EUR 190 million and EUR 200 million. Our investment approach is research-driven and conviction-led, and we span public and private fixed income, equities, real assets, multi-asset and multi-manager portfolios.

We refer to our wholly owned businesses as Global Platforms, which includes approximately 1,100 team members and over 355 investment professionals. Our Global Platforms business will be the focus of today's update. Our strategic partnerships, which is AIFMC in China and LBP AM in France, are joint ventures that allow us to deliver customer-focused solutions in their areas of expertise.

Due to our joint venture partners being public companies in their own right, my comments on our JVs will be limited today. Our assets under management are well diversified geographically by asset type with an emphasis on fixed income and a strong presence in Continental Europe, the United States and the United Kingdom.

Collectively, our global reach provides us and our clients with key insights and opportunities for continued growth and innovation. 60% of Global Platforms' assets under management come from third-party clients. And we've seen consistently positive net flows over the last 8 quarters. Our clients are well defined. We manage much of Transamerica and Aegon U.K.'s general account, as Will just told you.

We manage assets for affiliates such as Transamerica Asset Management in the United States. We also manage assets for around 450 institutional clients, including over 80 insurance companies as well as for assets managed by wholesale or retail clients. Our clients include pension funds, banks, insurers, sovereign wealth funds, wealth managers, financial advisers and investment platforms.

Our ability to attract and retain third-party assets is a testament to our strong performance and trusted relationships. Relative to performance, I wanted to show you at least a few of the strategies we have in each of the areas, Continental Europe, the U.K. and the U.S., very long-term track records.

Over the past 3 years, the vast majority of our strategies have outperformed their benchmarks or their peers. That's why you see 8 quarters of positive performance -- or positive collection of assets. We see flows in all of these strategies. We have flows in commercial mortgages. We have flows in equities, and we've just launched a new LTAF here in the United Kingdom.

Our strong track record is a key driver of our positive net flows and our reputation in the market. We manage our Global Platforms business through 4 business units, each with strong leadership and investment capabilities. Our Global Platforms' assets under management stand at EUR 261 billion, EUR 163 billion in Europe and EUR 98 billion in the United States.

We have significant expertise in alternative fixed income and private debt, leveraged finance, real estate, including agricultural loans. This 4 business unit structure allows us to be close to our clients, reacting quickly to their needs. Our alternative and nonlisted assets, which we generally define as any illiquid assets across Europe and the U.S. total EUR 98 billion and is a major engine for growth in the business.

Alternative strategies we already manage for Transamerica today include private ABS, private debt and private equity as well as several real assets. We expect our alternatives business and nonlisted AUM in the U.S. to grow as Transamerica's general account grows. Since I joined the firm a year ago, we have taken clear action to strengthen our strategic position.

By organizing into 4 business units, rationalizing some of our systems, simplifying the organizational structure and renegotiating vendor contracts, we have improved our operating margin from under 6% to 15.5% in the first half of 2025. We have invested in a single portfolio management system focused on our distribution activity on third-party assets, targeting investment strategies with higher revenue margins, such as CLOs, private debt and euro ABS. These actions have accelerated decision-making in the business, improved our scalability and positioned us for further growth.

Looking ahead, our strategic priority in Asset Management are clear. We are expecting -- we are expanding our third-party and higher revenue margin strategies. We are improving scalability and efficiency in our business. We are growing our strategic partnerships as well. At the same time, we continue to have strong collaboration with Transamerica, resulting in mutual growth.

These priorities will ensure we remain competitive and continue to deliver value to our clients and our stakeholders. I'll discuss each of these priorities in more detail. Our ambition is to grow our third-party revenue by about 6% per year, focusing on higher revenue margin strategies. This strategy emphasizes our capabilities in global high yield and an alternative in nonlisted assets.

We expect this result in revenue outpacing our AUM growth over the next few years. Our diversified distribution model, we have dedicated sales teams in the U.K., in the U.S. and in Continental Europe. We also manage and originate agricultural loans for third-party insurers in the United States, further diversifying our revenue stream. Our accelerating CLO launches, both in the U.S. and in the U.K. are distributed through third-party banks, where we have excellent long-term relationships.

Let's take a closer look at some of our more successful strategies. These figures just highlight a few of our capabilities. Our CLO, alternative fixed income and global high-yield strategies have all shown strong revenue growth and performance. For example, our CLO revenues are projected to grow from EUR 21 million in 2023 to EUR 34 million in 2025.

We have been managing CLOs in the U.S. since the 1990s, and we are one of the longest active CLO managers in Europe. Our alternative fixed income and global high-yield strategies have also delivered very impressive results, supported by our proprietary research and our long-standing expertise.

To support our growth ambitions, we are focused on improving the scalability and efficiency of our organization. Our goal is to achieve Global Platforms operating margin in excess of 20% by 2027, up from about 16% in 2025 and under 6% in 2023. In addition, we have ambitions to increase Global Platforms revenue per FTE to around EUR 470,000 by 2027.

We will achieve this by optimizing our employee base, reducing costs through contract renegotiations, product discontinuations and driving assets into more commingled funds to improve scalability. Investments in a single global platform for public securities, enhanced risk analytics are also keys to our success and our efficiency.

Our strategic partnerships are vital to our growth strategy. We have a 25% stake in LBP AM in France. We will support their expansion into French and European distribution, leveraging their strengths in equities, multi-asset and in private markets.

Our AIFMC partnership in China, where we hold a 49% stake, is a top 20 mutual fund company in China. AIFMC has extended its range from equity to fixed income to blended strategies with very strong investment performance. The Chinese regulatory reduction in management fees and in other fees have been well handled by the AIFMC management team. However, it has impacted our JV financial performance.

Nevertheless, we still see outstanding potential in the Chinese market in the long run. In aggregate, these partnerships provide unique access to new markets and client bases, supporting our ambitions to grow and diversify our business. As part of Aegon's relocation to the United States, we and Aegon Asset Management are fully aligned with the group's ambitions and deeply engaged in supporting Transamerica's growth.

Our new organizational structure allows us to better support Aegon's relocation to the U.S. without any disruption in how we run our business. This includes being the anchor manager for Transamerica, as Will just said, and we'll grow our general account assets with them, adding resources as they're further pushing into higher-yielding investment strategies.

We consistently work with Transamerica to develop new higher-yielding products and have created an outstanding stable value fund for their clients. Transamerica also helps AAM by providing seed capital for the development of new strategies and existing AAM U.S. strategies. In January of 2026, we will move Transamerica Asset Management's mutual fund business into the reporting line of AAM to collect all of our asset management activities together under AAM in the U.S.

Together, Transamerica and AAM have a truly symbiotic relationship with clear roles and responsibilities outlined here. Our close collaboration drives us to meet Transamerica's evolving needs as they grow their general account, and it allows us to benefit from their growth as well as capitalize on new opportunities in the U.S. market.

Our financial ambitions between now and 2027 are clear. They are ambitious but achievable. For Global Platforms, we are targeting an operating margin in excess of 20% by 2027, and we expect third-party revenue to grow by about 6% annually. For the Asset Management business as a whole, combining Global Platforms and strategic partnerships, we aim for an operating result of more than EUR 200 million by 2027. That excludes TAM.

In addition, for AAM overall, we plan to grow total remittances to the group by more than 5% annually through 2027, starting from a base level of about EUR 80 million in 2025. These targets reflect our confidence in the strength of our people and systems, the scalability of our business model and most importantly, the continued confidence our clients have in us.

To summarize, Aegon Asset Management is a global asset manager with a large and growing third-party asset management base and strong alternative investment capabilities. The actions we have taken strengthen our business model and improved our financial performance. By executing on our clear strategic priorities, we are well positioned to further enhance our operating margin and achieve our ambitions for 2027. Thank you.

All right. Thank you very much, Shawn. And -- so I'm now going to invite everybody back on stage for the second Q&A session. So same approach as before. I'll be standing here moderating, and you can ask your questions by raising your hands and someone will give you a mic. I'll start with Nasib this time.

Nasib Ahmed from UBS. Questions -- I'm here. So Will, thanks for the detail around the life insurance business. Just on -- so you mentioned re-risking could get you 30 basis points. That's around EUR 250 million to, I think, EUR 400 million. Is that already in the numbers? And also another number question on the fixed index annuities. You said EUR 500 million to EUR 1 billion. That's already in the new business. I'm assuming that's what's driving the OCG down.

Second question on targets. There's a couple of targets that I'm missing, the WFG multi-ticket target and the midsized plan target. Any rationale for removing those or unless I've missed them? And then on Asset Management, I noticed on the separate account, you're only managing 18% within the affiliates. What capabilities can you build to get more policyholders to invest in your Asset Management solutions?

All right. Thank you. Will, do you want to start?

Yes, may I ask for a repeat of the first question. I didn't quite...

Yes. So you said it's 1 basis point of re-risking gives you EUR 8 million, and you said you're 30 basis points off the market, right? So the question is, is that in the numbers?

I understand. So as I said in my comments, neither FIA nor the general account is embedded in the financial guidance. So fully, it would be considered additive, incremental and outside. So let me just start by saying that the guidance we offer on operating results, OCG and net remittances are in our embedded plans, ones we're committed to, clear path to achieving. We have ambition to create better trajectory, better results and to do it long term beyond the '27 time horizon.

In our general account, we see room within comfortable room to be able to begin to invest for higher yields well within our risk appetite and well within our framework. We don't intend for that to happen overnight. One reason to start with new money investing, which is supporting our sales volumes as well as reinvestment is that it happens over time. It's a dollar cost averaging concept as we go through time.

So as we add capabilities and as we add that yield, we would expect that to be additive to value creation. That's one point. Second, the FIA plans we have are not embedded in our current new business strain. Our new business strain today, which is supporting the investments that I talked about in Life, our RILA product and our Stable Value is what is embedded in the OCG guidance that we have.

There are other questions you want to comment on the...

On the multi-ticket. Yes. So there's a couple of operational KPIs. We -- when we looked at our '23 Capital Markets Day, the big emphasis was on driving the financial earnings power of the company, right? Operating results, OCG and supporting the net remittances. In addition, we offered operational KPIs that we felt were important -- could be important drivers to get there.

Indeed, you've pointed out 2 operational KPIs I didn't highlight today. We actually went -- it wasn't just multi-ticket agents. We looked at multi-ticket as well as multiproduct. In both multi-ticket and multiproduct, we have fallen short of our ambition. I think I mentioned it that we see a room to improve in the overall productivity. We're on track for recruiting, but the underlying productivity of agents, we want to improve, and we think we can get back to those ambitions and catch up with a development of capabilities and technology that can make it easier for agents to do business and activate their clients.

That's one. In terms of the midsized plan target, we were pointed that as a segment that we are targeting as an attractive segment of retirements, small businesses, medium-sized businesses and full plans.

We've actually had success in installing our ancillary solutions strategy more broadly than midsized plans. You can obviously see that we're on track for our ROA targets. So we simply didn't highlight it. But indeed, we are a leader in the midsized business place and full plans.

All right. Shawn?

For me?

Yes. For the last question and the...

The affiliates question, we run just about all the fixed income that capabilities are for unique fixed income in the affiliate book now. So to grow that, one, we would need other capabilities that we don't have in the U.S. at the moment or in some asset allocation strategies, there are multiple managers within that, and we can further penetrate potentially in that strategy. But to materially change, it would require capabilities, we do not have yet in the U.S.

I guess would you lift up teams to develop that capability from competitors?

It's possibly, but it's not my focus. I'm focused organically on how to deal with what I currently have.

All right. Farooq?

That's very interesting presentation. Well, in terms of the new initiatives you talked about, can you talk about the phasing of it? I mean it feels like with WFG, you can do fixed annuities immediately. You have the capability, you've done it in the past, same with the re-risking.

So can you talk about some of the phasing of it in the next few years? Secondly, how important is it? I mean, this is a question actually for Lard as much as individual. And how important is it to have an asset manager that's global to be listed in the U.S. when you look at your peers or strategically, the synergies that you get from having that in the business or the way that people trade you, is this really, really central?

And then my second question you kind of -- my third question, you kind of answered, but I was just thinking inorganically in Asset Management, maybe not now, but wouldn't that be something you'd eventually need to develop in the U.S., for example, a bigger equities capability?

Let me take that first, Will. So on Asset Management, if you look at the Asset Management capabilities and you look at the products that we offer, whether it's in the U.S., whether it's in the U.K., whether it's in other markets, the products all have long-term savings elements, retirement, building up capital basically for our clients.

Therefore, the Asset Management capability is an important capability to have, not only for the obvious, let's say, financial benefits, but also in product design, in -- this is so integral to it that also the intangible fabric that you have to have access to, in this case, more than 350 specialists and investors is something that is very important for the product design and product capabilities that we are building.

So that's number one. Number two, our Asset Management business is a medium-sized asset manager. We know that. But if I look at the improvement potential of it, pretty big. And if you see where the margin improvement has come from, so we have 3.5% margin, was it in '23, supported by the work of Shawn and his crew. They're now at 16%. They want to expand to 20% and beyond 20%. So I think there's a lot of financial room that I'd like to see happening because I like these capital-light earnings and those things are valuable. I'd like to see that coming across.

So I like the model that Will and Shawn both were explaining, which is that Will says, look, I see opportunity on a risk return basis to pick up yield over time in my general account, which, by the way, is growing as a result of the growth of Transamerica.

Number two, he's saying, look, I got an Asset Management business, which is more and more skewed toward alternative fixed income products. That's very helpful for me. That's why it's an anchor capability that he internally uses by collaborating with Shawn. Then in addition, he's saying, I'm going to add other asset managers where needed because asset managers can't be all things to all people at the same time.

So that's only good. And that actually optimizes the model of having an in-house manager with the other managers that you complement with. And as a result, Will cannot only help to structurally over time on a risk return basis, pick up more yield in his general account, but secondly, also power potential new product offerings like the broadening initiative that Will and the team are working on broadening the product offering in the annuity space.

So for all those reasons, unlike good, let this happen, let this continue. There's a lot more value to be created here, and that's what we're focused on, okay? When it comes to acquisitions or inorganic activity, I said that we are focused on our organic path, whether it's all the work that Shawn and the crew is doing for Asset Management, where there's a lot of work to be done, whether it's all the work that Will and his team are doing on the U.S. and the international markets, et cetera.

That's what we're focused on. But if there is an acquisition opportunity that makes a lot of sense financially, that we're ready for, that accelerates our strategy, ticks all the financial boxes, we're here to make money. We're here to create value. That's what we've been doing over the last 5 years. We will continue to do that in the coming years.

All right. Will, on the...

Will, on the other question.

On the other question.

I would just -- furthermore, the insurance industry economic value chain, an important aspect of that is Asset Management, and we don't want to forfeit that. We want to benefit from that. So being able to get most of the synergies from the compound of economics is an important way that we think about it.

As it relates to our general account initiative, we've added a Chief Investment Officer, and we would expect that we would begin to phase in this work through '26, '27 and '28. The -- what determines the phasing? I think the phasing is determined in part by prudence of relative value investing.

I would say that is an important part. I think, too, it's paced with the level of our new business and reinvestment and it's paced with our origination sources. So I view this as something that is sequenced carefully, prudently as a way that we run the company and the way that we deploy our assets in our general account, not as a big bank.

One supports the other. Up until this point, we purposely built our strategy that we announced to you in 2023 and all the embedded plans based on where our advantages are -- were at the time, but also where we could win around our limitations. At that time, our general account was not growing, and we needed to demonstrate that we could fire up the Transamerica commercial engine to indeed get it growing.

So up until this point, we have been participating in products where having competitive yields were not a part of the equation. What I'm signaling to you in FIA is that we will need -- we will be very disciplined and we'll be very targeted about the manner and form in which we begin to select products where yield is in the competitive equation.

So the strategy around the general account goes hand-in-hand with unlocking and opening the door for the FIA. Now the manner and form in which we do this, we ultimately need to finalize. The business case indeed needs to be value generative around the parameters that Mr. Duncan -- Mr. Russell and Lard laid out earlier. And as we have those updated district, we tend to -- we will update you as we have this finalized, we'll update you and expect it will be next year.

All right. Michael?

Lots of little questions. The first one is just a simple number one. The EUR 75 million, does it come in 2025? Or is it '26?

We injected it in 2025. The benefits in '26.

'26. Okay. And then on retirement, I think earlier in the conversation, I had the impression that it was still a net outflow, but at some stage, it swings to net inflow. And I just wondered when this happens? And maybe can you give us a number? And then on a key question, Duncan approved this question. Who's your peer? I mean, who you're trying to beat in the U.S., just to give it a feel?

I know we're not going to be following you in 2 years. You'll be aware you'll be in the U.S. But just in the meantime, it would be nice to know. And the final question is -- two questions. The Asset Management, does it include the business that you got from ASR, managing the mortgages and stuff?

Okay. So that's not because they wanted to buy it. And then the final point is on TCS. Can you -- the impression I had from what you were saying just before the break is this kind of J-curve and you're actually getting to the acceleration. Maybe you can give us a feel for that.

A lot of good questions...

All right. Do you want to start, Will, on the retirement question?

Michael, how about I start with the TCS. When the transformation began, Transamerica's operations and service and product and technology support behind the Protection Solutions division, Life and Annuity business was wholly outsourced. As a part of our strategy in 2023, we brought that back in-house under our control.

And that was critical because there were -- there are many high-value touch points in operations and service that without that, you simply have not earned the advisers and the agents trust to choose Transamerica as their product provider. They are not beholden to use Transamerica.

It is a free country, and they have a broad array of carriers that they can choose to. So we must have a company, a culture where we realize that we're earning our advisers and agents business each and every day. Operations and service are a really key part of that.

We have fully resolved the TCS or the outsourcing situation with a large third party. That is now fully in-house. That was completed in the first quarter of this year. And from that position, we now, I would say, also have the ability to have improving operating leverage as an arrow in our quiver. And it sets us up to be able to think about product extensions and market extensions.

Keep in mind, our Life business is built on very high policy volumes. I think we are -- we are the #5 in number of policies issued in the U.S. market. So therefore, our operations are even more paramount. So it has opened itself up.

I'll jump to your second question, just to keep it here, Michael, on retirement. Stepping back, the retirement industry as a whole is in net outflows. And it's in net outflows because of the baby boomer generation exiting the workplace, having accumulated retirement balances during their career. They then move those balances out of the workplace, retirement industry into individual accounts while the next generation is younger, entering the workforce and building up their account balance.

So at a certain point, this industry is about getting positioned for when the next generation, which, by the way, is much larger than the baby boomer generation in the workforce begins to accumulate sufficient values, you will see the industry at a certain point move in to positive flows.

We were performing worse than our industry peers in net deposits. We have restored that. So we now are performing around net deposits consistent with peers. They remain, and I would expect them to remain negative to hover around 0. There may be quarters from time to time where we would have positive net flows, but it's because your retirement plans can come in and leave in large amounts because they're institutional accounts.

That's why the emphasis is on margin and ROA. That's why I point to growing from 8 basis points ROA to 11 basis points ROA and then ultimately to mid-double digits. It's imperative.

Competitors?

Who do we compete with in the U.S.? I wouldn't say there is -- if you take companies, there rarely are direct peers. But if I was thinking about Transamerica as a leader in life insurance, retirement and retail distribution, if there was one peer that's most similar at the aggregate level, perhaps Corebridge.

When you get into individual business lines, we think of it a little differently. In distribution, I think Primerica. In retirement, I think Voya. In Life, I think Nationwide Financial. Each are focused on the similar business model and similar target market of the ultimate customer.

All right. And Duncan, on the -- does it include the business you got from ASR? I think the answer is yes.

Yes.

My business, yes. One of the 450 clients is ASR.

All right. Ian?

Why did you choose not to include the U.K. asset manager in the U.K. strategic review? And also, if you could talk about the synergies you see between the Asset Management businesses and why you, in particular, think you're the best owner of the Dutch asset management business? And then on the U.S. general account, you mentioned a willingness to add external managers to that. Would you be looking or does that include looking at a strategic partner or a strategic partnership with a U.S. alternative asset manager?

Yes. So let me answer all those questions. The first one is we deliberately did not include our Asset Management business in the U.K. in the review. We believe that the total setup that we have for the asset manager, the strategies and where they are being managed for. It's a global business model, right?

So you have assets, investor teams and then you sell a lot of these strategies across the globe to multiple mandate givers, if you will, potential clients. So in the U.K., we are not including the Asset Management business in review. In terms of synergies, as you've seen from the deck, there's EUR 43 billion that is being managed in the U.K., U.K. AUM.

It's the general account of the insurance business. The fees associated with that, by the way, are relatively low. It's really not much. And obviously, whatever happens in that review, we aim to protect the value of our asset management fees that we're generating in the U.K. So that's number one.

Number two, yes, we think we're a good owner of our business -- our Asset Management business in the Netherlands. It's EUR 120 billion of AUM that you're running out of that for Continental Europe. That's being driven from the offices in the Netherlands, profitable business, aim to grow the profitability and the margins. So again, it's an interconnected business model that operates globally and that has investor teams managing the strategies. So we're happy to own that.

Then the final question that you had on adding external managers, will you look at strategic partners? We're evaluating, so Will and myself and the others, we're evaluating how to set up the model that Will was describing as one of the initiatives that you're on, Will, which is to add to the anchor partner of our own in-house manager, other managers, and we're still looking at the best way of how to do that as part of that initiative.

All right. [indiscernible]

Just a quick one. I mean you say that WFG is sitting at the center of what you're doing. Just -- I'm wondering, I mean, you have Primerica, but no one has bid for it. I mean if it was so essential, you would have thought that one of the other Life peers would have thought that they would have bought it because it would have been interesting to follow your model. So I would like just to have your thoughts on this.

Jason, I don't understand one thing. Did you say WFG did you hear the question well?

In essence, you have WFG. So first, the major competitor is Primerica. And I was wondering if Primerica wouldn't be better, why Primerica has not been bought by other -- why other insurance would not be interested to create the model you have where basically it's integrated, they buy it and they have it so that they can build up internally the sales of the insurer as much as they can.

So there are a number of peer business models in the U.S. that are recruiting-based agents and agency-led businesses. WFG is one. Primerica is another. Primerica was once a Citigroup subsidiary before becoming -- before IPO-ing out as a stand-alone public entity.

And there are indeed a few others, some public and some private. So I think the value -- the advantage that you have in the insurance business of having access to a customer cannot be underscored. It gives you knowledge beyond access. It gives you knowledge, experience, data of what customers want, what they need, how to design products, how products behave. It's a strategic advantage and imperative.

So I believe it is indeed a crown jewel of Transamerica and one in which we will foster to be a better business, not only for ourselves, but also for our agents and our agency leaders.

And just to add to that comment, Jason, there's one more thing to it. If you look at our model that we operate, WFG is not only working exclusively for Transamerica. So what this means strategically for us is that we have unique access to all these middle market households with the second largest retail distribution force in the U.S. That's number one. So the reach is there. The access is there.

Number two, if we choose to manufacture in a certain market segment like Index Universal Life, we -- they sell that for us. So they're a big producer in new self swap volumes. And we actually create manufacturing profits and distribution profits. But if they are sitting in front of a client and they have a solution that we choose not to manufacture, then they offer products from other players, right?

And we still make money on it, the distribution piece of the value chain. So in that case, it is strategically a very important capability that we have because not only gives us -- it doesn't give us reach and all the things that Will was saying, but also because we want to choose in making sure we manufacture where we believe we have the great capabilities and also really risk-adjusted profit returns that are good, that where we do not wish to manufacture, we still pick up the distribution angle in the value chain.

And to add to Lard's comment, and WFG is relevant to leading world-class insurance companies in the U.S. and Canada. So our 2 largest life insurance partners are Nationwide and PacLife, high-quality companies in Canada, Manulife.

Manulife, yes.

Inside our annuities, which is predominantly third party, I would say it's 90% third party. Our best carrier partners are Nationwide and indeed Allianz. So not only is WFG an important originator of solutions for Transamerica to further bolster large point, it's also a leading and important relevant company for other carriers in the industry.

A gentlemen over there, Iain.

A question for Will. So moving to higher-yielding assets, obviously involves taking more credit risk at a time when credit spreads are really, really low. Just curious because as a shareholder, I like the fact that it's 97% investment grade now. Where do you see that going by the time this transition ends in '28?

We will maintain our conservative well-positioned, prudent asset partner relative to peers. So we don't view that changing, number one. Number two, one reason why you hear my comments measured where I say benefits will be realized over time and incrementally is the nature of where we happen to be in the macro credit cycle and where relative value might be at any particular point in time.

So I think the emphasis really is focusing on building out the capabilities to be ready. Building out the capabilities of the CIO office expertise, building out the origination sources. And then the foundation is set and you have the ability to begin to make those relative value prudent decisions that will remain within our risk appetite and our risk framework and maintain our relatively conservative and diversified portfolio position.

All right. Right here.

It's Abid Hussain from Panmure Liberum. I've just got one question. It's on the U.K. business. So I just want to go back to the strategic review. What's within the perimeter? Have you sort of given any color of what's in, what's not? And then in terms of the RFP process that you're running, is that a focus on a single disposal? Or do you think you maximize value by breaking up the business into its component parts? So just really trying to understand how you're going to maximize shareholder value in that review.

The perimeter, let me be clear about that first. That is our Adviser platform business, our Workplace business and the insurance unit-linked business that we have. So it's not the Asset Management business, but it's everything else. That's the perimeter that's under review.

We have launched a review today. So we are going to look at the best way we can accelerate the progress of the value creation of our U.K. business. All options are on the table, including a potential divestment, and we aim to conclude that review in the first half of 2026.

All right. Michael for question 6.

They're very light. The first one, I'm not sure, but I had in memory that was it last year or before you said, no, WFG is selling tons of fixed annuities, but we don't want to do it. If I'm right, what has changed?

And the second one is a very cheeky question because I think you didn't want to disclose it, but who knows. The new business train at $200 million a quarter, can you give us a feel for how big it could become?

Yes. I'll take the first, and Duncan perhaps the second. Indeed, when we were here in 2023, we put a flag in the ground that this company needed strategic clarity and focus. And we needed to have a discipline of targeting markets where we had a right to win.

And our conclusion, and my conclusion, I shared with you that there were 3 businesses that had the capabilities and that they could win with the advantages and with the reality of limitations because that's just -- right, that's the world. And it was WFG, it was life insurance and it was retirement.

But you noticed we did not talk about annuities and we did not commit to annuities as a part. And there's a few reasons. Number one, it was the business most impacted from the large outsourcing arrangement. It's a business that is -- that would have required more sophistication in operations and service because you're primarily originating those savings with financial high-quality banks, broker-dealers that are SEC registered and operated. You need the ingredient of yield, competitive yield, which we simply were not at that point in terms of capability and sophistication to have.

We need the product capability and distribution capability. So just an objective view of the ingredients. We simply did not have the ingredients where I felt we could win and compete on our terms. What's different today? Operations are back. Product skills are back, building asset yield capabilities. We launched a RILA product, very focused, single product to rebuild our third-party distribution, done, $4 billion of account value. We've put ourselves in a position to now make that choice and open the door for an add-on extension. So that would be the difference today, Michael, versus 2.5 years ago.

Duncan?

On the second question, no, unfortunately not, we're not going to give the components of OCG going forward. We will report it, but we're not guiding to it. And one of the reasons for that is that some of these things can move around a bit and some interaction between the different components. And I just wanted to simplify.

Farquhar from Autonomous. I just have three questions basically, mainly probably all for Will really. Firstly, I'd like your sense of where kind of redomiciling will make the biggest difference for you and maybe an ordering. You've obviously mentioned a few initiatives to work through, but I just really wondered which -- where you see it really making the biggest difference in order? And on a related point, where do you think moving to U.S. GAAP will ultimately align the business and maybe shift the way it's managed?

And then secondly, on the [ GA re-risking ], what's the reason for accepting the yield gap before in terms of where you were? And ultimately, where will it shift to strategic asset allocation over a cycle, which obviously will be timing dependent? And then thirdly, coming back to the question I had earlier in the first session on the inorganic options, where would that be most able to accelerate the organic strategy you do have? And obviously, you've spoken a lot about latent compounding economics, but I also wonder if there are any businesses that you actually see scope to maybe reinforce on the strategy side.

Thank you. So I think the -- from my perspective, the largest impact of redom is there's power and clarity, particularly in large organizations. Clarity and focus. And so when a company with our ambition, with our resolve and resilience, and I'm referring to the whole of Aegon Group makes the strategic decision to go, you put the whole power of the company behind it.

So I think that's one. Second, when you have strategy and financial reporting aligned, I think it simplifies, streamlines and makes a lot of processes efficient. And then lastly, comparability of peers is equally a simplifier and accelerator. Remember, we are competing in the marketplace against very talented competitors. We're also competing for talent. And being able to now have strategy and financial reporting ultimately aligned in GAAP also really opens up the funnel for more talent that would be versus being an IFRS 17 talent. There's not as much finance, strategy, technical insurance company talent that has that experience in the U.S.

And what I keep reflecting on in this decision is there's been a number of companies that have come before us that have made a similar journey where they've focused their future onto the U.S. They've gotten strategically and financially aligned. Now the form of their journey might be different.

But without exception, each have improved their strategic and financial performance and create a lot of value. So I am quite energized that the form in which we aim to take this company is that the Aegon shareholders can benefit from this value creation journey that can come from a redom to a very attractive market.

The other two. The question was why are you accepting a yield gap? This, I think, goes to the asset side of the portfolio. Why have you accepted it in the past and et cetera?

One, we've accepted a yield gap I wouldn't call it accepting a yield gap. I would say that we have been able to be successful in our markets without yield really being a part of the equation. Our IUL flagship product is a death benefit-oriented product.

So it's predominantly underwriting is the underlying kind of source of margin. There's a bit of spread. In Stable Value, while that's a spread product, it's not a competitive yield market because you're -- it's inside of the record-keeping retirement plan.

So I think as we now move into what we will not accept is entering markets where there is a yield gap. And I think that's the point that I'm really signaling is that as we move into and get bigger in RILA, choose to enter into FIA, we would not do that by accepting a yield gap because we have pricing discipline.

And it gets to the heart of picking markets where you have a right to win. So I would think about that not as looking backward as a yield gap, I think about as looking forward, we will not compete and operate with a yield gap. And then could you repeat your last question on organic options?

Inorganic, I think.

No, I think inorganic...

Inorganic.

I think it was inorganic.

Yes, I was just asked is -- the other question I asked to Lard as well is obviously, you've got your core organic strategy. There are options potentially on the inorganic side of things where that might accelerate things. I just wondered where you think that might be there in terms of where the strongest scope for that would be given the latent kind of compounding economics you've talked about and maybe in terms of weak points within the business where actually reinforcement might help.

Yes. So Farquhar, as you know very well, good deals are few and far between. And they are very opportunity driven. It's where opportunity meets discipline, where this needs to happen. I think the American marketplace is a huge marketplace. The life insurance marketplace is a huge marketplace. There's many, many players in many, many different parts of the market.

Having said that, we are focused on our organic strategy. If we -- and there's a lot that Will and the team are trying to achieve and there's a lot of focus on that. If there is an opportunity that presents itself, we'll look at it. We'll compare it to -- compare it. We will assess it against very strict financial and nonfinancial criteria. And if it all makes sense, we go after it. If it doesn't make sense, we don't. It's pretty simple.

All right. You already asked 7 questions, Michael. So this is like the final question, and this would actually be the final question of this Q&A session, if that's okay.

On the stage, my question is, which one of you is the most ambitious? In other words, whose words should I write down first? Is it Will, I want to be the best in Life? Is it Lard saying I want to make the most money? Is it Shawn making I want to make the biggest margin or is it Duncan who is the most -- biggest value creator, I know...

It's me. Do you want to do a roundtable about who is most ambitious? About?

Incentives.

Incentives. Yes. So you mean financial incentives for all of us? Okay. So we have a remuneration policy that we're all on, which is a fixed compensation, a short-term cash-based incentive plan for a year on financial performance criteria. And then we have on top of that a longer-term LTI, as we call it, a long-term incentive with a 3-year performance cycle based on financial criteria and a small component on nonfinancial criteria. And that is all stock-based.

The -- there are target levels that are being set for this. So over the short-term incentives, they are on financial KPIs, and they are set target levels every year. And then there's a curve, which is incentivizing outperformance of those. And there is a -- for the long-term incentive, it's a 3-year horizon, a 3-year performance cycle, also the same thing.

There are target levels, but then there is a curve in which you can outperform to have the incentives in the right place. So that's where we're actually all on.

The biggest driver. So on the STI, so the short term, there are financial KPIs. They have to do with commercial targets. They have to do with free cash flow. They have to do with OCG, an operating result, for instance. And when it comes to the long-term metrics, the metrics that we have published are return on regulatory capital. And the other one is a relative TSR, so relative total shareholder return measured against the peer group.

All right. Okay. Thank you very much. Thank you for all your questions. Thank you for all your answers. So we're going to have drinks soon. But before this, Lard, I'll leave to you to give the final words.

Yes. So first of all, I would like to thank all of you for being here today and to spend time with us and for all of you on the webcast also to have spent time with us today on this. This morning started with a long press release where we had a lot of news to share, and I'm very pleased that we were able to, in the dialogue, explore what that news really means and be able to discuss that with you.

So I want to thank you very much for that. I want to leave you with a couple of thoughts. If you just take a step back, just take a step back, I would submit to you that the transformative nature and journey since 2020 of this group is a pretty unique journey in our industry. We've told you what we have achieved so far.

We have shared plans with you what we aim to achieve in the future. But I hope that you also have seen that we are really focused on value creation, nearly obsessed with it and on building better businesses. And I also hope that you have seen that we're not shying away from any difficult decision.

We have taken those decisions in the past. And quite frankly, if you look at the monumental decision we took today for 180-year-old company to move the company to the U.S. to change the name of the company of the group. That's a pretty profound statement that we make in the total trajectory of this company.

And why are we doing that? Because we are led by value creation and creation of better businesses, and that is what we do. We have done so, and we move at a decent pace. This team will continue to do so. We are committed to our customers. We are committed to provide the best possible service to grow profitably, to create value and to remain our financial discipline and rational approach to everything. And on top of the plans or in addition to the plans that you have seen today and we presented to you today, we have launched a review of our U.K. business.

We have launched a EUR 400 million buyback for the coming year. And we have the plans and the opportunities that the U.S. marketplace has to offer, the Asset Management business with all its potential to grow better margins and to improve the margins over time and the international businesses that have created value and that become valuable every year again as they profitably grow.

With that, I would like to wish you the most wonderful holiday season that you can have. And I would also like to thank all the people on the webcast. Have a wonderful holiday season. To my colleagues at Aegon that are watching this, thank you very much for everything that you are doing for this company. We are an intent shop, and we will continue to be an intent shop, and I wish everybody a good holiday season, and I invite you here to share a drink with us. Thank you very much.

Good day, and thank you for standing by. Welcome to Aegon's Third Quarter 2025 Trading Update Conference Call. [Operator Instructions] Please note that today's conference is being recorded. I would now like to hand the conference over to your speaker, Yves Cormier, Head of Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. I would like to welcome you to this call on Aegon's Third Quarter 2025 Trading Update. My name is Yves Cormier, Head of Investor Relations. Joining me today to take you through our progress are Aegon's CEO, Lard Friese; and CFO, Duncan Russell. Before we start, we would like to ask you to review our disclaimer on forward-looking statements, which you can find at the end of the presentation. With that, I would like to give the floor to Lard.

Thank you, Yves, and good morning, everyone. I will start today's presentation by running you through the strategic progress we're making and the commercial performance in the quarter. Then I will hand over to Duncan, who will address our capital results in more detail. So let me begin on Slide #2 with the key messages for the quarter. During the third quarter of 2025, we continue to make good progress in transforming our businesses, and we generated EUR 340 million of operating capital generation.

World Financial Group expanded its distribution network, adding more licensed agents and increasing their productivity. The commercial momentum in our U.S. strategic assets resulted in higher life and annuity sales. In Retirement Plans, account balances increased as did the balance of our ancillary products and written sales remained strong. In the United Kingdom, we recorded some outflows due to the departure of 2 large low-margin workplace schemes, while both our asset management and international businesses continue to grow.

Turning to our capital position. Our units remain well capitalized. Furthermore, the cash capital at holding remains very healthy at EUR 1.9 billion despite returning just over EUR 800 million to shareholders in the period. At the end of September, we had executed just over half of our ongoing EUR 400 million share buyback program. We expect to complete the remainder by December 15.

Looking towards the end of the year, we continue to expect to achieve all our financial targets for 2025, despite the weakening of the U.S. dollar during the year. We look forward to providing you with an update on our strategy at our Capital Markets Day on December 10. On the day, we also aim to share the outcome of a review regarding a potential relocation of our legal domicile and head office to the United States.

Let's now move to Slide 3 to discuss the recent commercial performance of the Americas. Our aim is to build Transamerica into America's leading middle market life insurance and retirement company. In the third quarter, we continue to make good progress with this transformation. At World Financial Group, the number of licensed agents continues to increase steadily, thanks to the successful recruitment of new agents and improved retention of existing agents. The number of multi-ticket agents remained stable compared with the past 2 quarters, albeit below the level of the third quarter of last year. We have recently focused our actions on improving the productivity of existing agents. This led to a 15% increase in total life sales at WFG and a 9% increase in annuity sales backed by solid consumer demand.

Transamerica's market share in WFG was 65% in the reporting period. Around half of the 39% increase in new life sales in our Protection Solutions segment came from higher index Universal Life sales at WFG and our own agency channel. The remainder of the growth was driven by higher sales of the final expense product we offer through a fully digital underwriting platform that was launched in the autumn of 2024. In the Savings and Investment segment, net deposits in our Retirement Plan business were negative, largely due to outflows in large market plans and slightly negative net deposits in midsized plans.

However, business growth and favorable markets over the last year drove a 10% increase in the total account balances. Written sales in both large market and midsized plans remain strong, which implies solid levels of takeover deposits for future periods. We generated further growth in both the general account stable value product as well as in individual retirement accounts, as we work to increase profitability and diversify revenue streams of the retirement plans business.

I now move to Slide #4 to update you on our other businesses. At Aegon U.K., net deposits in the Workplace platform were negative for the first time in the last 2 years. This was due to the departure of 2 large low-margin schemes. In the adviser platform, we continue to see the adverse impact of ongoing consolidation in the nontarget adviser segments. We are working hard to improve the platform experience for our customers and the enhancements we have delivered to date have been well received, leading to higher Net Promoter Scores.

Together with several other initiatives, we aim to return the adviser platform to growth by 2028. In our International segment, we continue to grow our book. Sales in Brazil continued to grow, particularly in credit and group life products, but was largely offset by currency movements. New life sales decreased at our joint venture in China, which offset growth in the other markets. The new life sales contributed to the growth of gross written premiums across the book.

In Asset Management, positive third-party net deposits in our Global Platforms business were mostly driven by inflows in fixed income and alternative fixed income products. In Strategic Partnerships, net deposits were driven by Aegon's French Asset Management joint venture with La Banque Postale. With that, I turn to Duncan to discuss our financial performance in more detail. Duncan?

Thank you, Lard. Let me start with Slide 6. Operating capital generation before holding, funding and operating expenses increased by 1% year-on-year to EUR 340 million. Free cash flow amounted to EUR 76 million in the period and mainly reflected our share of ASR's 2025 interim dividend. Cash capital at holding remained strong at EUR 1.9 billion, largely from the proceeds of the sale of part of our stake in ASR in September. Gross financial leverage amounted to EUR 4.9 billion, which is consistent with our target level.

I now move to Slide 7 to address operating capital generation or OCG. Total OCG increased by 1% compared to 3Q 2024. OCG from the Americas increased by 6% or 12% on a constant currency basis. This was driven by a higher contribution from the strategic assets and a broadly stable contribution from the financial assets. The increase of OCG from strategic assets reflected more favorable claims experience compared with the prior year period as well as a higher release of required capital.

This was partially offset by a higher new business strain, largely associated with growth in Individual Life compared with the third quarter last year. The total new business strain in this quarter remained $10 million below the guidance of around $200 million per quarter. Adjusting for this and $20 million favorable claims experience, the OCG fell within the guidance of $200 million to $240 million per quarter for the Americas. In the U.K., operating capital generation decreased compared with last year where several favorable nonrecurring items were recorded as well as from higher new business strain from a changing product mix.

In British pounds, OCG amounted to GBP 38 million within the current run rate of around GBP 35 million to GBP 40 million per quarter. In the International segment, OCG decreased versus last year, mainly due to lower OCG in China, reflecting the reporting change we implemented at full year 2024. Nevertheless, it was still above the level of around EUR 25 million per quarter, which we see as the run rate, thanks to several favorable nonrecurring items this quarter.

Asset Management OCG increased mostly due to around EUR 6 million of nonrecurring items. Stepping back, therefore, we remain on track to achieve our full year OCG target of around EUR 1.2 billion for 2025. On Slide 8, we show the capital positions of our main units, which remained robust and above their respective operating levels. The U.S. RBC ratio increased by 5 percentage points compared with the end of June to 425%. OCG contributed 13 percentage points to the RBC ratio, and this was partially offset by the payment of a dividend from an operating company to our U.S. intermediate holding.

This was to prefinance the planned remittance to the group in the fourth quarter, which had a 4 percentage points negative impact on the ratio. Market movements had a 3 percentage points negative impact on the ratio, driven mainly by the interaction of favorable equity markets and flooring on the variable annuity book. Onetime items, including management actions had a 2 percentage points negative impact on the ratio, largely from restructuring provisions. In the U.K., the solvency ratio of Scottish Equitable increased by 3 percentage points to 188%, mostly from OCG, while market movements only had a marginal impact on the ratio.

I'm now turning to Slide 9. Cash capital at holding decreased slightly over the period to EUR 1.9 billion. Free cash flow added EUR 76 million, while the divestiture of 12.5 million shares in ASR in September generated gross proceeds of around EUR 700 million. We continue to expect to deliver free cash flow of around EUR 800 million for the full year, despite the impact of the lower U.S. dollar on remittances from the U.S., with remittances expected from all business units in the fourth quarter.

We returned just over EUR 800 million of capital to shareholders in the third quarter. Around EUR 600 million of this was related to the payment of dividends. The remaining amount was returned in the form of a share buyback as part of our ongoing EUR 400 million share buyback program, which we expect to complete by year-end. Finally, capital injections to expand investment management capabilities in our international businesses as well as some other items, largely related to capital market transaction costs and the ongoing relocation review reduced the balance by EUR 99 million in total.

As mentioned previously, our objective remains to reach the midpoint of the operating range for cash capital at holding or around EUR 1 billion by the end of 2026. Wrapping up on Slide 10, we remain well on track to achieve all our financial targets for 2025. We look forward to our Capital Markets Day on December 10, where we will provide an update on our strategy and financial targets and announce the outcome of our ongoing review regarding a potential relocation to the United States. We invite you to register and join us at the event in London.

With that, I would now like to open the call for your questions. Please limit yourself to 2 questions per person. Operator, please open the Q&A session.

[Operator Instructions] And your first question today comes from the line of David Barma from Bank of America.

Firstly, I wanted to ask about your long-term care book. Some of your peers have had to adjust reserves recently to reflect higher incidence levels. So I was hoping you could remind us what your assumptions are for incidents versus before COVID and also the mortality and morbidity assumptions you have within that portfolio?

And then I'll ask my second question straightaway on cash. So your cash conversion of earnings in the U.S. looks like it will still be around 70% for this year. Do you see this level as adequate? And what's holding you back from increasing it already?

Duncan -- thank you, David. Duncan, over to you.

Okay. So on the long-term care, we continue to track quite well actually versus our assumptions in the third quarter. You saw that our actual -- you can see that our actual to expected claims ratio was 97%. Our PDR, which is a target of ours from the Capital Markets Day remains at a good level. And we continue to make progress on implementing our rate increases with a further $115 million implemented in this quarter. So we're making good progress.

In terms of our assumptions, we remain happy with our assumptions. We did an assumption review earlier this year, as you recall, where we strengthened our morbidity incidence assumption. We also assume some higher mortality, and that was reflected in our 2Q assumption review overall. In terms of mortality improvement, we think we have a fairly conservative approach, in that we assume mortality improvement. We include mortality improvements for off-claim lives, but excluded for on-claim lives, and we think that's pretty conservative.

And then finally, on morbidity improvements. If you recall, we removed an assumption around morbidity improvement back in the second quarter of 2023, which we think is in line with industry best practice. So overall, we're very happy with our assumptions, and we're seeing continued good progress on our long-term care book. Your second question was cash conversions. Cash conversions, I assume what you're referring to there is the ratio of remittances coming out of the U.S. to either our IFRS operating earnings or OCG.

And just to remind you, we target a stable progression of remittances out of our business units. Back at the Capital Markets Day in 2023 in the U.S., we were targeting a mid-single-digit growth out of our U.S. business in terms of remittances, and that remains our go-forward assumption. In terms of the overall level of cash conversions, remember, we have OCG, but we're also making investments in the businesses below the line and which impacts total capital generation.

We will now go to the next question, and your next question comes from the line of Iain Pearce from BNP Paribas.

My first question was just on the strategic assets in the U.S. So when I look at the year-on-year sort of Q3 versus Q3 last year, the eligible own funds generation seems to be down across all 3 of the units. So just wondering if you could elaborate on what's driving that lower own funds generation when we just look at that line rather than the sort of OCG as a whole?

And then the second one was just on the reduction in capital employed in the financial assets. Obviously, that's come down quite nicely in Q3. Just wondering if you could talk about what the driver of that reduction is, and if that sort of run rate is a good run rate or if there's something special in Q3 that drives that figure.

Thank you very much, Iain. Duncan, can you take questions for generation from strategic assets and the reduction of capital employed in financial assets and the underlying drivers for that?

So maybe on the capital employed in financial assets, which I think is fairly easy. Indeed, we're seeing good progress on reduction in the capital employed in financial assets, which has continued to fall over the last couple of years and indeed also in the third quarter. If you recall, we implemented our base fee hedge in the third quarter, which helped to reduce required capital for the variable annuity book.

And in addition, we favorable equity markets and the interaction between that and flooring also contributed to a reduction in required capital. So basically, our required capital for variable annuities has continued to drop in the third quarter, and that basically explains the reduction in financial assets overall.

Your second question, I'm not entirely sure what it was actually, but I think is it referring to earnings on in-force?

Yes. So if I look at the first slide of the appendix, so Slide 13, year-on-year, if you look at the earnings on in-force for the Distribution Savings and Investment and Protection Solutions business, that all -- those lines are all down Q3 '25 versus Q3 '24. So I'm just wondering what's driving that because OCG is up, but it seems to be predominantly by release of capital and lower new business strain movements as opposed to…

Yes. Okay. No, I understand now. Sorry for that. So on distribution, as I mentioned in my speaker notes, we saw -- we've had some margin pressure on the distribution business, and that's because we are making some investments into our franchise there in order to ensure that the medium- to long-term prospects remain buoyant. So there is a bit of margin pressure on the distribution side.

On the other products, savings and investments and -- just fairly lumpy. So in any one quarter, we can get puts and takes and nothing material driving that. And then on protection, earnings on in-force is down because of just movements in mortality compared to the prior year.

Your next question today comes from the line of Nasib Ahmed from UBS.

The first one, I guess, for Duncan. Stranded costs in the financial assets, can you give us kind of some sense of what kind of costs you're allocating to the financial assets? And the reason I ask is because I think back in the day when you were looking at the variable annuity book, that was one of the points that you needed to take into account in terms of offloading that business?

And then second one, I guess, a follow-up to David's initial question on payout ratio. I think in the 2020 CMD pack, you had a 75% payout ratio for the group. I know you had the Netherlands in there. And then the medium-term target to improve that from 75% to a higher level. Is that kind of still what we should be expecting in terms of payout to OCG?

Duncan?

Yes. So on the second one, again, just to reiterate, so how we're managing the cash flows into the holding is we're trying to make sure that the units, a, pay remittances in line with the growth in their cash flow. And so for the U.S., for example, we've guided towards a mid-single-digit growth in the remittances coming out; b, that we don't want that number to jump up and down year-on-year much because we like predictability in the cash flow coming into the holding. It allows us to plan and to manage the use of cash.

And then, c, and I think that's what you're referring to at the Capital Markets Day that over time, as our -- as the quality of our businesses improve, given that we have been a bit of a restructuring story and therefore, the quality of our earnings improve, then over time, there should be potential to increase the payout ratio over time. On the -- your other question was stranded costs. I can't give you a precise number right now. I'll come back to that maybe at the Capital Markets Day. But indeed, when we consider actions around our financial assets, we have a range of considerations around that.

But one of the inputs indeed is stranded costs because they do represent a sizable portion of our balance sheet, as you know. And therefore, they do cover an element of fixed costs. But let's come back to you potentially at the Capital Markets Day with a bit more guidance on how we think on that. So far, by the way, our actual to expected performance on costs on the financial assets has been good.

[Operator Instructions] We will now take the next question, and the next question is a follow-up from David Barma from Bank of America.

On variable annuities, Duncan, you previously mentioned the possibility of fixing the flooring via internal reinsurance through a captive, I think. Is this still on the table? Or are you okay keeping that noneconomic sensitivity in the VA block? And then secondly, on the net flows into the U.S. mid-market retirement plans, they've been very, very volatile in the last years, but only slightly positive on average.

Lard, would you be able to give us some color on the competitive dynamics there and what the more elevated withdrawal rates might be driven by? And then lastly, coming back to mortality and morbidity and widening the question from just the LTC block to the whole U.S. business. So if I got this right, I think 8 of the last 10 quarters were more favorable than expected. So could you talk about the dynamics there? And at what point you'd recognize this as a structural trend versus where your reserving and expectations are?

Yes. So David, on the retirement plans in the U.S. frankly, as I mentioned in my speaker notes, the business in total is developing actually quite well and has reached now $251 billion of AUA, of which the AUA for midsized plans has increased to $62 billion. And the written sales, which is -- as a good indicator for future takeover deposits are actually strong, and they remain strong.

If you look at the net deposits cumulatively over the last 4 to 8 quarters, we have booked net deposits of $1.4 billion in the last 4 quarters and $2.2 billion in the last 8 quarters, respectively, in dollars. So also, you see really that the underlying business is really strengthening quite a bit. So actually a pretty -- in our view, we're progressing quite well in the business. The -- as I said, the written sales remain strong for both large and mid-markets. Pipeline is strong. So we believe that we're actually pretty well positioned here.

Duncan?

On the sensitivity, so we provided again the RBC sensitivities in our presentation. And what you see from those is that our sensitivity to equity markets on a statutory basis for plus or minus 10% is pretty manageable. A 25% drop has a roughly 24 percentage points hit to the RBC. So I think we're in quite a good position there.

But indeed, we have this peculiarity whereby if equity markets go up 25%, which is obviously a very good thing for our business and our long-term earnings power. Our RBC would fall by, as of the third quarter, roughly 52 points. And that's entirely due to the flooring, which, as you pointed out, is noneconomic. At this point in time, we haven't taken any action on the flooring. It's something which we'll continue to monitor.

And if we feel that, that becomes a constraint or an issue for us. We will indeed explore potential options to mitigate that. But so far, we felt that that's not something we needed to do. We did implement a base hedge, as you recall, last quarter to dampen our underlying economic sensitivities to equity markets, and that remains in place as of today.

Second question was life mortality. I don't know if it's precisely right in terms of your statistic on the number of quarters. But indeed, the thing we do monitor every quarter in detail the amount of mortality actual to expected. And since we made the assumption update a period ago on mortality, we've had, I would say, fairly neutral overall outcomes, mortality coming in more or less with what we would have expected, which is a good thing. In any one quarter, that can be a positive or minus. This quarter, it was a positive. But overall, it's giving us comfort that our mortality assumptions are in the right sort of area.

We will take the next question, and the question comes from the line of Jason Kalamboussis from ING.

The first one is for Lard. If you could -- if you can give us the same comments that you gave on the U.S., that means how you see on the U.K., the developments this year or back end of last year and this year compared to your plans? Are you satisfied with it? And the second question is on the U.S. RBC ratio. In fourth quarter, clearly, it's more likely to be lower. So I would be interested to understand if it is a level you are happy with or if we should be looking at some stage for some injection from the holding into the U.S.

And also just mentioning that, I mean, I don't follow the U.S. life insurance industry, but my impression was that a lot of your peers like to be in the 430%, 440% level. So again, if you can comment on that, it would be much appreciated.

Yes. Let me take the first question, Jason, on the U.K., and then Duncan will discuss the RBC topic. So on the U.K., well, as you know, we have announced our plans for the U.K. to turn it into a leading savings and pension player in the U.K. We have also disclosed how we would do that in the coming years. We have set targets that we want to get the adviser platform to net positive by 2028 and the overall platform to grow in total by 5 billion by 2028.

And we've also set other targets associated with it and also investments that we would make to the -- especially the adviser platform to make the customer journeys more intuitive. We're doing that against the backdrop of a market in the adviser platform business where we see a lot of vertical consolidation happening, and that is driving part of the reason for the outflows there. And the other piece was that we felt that the platform needed work and needed improvements and a lot of new releases and capabilities. And that's why we're doing quite some investments in it.

On the workplace side, you've seen now 2 years of very strong workplace business. And the fact that we now have to this quarter, 2 plans that are going out, which are low margin, by the way, should not detract from the reality, which is that this is a very strong business that has structurally provided either a #2 or #3 position in attracting new plans. So that business is doing well, and 1 quarter doesn't change that. When it comes to the adviser platform, we continue to roll out new releases and improvements. That actually leads to a positive reception.

So we've seen that in our Net Promoter Scores. That's number one. You know that we target 500 advisers. The feedback we're getting from them is also positive. So this is a more longer-term trajectory, as we said, because we want to turn it to positive by the end of 2028. So we are on track. It is not an easy turnaround story that we have there. But the workplace business, strong business, adviser platform, doing what we expected it to do. Reception of the improvements that we're making is positive, is good. And as a result, we maintain our targets for 2028 for the business. Duncan, RBC?

On the RBC, so I think you're aware, we have an operating -- what we call an operating level, which is our kind of normal level we would target for the business of around 400%. And we have a minimum dividend payment level of 350%, which is the level at which we will continue to pay remittances up from the U.S. into the holding. And we're currently slightly above that. From my perspective, that's fine. U.S. peers are anywhere between 350% and 450% depending on business mix, how they're structured as an organization, et cetera. So I don't think we're an outlier, to be honest. And from my perspective, the RBC ratio is at a fine level.

Your next question comes from the line of Michele Ballatore from KBW.

Sorry if I missed this, but the reduction of around $200 million in the capital employed in the financial asset versus the second quarter. Is it -- I mean, is there any particular action taken there? So if you can maybe give me some details about this? And also on the target of reaching $2.2 billion, should we expect more details around this particular factors at the next Capital Markets Day?

So it's Duncan here. So I already mentioned that if you recall, in the second quarter, we -- or just after the second quarter, I think August, mid-August, we implemented a base fee hedge on a portion of the base fees, and that obviously reduced required capital because we're reducing our risk exposure. And in addition, what I mentioned to you is that as equity markets moved up, there's an interaction with how the flooring works, which reduced required capital with some offset in reserves.

And the combination of those 2 things meant that the amount of required capital and variable annuities fell in the quarter, and that basically explained the whole movement in financial assets in 3Q. I think your second question was in terms of the target for 2027. And we continue to make progress, as you saw. As you've seen, actually, we've made good progress in reducing it since -- we originally came out with the designation of financial assets.

We made good progress during this year as well from a combination of management actions, unilateral and bilateral. And we're going to continue to explore all options on the financial assets, actions we can take ourselves, actions we can take with our customers. And if the economics are right, third-party actions with external counterparties.

The next question comes from the line of David Barma from Bank of America.

Sorry, it's me again. And just one last small follow-up on the capital employed again. There's a lot of different moving parts in tracking this capital employed figure between what you're doing, the equity performance, the runoff of the book, et cetera. So Duncan, could you give us a sense of how you're doing compared with the ambition for a $700 million reduction coming from management actions. So the management action part specifically of the reduction in the capital employed, please?

Yes. So I agree with you, by the way, there are a lot of moving parts. And when I look at the financial assets in general, to be honest, the overriding principle is how we're managing the risk profile. And capital employed is one way of expressing that. But as you can see and as you know, there are many moving parts and drivers of that. So I also look at the sensitivities, particularly under an IFRS basis where you don't have the impacts of flooring, et cetera. So I think your point is fair.

In terms of management actions, I think, we've made reasonable progress so -- and by management actions, I mean, including things like optimizing the hedging strategy, right? So the implementation of the base fee hedge. So I think we've made reasonable progress. Some of the management actions we anticipated years ago, we would implement, didn't work out, and that's because markets behaved differently than we thought and this book is quite sensitive to markets. But we identified other actions we could take, including the base fee hedge, which offset that. So we've made reasonable progress.

I think as we look forward to delivering the target, it's likely we're going to have further management actions. The natural runoff of the book is not going to be sufficient. And we'll continue to look for actions we can take in our own control and as I keep pointing out, potential third-party transactions, if they make sense economically. Overall, though, David, I think we're doing okay versus our target in aggregate. Things move around. We block and tackle. We adjust our own plans depending on what's happening with markets and where our levels are. But overall, I think we are in a pretty good place of managing the financial assets down.

Your next question comes from the line of Michael Huttner from Berenberg.

I mean -- sorry, I joined the call late, so probably be answered, but just in case. I have 2. The one is on the cash and the other one is on mortality. On cash, can you give us a feel for the walk forward from the EUR 1.8 billion and change in 9 months and the EUR 1 billion target you've kind of set for 2026. What could be the potential moving parts?

And then the other one is on mortality exposure. So from memory, I think you reduced maybe 30%, even 40% the institutionally owned life, and that's gone now. So can you give us a feel for what the current mortality exposure is at the group level and how you think of it as developing? I noticed mortality was EUR 12 million better in Q3, which to me feels like a low number. I would have expected around EUR 30 million, but maybe there's some moving parts I'm not aware of.

Thank you, Michael. Yes, it's a busy day today for disclosures so Duncan over to you.

So on the cash, Michael, you're basically asking us to give you a movement from here to the target of EUR 1 billion by end of 2026, which we're not going to do, at least not today. As you know, the cash capital at holding, we're going to bring down to EUR 1 billion by the end of 2026. We have 3 broad buckets which we can deliver that. The first is to deleverage further with our current portfolio, that's not required in any meaningful way.

The second is to fund either organic or inorganic initiatives, which our businesses may source or the group may source. And then the final one is if neither of those emerge, we'll return the capital to shareholders, as we have been doing over the prior quarters. And we aim to do all this by the end of 2026, so just over a year from now, so not too much longer to wait.

In terms of mortality, I think, you're right, firstly, in our strategy in mitigating mortality risk. So we had a program to purchase institutionally owned policies, which we successfully executed upon. And also, we've done, I think, 2 reinsurance transactions on our legacy life books in the U.S. in the past. And we updated our assumptions, obviously, which, as I pointed out in a prior question, we're trending more or less as we would expect since that assumption update. So things look okay.

In our statistical supplement, we give you the -- under the financial assets KPIs, we give you the net face amount for Universal Life, which I think is a reasonable number to track in terms of our total exposure on this book. Hopefully, that's answering what you were asking.

And how much was the institutional purchase so far? And is it all now gone clear through the capital because I think there's an element where you have to cancel the stuff before and you have to wait for the reinsurers to agree.

That's right. So not all of it has been canceled. So I think -- because as you're aware, the process is we purchase the policies from the institutional owner. All of these policies have reinsurance on them and we negotiate with the reinsurers for them to take their share of the exposure. And if we were to cancel fully our remaining exposure as of today, there would be a negative impact on the RBC ratio of around 11 points, including the release of the equity, which is in that vehicle.

Brilliant. And just the last figure, how much have you bought back on the institutional to date?

As of 3Q, we bought back -- we reached our target. So we were targeting, if you recall, to purchase 40% of the outstanding face value of around USD 7 billion, and we hit that target in 3Q 2024 and our activities since then has been more muted.

We have no further questions. I would like to turn the call back over to Yves Cormier for closing remarks.

Thank you, operator. This concludes our Q&A session. Should you have any remaining questions, please get in touch with the Investor Relations team. On behalf of Lard and Duncan, I would like to thank you for your attention. Thanks again, and have a good day.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.