Not only has AEGON expanded across Europe, it has also spread Transamerica. The Dutch life insurance giant is using its expertise in acquisition (US rival Transamerica was its largest catch) and consolidation to build a transnational collection of financial service businesses serving 40 million customers worldwide. Its subsidiaries operate primarily in the US, the Netherlands, and the UK, offering personal and commercial life insurance, pensions and annuities, and accident and supplemental health insurance, as well as retirement and savings advice and management services. AEGON also has insurance operations in 15 other countries in the Americas, Europe, and Asia, as well as banking operations in the Netherlands.
The company has established a strong growth pattern for existing and new international markets largely through strategic acquisitions, though its pace has slowed some due to economic downturns in 2008 and 2009. AEGON, which derives about 60% of its revenues from life insurance premiums, is focused on organic expansion in the high-growth regions of Asia, central and eastern Europe, and Latin America. To consolidate its market position in Spain, AEGON in mid-2013 inked an exclusive 25-year strategic partnership with Banco Santander SA. As part of the agreement, AEGON acquired a 51% stake in the joint venture, which consists of a life insurance company and a non-life insurance company. The venture distributes life and general insurance products through Banco Santander's SA branch network while AEGON Spain provides back-office services.
In the Asia/Pacific region, AEGON is broadening its operations partially through its Beijing-based insurance joint venture with the Chinese National Offshore Oil Corporation (CNOOC). It also formed a mutual fund joint venture with China-based Industrial Securities Co. in 2008, and it has an annuities partnership with Sony Life in Japan that began operations in 2009.
European expansion efforts include AEGON's 2009 buyout of former partner Banca Transilvania's shares in BT AEGON, the Romanian pension business set up by the two companies the previous year. Acquisitions in other regions include the 2009 purchase of a 50% stake in Brazilian life insurance firm Mongeral SA. AEGON has also been focusing on broadening its global distribution channels, which include independent agents, brokers, direct response, workplace marketing, banks, and other financial institutions.
The company began scaling back on growth efforts in 2008 due to global economic conditions, announcing plans to focus on high-growth and high-return investments in the emerging geographic markets. Later in 2008, as global financial conditions worsened, AEGON secured a €3 billion ($3.8 billion) capital infusion from the Dutch government to help it ward off economic woes. (This was fully repaid in 2011.) The funding was part of the Dutch government's bailout package designed to keep a group of banks and insurers from falling victim to the downturn in the global credit and equity markets.
To further ward off the impact of a slowing economy (and pay off its loan from the Dutch government), the company has initiated cost-containment and risk-reduction measures. It has been working to cut costs in its established market operations by reorganizing its Dutch, US, and UK divisions; it also restructured some global management responsibilities. In 2009 the company sold its Taiwanese life business for $84 million to Zhongwie Company. Also in 2009 it sold its Dutch real estate brokerage business, and in early 2010 AEGON sold its funeral insurance business in the Netherlands.
The company announced additional restructuring measures to further streamline its operations in 2010. To reduce costs and risk exposures, AEGON made plans to sharpen its focus on life, pension, and asset management operations, and as such began seeking a buyer for Transamerica Reinsurance, its US-based global life reinsurance business. The company sold Transamerica Re to French reinsurance firm SCOR for some $900 million in 2011. The sale included all of the life reinsurance operations, although AEGON retained the annuity guarantee business. Further reorganization that year included cutting 300 positions in the Netherlands, with associated costs of about $80 million, which are expected to be accounted for before year-end. The company expects to achieve most of its cost savings in 2012.
In 2011 AEGON repurchased €750 million in securities held by the Dutch state and completed the final repayment of the government bailout funds. Overall, the company spent €4.1 billion to repay the original €3 billion loan, including premium and interest payments. AEGON was the first company to repay the Dutch government funds issued through the 2008 bailout program. Although repayment frees AEGON to resume its acquisition activities, the firm plans to continue its focus on organic growth efforts, especially in Asia.
For several years AEGON has been restructuring its UK division around its core retirement and workplace savings units. In 2011 the company sold off its closed UK-based Guardian life and pensions business to private equity group Cinven for GBP275 million in cash. The sale provided proceeds for the company to recapitalize its Scottish Equitable business.
Independent trust Association AEGON (or Vereniging AEGON) controls about 33% of the company. Association AEGON is charged with safeguarding the interests of AEGON's shareholders and helped facilitate its bailout by issuing shares to the Dutch government.