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## Overview 

AEGON’s operation in the Netherlands reported strong underlying earnings for 2010. Net income increased considerably as a result of lower impairments and improved results from fair value items. At the beginning of the year, AEGON sold its funeral insurance activities. During the fourth quarter the company announced a reorganization of its banking activities. This is part of AEGON’s strategy to focus on its core businesses, positioning the company for sustainable growth. 

## Underlying earnings before tax 

Underlying earnings before tax declined 3% during the year to EUR 385 million as increased earnings from life and savings and non-life were more than offset by lower pensions earnings. Life and savings increased to EUR 186 million as improved margins on savings account balances were only partly offset by a loss of earnings due to the sale of the funeral insurance business. Earnings from pensions declined to EUR 153 million, mainly as a result of lower investment income. Non-life earnings increased to EUR 33 million as a result of more favorable motor and fire insurance claim levels. Earnings from distribution remained level at EUR 16 million. 

## Net income 

Net income from AEGON’s businesses in the Netherlands almost tripled to EUR 711 million. This sharp increase was the result of a significant improvement in the performance of fair value items and lower impairments, somewhat offset by fewer realized gains on investments compared with 2009. 

## Operating expenses 

Operating expenses declined 14% during the year to EUR 748 million. The decline was due mainly to cost savings measures and the transfer of asset management activities to AEGON Asset Management. 

## Market positions 

## The Netherlands 

# 3 Group pensions 

# 5 Accident and health 

# 6 Individual life 

# 7 Property and c asualty 

## Sales and deposits 

Total new life sales in the Netherlands increased 4%. AEGON successfully utilized its leading position in the Dutch pension market to secure a number of sizeable group pension contracts during the year. Individual life sales were level at EUR 83 million as a result of continued demand for mortgage-related products and immediate annuities. This was a strong result, given that the market as a whole is declining. 

Following changes in government regulations, the disability insurance market in the Netherlands is now more open to private sector insurers. As a result, AEGON accident and health premium production increased 53% to EUR 26 million for the year. 

AEGON reported EUR 2.4 billion of gross deposits for 2010, a decrease of 31% compared with 2009 as a result of lower savings deposits. Net deposits turned negative for the year as a result of higher outflows from savings accounts due to lower interest rates offered on savings accounts. 

## Value of new business 

The value of new business in 2010 declined to EUR 144 million. The positive effects of increased sales were more than offset by lower spreads in AEGON’s mortgage and annuity businesses. The internal rate of return on new business amounted to 14%. 

## Revenue-generating investments 

Revenue-generating investments increased 2% to EUR 73 billion mainly as a result of improved market conditions. 

