## GENERAL HISTORY 

ÁB-AEGON Általános Biztosító Rt (ÁB-AEGON) has been a member of the AEGON Group since 1992. The legal predecessor of the company was the state-owned ÁB, which was incorporated in the 1940’s. 

ÁB-AEGON has four subsidiaries: 

• AEGON Securities 

• AEGON Real Estates 

• AEGON Pension Fund Management Co 

• AEGON Hungary Fund Management Co. 

ÁB-AEGON operated in a divisional structure until it was restructured in 2000. Operations are currently divided by sales channels and functional areas. 

## PRODUCTS AND DISTRIBUTION 

ÁB-AEGON is a composite insurance company offering both life insurance and non-life insurance products. The core business products are life, pension, mortgage and household insurance. 

The life insurance product portfolio consists of traditional general account products and unit-linked products, although in recent years unit-linked sales have been much more significant than general account product sales. For general account products, profits on the investments are shared with the customer. For unit-linked products, the clients’ money is managed in a separate account invested in investment fund units and only a management fee is deducted from the return. 

In the case of non-life insurance products, the company has a conservative underwriting policy, limiting ÁB-AEGON’s risk. ÁB-AEGON’s share in the household segment is 40%. Margins for household insurance are attractive and presents ÁB-AEGON with opportunities for cross-selling life insurance products. Property and car insurance are also represented in the portfolio, but are not core products. 

## AEGON HUNGARY 

## PENSIONS 

Pension insurance is a core business of ÁB-AEGON, therefore pension fund services are also offered. The mandatory and voluntary pension funds of ÁB-AEGON are among the largest in the country in terms of managed assets and number of members (source: Hungarian Financial Supervisory Authority). The pension fund business concentrates its growth strategy in recruiting new members and purchasing other pension funds. 

## TRADITIONAL GENERAL ACCOUNT PRODUCTS 

These products consist of small life policies that were issued before ÁB-AEGON became part of the AEGON Group. The premium income from these policies is small and the profit margin is very low. Traditional general account products also include indexed life products that are not unit-linked but have guaranteed interest. ÁB-AEGON no longer offers either of these products. 

## UNIT-LINKED PRODUCTS 

Unit-linked products are the most recent and most important products sold by ÁB-AEGON. Unit-linked products are connected to a mutual fund and the investment company buys units of the mutual fund with the policyholder’s funds. ÁB-AEGON deducts only an asset management fee. The unit- linked products cover all types of life insurance (including pension, endowment and savings). They have recently been very popular in Hungary and the largest part of ÁB-AEGON’s new sales is derived from unit-linked life products. 

## GROUP LIFE PRODUCTS 

These products are mostly identical to unit-linked products and some of them have guaranteed interest and accidental health coverage. They are sold to companies covering large groups of employees. 

## ASSET MANAGEMENT 

ÁB-AEGON also provides asset management services through its subsidiary, AEGON Securities. It offers five mutual funds to the public: domestic bond, domestic equity, international bond, international equity and money market. The assets of the Pension Fund Management Company are managed by AEGON Hungary Fund Management Company. 

DISTRIBUTION CHANNELS ÁB-AEGON’s distribution channels are the composite network, the life network, independent agents and brokers. 

ÁB-AEGON’s two main distribution channels (the composite and life networks) work with agents but the company also uses alternative channels and partners to increase the number of sales in this sector. This system enabled ÁB-AEGON to keep a strong position in life insurance new sales in 2002 and 2003. 

ÁB-AEGON also endeavors to develop relationships with banks. ÁB-AEGON’s current partner banks offer mortgage products, simple savings products and units of AEGON Securities’ mutual funds to the public. 

