Regulatory News:
Aegon today announces that its US subsidiary, Transamerica,
has entered into an agreement with Tata Consultancy Services (TCS)
to administer the company’s US insurance and annuity business
lines. The partnership enables Transamerica to accelerate the
enhancement of its digital capabilities and the modernization of
its platforms to service its customers in all lines of business.
The agreement, a multi-year partnership with more than USD 2
billion of revenues to TCS, is expected to be completed by the
second quarter 2018.
This agreement is expected to lead to annual run-rate expense
savings for Aegon of approximately USD 70 million initially,
growing to USD 100 million over time. The majority of these expense
savings is expected to benefit underlying earnings. Total
transition and conversion charges are estimated to amount to
approximately USD 280 million, and these amounts will be recorded
in non-underlying earnings. The majority of these charges are
expected to be recorded over the first three years of the
agreement, with approximately USD 100 million of transition and
conversion charges reflected in the first half of 2018.
TCS will administer Transamerica’s life insurance, annuity,
supplemental health insurance and workplace voluntary benefits
products and take on administration of over 10 million policies. In
addition, Transamerica is considering entering into a similar
servicing and administration arrangement for its long term care
customers. Any forthcoming decision would be announced separately.
Transamerica will continue administration and servicing of its
retirement plans, IRAs, Advice Center, mutual funds,
exchange-traded funds and stable value solutions on existing
platforms.
This decision supports execution of Transamerica’s customer
centric strategy and focus on sustainable growth. “We continue to
put our customers at the forefront of everything we do. I’m very
excited to embark on this partnership with TCS, whose
transformation and technology innovation capabilities will
supplement our focus on improving our customers’ experience in a
digitally enabled way. This supports meaningful growth in all
business lines – including insurance and annuities – and advances
our competitive positioning. TCS was carefully selected because of
its significant, ongoing investments in technology and its
expertise in the insurance and annuity industry,” said Mark Mullin,
member of Aegon’s Management Board and CEO of Transamerica. “TCS’
core competencies complement ours. TCS will provide valuable
administration and quality customer service, and Transamerica will
continue to engage with our customers, clients, and advisors in
ways that are most meaningful to them by utilizing our digital
engagement platforms and by developing new solutions that help
people save, protect, invest and retire.”
All of the Transamerica employees currently supporting these
business lines and whose roles are in scope will be offered
positions by TCS, helping to ensure a consistently excellent
experience for Transamerica customers. The transition will affect
approximately 2,200 current Transamerica employees. Transferring
employees will be given the opportunity to remain in the same US
cities where they are currently based.
Founded in 1968, TCS is a leading global IT services, digital,
consulting, operations, and business solutions company that has
operated in the US for more than 40 years. It offers deep expertise
in the insurance sector and works with more than 100 insurers
today, including six of the world’s top 10 insurance companies. TCS
will expand its existing relationship with Transamerica under this
transaction, and will locate in Transamerica’s current offices in
various US cities. The agreement between Transamerica and TCS
represents a notable expansion of TCS’ insurance business in the
US, and the company plans to establish its new North American
insurance hub for business operations in Cedar Rapids, Iowa, as
part of its plan to make a significant investment in the
region.
“TCS continuously invests in the latest technologies, local
talent and US facilities to help leading US companies adapt to
rapidly evolving customer demands. This agreement marks TCS’ entry
into a highly specialized US Insurance Third Party Administration
marketplace and will establish TCS BaNCS as a formidable digital
platform for the US Insurance industry, following its stellar
global track record over the past decade,” said Suresh Muthuswami,
President and Global Head, Banking, Financial Services and
Insurance Platforms, at TCS. “TCS has partnered with its global
insurance clients in their transformation journeys and played an
integral role in their growth. We have enabled improved
speed-to-market, customer engagement and cognitive operations
through our innovative technology services, the TCS BaNCS agile and
digital platform, and our unmatched industry expertise. TCS is
proud to partner with Transamerica in its ongoing transformation to
enhance its customer experience, and looks forward to welcoming
their current employees for new careers at TCS.”
TCS has invested nearly USD 3 billion in the US over the past
three years and is among the top two job creators in IT services in
the US. It is also one of America’s 50 most community-minded
organizations, engaging nearly two million Americans through its
extensive nationwide STEM education programs, academic partnerships
and endowments to schools such as Carnegie Mellon University,
Cornell Tech and Massachusetts Institute of Technology.
About Aegon
Aegon’s roots go back more than 170 years – to the first half of
the nineteenth century. Since then, Aegon has grown into an
international company, with businesses in more than 20 countries in
the Americas, Europe and Asia. Today, Aegon is one of the world’s
leading financial services organizations, providing life insurance,
pensions and asset management. Aegon’s purpose is to help people
achieve a lifetime of financial security. More information on
aegon.com/about.
About Tata Consultancy Services (TCS)
Tata Consultancy Services is an IT services, digital,
consulting, operations and business solutions organization
that delivers real results to global business. TCS offers a
consulting-led, integrated portfolio
of IT, BPS, infrastructure, engineering and assurance
services. This is delivered through its unique Global Network
Delivery Model™ (GNDM), recognized as the benchmark of
excellence in software development. A part of the Tata group,
India’s largest industrial conglomerate, TCS has over 389,000 of
the world’s best-trained consultants in 46 countries. The company
generated consolidated revenues of US $17.58 billion for year ended
March 31, 2017 and is listed on the BSE (formerly Bombay Stock
Exchange) and the NSE (National Stock Exchange) in India. For more
information, visit www.tcs.com
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Disclaimer
Forward-looking statements
The statements contained in this document that are not
historical facts are forward-looking statements as defined in the
US Private Securities Litigation Reform Act of 1995. The following
are words that identify such forward-looking statements: aim,
believe, estimate, target, intend, may, expect, anticipate,
predict, project, counting on, plan, continue, want, forecast,
goal, should, would, is confident, will, and similar expressions as
they relate to Aegon. These statements are not guarantees of future
performance and involve risks, uncertainties and assumptions that
are difficult to predict. Aegon undertakes no obligation to
publicly update or revise any forward-looking statements. Readers
are cautioned not to place undue reliance on these forward-looking
statements, which merely reflect company expectations at the time
of writing. Actual results may differ materially from expectations
conveyed in forward-looking statements due to changes caused by
various risks and uncertainties. Such risks and uncertainties
include but are not limited to the following:
- Changes in general economic conditions,
particularly in the United States, the Netherlands and the United
Kingdom;
- Changes in the performance of financial
markets, including emerging markets, such as with regard to:
- The frequency and severity of defaults
by issuers in Aegon’s fixed income investment portfolios;
- The effects of corporate bankruptcies
and/or accounting restatements on the financial markets and the
resulting decline in the value of equity and debt securities Aegon
holds; and
- The effects of declining
creditworthiness of certain public sector securities and the
resulting decline in the value of government exposure that Aegon
holds;
- Changes in the performance of Aegon’s
investment portfolio and decline in ratings of Aegon’s
counterparties;
- Consequences of a potential (partial)
break-up of the euro;
- Consequences of the anticipated exit of
the United Kingdom from the European Union;
- The frequency and severity of insured
loss events;
- Changes affecting longevity, mortality,
morbidity, persistence and other factors that may impact the
profitability of Aegon’s insurance products;
- Reinsurers to whom Aegon has ceded
significant underwriting risks may fail to meet their
obligations;
- Changes affecting interest rate levels
and continuing low or rapidly changing interest rate levels;
- Changes affecting currency exchange
rates, in particular the EUR/USD and EUR/GBP exchange rates;
- Changes in the availability of, and
costs associated with, liquidity sources such as bank and capital
markets funding, as well as conditions in the credit markets in
general such as changes in borrower and counterparty
creditworthiness;
- Increasing levels of competition in the
United States, the Netherlands, the United Kingdom and emerging
markets;
- Changes in laws and regulations,
particularly those affecting Aegon’s operations’ ability to hire
and retain key personnel, taxation of Aegon companies, the products
Aegon sells, and the attractiveness of certain products to its
consumers;
- Regulatory changes relating to the
pensions, investment, and insurance industries in the jurisdictions
in which Aegon operates;
- Standard setting initiatives of
supranational standard setting bodies such as the Financial
Stability Board and the International Association of Insurance
Supervisors or changes to such standards that may have an impact on
regional (such as EU), national or US federal or state level
financial regulation or the application thereof to Aegon, including
the designation of Aegon by the Financial Stability Board as a
Global Systemically Important Insurer (G-SII);
- Changes in customer behavior and public
opinion in general related to, among other things, the type of
products Aegon sells, including legal, regulatory or commercial
necessity to meet changing customer expectations;
- Acts of God, acts of terrorism, acts of
war and pandemics;
- Changes in the policies of central
banks and/or governments;
- Lowering of one or more of Aegon’s debt
ratings issued by recognized rating organizations and the adverse
impact such action may have on Aegon’s ability to raise capital and
on its liquidity and financial condition;
- Lowering of one or more of insurer
financial strength ratings of Aegon’s insurance subsidiaries and
the adverse impact such action may have on the premium writings,
policy retention, profitability and liquidity of its insurance
subsidiaries;
- The effect of the European Union’s
Solvency II requirements and other regulations in other
jurisdictions affecting the capital Aegon is required to
maintain;
- Litigation or regulatory action that
could require Aegon to pay significant damages or change the way
Aegon does business;
- As Aegon’s operations support complex
transactions and are highly dependent on the proper functioning of
information technology, a computer system failure or security
breach may disrupt Aegon’s business, damage its reputation and
adversely affect its results of operations, financial condition and
cash flows;
- Customer responsiveness to both new
products and distribution channels;
- Competitive, legal, regulatory, or tax
changes that affect profitability, the distribution cost of or
demand for Aegon’s products;
- Changes in accounting regulations and
policies or a change by Aegon in applying such regulations and
policies, voluntarily or otherwise, which may affect Aegon’s
reported results and shareholders’ equity;
- Aegon’s projected results are highly
sensitive to complex mathematical models of financial markets,
mortality, longevity, and other dynamic systems subject to shocks
and unpredictable volatility. Should assumptions to these models
later prove incorrect, or should errors in those models escape the
controls in place to detect them, future performance will vary from
projected results;
- The impact of acquisitions and
divestitures, restructurings, product withdrawals and other unusual
items, including Aegon’s ability to integrate acquisitions and to
obtain the anticipated results and synergies from
acquisitions;
- Catastrophic events, either manmade or
by nature, could result in material losses and significantly
interrupt Aegon’s business;
- Aegon’s failure to achieve anticipated
levels of earnings or operational efficiencies as well as other
cost saving and excess capital and leverage ratio management
initiatives; and
- This press release contains information
that qualifies, or may qualify, as inside information within the
meaning of Article 7(1) of the EU Market Abuse Regulation.
Further details of potential risks and uncertainties affecting
Aegon are described in its filings with the Netherlands Authority
for the Financial Markets and the US Securities and Exchange
Commission, including the Annual Report. These forward-looking
statements speak only as of the date of this document. Except as
required by any applicable law or regulation, Aegon expressly
disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained
herein to reflect any change in Aegon’s expectations with regard
thereto or any change in events, conditions or circumstances on
which any such statement is based.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180111006014/en/
AegonMedia relationsDick Schiethart+31 (0) 70 344
8821gcc@aegon.comorInvestor relationsWillem van den Berg+31 (0) 70
344 8405ir@aegon.com
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