Aegon N : Interim Financial Statements 2Q 2021

Condensed consolidated interim financial information

for the periods ended June 30, 2021

The Hague, August 12, 2021

Helping people achieve a lifetime of financial security

Condensed consolidated interim financial information for the perdiods ended June 30, 2021

Table of contents

Condensed Consolidated Interim Financial Information
Interim Report	2
Strategic highlights	2
Financial highlights	6
Condensed Consolidated Interim Financial Statements	11
Condensed consolidated income statement	11
Condensed consolidated statement of comprehensive income	12
Condensed consolidated statement of financial position	13
Condensed consolidated statement of changes in equity	14
Condensed consolidated cash flow statement	15
Notes to the condensed consolidated interim financial statements	16
Management statement	33
Review report	34

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Condensed consolidated interim financial information for the perdiods ended June 30, 2021

Interim report

Strategic highlights

Aegon is a financial services group that offers investment, protection, and retirement solutions to its customers. The company's purpose is to help people achieve a lifetime of financial security.

Aegon's strategy

Aegon is taking significant steps to transform the company in order to improve its performance and create value for its customers and shareholders. To ensure delivery against these objectives, a rigorous and granular operating plan has been developed across the Group. Aegon focuses on three core markets (the United States, the Netherlands, and the United Kingdom), three growth markets (Spain & Portugal, China, and Brazil) and one global asset manager. Aegon's businesses within its core markets have been separated into Financial Assets and Strategic Assets. The aim is to release capital from Financial Assets and from businesses outside its core and growth markets, and re-allocate capital to growth opportunities in Strategic Assets, growth markets and Asset Management. Throughout this transformation, the company aims to maintain a solid capital position in the business units and at the Holding. Through proactive risk management actions, Aegon is improving its risk profile and reducing the volatility of its capital ratios.

Operational improvement plan

Aegon has an ambitious plan comprised of more than 1,100 detailed initiatives designed to improve the operating performance of its business by reducing costs, expanding margins and growing profitably.

Aegon is implementing an expense savings program aimed at reducing addressable expenses by EUR 400 million in 2023 compared with the base year 2019. Aegon has delivered on its ambition to achieve half of its expense reduction target by the end of 2021. Aegon has reduced addressable expenses by EUR 245 million in the trailing four quarters compared with the base year 2019. Of this expense reduction, EUR 220 million was driven by expense savings initiatives. The remaining reduction in annual addressable expenses reflects expense benefits related to reduced activity in a COVID-19 environment net of expenses made for growth initiatives, which are aimed at improving customer service, enhancing user experience and developing new products.

Strategic Assets

Strategic Assets are businesses with a greater potential for an attractive return on capital, and where Aegon is well positioned for growth. In these businesses, Aegon will invest in profitable growth by expanding its customer base and increasing its margins.

Americas

In the US Individual Solutions business, Transamerica's aim is to achieve a top-5 position in Term Life, Whole Life Final Expense, and Indexed Universal Life through profitable sales growth. New life sales in the first half of 2021 showed a 25% increase of compared with the first half of 2020. Transamerica is benefiting from an increase in licensed agents at World Financial Group (WFG) and a higher market share

in this distribution channel from the addition of a funeral planning benefit to Indexed Universal Life products for qualifying policyholders.

In the US Workplace Solutions business, Transamerica aims to compete as a top-5 player in new sales in the MiddleMarket segment of Retirement Plans. Momentum is building here with four consecutive quarters of written sales of over USD 1 billion. Written sales were supported by Pooled Plan Arrangement contract wins. These multi-employer pension schemes are a strategic growth driver.

The Netherlands

Aegon is the largest third-party mortgage originator in the Netherlands, benefiting from its scale, high service levels to intermediaries and customers, and diversified funding. In the first half of 2021, the company originated EUR 5.9 billion of residential mortgages - of which two thirds were fee-based mortgages originated for third-party investors.

Workplace Solutions defined contribution products (PPI) showed strong net deposits in the first half year. PPI assets under management surpassed the EUR 5 billion mark for the first time, underscoring Aegon's leading position in this market. Aegon expects its online bank Knab to continue its development into a digital gateway for individual retirement solutions. In the first half of 2021, the online bank grew its customer base by 16,000.

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Condensed consolidated interim financial information for the perdiods ended June 30, 2021

United Kingdom

Aegon's assets under administration in the United Kingdom reached GBP 200 billion for the first time, as it continues to increase scale in the UK pension and savings market. The growth in assets reflects strong markets, and benefits from a number of ongoing investments in the business. The first half year net deposits included a significant Master Trust contract win, which underscores that Aegon is well positioned in this fast-growing market.

By profitably growing its platform business, and by reducing expenses, Aegon UK aims to mitigate the impact from the gradual run-off of its traditional product portfolio.

Financial Assets

Financial Assets are blocks of business which have closed for new sales, and which are capital intensive with relatively low returns on capital employed. Aegon has established dedicated teams to manage these businesses, who are responsible for maximizing their value through disciplined risk management and capital management actions. To achieve this, Aegon is initially focusing on unilateral and bilateral actions before any third-party solutions would be taken into consideration. Unilateral actions are those that can be executed fully under Aegon's control, while bilateral actions require the interaction and consideration of other stakeholders.

Americas

An example of such a bilateral action, is the lump-sumbuy-out program that Transamerica launched in July 2021 for policyholders of Variable Annuities with guaranteed minimum income benefit (GMIB) riders, whose financial objectives may have changed since the issuance of their policies. The program aims to reduce hedge costs for the remaining Variable Annuities portfolio going forward and may reduce Transamerica's economic exposure, depending on the take-up rate by policyholders.

Aegon expects to expand the dynamic hedging program, covering the equity and interest rate risks of its US Variable Annuities block with guaranteed minimum withdrawal benefits (GMWB), to the entire Variable Annuities portfolio once the take-up rate of the lump-sumbuy-out program becomes more clear. This expanded hedging program builds on the effective dynamic hedging program of the GMWB portfolio where the hedge effectiveness for the targeted risks was consistently above 95% over the last six quarters. Dynamic hedging stabilizes cash flows on an economic basis and reduces sensitivities to equity and interest rate risks. The operational preparations for the expansion of the dynamic hedge program were completed in the first half of 2021.

The combination of extending the dynamic hedge to the full portfolio of Variable Annuities together with the execution of the lump-sumbuy-out program is expected to have up to 5%-points negative impact on the RBC ratio based on current market conditions. Dynamic hedging decreases available capital as a result of reflecting the hedge costs in the calculation of the reserves, which is largely offset by lower required capital as a result of holding higher reserves. On an ongoing basis, the expansion of the dynamic hedging program is expected to reduce operating capital generation by around USD 50 million per year. At the same time, Transamerica's reduced exposure to equity and interest rate risks leads to more predictable capital generation over the lifetime of the variable annuity business, and increases the certainty of remittances. Expanding the Variable Annuity dynamic hedging program and executing the lump-sum buy- out program is expected to result in a USD 0.5 to 0.7 billion pre-tax,one-time loss to be reported in Other charges in the third quarter of 2021. This is mostly driven by a non-cashwrite-off of deferred acquisition costs.

After the full implementation of both programs in the second half of 2021, Aegon will consider further unilateral and bilateral actions to maximize the value of the variable annuity business. Aegon will also allocate internal resources to investigate its options regarding potential third party solutions. Aegon will update the market on its progress in the first half of 2022.

The primary management action regarding the Long-Term Care block is a multi-year rate increase program that has a value

of USD 300 million. Since the end of December 2020, the company obtained regulatory approvals for additional rate increases worth USD 176 million. Furthermore, claims experience developed favorably for the Long-Term Care business, in part as a result of elevated claims terminations due to the impact of the COVID-19 pandemic.

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Condensed consolidated interim financial information for the perdiods ended June 30, 2021

The Netherlands

The dedicated team responsible for the Dutch Life business is actively managing risks and the capital position to enhance the consistency of remittances to the Group. The main legal entity of the Dutch Life business - Aegon Levensverzekering N.V. - implemented a quarterly remittance policy in the fourth quarter of 2020, and since has remitted EUR 25 million every quarter. Its Solvency II ratio amounts 172% per June 30, 2021, which is above the operating level of 150%.

Growth Markets and Asset Management

In its growth markets - Brazil, Spain & Portugal and China - Aegon will continue to invest in profitable growth. The market consistent value of new business (MCVNB) showed an increase of 15% compared with the first half of 2020. New premium production for property & casualty and accident & health insurance increased by 88% compared with the first half of 2020 as a result of new products launched in Spain & Portugal.

The operating result from Brazil decreased to USD 1 million in the first half of 2021 from USD 5 million in the first half of 2020. This was mainly due to higher claims resulting from the COVID-19 pandemic and unfavorable currency movements. These were partly offset by increased operating margins driven by growth.

Aegon Asset Management aims to significantly increase the operating margin of its Global Platforms by improving efficiency and driving growth. Third-party net deposits on the Global Platforms were EUR 2.2 billion in the first half of 2021, driven by significant net deposits on the Fixed Income platform. This builds on Aegon's track record of positive third-party net deposits. Aegon Asset Management is transitioning to a global operating platform to improve efficiency and customer experience. As an important first step in this process, all front office and risk teams now have access to a shared risk management module Alladin provided by BlackRock.

Smaller, niche or sub-scale businesses

In small markets or markets where Aegon has sub-scale or niche positions, capital will be managed tightly with a bias to exit.

On March 1, 2021, Aegon announced the completion of the sale of Stonebridge, a UK-based provider of accident insurance products, to Global Premium Holdings group, part of Embignell group. Proceeds of GBP 35 million were received in the second half of 2020 and GBP 23 million in the first half of 2021.

Aegon has taken note of an announcement issued by Vienna Insurance Group AG Wiener Versicherung Gruppe (VIG) on April 7, 2021. The announcement issued by VIG reads as follows: "Acquisition of the Aegon entities prevented by Hungary for the moment. VIENNA INSURANCE GROUP AG Wiener Versicherung Gruppe received a decree yesterday afternoon in which the Hungarian Ministry of the Interior announced that the intended acquisition by a foreign investor of the Aegon companies in Hungary is denied. As part of the approval process, Vienna Insurance Group has been in constructive talks with the responsible Hungarian Minister of Finance since January 2021. The decree is in contradiction with the course of the talks to date. Vienna Insurance Group expects that this issue will be resolved positively in the near future." Aegon will continue to work with VIG to close the transaction.

On April 27, 2021, Transamerica closed the sale of its portfolio of fintech and insurtech companies to a fund managed and advised by Swiss-based private equity firm Montana Capital Partners. The transaction had a positive impact of EUR 40 million on Cash Capital at the Holding in the first half of 2021.

Strengthening the balance sheet

Aegon aims to continue strengthening its balance sheet, and is taking proactive management actions to improve its risk profile and reduce the volatility of its capital ratios.

At the Capital Markets Day on December 10, 2020, Aegon announced its plans to reduce its economic interest rate exposure in the United States by one third to one half in order to reduce its dependency on financial markets and improve its risk profile.

At the end of the first half of 2021, Aegon had already executed around over two thirds of this plan through management actions.

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