Capital management and solvency (Tables)

12 Months Ended

Dec. 31, 2018

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Summary of Composition of Available Own Funds Across Tiers

The below table provides the composition of Aegon’s available own funds across Tiers:

Available own funds	December 31, 2018 Available own funds		December 31, 2017 Available own funds
Unrestricted Tier 1		12,204		10,428
Restricted Tier 1		3,406		3,540
Tier 2		1,487		1,213
Tier 3		505		448
Total available own funds		17,602		15,628

Summary of Equity Compares to Solvency II Own Funds

IFRS equity compares to Solvency II own funds as follows:

	December 31, 2018			December 31, 2017 1
Shareholders’ Equity		19,225			20,288
IFRS adjustments for Other Equity instruments and non controlling interests		3,342			3,813
Group Equity		22,567			24,102
Solvency II revaluations & reclassifications		(6,618	)		(10,169	)
Transferability restrictions 2		(1,884	)		(1,758	)
Excess of Assets over Liabilities		14,065			12,174
Availability adjustments		4,326			4,147
Fungibility adjustments 3		(789	)		(693	)
Available own funds		17,602			15,628

¹  The 2017 comparative numbers have been updated for a change of the presentation for the subordinated debt

²  This includes the transferability restriction related to the RBC CAL conversion methodology.

³  Amongst others, this contains the exclusion of Aegon Bank.

Summary of Composition of Total Capitalization and Calculation of Gross Financial Leverage Ratio

The following table shows the composition of Aegon’s total capitalization, the calculation of the gross financial leverage ratio and its fixed charge coverage:

	Note		2018			2017
Total shareholders’ equity – based on IFRS as adopted by the EU		32		19,543			20,573
Non-controlling interests, share options and incentive plans not yet exercised		33, SOFP 2		80			81
Revaluation reserves		32		(3,461	)		(4,920	)
Adjusted shareholders’ equity				16,162			15,733
Junior perpetual capital securities		33		2,808			3,008
Perpetual cumulative subordinated bonds		33		454			454
Non-cumulative subordinated notes (Other equity instruments)		33		-			271
Fixed floating subordinated notes		34		1,389			695
Non-cumulative subordinated notes (Subordinated borrowings)		34		-			69
Trust pass-through securities		35		133			133
Currency revaluation other equity instruments 1				110			40
Hybrid leverage				4,895			4,669
Senior debt 3		39		1,774			2,312
Senior leverage				1,774			2,312
Total gross financial leverage				6,669			6,982
Total capitalization				22,831			22,715
Gross financial leverage ratio 4				29.2%			30.7%
Fixed Charge Coverage				8.2x			8.2x

¹ Other equity instruments that are denominated in foreign currencies are, for purpose of calculating hybrid leverage, revalued to the period-end exchange rate.

² Non-controlling interests are disclosed in the statement of financial position.

³ Senior debt for the gross financial leverage calculation also contains swaps for an amount of EUR (1) million (2017: EUR 31 million).

⁴ To align closer to definitions used by peers and rating agencies, Aegon has retrospectively changed the definition of adjusted shareholders’ equity used in calculating the gross financial leverage ratio. Shareholders’ equity will no longer be adjusted for the remeasurement of defined benefit plans. All figures, including comparatives, are based on the new definition, unless stated otherwise.

Schedule of Total Distributable Items

The following table shows the composition of the total distributable items:

Distributable items 1	2018		2017
Equity attributable to shareholders based on IFRS as adopted by the EU	19,543		20,573
Non-distributable items:
Share capital	(322	)	(322	)
Statutory reserves 2	(5,915	)	(6,502	)
At December 31	13,307		13,749

¹ Distributable items under Dutch law; note that Solvency II ratios also possibly restricts the distribution of dividends.

² Statutory reserves contains legal reserves of both FCTR and group companies and the positive revaluations of the revaluation account.