AEG

Good day, and thank you for standing by. Welcome to Aegon's Second Half 2025 Results Conference Call. [Operator Instructions] Please note that today's conference is being recorded. I would now like to hand the conference over to your speaker, Yves Cormier, Head of Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. I would like to welcome you to this conference call on Aegon's second half year 2025 results. My name is Yves Cormier, Head of Investor Relations. Joining me today to take you through our progress are Aegon's CEO, Lard Friese; and CFO, Duncan Russell. Before we start, I would like to ask you to review our disclaimer on forward-looking statements, which you can find at the end of the presentation. And with that, I would like to give the floor to Lard.

Thank you, Yves. Good morning, everyone. I will start today's presentation by running you through our strategic developments and commercial performance in 2025 before Duncan will go through the results in more detail. So let me start with Slide #2 with the key messages for the year. Our results over 2025 demonstrate the strength of our strategy and our ability to consistently deliver upon our ambitions. We have either met or outperformed all our financial targets for 2025. Operating capital generation before holding and funding expenses increased year-over-year to EUR 1.3 billion ahead of target. Our operating results increased by 15% compared with 2024 to EUR 1.7 billion. This increase reflected business growth across all units, stable market impacts, and improved experience variances in the Americas and international businesses. Free cash flow for the full year 2025 was at EUR 829 million, consistent with our target. On the back of our strong capital position and financial performance, we proposed a final dividend of EUR 0.21 per common share, resulting in a full year 2025 dividend of EUR 0.40 per share, in line with our target and up 14% from EUR 0.35 per share over 2024. Furthermore, we executed EUR 400 million of share buybacks in the second half of 2025. And we are currently executing the first half of our new EUR 400 million buyback program for 2026, as announced at our Capital Markets Day in 2025. Commercial momentum remains strong in 2025. In our U.S. strategic assets, we continue to grow WFG as well as our new life sales and our retirement plan assets. At the same time, we continue to reduce our exposure to financial assets. The capital employed in this segment was $2.7 billion at year-end, ahead of our target. We also reported solid results in our other business units in 2025. Our asset manager delivered net third-party inflows. Our U.K. workplace platform generated healthy net inflows. And our international business continued to perform well. Finally, we are making progress with the preparations for our proposed relocation to the U.S. as announced at the Capital Markets Day. U.S. GAAP implementation is still at an early stage, but is progressing as planned. I'm now turning to Slide 3 to run through the commercial performance of the Americas in more detail. As we discussed at our 2025 Capital Markets Day, progress in the Americas remains strong. Starting with World Financial Group, we remain on track to grow the number of licensed agents to around 110,000 in 2027. As of year-end 2025, the number of licensed agents amounted to nearly 96,000, an 11% increase on the previous year. Initiatives to improve agent productivity have led to a higher number of producing agents. In addition, producing agents also sold a higher average number of policies at a higher average premium per policy sold. As a result, new life sales increased by 10% compared with 2024, while sales of annuities increased by 6%. The productivity gains in WFG were one of the key drivers of the 30% increase in new life sales in our Individual Life business. We also recorded strong new life sales of the final expense product that we offer in the instant decision market through a fully digital underwriting platform. Furthermore, we continue to successfully grow our RILA sales. We achieved a 45% increase in indexed annuity net deposits in 2025, thanks to higher gross deposits from further improvements in wholesale distribution productivity. In the Savings & Investments segment, the midsized retirement plans business reported net inflows in 2025 on the back of our strong positioning in the pool plan space and supported by a large takeover deposit earlier in the year. The level of written sales remains solid, which should support gross deposits going forward. We also generated further growth in both general accounts stable value and individual retirement accounts as we work to increase profitability and diversify revenue streams of the retirement plans business. I'm now moving to Slide 4 for an update on our other businesses. At Aegon U.K., we continue to be well positioned in the Workplace Platform business. Net deposits during 2025 were driven by both the onboarding of new schemes and members and regular contributions from existing schemes. For the Adviser Platform business, net outflows in 2025 reflected ongoing consolidation and vertical integration in nontarget adviser segments. As announced at our 2025 Capital Markets Day, the strategic review of the Aegon U.K. is ongoing. In our International segment, new sales continued to contribute to the growth of the book in 2025. Our joint venture in Brazil reported higher new life sales, particularly in credit life products as did our activities in Spain and Portugal. In China, new life sales were negatively impacted by changes to product pricing to reflect the new pricing regulations and the current economic environment. Aegon Asset Management generated positive third-party net deposits during the year in both global platforms and strategic partnership businesses, although at a lower level than last year. In global platforms, net deposits were mostly driven by fixed income products and more than offset outflows from the SGUL reinsurance transaction that we did last year. In strategic partnerships, net deposits were driven by our Chinese joint venture, AIFMC. We are implementing the plan for asset management as presented at the 2025 Capital Markets Day. For instance, we recently expanded our CLO warehouse capacity in the U.S. and Europe in line with our ambition to grow our higher revenue margin third-party business. Before handing over to Duncan, I would like to take a step back and reflect on the outcome of the plan we presented at the 2023 Capital Markets Day using Slide #5. First, as I mentioned, we either met or exceeded our financial targets in terms of operating capital generation, free cash flow, dividend and leverage. Second, at the same time, we have significantly transformed our business. We finished the year ahead of our target in terms of capital employed for the financial assets at $2.7 billion, and our U.S. strategic assets now significantly outweigh our U.S. financial assets, both in terms of CSM and capital employed. This is quite a remarkable shift. These are not only great achievements, but they also lay strong foundations for the next steps of our journey as we relocate to the United States while continuing to increase the profitability of the group and return capital to stockholders. I am very proud of all our colleagues across our businesses for contributing to our success. Well done, everyone. I will now hand over to Duncan to discuss our financial performance in more detail. Duncan, over to you.

Thank you, Lard. I will zoom in on our second half 2025 results, starting on Slide 7. The operating results increased by 11% year-on-year to EUR 858 million, with all of our businesses delivering higher figures. Operating capital generation increased by 8% with strong figures from Transamerica. Free cash flow in the second half of 2025 amounted to EUR 388 million, and we received remittances from all units. Cash capital at holding decreased to EUR 1.3 billion at the end of 2025, mostly because of capital distributions to shareholders in the form of dividend payments and share buybacks. Valuation equity per share increased by EUR 0.60 with a positive contribution from both shareholders' equity and the CSM balance after tax. Gross financial leverage was stable at EUR 4.9 billion. Finally, the group solvency ratio remains robust at 184%. As announced in May last year, the eligibility of the perpetual cumulative subordinated bonds in our capital stack ended as of January 1, 2026. These bonds contributed 7 percentage points to the group solvency ratio as of December 31, 2025. Now using Slide 8, I will address the development of our operating results in the second half of 2025. Starting with the U.S., the operating result increased by 5% in euros or 14% in U.S. dollars, thanks to a combination of growth and more favorable variances. The operating results of strategic assets increased by 10% in local currency and benefited from business growth, notably in the individual life and retirement plan businesses, partially offset by a lower operating margin in the Distribution segment. In financial assets, the operating result increased because of more favorable experience variances compared to the second half of 2024. On the other units, the operating results of the U.K. increased, benefiting from business growth in favorable markets, which led to both a higher CSM release and increasing noninsurance revenues in the second half. In the International segment, the increase of the operating result was also driven by business growth and a onetime item in China. Furthermore, the results from China benefited from a true-up related to the local implementation of IFRS 17, which is booked in the second half. Aegon Asset Management's operating results improved in the global platforms business mostly from the impact of favorable markets on revenues and from an improved operating margin. Looking forward, as mentioned at our recent Capital Markets Day, over the 2026 to '27 period, we aim to grow the operating result of the group by around 5% per year from the EUR 1.5 billion to EUR 1.7 billion in run rate in 2025, taking into account an assumed euro-dollar exchange rate of $1.20. I now turn to Slide 9. Here you see our IFRS net results for the second half of 2025. Nonoperating items were unfavorable in the period and were largely driven by realized losses on assets transferred in the context of the SGUL reinsurance transaction. These realized losses were taken in the P&L, were fully offset in other comprehensive income and therefore, had no impact on the development of shareholders' equity. Net impairments reflect an ECL reserve increase from new investment purchases as well as a small number of downgrades and defaults of bond investments. Fair value items were negative mostly from revaluations of solvency hedges in the U.K. and other charges were mostly driven by various items in the U.S. and U.K. and partially offset by the positive result from the stake in ASR. I am now on Slide 10. In the second half of the year, our shareholders' equity grew by 2%, and our CSM balance increased by 4% over the same period. The increase in the CSM was largely from business growth in the U.S. strategic assets. We saw a 24% increase in CSM in the second half, thanks to profitable new business, favorable assumption changes and experience variances. The CSM of our financial assets decreased due to the runoff of the book as well as the impact of the SGUL reinsurance transaction. These developments mean that the CSM balance of our strategic assets now accounts for 57% of total Americas CSM. Outside the U.S., the changes to the total CSM balance were limited. Overall, valuation equity per share, which represents shareholders' equity plus net of tax CSM increased by 7 percentage points over the second half of 2025 to EUR 9.06 per share. Moving now to Slide 11. OCG before holding, funding and operating expenses increased by 8% compared with the second half of 2024. OCG from the U.S. increased by 19% or 27% in U.S. dollars over the same period with a higher contribution from both the strategic and financial assets. Mortality and morbidity claims experience was favorable in the second half of 2025, while it was unfavorable in the prior year period. OCG benefited also from a favorable release of required capital from the investment portfolio actions and a reduction in short-term financing. This was partly offset by a higher new business strain from growing our strategic assets. Adjusting for favorable items, the U.S. OCG in the second half of 2025 fell within the guidance of $200 million to $240 million per quarter. In the U.K., OCG decreased mostly because the second half of 2024 includes some favorable items, while the International segment reported lower OCG. At Aegon Asset Management, OCG increased due to favorable markets and an improved operating margin compared to the prior year period. Holding, funding and operating expenses were largely unchanged year-over-year at EUR 142 million, bringing the total for full year 2025 to EUR 295 million. As a result, OCG after holding, funding and operating expenses for the full year 2025 amounted to EUR 992 million. I'm now turning to Slide 12. The capital positions of our business units remain strong and well above their respective operating levels. The U.S. RBC ratio increased by 4 percentage points compared to June 2025 to 424%. The increase was driven by OCG from the operating entities applying the RBC framework. This is partly offset by remittances to the holding. Onetime items and management actions negatively impacted the RBC ratio by 3 percentage points during the period. The negative impact on the RBC ratio of the SGUL reinsurance transaction was offset by capital investment into Transamerica from the group. Market movements had a limited impact. In the U.K., the solvency ratio of Scottish Equitable decreased by 2 percentage points to 183%. Operating capital generation in the period was offset by remittances to the holding and investments in the business. Market movements here also had a limited impact. On Slide 13, you see that cash capital at holding has come down in the second half of 2025 to EUR 1.3 billion. This development is consistent with our aim to reach the midpoint of the operating range for cash capital at holding around EUR 1.0 billion by the end of 2026. Free cash flow amounted to EUR 388 million in the period and included remittances from all our units as well as dividends received from our stake in ASR. For full year 2025, free cash flow amounted to EUR 829 million, consistent with our target of around EUR 800 million for the year. We returned nearly EUR 1 billion of capital to our shareholders through dividends and share buybacks in this period. Consequently, our share count ended 2025, 5% lower than at the start of the year. Capital injections into the businesses amounted to EUR 751 million and mostly related to the investment in Transamerica to offset the impact of the SGUL reinsurance transaction. This is funded by the disposal of part of our ASR stake, 12.5 million shares, as indicated at our Capital Markets Day. The remainder mostly related to investments in our international investment management businesses and in Aegon Asset Management. We have already launched a share buyback for the first half of 2026, totaling EUR 227 million and expect this to be completed on or before June 30, barring unforeseen circumstances. This share buyback covers both the first half of EUR 400 million program for 2026 announced at the Capital Markets Day and EUR 27 million related to share-based compensation plans. After completing this first part, we expect to launch the second half of the EUR 400 million program. I am now moving to my final slide, #14. To conclude, the results over the second half of 2025 were strong, and we are confident we are well positioned to meet our growth ambitions for 2026 and 2027. As discussed at our 2025 Capital Markets Day, the next time we present our results will be in August with the first half figures. We will also move the timing of our results conference call to 2:00 p.m. Central European Time to accommodate U.S.-based investors. With that, I would now like to open the call for questions. Please limit yourself to 2 questions per person. Operator, please open the Q&A session.

[Operator Instructions] And our first question today comes from the line of Farooq Hanif From JPMorgan.

My first question is on the operating profit in the second half of the year, which was kind of at the upper end of your guidance range. Having looked at the detail and discussed with the IR team, it feels like it's a reasonably clean number. But obviously, it's towards the upper end. So I'm just wondering about the sustainability of that, given the growth in CSM, the strategic assets that you talked about. So if you could comment on that, that would be helpful. And my second question is on, I mean, the ASR stake. I know you've been reluctant to really give much update on it in the past. But I was just wondering, sort of philosophically, is this something that you would want to or could or would be happy to own once redomiciled in the U.S.? And to what extent do the proposed tax legislation in the Netherlands impact your decision around that?

Thanks, Farooq. Duncan, can you take both?

Sure. Farooq, you're right, the second half operating result was, once you adjust for favorable or unfavorable items, I think, is a reasonable representation of the underlying figure. It benefited obviously from strong markets, which we saw in the second half of the year. But it leaves us in a good place with our ambition to hit the targets we outlined at the Capital Markets Day in December. On ASR, no change there. So that's a shareholding which we're happy with. We've given guidance in the past that there are 2 reasons we would sell that. One is that we feel that it hits intrinsic value and/or we have an alternative use of the capital. Our redomiciliation to the U.S. has no impact on our ownership there.

What about the tax, is that something you've considered?

Again, I think, at the Capital Markets Day, I said that I didn't see tax having an influence on our ownership position with ASR.

Your next question comes from the line of David Barma from Bank of America.

Firstly, on OCG, which is tracking towards the bottom end of your quarterly run rate in Q4. What conditions do you need to see for you to be closer to the top besides currency movements? And in particular, on the new business strain, which was particularly strong or high in Q4, what kind of strain are you expecting for the coming years? And then secondly, on WFG, results came down in 2025. I'm looking at the first profits here. And if I look at agent productivity or cost income, they both seem to have deteriorated in the period. So are you able to give some color, please, on the trends there? And maybe if you can quantify the investment program that I think is going on at WFG in '25?

On the first question, on OCG, you know, we had a very strong quarter in OCG. Our reported OCG was actually very healthy. We highlighted three things in there, which supported it in the fourth quarter. The first was, we had positive mortality and morbidity variances. As you know, that's going to move around quarter-on-quarter, but this quarter, it was pretty favorable. Secondly, we had high new business strain versus the guidance we gave during 2025, and that reflects that we had a very strong commercial performance on the life insurance side. And then thirdly, we had a high release of required capital, which was high versus prior quarters. Although if you look at our history there over the last 2 years, you do see that can move around quite a bit, and does tend to spike in the second quarter and the fourth quarter as that's the quarter we paid dividends out of Transamerica. So net-net, it was a strong quarter. Once you adjust for all of these favorable items and also take into account FX, we think we were at the bottom end of the kind of underlying run rate. And if you go back to our Capital Markets guidance, which we gave in December, we feel in a good place with achieving that for 2026 and 2027.

So on WFG, we have a lower margin on the back of very strong sales growth and also productivity growth. So there's more producing agents producing also higher premium per policy sales. But the reason why the operating result is lower than last year is that we're investing in the business in a number of areas. It's in leadership and governance of the company as a whole because the company is growing quite a lot, don't forget that, from 56,000 agents a number of years ago to 96,000 now. Also, technology initiatives to strengthen the sales process, a lot of training that we did to improve productivity and making more agents that are licensed producing quicker and compliance and field support for the growing number of agents. So that's the reason -- that's the investments that we are having in the business. Duncan?

And maybe just to add on that. So if you go back to the Capital Markets Day, we flagged that we saw our strategic assets in the U.S. growing by around 10% per annum over the coming years. For Distribution segment, we flagged also that we expected the operating margin to remain at the lower end and the growth in the profits to be mostly driven by revenue growth.

Your next question today comes from the line of Farquhar Murray from Autonomous.

Just 2 questions, if I may. Firstly, on the legal settlement. So I suspect in terms of magnitude, the most we're going to get is that it's part of the $230 million of charges in the U.S., which I can understand. But maybe you could give us some color on those cases where this settlement takes us in terms of the uncertainties around that and maybe what's the process for finalizing this? And then secondly, on the U.K. strategic review, if this ultimately does come to a sale towards the summer, could I ask how you will approach any decision between cash and equity within the offers made around it? And is there any preference or what are the criteria and considerations from your side?

Farquhar, this is Lard, I'll do both. So let's start with the legal settlements. They are pertaining to 2 cases, which we settled. The detail of that, it's quite technical. So I will refer to a page, which is Page #269, 2-6-9, of the annual report. It's the first 2 paragraphs under the section proceedings in which Aegon is involved. And if you read those 2 sections, you will find those are the 2 cases that we're talking about here. They are indeed included in the other charges of USD 230 million, as you pointed out yourself. So they're including that alongside other items in that bucket. As pertaining to the process, we settled those cases, they now need to be approved by the courts, and that's a process that will take a bit longer. Then when it comes to the U.K. review, we have launched it, as you know, at the Capital Markets Day on the 10th of December. It's early days, so we will not give any comments on this until such time as we have an update for you. We expect that update to happen somewhere before the summer, let's say. That's what we aim to do.

[Operator Instructions] And our next question today comes from the line of Michael Huttner from Berenberg.

I had 2 questions. One, in the past, Duncan, you've given us the kind of waterfall to the underlying OCG. I just wondered if you could do that, for my benefit, I imagine my competitors are much more clued up than I am, but that would be really, really helpful for the year. And then the second question, which kind of relates to it, but maybe a bit differently. I'm always obsessed by mortality, and there's that lovely Munich Re update, I think, this week on GLP-1s and stuff. Can you talk a little bit about the improvement in mortality you've seen? So year-on-year, the variance is better, but is there any trends here we should be thinking about?

Michael, thank you. So we think that the clean 4Q OCG was around EUR 294 million for the group compared to the reported OCG of EUR 372 million. And if I break the movement from one to other down, we had a positive impact of around EUR 47 million in the U.S. from favorable items. And within that, there was EUR 36 million attributable to favorable claims experience. The majority of that was mortality, EUR 29 million was mortality, EUR 7 million was morbidity. So that's good. Against that, we had new business strain, which was EUR 34 million higher than the guidance we gave at the start of 2025, and that's reflecting strong sales. And then against that, we had relatively elevated release of required capital against the guidance we gave at the start of 2025 of around EUR 45 million, and that's reflecting normal ALM activity. And as I noted, we do tend to see that spike a bit in 2Q and 4Q as Transamerica pays dividends. Then in the other units, we had overall positive favorable items of around EUR 31 million, of which about EUR 20 million was in international, split equally between China and Spain. And then around EUR 7 million in the U.K. and EUR 4 million in Aegon Asset Management. On mortality, we saw this quarter favorable severity. We saw that particularly in younger ages and very old ages. You know that number can move around in any single quarter, given the size of our book. But if I take a step back and look at our mortality experience since we made the updates, about 1.5 years ago now, we're happy with how it's performing versus our best estimate.

Our next question today comes from the line of Nasib Ahmed from UBS.

First one on financial assets. At the CMD, you did the universal life deal. And it seems like you've got the SPV set up. So are you going to chip further away at the $2.7 billion this year? Do you have anything in the pipeline in terms of reinsurance transactions or anything else? Any more color on that, Duncan, would be appreciated. And then secondly, I noticed you're focusing a little bit more on IFRS in the presentation slide. You removed the bridge of the OCG where you show the expected in-force and the release of capital. Just wondering why the change? Is it because U.S. GAAP is closer to IFRS? How should we think about U.S. GAAP, is it more closer to OCG or IFRS?

Duncan, 2 questions for our CFO.

So on the reinsurance deal, you're right. In December, we announced at the Capital Markets Day, I think a very innovative transaction on our part, whereby we reinsured a significant part of our secondary guarantee universal life exposure in the U.S., and that brought our required capital down to $2.7 billion. Actually, if you take a step back and look over the last 4 years, I would argue that we've done a huge amount of management actions across all of our books. And we're actually positioned as one of the more innovative parties in the market with the recent transaction, I think, giving us even more optionality because we've established this reinsurer. We continue to look for ways to bring down the $2.7 billion to our targets in 2027. That will be done through a range of actions, management actions we can take ourselves, actions which we engage with policyholders on and then also potentially third-party actions. I think the main message I'll give you is that we're confident we can hit our targets. And we've demonstrated, I think, that we are at the forefront of innovation in dealing with these legacy blocks. On the shift from -- on the emphasis on IFRS, I think we've always placed a great deal of emphasis on IFRS. We've historically run 2 frameworks, OCG and our accounting framework, which is IFRS 17. We are trying to simplify our communication. We took a step of that with the Capital Markets Day, where we have given targets, which I think are simple to understand and simple to track. And so that's how we're going to manage the next 2 years. You know that we're in the early phases of implementing U.S. GAAP. I'm not going to comment on that on how that's going or what the expected outcome of that is. But over the coming years, we will update the market when we have U.S. GAAP figures and eventually transition our disclosures to that of a normal U.S. company.

[Operator Instructions] And our next question today comes from the line of Farooq Hanif from JPMorgan.

So just following on from Nasib's questions. You mentioned at the CMD that the reserving on a stack basis, you're happy with across most of your books, but LTC is the one that stands out. Is your position still that it's hard to find market deals that economically make sense to you right now? Is that still your position and that you can deal with it kind of internally through your internal management actions on pricing? And secondly, this is a slightly kind of open-ended question, I guess, but just, I mean, you consistently have lots of positive and negative experience variances on an IFRS basis, for example. And I see quite a lot of assumption changes again in CSM. I'm just kind of wondering to the best of your knowledge, do you feel like you're getting closer to dealing with these variances going forward? Or are there any items we should watch out for going forward in earnings that could still remain volatile under IFRS?

Both questions for you, Duncan?

Okay. On the financial assets, so what we tried to give at the Capital Markets Day was, firstly, a framework whereby we said that we look at third-party transactions on an economic basis, and we referenced our valuation equity and also free cash flow per share, so both cash and economics. So that's the framework when we assess transactions. Second thing we gave was, we stated that our statutory reserving in aggregate for the financial assets was now comparable to on an IFRS basis. But within that, there are obviously blocks which are stronger and blocks which are lower. And we did indeed say that long-term care was lower. If we look at third-party transactions, actually, I think the binding is more the economic price. And if you look at long-term care, the reality there is that there are a lot of -- it's a relatively more sensitive block because it's long duration. The peak reserves are not until sometime in 2030. And that makes it a bit more sensitive to various policyholder and behavior assumptions. And therefore, we've so far taken a view that we are the appropriate owner of that block and our approach to managing that liability is through rate increases and other options we give to the policyholder to manage exposure. And I think that's probably the base case for the coming period. On variances, well, we gave a range of around EUR 100 million within our operating profit, which I think should be enough to cover positive and negative variances in a half year period, both from experience variances and onerous contracts. There will always be variances. This half year, we had positive mortality. We had some negative on premium persistency and expense on onerous contracts. So there will always be a number, and that simply reflects the leverage of the balance sheet to the P&L. But I believe that the operating range we give, which is EUR 100 million range, so plus or minus EUR 50 million should be enough to cover those variances on a go-forward basis.

Your next question today comes from the line of Iain Pearce from BNP Paribas.

Just one. In the presentation, you flagged some impacts from downgrades and defaults. I was just wondering if you could give us any more details on what this relates to, if there's sort of concerns about further downgrades in the investment portfolio? If it has anything to do with any of your private credit holdings as well? And I assume these are U.S. related as well. Just any details on what's driving that because it's not something we've really had flagged before.

I can take that. That's a good question. So as you know, under IFRS, we have the ECL. And if you look in our statistical supplement on Page 15 you'll see the movement in the ECL and there you'll see transfer between stages, which we saw some movement from stage 1 to stage 2 and some movement from stage 2 to stage 3, relatively small. I would say, still fairly benign. And that was across a range of bond holdings we have, ABS holdings we have, et cetera, but still pretty benign, to be honest with you, not a meaningful number yet, but it is something we track. On our asset portfolio, in general, it's performing very well, and you can see that in the movement in the ECL.

And your next question comes from the line of Jason Kalamboussis from ING.

Two quick follow-up questions. The one is in the U.S., plus 14% on local currency is above your -- which you're indicating as guidance. Do you think that this was supported mostly by the stronger markets we saw in the second half? Or do you find that there is a good momentum that could be carried in 2026? And also incidentally, I mean, if you could comment on the fourth quarter, how was it compared to the previous 3 quarters in the U.S. in local currencies? And the second thing is just for my understanding on the U.K. sale process, I understand that you are not going to comment on it, but I was looking just to understand how it works. So you are looking at bids for the whole of the U.K. But within it, do you also take or do interested parties show an interest for part of it and give a price or they have to actually look at it as one piece. And if you want afterwards to sell it in two different pieces, for example, because you're not happy with the price you get for the whole piece, then they have to resubmit, and you start discussions on that kind of second process. Essentially, is it a 2-stage process? Or is the second one folded partly in the first one. So I would be just interested if you could share any thoughts on it.

Jason, this is Lard. I will do the U.K. piece and then I'll hand over to Duncan for your first question. On the U.K., as I mentioned, the strategic review that we launched pertains to the insurance business and pertains to the platform business. It does not pertain to the asset management office that we have and business that we have in the U.K. So that's something I want to make sure it's clear for everybody. Secondly, it's in the early stages, and we aim to give an update when appropriate, and we hope to do that before the summer of this year.

On the operating profit in the second half, what tends to drive -- or what drove a lot of that growth, Jason, was the variances. So in the second half of 2025 for the U.S. on a U.S. dollar basis, we had a positive experience variance on claims of $129 million linked to mortality and morbidity comment earlier, whereas last year in the second half, that was only $33 million. So there's a big swing from variances, which are always going to occur, but hopefully should be captured in our range. If we look forward, the guidance we gave at the Capital Markets Day was that we would expect the operating result run rate to grow around 5%, driven by around 10% growth in strategic assets and shrinking profits and financial assets. As you know, the strategic assets profits are driven mostly by CSM progress and then our noninsurance profits. You see that our CSM is progressing really nicely. So our CSM on Protection Solutions ended the year at $4.3 billion and at half year it was $3.6 billion. So good progress there, which I think is supportive of the growth ambitions on the insurance side. And I just flagged earlier that on distribution, we expect a continued lower margin but good revenue growth. So that should support the overall roughly 10% growth in strategic assets. Against that, the financial assets will continue to run down. You note there that the CSM ended the year at $3.2 billion, began the year at $3.8 billion. So as that runs down, there'll be a lower release from CSM and hence shrinking operating profit over time. And the dynamic of those two things should get you the roughly 5% growth in operating profit.

And the next question comes from the line of Michael Huttner from Berenberg.

It was on the net inflows rather than -- so what I noted from speaking to your excellent IR, but I wanted to have some comments on how you see it developing. In the second half, net outflows in retirement plans in the U.S. was $0.6 billion. I think that's the retirement of baby boomers. I just wondered what the outlook is there? And then in the U.K., we had EUR 273 million net inflows in H2, which is well below what we had in H1, I think EUR 1.9 billion or something. So I just wondered how you see the run rate here. Then finally, on asset management, EUR 1.3 billion net outflows, I think, again, second half. And I just wondered how you see that developing?

These are different business lines. I will go one by one. First of all, our plan assets in the U.S. have gone up by 13% year-on-year. And the net outflows you're reporting, so the business itself is in very good shape. And especially when you look at the written sales, the new plans, the pool plans that we're getting, actually, the retirement business is doing very well. The outflows are indeed something that is in line with what the market sees overall in the U.S., which is baby boomers taken there, taking some of the money out. But also given where the stock markets are, people taking a little bit of money out. And that's what you're seeing there. Nothing else driving it. If you look at the U.K., the outflows we're seeing there is stemming from the same trend that we've been seeing for a longer time, which is a combination of a couple of things. And in the second half, there was one additional thing that I want to mention as well. So first of all, we target, as you know, a target segment of 500 advisers. Beyond that, in the nontarget segment, there's quite a lot of vertical consolidation and that drives where people are buying platforms and as a result, move assets away from it. So we've seen that for quite a number of quarters, and that has not changed. What we also saw in the second half of the year, there was quite some jitters in the U.K. on the budget. It's now settled because the budget is clear. But before that, there were concerns and as a result, clients took some money out because there were rumors that the tax-free pickup of pension money would not be possible anymore. And as a result, that led to a little bit of that. We have good progress actually on the technology improvements that we're making with target advisers providing positive feedback on that. But unfortunately, the commercial result of that is not yet visible. If you look at the AUM flows, so first of all, third-party flows were up. So they were worse than last than 2024. '24 was a record year, by the way, for that. But they were much lower than 2024, but they were positive. So we have positive flows driven -- so both on global platforms, which is our own platform as the strategic partnerships. And in terms of the outflows, we saw 2 main things happening; one client in the U.S. redeemed from our U.S. high-yield fund; and then we had the ASR, so they had some allocation changes in their general account. And as you know, we have a partnership with them on that. We noticed that in our asset management results. That is what we've been seeing. However, bottom line is, the retirement business in the U.S. is doing very well as is demonstrated by the set of numbers here. And the U.K., the workplace business is also in a very good place. It may not have been as high as the previous year because that was like a record year. This one is the second best year that we had, so it's still in a very good place. And on the adviser platform, I gave my views. And on AUM in total -- sorry, on asset management in total, we had positive flows, as I mentioned earlier. I also want to point to the margin improvement that we saw, by the way, in the asset manager, it nearly doubled this year to 17%.

And the next question comes from the line of Nasib Ahmed from UBS.

Just one question. Lard, you mentioned the legal proceedings on Page 269. I had a look, and there's a paragraph, the third paragraph, which has been there for a while around distribution. Just wanted to understand what that's related to? Is that WFG related? Or is it something else?

Well, the two that I was referring to are the cases that -- so one has to do with an old block of business and bonuses that were paid on that on universal life policies. Again, it's more eloquently described in the first paragraph of that section in Page 269. And the second one had to do with the topic of the MDR, so the monthly reduction rates that were increased. And also that is described more wholesome in Page #269. Those two cases have been settled. That's good news. And now we await the confirmation. Now, then what you're referring to, the third paragraph, they're not WFG related. So the first two cases -- so the cases I mentioned that we settled are not WFG-related.

Sorry, I was asking about the third paragraph where it says, there's some legal action going on around agents that might be considered independent contractors as opposed to employees. So I was asking about that one, whether that's WFG related?

We'll follow up with you on that. But I think you're referring to a case that we mentioned half a year ago, already in our half year disclosure. We'll follow up. IR will give you a ring.

And the next question is a follow-up from Michael Huttner from Berenberg.

Sorry about that. On the number of advisers at WFG, the total number is up, which is wonderful. The dual or the multiticket number is up, but it's kind of much slower growth. Can you talk a little bit about that? I think it was a question a couple of years ago, and I think the implication was that it didn't worry you too much, but it's the multiticket is obviously the higher value part, I don't know. Any comment would be helpful.

You may recall in many of the discussions last year that we wanted to improve productivity, right? And I've mentioned in a number of earnings calls that we were running programs to indeed improve that productivity. Now what has happened is that through our training and through our field support, we have been able to make more agents because the agency sales force has grown quite a bit. So the agents that become fully licensed agents, then also need to learn and to get productive and to become sellers. And that's what you're actually seeing in the numbers. We were able to improve the number of producing agents. Then the second thing that happened is they also sold insurance policies with a higher premium amount. And that also drives the metric of productivity up. That's all good news. So the agency network become stronger, has become bigger, has become more productive and that bodes well for the future, and we will continue to strengthen the network. I mentioned that we are doing investments supporting the field force training, all these good things to ensure that, that massive sales force that we have, which is the second largest in the U.S., and that goes to the underserved mainstream American family class and help them with our protection and retirement plans, et cetera. So yes, it's a good progress that we're making there.

Thank you. We have no further questions. I would like to hand the call back over to Yves Cormier for closing remarks.

Thank you, operator. This concludes today's Q&A session. If you have any remaining questions, please get in touch with us at the Investor Relations team. On behalf of Lard and Duncan, I would like to thank you for your attention. Thanks again, and have a good day.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Aegon's First Half 2025 Results Conference Call. [Operator Instructions] Please note that today's conference is being recorded. I would now like to hand the conference over to your speaker, Yves Cormier, Head of Investor Relations. Please go ahead.

Thanks, operator, and good morning, everyone. Thank you for joining us for this conference call on Aegon's first half year 2025 results. I'm Yves Cormier, Head of Investor Relations, and joining me today to take you through our progress are Aegon CEO, Lard Friese; and CFO, Duncan Russell. Before we start, we would like to ask you to review our disclaimer on forward-looking statements, which you can find at the end of the presentation. And with that, I would like to give the floor to Lard.

Thank you, Yves, and good morning, everyone. I want to start today's presentation by informing you about the next steps in Aegon's transformation and running through our commercial developments before Duncan will address our results in more detail. So let me begin on Slide #2 with the key messages. Our strategy is to grow and transform our businesses, and we made good progress in doing so during the first half of 2025. We are on track to deliver on our strategy and on all our targets. Our operating result was EUR 845 million, up 19% compared with last year. This increase was mainly driven by profitable business growth and less unfavorable claims experience in the U.S., but also in the U.K. and in our International segment. Operating capital generation before holding and funding expenses amounted to EUR 576 million, decreasing by 2% over the same period. New business strain increased, especially in our U.S. strategic assets as we grew the business. Commercial momentum remains strong across our key markets leading to higher new life sales and more net deposits. The capital position of our operating units remains strong and above their respective operating levels. Furthermore, in the U.S., we have extended the hedging of the variable annuity portfolio to cover part of the base fee exposure, which reduces our exposure to downward equity markets further. Cash capital holding totals over EUR 2 billion following the receipt of planned remittances from all our units and the completion of a EUR 150 million share buyback in the first half of the year. On the back of the solid performance, we have increased the interim dividend by EUR 0.03 compared with last year to EUR 0.19 per common share. Furthermore, today, we announced a EUR 200 million increase to the current share buyback program, which began in July. In total, we will buy back EUR 400 million of shares during the second half of 2025. This once again demonstrates our ongoing commitment to return excess capital to shareholders unless we can invest it in value-creating opportunities, and it is consistent with our plan to reduce our cash capital at holding to around EUR 1 billion by the end of 2026. Today, we are also announcing a review of potential relocation of our head office to the U.S. I will now move to Slide #3 to provide you with some background on this review. This is an important step in the transformation of our company. In recent years, Aegon's business in the United States, which accounts for approximately 70% of Aegon's operations has become Aegon's primary market and central to the company's strategy and long-term growth. The relocation of Aegon's legal domicile and head office to the United States is a logical step, is expected to simplify Aegon's corporate structure as it would align its legal domicile, tax residency, accounting standard and regulatory framework with a geography where it conducts the majority of its business. Moreover, bringing the head office closer to our largest market allows much closer cooperation between the holding and its main business unit, which is an important enabler to grow successfully in the long term. As part of the review, we will evaluate the additional advantages that would come with being a U.S.-based company. This includes the impact on all of Aegon's stakeholders and of making our listing on the New York Stock Exchange our primary listing alongside our Euronext listing. Another key component of this review is the implementation of U.S. GAAP reporting, which is a complex process, which would likely take 2 to 3 years to complete. Preparations for the implementation have begun. We aim to share the outcome of this review at our Capital Markets Day on December 10 of this year. With that, I will now move on to Slide #4 to discuss our recent commercial performance and starting with the Americas. We continued to deliver on Transamerica's transformation, growing our strategic assets during the reporting period. World Financial Group recorded a 14% increase in its number of licensed agents to over 90,000, thanks to successful recruiting efforts and improved retention. The productivity of the agents selling life insurance products increased mainly from higher average premiums per policy. This offset a slight reduction in the number of multi-ticket agents, while it led to an increase in Transamerica's market share in WFG U.S. life sales. This higher agent productivity at WFG was one of the key drivers of the 13% increase in new life sales in our Individual Life business. We also recorded strong growth of new life sales in the brokerage channel, driven by the successful launch of a fully digital experience of a whole life final expense product last autumn. Furthermore, we continue to see steady growth in the RILA product, where net deposits nearly doubled compared with last year. In the savings and investments segment, we recorded solid net deposits in our retirement plan business over the reporting period. This was driven by midsized plans, partly supported by the onboarding of a large pooled plan. Written sales continue to be strong, which we see as a positive indicator for future growth of our book. Finally, we realized further growth in the general accounts stable value product and in IRAs as we work to increase profitability and diversify revenue streams in the retirement plan business. Let's move on to Slide #5 for an update on the other units. At Aegon U.K., we continue to make progress on the strategy we presented at the Teach-In in June of last year. Deposits in the Workplace platform can be lumpy. And in this period, we benefited from the onboarding of a larger scheme. The Adviser platform business continued to be adversely impacted by ongoing consolidation and vertical integration in nontarget Adviser segments. In the International segment, our joint ventures in Brazil, China as well as Spain and Portugal, all generated higher new life sales. This was partially offset by lower sales at TLB as a result of changes in the competitive landscape in Singapore. Aegon's Asset Management reported solid third-party net deposits during the reporting period. Net deposits in the Global Platforms business were mostly attributed to alternative fixed income products. Strategic partnerships net deposits were driven by our Chinese joint venture, which benefited from a collaboration with the consumer finance platform. I will now hand over to Duncan to discuss our financial performance in more detail.

Thank you, Lard. Let me start with an overview on Slide 7. In the first half of 2025, the operating results increased by 19% year-on- year mostly reflecting an improvement at Transamerica. Operating capital generation before holding, funding and operating expenses decreased by 2% over the same period, mainly driven by higher new business strength. Free cash flow in the first half of 2025 amounted to EUR 442 million, and this is a significant increase compared to the EUR 373 million generated last year. Cash capital at holding remains very healthy, standing at EUR 2 billion for the end of June, allowing us to announce an increase of our ongoing share buyback program. On a per share basis, valuation equity, which consists of the sum of shareholders' equity and the CSM balance after tax decreased by 5% in the period, mostly from the impact of unfavorable exchange rate movements on the group CSM, which were partly offset by a strong net result. Exchange rate movements were also the driver for the reduction of gross financial leverage. And lastly, the group solvency ratio decreased by 5 percentage points compared with year-end 2024 to 183%, mainly from the new share buyback program and the reservation of the 2025 interim dividend. Using Slide 8, I will address the development of our IFRS net results in the first half of 2025. The operating results amounted to EUR 845 million coming in at the top end of the EUR 750 million to EUR 850 million run rate range we had indicated with the full year 2024 results. In the U.S., the operating results improved materially year-on-year to EUR 685 million within our guided range of EUR 650 million to EUR 750 million. The result benefited from growth in our strategic assets, notably the Protection Solutions business with some offset in distribution where the operating margin fell in the first half of 2025 as previously flagged, as we invested further in the business. We had an improved result in financial assets because of less unfavorable experience variances from onerous contracts. Claims experience was largely offset by reserve releases. Unfavorable reserve changes due to premium variances that we saw in the U.S. in the second half of 2024 continued into the first half of 2025. As we previously flagged, but to a materially lesser degree. The operating results of the U.K. increased is benefiting from business growth and favorable markets. In the International segment, the operating results increased mainly from a higher CSM release in TLB and Spain and Portugal. Aegon Asset Management's operating results as well as out of the holding was broadly stable compared with the same period of last year. Moving on. Nonoperating items were an aggregate favorable in the period, driven by hedging results recorded in fair value items. Other charges amounted to EUR 207 million, mostly because of the assumption updates in the U.S. and at TLB to address the experience we've recently seen. Finally, we booked a EUR 50 million contribution from our stake in ASR. Looking forward to the second half of the year, we are increasing our guided operating results range for the U.S. by $50 million to EUR 700 million to EUR 800 million, but we're keeping the group guidance of EUR 750 million to EUR 850 million, reflecting the current exchange rates. I'm now moving on to Slide 9. Based on the strong net result and a positive contribution of the assumption updates to OCI, shareholders' equity increased slightly over the period. The CSM balance decreased over the period, mostly because of unfavorable currency movements. In U.S. dollars, the CSM of our strategic assets in the U.S. increased thanks to profitable new business, while the CSM of our financial assets decreased due to the runoff of the book, the impact of claims experience as well as the impact of strengthening policyholder behavior assumptions. Outside the U.S., the changes to the total CSM balance were limited with the U.K. CSM decreasing modestly on a local currency basis and the International segment, CSM increasing modestly from assumption updates. Overall, valuation equity per share decreased by 5 percentage points over the first half of 2025 to EUR 8.47 per share mostly due to the exchange rate development. Slide 10. Operating capital generation or OCG decreased by 2% compared to the first half of 2024. OCG from the U.S. decreased by 4% or 3% in U.S. dollars. OCG from the strategic assets decreases our investments in business growth, drove higher new business strain. OCG from financial assets increased mostly from higher fees as variable annuity account balances increased on the back of favorable markets. Furthermore, claims experience in the period was less than favorable than in the same period last year and included $86 million of unfavorable mortality, largely related to the Universal Life book. Looking through the unfavorable claims experience in the period, we continue to observe a quarterly OCG run rate for the Americas of around $200 million to $240 million. The OCG benefited from favorable markets as well as favorable nonrecurring variances. The International segment reported lower OCG with improved underwriting experience in TLB being offset by lower OCG from China. Aegon Asset Management's OCG was stable compared to the same period of last year. Looking ahead, we continue to expect OCG before holding, funding and operating expenses of around EUR 1.2 billion in 2025. I'm now turning to Slide 11. The capital positions of our business units remain robust and above their respective operating levels. The U.S. RBC ratio decreased by 23 percentage points compared with year-end 2024 to 420%. Market movements had a 15 percentage points negative impact on this ratio. Of this, 5 percentage points was due to hedging, rebalancing and cross effects as a consequence of elevated market volatility in April, which we flagged with the first quarter trading update. The remaining unfavorable impact was largely driven by valuation moves in our alternative asset portfolio and lower interest rates. Onetime items had a 9 percentage points unfavorable impact due to restructuring costs, the annual actuarial assumption update and several smaller items. For the remainder, operating capital generation in the period was offset by remittances to the group. Finally, in mid-August, we decided to expand the dynamic hedge program of our variable annuities to cover the equity market exposure of the fees of 25% of the base contracts. This represents an additional lever available to us to manage our risk profile going forward, reduces our economic equity market exposure on the VA block, and thus capital requirement and first solidifies the expected runoff profile, albeit with a small negative impact on run rate OCG. In the U.K., the solvency ratio of Scottish Equitable decreased by 1 percentage point to 185% as operating capital generation in the period was offset by remittances and investments in the business. Slide 12. Cash capital at holding remains extremely healthy, standing at just over EUR 2 billion. Free cash flow amounted to EUR 442 million in the period and included remittances from all our units as well as capital returns from our stake in ASR. We returned EUR 110 million of capital to shareholders through share buybacks. And in addition, we purchased 14 million worth of shares, which will be used for share-based compensation plans. Today, we have announced a EUR 200 million increase for the currently ongoing share buyback program, bringing it to a total of holding, around EUR 1 billion by the end of 2026. Let me conclude our presentation with the final slide on Page 13. Taking into account our performance in the first half of 2025 and the outlook for our businesses, we are on track to achieve all of our financial targets for 2025. We look forward to meeting you at the Capital Markets Day on December 10 in London. At the event, we will share the conclusion of the review regarding a potential relocation of Aegon's head office to the United States. And with that, I would now like to open the call for questions. Please limit yourself to 2 questions per person. Operator, please open the Q&A session.

[Operator Instructions] And your first question today comes from the line of David Barma, Bank of America.

To start with, can you talk about what drove the decision to cover 25% of the variable annuity based fee, please? Did you see that as the optimal balance between cost of protection? Or is it a first step and you'd like to do more over time? And I'll ask my second straight away because it's linked to that. The -- that combined with the measures taken on the Universal Life block will weigh on OCG going forward, but you've reiterated the guidance. We've been in a similar situation in the past 2 years with mortality first and then the drag in China, both being offset by other measures. So as I'm trying to understand how reliant OCG is to the current level of equities and to what extent stronger-than-expected business growth is making you comfortable with the OCG level that you're guiding for? If you can give a bit of color on that, please?

Thanks, David. Yes. Okay. So the VA based fee hedging, David, we executed upon that in recent days, actually last week, we executed upon it. And that is an additional tool we brought into our toolkit to manage and stabilize the capital generation and the earnings profile of our legacy variable annuity book, which is in runoff, as you know. We did that for a number of reasons, partly to stabilize capital, partly to bring an additional tool kit, partly because equity markets are at a good level. So it's just part of a normal ongoing management unilateral actions related to financial assets. The 25% again, it's a bit -- probably a bit of prudence on our side. We wanted to execute upon that, monitor how it works to make sure you understand it fully. And then in the future, once we fully have observed that we could increase it or decrease it depending on how we view things. So one thing, we do have to balance and manage when we do these things is the impact of flooring on our capital position. So that is one thing, which we continue to monitor. But the net-net, it's reduced our underlying economic equity exposure on that VA book, which I think is a good thing. In terms of OCG, actually, it's a fairly clean quarter. We've reiterated our guidance. If I take the actual reported OCG for the half year, add in our quarterly run rate, then we're still getting into our guided range of around EUR 1.2 billion for the year. Your comments on our equity sensitivity, actually, we're not particularly equity sensitive. You can see the sensitivities in our balance sheet, which are not particularly large. And we -- I think we've guided that our OCG is sensitive by plus or minus 10% to around USD 40 million. So again, not particularly equity sensitive to be honest.

Your next question comes from the line of Michael Huttner from Berenberg.

I wanted to say it's almost like -- sounds like goodbye, the decision to -- and I take it as a decision if you've already started doing U.S. GAAP, it sounds to me like a decision. So first question on the U.S. GAAP, can you -- as an indication, where will it land roughly relative to the operating profit or the OCG we've got already? And the other two, I know that it's more than two questions. The pooled plan, how big it is? Because I guess it's around EUR 2 billion, but I don't know. And then also the figures on the new business strain. If I may, the economic exposure, the VA benefit, how much does it reduce the capital required?

Okay. Michael, that's a number of questions. Let me confirm, it's EUR 1.9 billion the pooled plan that you're referring to as part of the retirement growth of net deposits in this half year. For the remainder, I hand over to you, Duncan.

Yes. So Michael, the -- on U.S. GAAP, no, it's too early to tell. And I don't want to give any sort of guidance on that, that would be misleading at this stage, to be honest. Then on the capital requirement from the VA, it's a small capital benefit. We are reducing the equity exposure, which will reduce the required capital by a small amount in the third quarter.

And the new business strain?

I'm not entirely sure what your question was on new business strain. But if I look in the quarter, our new business strain was more or less as we anticipated, it was roughly EUR 6 million higher than our guided run rate in aggregate.

And the next question comes from the line of Farooq Hanif from JPMorgan.

I just want to delve a little bit into your thinking on the redomiciliation because you've told us, obviously, that you've considered this in the past or it's been on the table, particularly when you move to your regulatory domicile to Bermuda. So I mean, I get the point about it makes sense from the point of view of most of your business is obviously from the U.S. But I just want to understand what's changed given that you -- I believe that you've probably looked at this before. So I mean, the things that come to my mind are regulators, does it also make it easier for you to execute on some of your plans in the U.S.? Would that be a factor that, for example, in terms of being able to use U.S. GAAP and just being located there. I wonder if you've been willing to just talk a little bit more about this, I mean, I realize you're reviewing it all, but just some of the other factors that are important. And then -- sorry, that was a very long question. Second question, how clean is your EUR 845 million operating profit? Can you -- I mean you did quickly run, Duncan, run through some points, but how clean do you think it is?

Yes. So Farooq, I will answer your first question and take it through the rationale and everything that you asked for. And then -- but let's start to clear the questions to Duncan on the financials, the second one.

Yes, Farooq, it's pretty clean. So we are happy with the first half IFRS operating profit. We reported EUR 845 million as you mentioned. And if I -- there were still some negative variances. If we add back all those negative variances, which is roughly EUR 92 million for the group, we get to an adjusted number of around EUR 937 million, which is strong. . Having said that, as we flagged at the full year, we do have a recurring VA interest accretion, which we deduct, let's say, EUR 30 million to EUR 35 million. So underlying around EUR 900 million in the first half. Since then FX has weakened. And hence, we're coming back into around the EUR 850 million level, which is in the guided range. So a pretty good quarter, a pretty good half year, Farooq, to be honest.

So Farooq, on the rationale and everything related to what you asked on the potential move to the U.S. A couple of things here. So the Aegon transformation, as we all know, is pretty profound, and we've done quite a number of steps over the last years to be where we are today. And we are now ready for this next step in the transformation. At the time that we were announcing the combination of our Dutch business with ASR and then the subsequent closing of that in July -- at the beginning of July of 2023. We should all go back to that moment because it was in a very important moment. At that point in time, we were in the middle of implementing IFRS 17 -- had just implemented IFRS 17, and we were in the middle of disclosing it for the first time. That's number one. So at that point in time, there was not U.S. GAAP available at all. That's number one. Number two, we were closing the transaction with ASR, which is a very comprehensive transaction. We needed to make sure that we embedded the group after that appropriately operationally. We also moved as DNB could no longer be, had no legal basis any longer to maintain to be our group regulator. We moved our legal seat to Bermuda. And then subsequently, the BMA became our regulator, and we wanted to embed everything appropriately. And let's also not forget that in that same period because we closed the transaction on the 4th of July. But in June, that's a couple of weeks earlier, 2 weeks earlier, we had a Capital Markets Day in London where Transamerica was launching its strategy and its plan. And now we have 2 years behind us, and we can see how it's progressing. And at that time, we were at the start of that execution. And we are now 2 years further ahead, and we can now see that we have conviction that our U.S. team is executing very well. And you can see the growth, et cetera, is really coming through and now the U.S. business is 70% the overall footprint of the group. So the reality is that we are now ready for this next phase of the transformation. We believe it is logical that if the U.S. is 70% of your business located in one of the thriving largest market in the world, it is clearly the locomotive, if you will, that is able to carry entity to be the front part of the train that is Aegon Group. And as we aim to grow the U.S. business in the future, we want to be close into it and moving our holding company to our largest market is a logical thing to do. So we're leaning in. That's what you're -- to a reality of our business. And at this point in time, we are ready to do so. We have done a lot of work, but we aim to -- we need to discuss in the public domain with a number of stakeholders, all the implications, one of the most important stakeholder groups being our own employees, the works councils, all the implications for them. And then we will -- and also a number of other stakeholders and then we will conclude the review before the Capital Markets Day and then share the results of that review with you.

So just -- I'm really sorry to jump in, and I'm taking time, but has there been any regulatory pressure to do this?

No.

Your next question comes from the line of Iain Pearce from Exane BNP Paribas.

They're all around the redomiciliation. First, if you could just touch on what you think the main challenges will be of potentially redomiciling obviously, you flagged U.S. GAAP, but just sort of what you think the main challenges of the move would be? And have you had any conversations with your main shareholder about this move? I mean clearly, that article of association might cause some problems for them with a redomiciliation potentially. And then the second one is just around the asset allocation opportunities of redomiciling and moving to a U.S. regulated entity. Do you see that one of the main benefits of -- and is the plan to really re-risk the asset portfolio in the U.S. and increased private asset allocations as part of this redomiciliation?

Thank you very much Iain. I'll take the first couple of questions. And on your last question, I'll hand it over to Duncan. So if you look at the key challenges. So first of all, let's clear the anything with association Aegon. We cannot speak for them, obviously. They are informed, and we cannot speak for them. But they are informed to and we'll continue to engage with them obviously in the coming period. When it comes to the main challenges, well, we expect this move -- head office processes in the U.S. We need to build down head office processes here, and we need to make sure that we do that well. U.S. GAAP is a key gating item. The -- we started with it, but the project has started, but it's implementing a new accounting standard. It's going to take some time. And that is a key thing to make sure we do right. And of course, in the meantime, we need to make sure that this transition process is appropriately change, managed and those, I would say, are the key things to mention here. When it comes to the asset allocation opportunity potentially of the -- Duncan?

Yes. I think no impact on the redomiciliation on our allocation choices or opportunity. We manage our entities on a local capital basis. So we're already operating under the U.S. statutory regime for Transamerica, and we have asset allocation appropriate to our liabilities in that market, and I see no impact from the redomiciliation.

And the next question comes from the line of Nasib Ahmed, UBS.

So first one on just M&A. You've still got the financial assets. There's been a big variable annuity deal where I think the counterparty managed to get over the line on the counterparty risk, and that was one of the blockers for you guys, I think. So any thoughts on kind of third-party actions on the EUR 3.3 billion locked in? And then on the flip side anything that you would potentially buy? And how does the U.S. redomiciliation help with M&A on the acquisition side? Second one is on OCG versus IFRS in the U.S. So Duncan, you raised the guide on the IFRS by EUR 50 million, but I think the OCG guide stays the same. What's the difference? Why haven't you raised the OCG guide in the U.S.?

Yes. So I'll take the M&A side and then you can do financial asset, Duncan on the piece about the OCG. So on acquisitions, same as we mentioned before, it's very much linked to our strategy. We want to grow like anybody -- like any company wants to grow. So if we see an opportunity that makes sense and it strengthens our business and it makes sense both for financial criteria and nonfinancial criteria, then we will certainly look at it. We will be disciplined. We're not going to do any M&A unless we believe that we can integrate it and that we will create value for our stockholders. Now the U.S. is a large market, it is our largest market. So being there physically with your head office, of course, and being closer to that market on a daily basis, obviously, would be positioning yourself more beneficial for that. But our M&A approach has not changed to what we mentioned before. Duncan?

Two separate questions. On the financial assets, we continue to look at our unilateral, bilateral and third-party options on those books of businesses. We've been doing that for years. And should the transaction presents itself, which we find attractive for our shareholders, if they make sense, we'll do it. If not, we won't and we'll focus on unilateral or bilateral options. So no real change there. We just continue to look at all our options as we have been doing for the last couple of years. On the guidance, well, 2 things. Partly, the guidance reflects what we actually see in our actuals on a clean basis in the half year. So we saw -- we've seen that the U.S. operating profit performed well in the first half under IFRS, and that reflects, therefore, in the raised guidance, which means we expect that run rate to continue and on OCG, where we performed more in line with our previous guidance. And hence, that's driven the unchanged outlook there. Bear in mind, there are quite material differences in the way, for example, growth is treated under 2 regimes. So in the U.S. regulatory regime as you grow into a new business strain, which is pressing in the near term. Under IFRS, you create CSM, which come through in earnings relatively quickly. So that is also an explanation, if you really didn't catch it.

Your next question comes from the line of Farquhar Murray from Autonomous.

A couple of questions from my side, just mainly on the domiciling discussion. Obviously, it's been debated for a few years and does not seem a bit of a foregone conclusion, but I just wondered if you have a sense, therefore, on the actual like project costs of the U.S. GAAP implementation. And then obviously getting closer to the U.S. business makes a lot of sense, but I just wondered where that leaves your approach on the rest of the global footprint.

Yes. So first of all, the costs are going to be part of the review, and we'll update you on the, let's say, on the outcome of the review at the Capital Markets Day. When it comes to the total footprint, well, as you know, we've set ourselves a perimeter in 2020 when I joined the company. We're now in that perimeter, and we have a strategy to improve and to create advantage business in that perimeter. And that is unchanged.

Your next question comes from the line of Benoit Petrarque from Kepler Cheuvreux.

So yes, the first one is actually on your ASR stake. What is your initial thoughts around your stake also going forward, looking at the potential relocation in the U.S. It sounds like it becomes less core than before. And then maybe on ahead of the potential relocation, do you plan to initiate deleveraging actions and yielding holding levels. So any plans to maybe refocus more on deleveraging next year?

Duncan, can you take those questions?

Yes, nothing changes on either of those fronts. So again, today, we announced a review, we'll conclude on that review with the Capital Markets Day. And if we decide to proceed it will take 2 to 3 years, the leverage, no need to change our leverage given our footprint is what it is today. And on ASR, we've been consistent that we're a long-term patient holder. And there are 2 potential reasons we would dispose of that, either we have an alternative lease for that or we feel that the price reflect the intrinsic value. No change on either based on the announcement today.

Your next question comes from the line of Jason Kalamboussis from ING. Jason, it looks like we've lost your connection. Can you hear us?

My suggestion, operator, is you move to the next question, and then if Jason comes back, we'll take his question, obviously.

I will now go to the next question. And your next question is a follow-up from Michael Huttner from Berenberg.

On U.S. mortality Slide 17, can you talk a little bit about the unfavorable claims experience. I remember a figure, I think it was EUR 66 million in Q1. So normally, you would have EUR 33 million because of normal seasonality and there was EUR 33 million on top. I just want to get a feel, it's for which way it's going versus your assumptions? And the second question is, I mean, sorry, Lard, I didn't hear the answer on pooled. I did the numbers. So on the savings and investment Q2 2025, you had a EUR 2 billion net inflow. It was 0 in Q2 2024, and you mentioned pooled plan. And I'm really sorry, I didn't hear the number on that.

EUR 1.9 billion. The pooled plan, you guessed it was EUR 2 billion. You're pretty close. It was EUR 1.9 million. And for your other question, I will hand it over.

Michael, we had the overall mortality in the U.S. in the second quarter was slightly positive. I would say more or less in line with our best estimate expectation slightly positive. So since the mortality update we did last year, we had positive 3Q, 4Q, negative 1Q, positive 2Q this year, and we remain comfortable with our overall mortality assumptions.

We have no further questions at this time. I would now like to hand the call back over to Yves Cormier for closing remarks.

Thank you very much, Jerry, before I hand over to Yves. We will make sure we reach out to Jason Kalamboussis for his question.

All right. Well, thank you, operator. So this conclude today's Q&A session. Should you have any remaining questions, please get in touch with us at the Investor Relations team. And on behalf of Lard and Duncan, I would like to thank you for your attention. Thanks again, and have a good day.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.