Aegon Ltd. (AGN) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to Aegon's 2023 Capital Markets Day. My name is Jan Willem Weidema and I'm the Head of Investor Relations. On behalf of the entire team, thank you for joining us. During the course of this event, you'll hear from our Chief Executive Officer, Lard Friese who will present our strategic vision. Then it's on to Will Fuller, the CEO of our U.S. business, Transamerica to expand on the attractiveness of the U.S. middle market and our proposition here. After that, Duncan Russell, our Chief Transformation Officer, will join them on stage for the first Q&A session. Next, we have our U.S. management team members, Jamie Ohl and Phil Eckman discuss our U.S. Individual and Workplace Solutions businesses in more detail. And finally, we have our Chief Financial Officer, Matt Rider who will share in detail how a transformation will benefit our shareholders. We will round it off with a second Q&A session with all presenters. Before we start, we would appreciate it if you take a moment to review our disclaimer on forward-looking statements that is on the back of the presentation. And with that, I would like to open the floor to Lard.

Yes. Thank you, Jan Willem, and welcome to all of you to our Capital Markets Day. It's really great to see so many familiar faces to come together in this beautiful location. I also want to extend a warm welcome to the many guests and colleagues who are on the webcast today and are following this virtually, including our agents from WFG, so welcome -- welcome to this event. We are excited about Aegon's future. And today, we will tell you why. We will accelerate the execution of our strategy, drive growth and create value by reallocating capital. So let's get started with Slide #2. I'm pleased with the progress that we have made over the last few years to increase our strategic focus, enhance our risk profile, strengthen our balance sheet, stabilize our capital ratios and improve Aegon's performance. Today's presentation is about the next chapter in Aegon's transformation, and I have 5 points that I want you to take home with you today. First, we expect to complete the transaction with ASR in the coming weeks. Our shareholders will benefit from the value of this transaction by our stake in ASR, especially as we begin to realize significant synergy benefits. #2, we aim to build America's leading middle market life insurance and retirement company. We will do so by investing in Transamerica's advantaged positions to drive profitable growth. #3, we will meaningfully accelerate the release of capital from our U.S. financial assets through newly identified management actions. #4, we will continue to strengthen our U.K. and fully owned asset management businesses and invest to grow our successful insurance and asset management joint ventures. And #5, we have significant financial flexibility at the holding, and we will remain disciplined and rational as we put that flexibility to work. We expect that the actions that we are taking will lead to attractive and growing returns for our shareholders. We have announced today the following financial targets for 2025, increase in operating capital generation from the business units to around EUR 1.2 billion, to grow free cash flow to around EUR 800 million and to grow our dividend to around EUR 0.40 per share and reduce gross financial leverage to around EUR 5 billion. Matt Rider will discuss our targets with you in more detail later today. But let us first look at our achievements since the last Capital Markets Day we held in 2020. So let's move on to Slide #3. When we started our transformation journey, we acknowledge that Aegon was not living up to it's potential. Today, thanks to our granular plans and rigorous execution, Aegon is more focused with improved operational performance, stronger balance sheet, and an enhanced risk profile. We have increased our focus by exiting noncore and subscale businesses. We have materially reduced the sensitivity of our capital ratios to financial markets. We have improved our operational performance by introducing an intense operational rhythm and by fostering a high-performance culture. We now have a hop in our step. And we have reallocated capital by making disciplined investments in strategic assets and by taking significant management actions to derisk and release capital from financial assets. Throughout our transformation and despite volatile markets in recent years, we have maintained a strong balance sheet. Slide #4 talks to the financial results of this transformation. Back in 2020, we told you about our operational improvement plan that consisted of more than 1,100 initiatives. The program was a success. The benefit to our operating results has exceeded our target 1-year ahead of schedule. In addition, this program has fundamentally changed the way we work at Aegon and has structurally strengthened our execution muscle. We have also reduced our gross financial leverage to within our target range, and we did that 1.5 years ahead of schedule. We targeted cumulative free cash flows of between EUR 1.4 billion and EUR 1.6 billion throughout the -- over the period 2021 to '23 but in fact, we already achieved this at the end of 2022. And taking our guidance for 2023 into account, we expect to materially outperform on this target by the end of this year. We initially targeted a dividend of around EUR 0.25 per share over 2023. Following the ASR transaction, we increased this target to around EUR 0.30 per share. In addition, we have returned EUR 500 million of capital to our shareholders through 2 separate buyback programs. Finally, we took the opportunity to create a leader in the Dutch market by combining our Dutch insurance and banking activities with ASR. The agreed deal structure allows us to improve our overall financial flexibility, repurchase EUR 1.5 billion of shares and capture significant synergies through our stake in the combined company. In addition, it will strengthen our Dutch asset management franchise. Now it may sound like meeting our previous targets and commitments was easy but I can assure you that was not the case. Every achievement I mentioned was built on hard work and overcoming challenges against the volatile market backdrop. And I want to express my deep gratitude to our management teams and to our staff for their important contributions. Chapter 1 of the turnaround of Aegon has been successfully concluded, but this is obviously not the end of our story. So let's turn to page and open Chapter 2. For the next chapter, we have defined 4 key priorities to create value for our shareholders on Slide #5. Our near-term priority is to finalize the transaction with ASR. We are in a good place to proceed to closing. Subsequently, we'll own a strategic stake in a Dutch market leader, and our shareholders will benefit from the synergies to be realized from the transaction. As previously indicated, we will no longer have a regulated insurance business in the Netherlands after the transaction with ASR closes. We are making progress on the review of the implications thereof for group supervision and discussions with our college of supervisors are ongoing. We will provide an update if and when appropriate. What's more, this transaction with ASR marks a major change to our corporate profile. We are transforming at pace. But we want to move even faster. So to accelerate the execution of our strategy, we will sharpen our operating model. Today, we will also present our ambitions to increase Transamerica's value and to capture the opportunities in the U.S. middle market, we will increase both the level and the quality of capital generation from strategic assets while reducing our exposure to financial assets. This will result in a meaningful reallocation of capital from financial assets to strategic assets and create shareholder value. Why? Well, because the return on capital that we generate is expected to significantly improve and will be above our cost of capital. At the same time, we will continue to strengthen the U.K. and asset management businesses and we will invest in growing the various joint ventures we have in Aegon International and Asset Management. We will organize separate investor updates where we will share our plans for these businesses to reach their full potential. Lastly, we will continue to be rational and disciplined allocators of capital, looking to utilize our significant financial flexibility at the holding company to create value for our stockholders. So let's turn to Slide #6. We've made good progress with the preparations for the separation of our Dutch activities and have made transition agreements with ASR regarding disentanglement solutions. Most of these transition arrangements are expected to end within the first year after closing. The regulatory approval process is progressing well, and we expect the transaction to be closed within a matter of weeks. We will start the associated EUR 1.5 billion share buyback program shortly after closing as we announced at the time of the transaction. On Slide #7, I would like to highlight that although a lot is changing at Aegon, our purpose, our mission and our commitment to sustainability will remain unchanged. But we will evolve our operating model to ensure that we can increase the pace of our transformation. You'll notice we have refreshed both the logo and the visual identity for the holding company. This is the marking of the beginning of our next chapter of our transformation. Over time, we will also seek to adapt the visual identity of our operating companies in a similar vein, while obviously maintaining the iconic Transamerica brand in the U.S. The pace of transformational change at Aegon has been high over the past years, but we aim to accelerate it going forward. We will continue to emphasize the importance of a high-performance culture and further intensify our organizational rhythm. Our business units will continue to improve the experience of their customers and distributors, focusing on profitable growth in chosen product lines. Over the past few years, we have implemented an Aegon way of working, which has brought greater discipline and execution capability than had existed in the past. This has now become our business system and is embedded in our operating cycle. The holding company will continue to work closely with our businesses so as to create catalysts, share expertise and provide clear strategic direction. Our objective is simple. We want to build advantaged well-run businesses in chosen markets and create sustainable shareholder value. We act rationally, thoughtfully and at pace. And we do not shy away to move at scale when the opportunity presents itself. No sacred cows in our pursuit of value creation and the transaction with ASR is 1 example of this. So let's move to Slide #9. After our many strategic interventions, we now have an attractive set of businesses. Our fully owned activities are established in our established businesses and in large markets where the dynamics are in our favor. Demographic realities and changing regulation means that our customers need to save more, not less. In addition, governments are shifting responsibilities for long-term savings and retirement planning to households and individuals. We have good market positions and clear competitive differentiators to benefit from these trends. All of our businesses have the potential to improve. And in so doing, deliver shareholder value. Our partnerships play an important role. They offer us unique access to growing underpenetrated markets and are in themselves strong franchises. Aegon brings value to these partnerships through our capital, our expertise and our experience. In the Netherlands, we decided that the best way to create value was to create a market leader through the combination with ASR, in which we will become a strategic shareholder. This will be an extremely well-placed business. And our shareholders will benefit from that over time. Now Slide #10 highlights that we have realized material improvements in our businesses since the last Capital Markets Day, but we're not done yet. Let me start in the U.S. We expect that our owned distribution channel, World Financial Group, will be a significant driver of growth in the coming years. You will hear today about our plans to grow both in a number of agents in WFG and to improve agent productivity. You will see how this will drive both pure distribution earnings as well as improved proprietary life insurance sales. Now coupled with our plans to expand life insurance distribution through the brokerage channel and to improve efficiency and product manufacturing, you will see that the end result is very compelling. The U.S. retirement business has good commercial momentum and is generating attractive returns. We want to increase the size of that business through organic growth particularly in the middle market as well as to increase the share of wallet from the large customer base that we have. Will Fuller and his team will elaborate on their plans for Transamerica later in this day. In the United Kingdom, our platform business is the largest in U.K., and it is active in both the retail and workplace channel. This brings cost synergies and is a valuable unique differentiator. Our focus is on improving our customer offering, which will in turn drive further sales growth. Our asset manager's revenues have been negatively impacted by rising interest rates and lower equity markets over the course of 2022. While we will focus on reducing expenses to improve profitability in the short term, it is important to recognize that we have unique differentiators such as the asset manager's expertise in alternative assets and responsible investing as well as strong distribution through Transamerica and ASR. Finally, I am pleased with the performance of our joint ventures, and I'm really excited about their potential. Our local management teams are strong, and the businesses are growing fast. On the next slide, I will go into some more detail on the units. Let's start on Slide #11 that summarizes why we are so confident about Transamerica's future. The U.S. middle market is our sweet spot. The U.S. middle class is large, is underserved and offers room for growth. Those companies that are able to successfully reach these consumers achieve higher returns than the overall industry. Transamerica is uniquely positioned to serve this diverse and geographically spread group of consumers in an effective way. We have strong market positions in middle market, strong brand, and advantaged access points to customers through the WFG franchise and our retirement plan business. We want Transamerica to realize its full potential. And throughout today's presentations, you will see we have granular bottom-up plans to further improve its competitive position and clear and attractive financial ambitions. On Slide #12, I want to address our U.S. financial assets. As you know, our aim for financial assets is to create value for shareholders by reducing risk and releasing capital. Since the Capital Markets Day in 2020, we have made steady progress in reducing the capital employed in our financial assets, mostly by improving our risk profile. While we have been proactively managing our universal life and single premium group annuity businesses, we are announcing today that we are adding them to the scope of financial assets. We are doing so in order to increase our focus on reducing the size of these blocks. Absent further management actions, the capital employed in our financial assets would only gradually reduce by around $600 million through 2027. That's not enough. So we have identified new unilateral and bilateral management actions to accelerate this process. We now expect the capital employed in financial assets to reduce by an additional $1.2 billion over time, and we will continue to explore ways to reduce this further. We have not taken into account any material third-party transactions in this projection. And please note that the capital release as a consequence of management actions, creates financial flexibility to potentially reduce exposure to financial assets even further. Let's dig deeper into this on Slide #13. Given our focus on reducing our exposure to financial assets, we will regularly assess the potential to accelerate capital release through third-party transactions. In 2022, we explored third-party options for our variable annuity book. And last November, we told you that we had decided not to proceed with a transaction at least at that moment for a variety of reasons, including counterparty risk and stranded cost. The trade-offs outlined on this slide will remain relevant in any future engagement we may have with third parties. This naturally holds for the universal life and group annuity blocks that were added to the scope of financial assets today. Finally, there is also another -- an aspect to consider. The more successful we are in growing our strategic assets, the more likely it is that we will execute a deal. Delivering upon our plans will enable Transamerica to more easily absorb stranded cost to pay sustainable and growing remittances to the holding and to generate additional financial flexibility to execute a transaction. I am turning now to our businesses outside the U.S. on Slide #14. In the U.K. Aegon is focused on growing and improving its market-leading platform businesses and activities. We have seen good commercial momentum in our workplace channel with solid sales growth. The retail channel, however, is more susceptible to market movements, which has impacted the sales momentum. We need to improve and invest in our service offering. Our near-term priority for the U.K. is to continue to be disciplined on cost, to create room to invest in the platform, to position ourselves well for the future. Our asset manager consists of 2 parts: the global platforms and our strategic partnerships. The global platforms provide investment solutions for the general accounts of the group's insurance businesses for affiliate platform businesses as well as for third party. While we have strong investment capabilities in the areas that we focus on, we need to become more efficient in order to improve the financial performance of the business. We anticipate presenting granular plans next year on the path we envisage for Aegon U.K. and asset management to reach their full potential. Finally, we are pleased with the progress we have made with our strategic partnerships in Asset Management and the joint ventures within our International segment. These businesses successfully leverage the know-how of the local management teams, combined with Aegon's international expertise. And don't forget currently, these activities represent around 16% of group operating capital generation after the strong growth that they achieved in recent years, and we expect them to continue to grow going forward. On Slide #15, we want to highlight the value ASR represents to Aegon. Based on market valuations at the end of last week, ASR already represents more than 1/4 of Aegon's share price after taking into account the EUR 1.5 billion share buyback. Given the market-leading position, the combination we will have, we expect material synergies to be realized that will ultimately be reflected in the share price. We are a strategic stakeholder for an indefinite time frame with privileged insights and appropriate governance measures in place to protect Aegon's interest. We will hold the stake in order to monitor the integration process, and we intend to hold it until we feel that ASR share price reflects its intrinsic value unless value-creating opportunities present themselves. On Slide #16, you will notice that despite the EUR 1.5 billion share buyback and up to EUR 700 million deleveraging, we will execute in relation to the ASR transaction, Aegon continues to have significant financial flexibility at the holding. Over time, we intend to reduce the level of cash capital at holding towards the midpoint of our EUR 0.5 billion to EUR 1.5 billion operating range. We will continue to weigh potential value-creating opportunities against capital returns to shareholders in a disciplined way as we have demonstrated over the past years. Furthermore, gross financial leverage is at a comfortable level pro forma for the deleveraging related to the ASR transaction. So let me now summarize the targets that we have set for ourselves that reflect the strategy that I have outlined to you today. These targets are ambitious. But given the quality of our management team, our colleagues, the intensified organizational rhythm and our disciplined management of capital, I am confident that we will be able to deliver on those targets. In the next 3 years, we want to achieve more things. First, we will reduce our gross financial leverage to around EUR 5 billion, which will occur following deleveraging related to the ASR transaction. #2, we target an increase in the level of operating capital generation from the business units from more than EUR 1 billion in 2023 to around EUR 1.2 billion in 2025. #3, the increase in operating capital generation is expected to lead to an increase in free cash flow to around EUR 800 million in 2025. This is up from around EUR 600 million we expect for this year. And finally, but very importantly, we are confident that we can continue to grow the dividend per share. We recognize the importance to dividends -- of dividends to our investors, and of offering attractive returns and the steps we have made in the past 3 years, together with our plans for the next years give us the confidence that we can achieve around EUR 0.40 dividend per share over 2025, up from EUR 0.23 per share over 2022. I'm now coming to my concluding remarks on Slide #18. I'm proud of the enormous progress Aegon has made since the last Capital Markets Day. But it is now time for the next chapter of our transformation. This management team and also all of our colleagues across the globe are laser-focused on creating a leader in investment, protection and retirement solutions. We will do so by delivering on the plans that I've shared with you today. So let me summarize our key priorities. There we go. #1, complete the transaction with ASR and execute the associated share buyback. #2, increase Transamerica's value through a large-scale capital reallocation effort. We released capital from low-return financial assets and invest capital in higher-returning strategic assets to build America's leading middle market life insurance and retirement company. #3, strengthen our U.K. and fully owned asset managed businesses and invest in growing our joint ventures. And #4, create additional value by deploying our financial flexibility at the holding in value-creating ways. I now want to welcome Will Fuller, our Chief Executive Officer of Transamerica to the stage to share with us his thoughts on our prospects in the United States. And after Will's presentation, I will rejoin him on stage together with our Chief Transformation Officer, Duncan Russell, to answer your questions. Will, floor is yours.

Thank you very much, Lard. It's great to be here, and it's great to see some familiar faces and welcome to the webcast as well. I'm glad to be here to share more detail around Transamerica strategy. As Lard mentioned, we are a stronger and better positioned company today. Indeed, we are building America's leading middle market life insurance and retirement company. That is where we have sharpened our focus, and we've chosen to build our future. This is the largest market in the U.S., it's relatively underserved by the financial industry, and Transamerica happens to be very uniquely positioned to be successful in the middle market, and we'll get into that in detail today. Turning to Slide 2. There are a few key takeaways I want to convey today. One, is that Transamerica is focused where the value is and playing to our advantages. We possess an iconic brand in the U.S. and privileged access points to the middle market, which we intend to fully advantage. Two, we intend to be disciplined about where we target our investments, only investing where we can achieve attractive returns. Three, our financial asset exposure will be reduced by our targets from unilateral and bilateral actions. And third-party solutions could further accelerate it in the shareholders' best interest. And four, we have targets. And our targets are attainable, and they are supported by our current performance and plans, including the improvement in operating capital generation and moderately growing our net remittances to the group. Now what gives me conviction is that our strategy does not rely on a radical change. Instead, it relies largely on the day-to-day execution of our existing plan, in our existing markets within our existing businesses, where we already have momentum, the growth curve we expect to deliver is the trajectory that we are delivering on today. Now allow me to reintroduce you to Transamerica. We are one heck of an iconic U.S. company, well-known, well regarded from coast-to-coast. 100 years ago, our founder was committed to the idea that financial security should be available to everyone and set out to serve communities that were underserved by financial services at the time. This is still true today. Our future is committed to our roots in serving the American middle class. And the middle class has long been the backbone of the U.S. economy and the backbone of the American dream of upward mobility. Our advantage is that we have privileged and proven access to the middle market in not 1 but 2 places that provides substantial opportunities to enter the market and unlock the economics of profitable growth, and we're fully leveraging these access points. Our first chapter of the transformation began in 2020, we committed to targets of Capital Markets Day, and we delivered on them. We've sharpened our focus. We've made choices, tough choices about the company that we -- where we intend to target, focus and the company that we intend to build going forward. We've assembled a new experienced leadership team, all energized and committed to lead the transformation and to do what it takes to realize Transamerica's full potential. We are united in that mission. Together, we have faced head on the root causes of lackluster performance. We've made necessary changes to instill execution rigor, improve discipline in risk management and foster a high-performance culture, including performing for our customers. In short, we've taken actions to deliver on our commitments and improve the value of the company. We are ready and excited and energized for our next chapter. And our actions are leading to more predictive and increasingly attractive results. Our strategic assets are growing as we play to our strengths and our advantages. The middle market is our sweet spot, and we've seen an improvement in our market positions there the most. We're maximizing the value of financial assets as retaining the volatility of legacy blocks that weigh on returns and capital generation. And our track record and momentum since Capital Markets Day, particularly in the wake, the backdrop of a volatile financial markets provides evidence that our actions are paying off. There are 4 pillars that underpin our strategy. There's 4 pillars that we think about every day as we have built our strategy and we go execute our strategy. One, a sharpened focus on the middle market and our access points. The first is World Financial Group, we call it WFG, and second is our workplace retirement platform. Two, our growth investments will be targeted where we have this access point advantage because that is where we have earned the right to win. And this is a prerequisite to capturing value at attractive returns as we will show you shortly. Three, we will release capital and accelerate runoff from financial assets. This improves the quality of our overall business mix and returns, and it significantly reduces our cost of capital. Four, we have set ambitious yet credible financial targets. These improving the quality of OCG and enabling mid-single-digit growth in our remittances to group. So let's start with the middle market and access points, shall we? We all know that the middle market and the middle class in America is massive, that it powers the U.S. economy, over 60 million households. Within those households, you'll find really interesting demographics. The consumers are much younger, they're more diverse and they're geographically spread out across communities all across the nation, not concentrated in major city centers like you see in the high net worth in the affluent segments. These are families that are on the move. They're upwardly mobile in their careers as well. You see income ranges from $50,000 to $200,000 in this segment. It also happens to be underpenetrated. You see very clear evidence of large protection gaps, clear evidence of large retirement savings gaps, all that is in public policies and society's best interest to close. That offers room for growth. The companies that are able to reach and serve the middle market, do so and demonstrate with higher returns than the overall industry. The products are simpler. They're less capital intensive. They're more capital efficient. They're more straightforward in their risk profile. If it's so attractive, why have companies found it difficult to enter the middle market and unlock the economics. Well, for many, the business models that work for the affluent plus high net worth channels have simply proved ineffective coming down market to penetrate this one. The middle class is so large, so diverse and so geographically spread and the volume that you have to be able to support in your operations is such that the economics of those affluent business models tend not to work. You actually need a business model designed for the middle market like ours. We have 2 access points that are differentiated. First is WFG, allow me to -- I'll spend some time introducing you to WFG, it may be a new franchise that we have for you. It's a fully owned insurance agency network, 70,000 agents across North America, U.S. and Canada, and 7,000 agency offices. They provide Transamerica products. But they also provide products from third-party companies. The second access point is our workplace retirement recordkeeping platform. Now this is a requirement if you want to participate in workplace retirement in America. You have to have a recordkeeper. It's a price [ admission, ] if you will. We have a leading one, 24,000 companies, 3.5 million participants and here, we also provide ancillary services, provided either by Transamerica or provided by third parties. There are 3 ways that we generate earnings from our access points. First, WFG and retirement provide capital-light stand-alone earnings on their own. Second, we choose to be a manufacturer selectively in the right product areas where we have the capabilities to win and we can do so at attractive returns. For instance, we do this tailoring products to the middle market customer, IUL, Indexed Universal Life and WFG would be an example, stable value would be an example inside of retirement. And the third way we generate earnings is we act as a distributor and collect distribution earnings as third parties sell other products through our network. Generally speaking, these other products tend to be more complex solutions tailored to affluent customers. So this business model assures that we have the benefit of compounding economics. And what that means is that our access points grow the rest of our businesses grow. Those 3 methods of generating earnings start to develop in compound. As WFG grows, our life business grows, the amount of third-party distribution, products we distribute grow. As our retirement record-keeper grows, our ancillary solutions grow, so on and so forth. And we're going, to get in more earnings driver detail in Jamie Ohl and Phil Eckman's presentation later today. Now these businesses that I'm concentrating and spotlighted today happen to be 80% of our statutory earnings on in-force. So they make up the vast majority of our earnings on in-force as a company. And it's where we're emphasizing and targeting our growth investments. In WFG, we're investing to increase our trajectory where within life and retirement, we're similarly increasing trajectory, but we have some restructuring investments that are targeted that we need to create a foundation that will enable long-term sustainable future growth. So allow me to introduce you WFG in a little more detail. It's a very unique franchise. It's acquired by Transamerica 20 years ago, has only 1 true comparative peer in the U.S. WFG is at scale and growing consistently. There were 63,000 agents in North America at year-end. We now are at nearly 7,000 agents year-to-date. These agents serve the middle market consumer, and when you serve the middle-market consumer, you need to be a part of their community and that community and we are. Our agent population matches the demographics of the middle market as it is, and we are highly diverse by any measure, racially, ethnically, by language spoken, by age and by gender. Our business model and cost structure is equally designed to effectively reach the middle market. Flexible work, 100% variable cost structure and scalable recruiting are all essential elements in that business model design. Consider this, all 7,000 agents are incentivized to recruit and 7,000 agency offices that are dedicated to expanding their agency force. Next, the agent force itself is productive. Generating over $600 million in annual life insurance sales and $2 billion in annual annuity sales. WFG is responsible for 1 out of 5 IUL policies issued by the industry, very productive, meaningful volume serving the middle market. We see that we can still help improve agent recruiting success and agent productivity. And this is where we're targeting our investments. We already see the evidence of that -- those investments are paying off and they're laying the foundation for future growth. And you see these in the targets that we're representing here on our 2 main earnings drivers, growing the sales force and improving the productivity, which is simply increasing the frequency of sales and increasing the number of products sold. The curve we're showing you here is the curve that we are on. As a result, we expect to develop WFG stand-alone earnings growth year-by-year to nearly double earnings by 2027. And this target is supported by a robust plan that is anchored into the reality of what we were delivering on the ground every day. Now allow me to shift to life insurance. If you're a life insurance manufacturer, and you'll hear from Jamie later today, and you wake up in the morning, it's a better morning when you know you've got advantaged distribution because that powers the business forward. And so our life insurance manufacturer starts having advantaged access points and advantages distribution with WFG and as Jamie and her team go to create value, their formula is geared to increasing statutory earnings on in-force by growing new business at attractive returns by improving the margins and improving capital efficiency, all of which are aided by having that great distribution affiliation with WFG. We tailor our product portfolio to the younger aged middle market consumer that WFG serves. And then we take and offer that same product to third-party brokerage distribution that may in fact be serving the same sort of clientele. Consequently, we are a leader in indexed universal life insurance in the United States. And our policies are shifting to lower risk, younger age, lower face amount profiles with limited large case concentration. The largest source of earnings in our life insurance business and in our IUL product comes from underwriting margin, and we are disciplined in our underwriting management. Our products overall have an IRR unlevered of 12% in a 4- to 5-year payback period. Now when you consider the market we're serving, we consider the need to be able to be built for volume because our policy design skews towards younger ages, lower face amount, we must be built for volume. We sell over 200,000 policies annually and our operations and service center must be tailored to support that amount of volume and to reliably create customer loyalty. Today, we push way too much paper. We have too many legacy processes. We don't have enough digitization. So this presents an opportunity for us to unlock the margin and enable our sales growth and it's something we're working on every single day step-by-step. So as part of our transformation, we are making near-term investments to take back the ownership of the highest value, highest impact activities in operations and service centers that were previously outsourced. And our goal is for that to enable the sales growth, the new business growth that we've just shared with you, as well as put us in a position to deliver margin improvement longer term. Now we expect that the combination of the profitable top line growth and the operating margin improvement to grow statutory earnings on in-force, even after accounting for the near-term investments in operations and service centers. In summary, when you combine WFG and our life business, you find an advantaged business, proven to reach the middle market successfully at scale, generating synergies together, a very compelling story in the United States. Now shifting to retirement. Here, we are well known as an established leader in the U.S. In the last 2 years, we've sharpened our focus to improve our positions in all segments and further establish ourselves as a top 5 leader in the midsize and small market plans. These are essentially companies with 1,000 employees or less. In addition, we are considered the industry leader in what is called the pooled-plan space. This is the fastest-growing segment in the United States. We're considered the leader. We fully integrated our bolt-on acquisition from last year of TAG resources and what pooled plans are, is they offer the ability for small businesses, the largest employers in America, I might add, for small businesses to collectively access retirement plans together, and they're able to do that at a lesser administrative burden, less regulatory burden and a lesser cost burden. So it's a very attractive growing marketplace. And we're considered the far and away leader. Our business model is geared to, first, maximize the value of recordkeeping, asset growth; and then two, generate value by offering ancillary suite of solutions to the underlying participants. Today, for every $1 of revenue that we generate from recordkeeping, we generate $1 from ancillary solutions. That is 2x what it was just 4 years ago. And this has led to a compounded annual growth in net revenues of 5% notwithstanding the volatility in the financial markets during this period. When we think about manufacturing in our retirement business, we think about what's in our [ wheelhouse ] as manufacturing spread solutions. That solution is referred to as a stable value offering for consumers in their retirement space. Here, we earn an investment margin. And we also specialize in individual retirement account consolidation services which essentially is when a participant leaves their employer, they have the ability to roll out their retirement balance into an individual account where they may need advice. And this is where we predominantly focus. We expect our earnings on in-force to nearly double by 2025 before reaching nearly $300 millions in '27. Improvement in equity markets are contributing to this trajectory as well as delivering on 2 earnings drivers that are within management's control. One, is we are concentrating our asset growth in the middle market and below, which has the most attractive margin returns. So concentrating assets in the most attractive markets. Two, we're expanding our ancillary solutions penetration primarily. This is accomplished by extending our stable value offerings and building on successful IRA consolidation services, we have materially improved our performance on these 2 fronts in the last couple of years. We're positioned very, very well. Once again, this business model is geared for the economics to compound with many synergies. As retirement participants grow, assets grow, the participant recurring deposits grow and so grow stable value in IRA. It's why we like this business as much as we do. Those are the strategic assets. Now let's shift to financial assets. Since last Capital Markets Day, we have made steady progress, taking actions to maximize the value, improve the risk profile and reduce the capital in our legacy liabilities. Notably, we have derisked market sensitivities. Our VA rate risk is now fully hedged and equity sensitivities have been reduced by 30%. Moving forward, as you heard today from Lard, our focus is on releasing capital and accelerating the runoff. We expect to reduce the capital deployed and financial assets by $1.8 billion, which includes $1.2 billion of identified management actions. The sort of actions we've shared with you that are unilateral, things that we can do ourselves, bilateral, things we can do with our partners. Notably, this target does not factor in any significant third-party transaction. Though, let me be clear, we have a [ biased exit ] and we are active in exploring potential solutions. We'll be rational, and we focus on the best interest of shareholders. Last year, we took a serious look at VA. We concluded that we were the best owner for now. We share those reasons with you, those reasons have not changed. Therefore, we think in the near term, a transaction in VA is unlikely. This leaves us with universal life and fixed annuities. You learned today, we've added those into financial assets. This is where we see activity. We see some deal demand. This is where we're concentrating our focus. And as always, we'll communicate with you progress as we have it. Now I'd like to address capital and OCG. When you bring together our strategy, you're bringing together higher return strategic assets with our financial asset strategies. We are holding capital levels similarly at roughly $8 billion. However, our actions are driving a shift in that capital. We're driving a shifting in that capital to approximately 75% in strategic assets, that's higher and 25% -- approximately 25% lower in financial assets. This results in the strengthening of the quality of our OCG as growth in higher returning strategic assets and OCG from higher-returning strategic assets is what is allowing us to have mid-single-digit growth in our net remittances. Separately, we will use OCG from our financial assets as a way to think about increasing our financial flexibility and accelerating our runoff even further. As a result, we expect to significantly improve our return on capital, and Matt Rider will share more detail on this later in the afternoon. Wrapping up, I'd like to reinforce, if I may, our takeaways today. One, Transamerica is focused where the value is and playing to our advantages and we're going to fully leverage those advantages. We intend to be disciplined about investing in growth where we can achieve attractive returns. We're increasingly doing that in products that are simpler and more capital efficient. Three, our financial asset exposure will be reduced to our targets and third-party solutions could accelerate. Four, our targets, what we've shown you today, they're attainable. They're supported by our current performance that improves OCG and enables our growth in net remittances. Lastly, as Lard said, this all happens from a lot of hard work from a lot of people. And so, I'd like to take a moment, if I could, and thank the 6,000 Transamerica colleagues, 70,000 WFG agents for their dedication, tireless efforts to perform for our customers and our shareholders. We are committed, and we are energized to build America's leading middle market U.S. Champion, and we're well on our way. So thank you very much for the time today. I look forward to keeping you updated on our progress. And now I'd like to invite Jan Willem back to the stage for Q&A. Thank you.

Thank you, Will. Before we start with our Q&A session and where you see the first hand is being raised but I would like to remind everyone that this session is only open for those people here in the room for the analysts and investors. After this event, the entire IR team is available to answer any questions of the online audience. For the first Q&A session, I ask you to focus your questions on Aegon's and Transamerica's strategy. There will be a second Q&A session at the end of our Capital Markets Day with the only presenters here today. In that session, there's plenty of time to also dig deeply into our financial targets. I would now like to ask Lard and Duncan to join Will here on stage for the first Q&A session. Go ahead, gentlemen. I will be the moderator for the first Q&A session. Please raise your hands if you have a question. And my colleagues in the room are here with microphones. So please wait a moment for the microphone to arrive before you ask your first question. And please ask 1 question at a time, so we can allow for a genuine question-and-answer session. This gentleman in front, Ashik was the very first one I saw to raise his hand. So Ashik, go ahead.

Yes. Very good color on the business, so thanks a lot for that. I have a couple of questions. This is Ashik Musaddi from Morgan Stanley, by the way. First of all, WFG, can we get some color as to what is the revenue model? What is the cost model. How do you make money? I mean yes, you see -- you explained that it's a distribution, but what sort of basis point you make? Some color on how do you make money in WFG? Because, I mean, I guess, at least I have heard about this for the first time. But you mentioned that this business has been there for 20 years. So what's changing in that as well. So that's the first one. And secondly, I would like to revisit Slide [indiscernible] It looks like the capital and strategic assets are going up significantly from $4.2 billion to roughly $6 billion based on those ratios. And that's a big increase for something which you're saying is capital light. I mean you mentioned that WFG is capital-light, retirement is capital light. And if I look at the middle block life business that grows at 2% a year. So for that kind of a business, increasing the capital by about $1.5 billion, $1.6 billion, is a lot. So what's going on there? And just linked to the chart above that, if I look at the capital generation, and I hope remittance would be about 70%, 75%. When there is $1 billion extra which you are keeping, which you are holding back, but your capital base doesn't change. So what's happening with that $1 billion capital, so...

Thank you, Ashik. Will, would you be so kind to take the first question on WFG, please?

Be delighted to. So we talk about WFG stand-alone earnings, we're talking about the earnings that are generated from WFG activities, would be separate and distinct from the earnings we would talk about in the context of being the life insurance manufacturer. So we'll set that to a side for a second. WFG generates activities as a distributor. A clear example of that would be as we're selling third-party products through our system, we are -- we collect distributions earnings on that. In the United States, our largest company selling life products and annuity products happens to be nationwide, [ PacLife, Athene, ] companies that are well known. So as products were successfully sold through our system, there's a commission that's generated for that, and we earn a share of those economics along with our agents, would be one. Two, there are other sorts of revenue-sharing partnerships that exist. But again, standard sort of revenue lines that you would expect from a distribution company. As I mentioned earlier, the cost model is quite simple, 70,000 agents, there's a 100% variable cost associated with our sales force. So costs are realized upon a successful sale, successful sales are at a time where revenue is generated. The second place where we generate economics out of WFG would be through manufacturing. I put a perspective on this. Last year, we sold over $600 million of life sales, I believe our life insurance business sold $300 million of that was products from Transamerica. So roughly half of those sales would be products sold that were proprietary products of Transamerica where the earnings would show up in the life insurance line, the other half would be products sold by third parties with earnings associated with activity, which show up inside the WFG stand-alone earnings.

Thank you, Will. Lard, can I give you the second one or...

No, I think Duncan maybe...

Matt is going to go into some detail this afternoon as well. So if I don't cover it in detail, let Matt touch on it. But I think you had 2 questions. One is we're investing in capital in strategic assets. That's right. That's at a return, we think is quite attractive. That fills the [ bathwater ] for the future earnings growth. It's what drives the earnings on in-force and allows us to pay remittances going forward. Some of the strategic assets do require capital. For example, we'll mention the ancillary products on the retirement business, stable value, but it's a spread product, which has some capital need. And also then on the individual life side, the IUL product does have a strain which also requires some capital. So there is -- there are some capital-intensive products which generate a return, but have an IRR unleveraged of 12% to 13%. The OCG question, I think what you're saying is that the payout ratio is not 100%. I think that's what you're referring to...

No payout ratio is not 100%, but that's fine. But clearly, if your payout ratio is lower, you're saving some capital. That should go into $8.3 billion every year -- so your $8.3 billion should be $9.3 billion whereas the chart shows $8.1 billion.

Yes, the chart was based on a 400% RBC ratio. So if you noticed in the footnote, there was a reference to add 400% RBC flat, so the extra OCG you see indeed is additional financial flexibility. That's group capital. So that will be subject to the normal capital management disciplines of the group, but it does provide flexibility to ensure the remittances come out of the U.S. and allow us to pay the group dividend.

Okay. Thank you. [ There, ] if you can pass the mic 1 on to [ Michael. Michael ] go ahead.

I had 1 question -- well 2. One is, why isn't it quicker, the EUR 1.2 billion. I think one of the slides shows by 2025, you do actually a really small portion. And I wondered if you can explain because yesterday at the dinner I think you mentioned buyouts and reinsurance. And from the previous experience, I think these can be done very quickly. And the second question, and I'm really sorry, I noted it and I can't find the slide again. So you might say I'm making it up. I hope I'm not. And what I saw -- and I was sitting next [ to viewer ] and it was really, really helpful. You were talking about not investing too much into new business or the new business strain. But when I looked at that particular slide, and I'm really sorry, I can't find it, the new business strain is actually bigger every single year than your OCG. And I was hoping that would be the other way around and I like chocolate and cash...

Thank you, [ Michael. ] I propose that we park the new business strain question for Matt's presentation because I'm hoping that, that will address your question in his presentation alone. And if not, please feel free to come back with a question. Maybe, Duncan, do you want to elaborate on the EUR 1.2 billion capital generation and our line with that.

Yes. No. So the -- thanks for the question. The good news is that we have identified a lot of management actions we think we can take, which we can execute upon in the coming years to improve the value of the financial assets, right? As Lard mentioned, the organic runoff is quite slow and limited. And through a series of actions, unilateral and bilateral we think we can add some value here. Whilst at the same time, increasing or maintaining the OCG. So release capital, maintain free cash flow. We're going to go as fast as we can. So there's no kind of constraint we're putting on ourselves there but there is a reality that these things have to be worked through. Some of the actions have a natural time line. So for example, rate increases on long-term care. There's just a natural process there, which takes time. Others, you're right, fully in our control. And we will move as fast as we can, but some have a natural time frame. So there's no limitation replacing ourselves. We'll move as fast as we can, but there is a reality.

[indiscernible] can I ask you to the gentleman here in front.

Cor Kluis, ABN AMRO, ODDO, I got the couple of questions. First of all, on WFG, the growth that we see is quite impressive from 43,000 agents in 2019, to 110,000 in 2027, and it's probably much faster than competitors are growing. How are you doing that? And of course, it's an incentive structure, et cetera, but everybody wants to grow probably in such kind of businesses. So -- that's my first question. How are you winning market share? And why are you confident that you will continue to win market share in that business? That's my first question. And second question is probably more for Lard. The group supervisor, it's not yet been decided yet, probably because you have not yet announced anything, but would it be logical to assume that the group supervisor will be known at the moment that the ASR deal has been closed? Or is that not the case? And is it really relevant to have 1 quite soon. The $1.5 billion is probably approved anyway. But yes, what's the relevance of that group supervisor to be announced already at that moment, so...

Thank you, Cor. Will, on to you for the WFG question.

Certainly. So what gives us confidence that we can grow at this level. As I mentioned, the curve we're showing is the curve that we've been on. And you've got the notion of -- we've got scalable recruiting now. So we incentivize all agents and agency offices to [ include. ] In a lot of ways, that becomes a bit viral, right? Becomes a bit viral in these communities. Two, the barriers to when you get people through a recruiting process, you would start to see people fall out because you have to be regulatory licensed. We now invest to help train and help make that process through getting your license easier, right? So we're actually seeing our retention rate and our accomplishment rate improve. We think we can improve that any further. The other thing that gives us confidence is that we see a public peer that's grown at that degree and growing to a successful size agency force similar to what we're aiming for. So that gives us confidence that we can learn from their experience as we embark on our own.

Thank you. Lard, group...

Wait a minute. There's a second question, I think. Yes, we indeed -- we are still -- at the time of the announcement of the transaction, we said that we will discuss with our group regulators -- with the council of regulators, what the implications are for group supervision. But still, these things take time. We're still in discussions with them, and we expect indeed around closing to be able to clarify that further. Yes.

Thank you. Cor, can you pass the mic on to David, please?

David Barma from Bank of America. My first question is coming back on the $1.2 billion of capital release in the U.S. So if I understand correctly, this will predominantly be used to finance further back book actions in the U.S. Can you talk a little bit about what kind of action large enough you can put out in the next few years that would consume all of that $1.2 billion? Or should we expect part of it to come back to the holding? The second question is on administration and processes, Will, you talked about the efficiency of the model. And recently, you reinternalized part of the TCS partnership you had. Can you talk about why -- what motivated this decision? And then lastly, very briefly on the retirement plan targets. What kind of AUM growth are you baking into the record-keeping earnings growth uplift?

Yes, Duncan, do you want to take the first one on financial assets?

Yes. So to reiterate, $1.8 billion of capital being generated, $1.2 billion coming from management actions, the rest from the organic runoff. I think there are 2 signals. The first is -- the first signal we want to give is that it's important to us to reduce the size of the financial assets. So we've identified management actions in the plan. And if we have -- once we've executed on them and generated the extra capital, our preference would be to go further and faster, if we can. So -- that's an important signal, and we think that's important for the overall equity story of Aegon and Transamerica, signal number one. In terms of an example of why that might be -- need to take the SGUL book, for example. That's currently a drag on OCG as the book matures and ages. We need to put up additional reserves. It could be the case that if we went through a transaction there, we need to invest some capital on day 1 in order to reduce the drag on day 2 and 3 and 4, and we think that could be in the interest of shareholders. Finally, just to reiterate, this is going to be subject to our normal capital allocation processes, right? It's not a free lunch. It's not a blank check. Everything we do will have to make sense. And if we can't utilize that capital, it will come back up to the holding company and be subject to the normal group capital framework.

Thank you, Duncan. Will, on to you for the TCS question.

Yes. What motivated the change in relation with TCS. Let me start with saying where it affected. The TCS and outsourcing was concentrated in our life insurance and our annuity operations and service centers. That's really where the focus was. And about 90% of those activities were outsourced. So first, I think it was an over-indexing of outsourcing. That would be a far greater percentage of activities outsourced than what you would see in amongst the industry, number one. But the most notable reason was just the material shift in our strategy by sharpening the focus to WFG and to growing life sales and linking back to needing to sell 200,000 policies and growing, there were activities that are high value, high impact that are best managed by us. We're the better manager, we're the better leader of those. And so that's behind it. Again, we push too much paper to the legacy process, not enough digitization. We want that back in our hands to deliver.

Thank you, Will. Maybe the last question was on retirements. How much is from -- how much AUM growth we assume and maybe you can split that between deposits and market benefits?

I think we can probably take that this afternoon.

You can take that to...

Yes, we will get into some of that detail this afternoon.

Andrew, can someone bring the microphone here in the middle, please.

Great. Andrew Baker from Citi. Just a couple on WFG, please. First is, is there an incentive for agents to sell Aegon products versus third-party products? And then is there, I guess, competition for Aegon products on the platform, so the IUL providers? Just trying to get a feel for the type of regulatory risk that is not in that distribution network. And then secondly, are you able to give a sense of I guess, how much of the sales come from what percentage of the agent. So for example, top 10%, top 20% of agents, how much are they contributing to overall sales?

Okay. Thank you. Will, do you want to take the first one?

Certainly. So WFG is an open platform. Agents are independent and open in the products that they serve and that they offer to their customers. They are incented equally to sell all products. So not prioritizing 1 versus the other. So yes, there is competition for Transamerica products. If I just take the product line that you'll hear Jamie talk about today IUL, which is where we have really tailored our focus. In WFG, we're competing against nationwide in PacLife who are also IUL manufacturers -- leading IUL manufacturers in the United States as an example. As far as how much sales come from agents, I think there's a common rule amongst all distribution organizations, at least in my career that the Pareto principle is indeed intact and you do see the highest producing agents have concentration in sales. I think Jamie can touch on that dynamic very clearly in her presentation.

Andrew, can you [indiscernible] the mic? Can you pass it back to Nasib, please?

Nasib Ahmed from UBS. So firstly, you talk about flexibility at the holding company, and we can see that your free cash flow is ahead of your dividend cost. What does that mean? What actions can you take? And specifically, would you consider acquisitions in your chosen markets using that flexibility. And then secondly, on -- Will you mentioned you wouldn't look at variable annuity third-party transaction. But when you guys talked about not doing one, you said there was appetite for bundled transactions. Would you consider 1 where variable annuities is bundled with Universal Life and other things that you think are attractive?

Lard, do you want to take the first one.

Yes, sure. Well, first and foremost, what we've issued this morning and what we're discussing with you today is a very big agenda. So we are fully focused as a priority on delivering on the agenda that we are providing you with today. And in addition, the U.K. in addition, asset management, the international businesses, we got a lot of on our plate. So that's the #1 priority for us. Now we indeed have financial flexibility. So if we -- if there is an opportunity that could accelerate our strategy, that we would be ready for operationally, et cetera, we would look at it carefully, be rational about it and we'll always compare it with the alternative of returning capital to stockholders in the form of buybacks, for instance.

Thank you, Lard. Who would like to take the question on bundled transactions?

I'm happy to. So first, we have a biased exit. So third-party solutions is again something that we're open to. What we signaled to you was that variable annuity transactions at size have the constraints that we uncovered last year. We don't see the reasons that we offered for remaining owner changing in the near term. I think what we're also signaling to you is that we do see deal activity and demand in UL and by adding fixed annuities, we're sharing that we do see more activity in the bundling of different liabilities together. Obviously, we will be open to anything that's in the shareholders' best interest.

Thank you, Hadley?

Hadley Cohen, Deutsche Bank. Just 1 question, please, around management remuneration for Transamerica specifically, can you tell me how management will be incentivized in relation to these targets, I guess, the split between the growth ambitions and the deemphasis on the financial asset side. And then more broadly, for the group remuneration, I mean presumably, KPIs will be aligned with the new financial targets that you've set. But I think historically, your variable remuneration has been capped at 100% of base. But with the ASR deal nearing completion and what have you -- what's stopping that from going away and your remuneration being more aligned with other global insurers?

Let me take that. I'll take that, yes. So yes, obviously, our remuneration practice is aligned with the kind of targets that we have. By the way, we disclosed them for myself and for Matt, in the annual report you can see it. And it's aligned with the financial targets that we have. So that's clear. That, of course, starts with me. But trust me, it's cascaded down to the organization, by the way for everybody in the organization, right? So we want to make sure that there is alignment with the objectives that we set ourselves out to do and the targets that we have. So that's number one. We operate in regulatory frameworks. They are different around remuneration. And of course, we need to observe those. Within that, we align all the incentives to ensure that they support strategy that we pursue.

Thank you. [indiscernible] could you be so kind to bring the microphone over there. You can go ahead.

Iain Pearce from Exane. Two questions, please. The first one was on the IRR of the [ IOU ] product. I think that's a -- the 12% figure is a 2022, Q1 '23 number. What does that number look like if you go back a bit further? And going forward, is potentially more competitive to start writing our [ IOU ] business? Do you think that 12% number is sustainable? And then on the retirement plans business, obviously, you focused there quite a lot on the mid-market segment. You do have quite a lot of exposure to larger plans as well. So what is the plan for those larger plans in the retirement segment?

Thank you. Will, both for you.

Absolutely. So -- and you'll get a bit more detail on this from Jamie Ohl later today, but IRRs on our life portfolio are what I shared with you, 12% unlevered 4- to 5-year payback period. The -- it is a direct reflection of the products in the market we serve. So by choosing the middle market and choosing to distribute those products predominantly through where we have an advantage of distribution. We have a different competitive dynamic in that market than the overall IUL space. I think you will find these returns to be more attractive than overall IUL returns because of the choices that we've made, choices that we are not participating in the higher net worth IUL sales, the more esoteric engineered product designs, don't participate in that segment, number one. Number two, the risk profile is also more attractive because of the profile of younger age lower face. That's contributing to, again, the high-quality business. And again, because we're sharpening our focus on middle market, we do not -- we expect that to be fairly sustainable. The -- as I shift to your question on retirement plans. And I made a point in my comment that we've been well established in all markets. Indeed, we've been a significant large market player. We have -- but our most attractive and strongest position has been on the middle market and below. You're going to hear from Phil why we are concentrated in asset growth in that market. We can compete better on our terms that market also has the ability to kind of unlock more attractive economics, not just from recordkeeping but also from ancillary solutions. In the large market, we're opportunistic. We compete but we're not going to compete on price to the extent that we're destroying value or having a loss later or acting as a hobby. We're going to be a rational economic manager of the retirement business and generating earnings on in-force growth.

Thank you. In front and left here.

[ And back to Mike. ]

Michele, go ahead.

Michele Ballatore from KBW. My question is on the 68 million households you're targeting. I mean what kind of demand you see from them in terms of product. I mean are you offering an alternative to savings or like creating a need for life insurance, I mean what is the demand and how it has evolved over time because, I mean, it's been a long time.

Yes. I think you -- what we see in this segment of a population is in the middle class America that are upwardly mobile families, buying homes, that there's need for insurance to cover basic financial obligations you have with the family. But it's also viewed as an alternative savings program as well, right? It's IUL, which offers both protection and cash accumulation. That's the main value proposition. And so we generally are finding increasingly in America, not just in the middle class you're using insurance to solve multiple financial needs, would be one. Two, I think in the annuity business or the annuity sales volume that you see, it's really about building retirement savings. So it's just classic financial protection and building family savings.

And Jamie, in her presentation, will double-click on that and take you through what -- for different stages of life, what products we have on offer.

And this is a segment which has a notable protection gap and a notable savings gap. So it really is a community that benefits from being actively engaged in their community, being actively educated and actively engaged on purchasing life insurance and investing in annuities versus leaving this community to do it on their own.

Right. Sorry, just a follow-up. So basically, these people, they have not been served with this kind of at all.

Yes, it's a relatively -- it is a relatively underserved market from both insurance and for savings needs.

And what you'll see, Michele, also after Jamie has done her presentation, and Will already alluded to it in his presentation, is that you have this vast underserved market in an income segment of $50,000 to $200,000. Very diverse. The key -- a lot of competitors in U.S. have a focus on the high end of the retail market, right? And as a result, this has been underserved as Will outlined. Now the -- Will outlined one thing in his presentation and Jamie will expand on it, which is that access to those consumers is absolutely critical. And we are the ones with a unique franchise with WFG of 70,000 agents, which will grow are actually coming from those communities and who are the ones who are trusted in those communities to sit down with them and discuss their family finances. That is really unique and a unique differentiator for Transamerica. And next to that, as Will outlined, you have the retirement business in the middle market as well where you access not only middle -- midsized companies, but also their middle-market employees. So with that, the access points to that underserved market are really very good and very strong, while a lot of people in the industry have really focused more on the higher price -- on the higher point of the retail, so the more wealthy individuals, if you will. That is a unique opportunity and we're -- we've got a great match here. That's why we're so excited about this, right? And when Will and I were visiting all these agents and their leaders, et cetera, we've grown our confidence that this is really a very attractive place for us to go.

Thank you. Can I ask a microphone in the back, please.

Corinne Cunningham from Autonomous. How do you protect against the, I suppose, the misselling or the potential for, I suppose, as you are selling into perhaps less well financially educated buyers of the products, how do you, at this level, control all 70,000 agents, the quality of their production?

Yes. So first, all distribution companies in America are to adhere to the exact same regulatory parameters. So first and foremost, you have to have an adequately staffed and enabled supervision and compliance system for the size of your organization. If you have 10,000 agents, 20,000 agents or 70,000 agents or 100,000 agents, you have to adequately provide supervision and compliance. So that's one point. Second is, I think it's about the training and it's about the system at which the agents operate within, ensuring that they're properly educated and can -- and licensed, ensuring that they have a financial needs analysis program that guides the financial education and supports the quality of the recommendations. And then your supervision and compliance ensures that those recommendations are indeed suitable and in the best interest of the customers. Regulations differ slightly between U.S. and Canada. So we have to operate at the regulatory standard of where the agent and the consumers live and reside. You'll see in our -- in Jamie's presentation that our growth requires investments that have to run in parallel and as we grow our agents in parallel, we need to increase the resources to our supervisor, supervisory and compliance activities as well. That's factored in.

Thank you very much, Will. There's a follow-up question in the front here. [ Michael, ] go ahead.

There's 2 of them.

This is actually a slightly critical question. So you've had 3 years of dealing with the financial assets, in the last year, you made the decision on variable annuities. Now we have a figure of $1.2 billion, which looks like we failed to account for it last time. We need to put it somewhere now. It feels like money -- I mean I'm not a shareholder, but it feels like money with -- as a shareholder I would want it to go to me because I'm kind of thinking, hang on, you never told me about this figure. What is it? So maybe you could give a little bit more color. And I think, yesterday, at the dinner, there were -- one, you mentioned this extra reserving for SGUL. And then at the dinner, you also mentioned the decision of either hedging or not hedging for the base fee risk. And I just wondered if you could explain, if you do invest in that, do we get the money back? Or was it just written off?

Duncan, can you explain our philosophy for financial assets?

Sure. [ Michael, ] it's quite important to remember the $1.2 billion is going to emerge as we take action. So it's not there today. It's not money which is distributable today, it's not even been executed upon today. So it's an intention, and it will require our dedicated team in the U.S. to actually work pretty hard over the coming years to do it. And as I mentioned, some of those things are going to take time, such as putting through extra premium rate increases in long-term care. And some are more at our own initiative and just what we can handle. These things are quite complicated though. So to put into context, the variable annuity process we looked at last year took quite a lot of work. We had to first do our own actuarial appraisals internally. We also engage in external advisers. And you have to think about a variety of things, financial, nonfinancial, legal, et cetera, so it does take a bit of time. And then that's even before you engage with the counterparties and start negotiating. Bear in mind, a lot of these counterparties are owned by private equity and are very diligent in what they do and look at as well. So these things do take time. But it's important to realize that $1.2 billion is not there today. It requires action -- its action we will take and deliver. So it's value we're bringing to the table. And as I said, the preference is then to use that $1.2 billion to further accelerate the financial asset reduction. But if we can't utilize it, then of course that will come back up to the group and be subject to our normal capital management philosophy. Hopefully, that answers the question.

Yes Ashik?

Yes. Just going back to that capital allocation of $8.3 billion. Now shifting away from financial assets to strategic assets is certainly having a big positive on your return profile because your lower ROE business is now becoming a higher ROE business, so that's great news. But how does it change your risk profile from that perspective? Because it feels like you'll be adding a lot of stable value, you'll be adding a lot of index universal life. So looks like you are adding a lot of credit. So how are you thinking about the changing risk profile here? I mean, what are the risks which are going away from financial assets and what are the risks that are coming in. So it would be good to get some color as to how we should think about it. So that's one. And second question is when we think about $1.2 billion, you mentioned that it creates flexibility for future to accelerate further actions to reduce financial asset, but it looks like you're deploying $1.2 billion into strategic assets and that dollar amount is more or less same. So where is that flexibility? Is that flexibility? What we are talking about is the money you are retaining like OCG less dividends. So basically, it's both the same thing? Or is there anything else we are missing?

Let's deal with that second one first. So the $1.2 billion is additional financial flexibility we will create as we execute upon the financial asset actions we intend to take. Okay? So it's capital, which is generated through actions -- through manager actions and that capital then we intend or our preference would be to reinvest it in order to take further action on financial assets because we think it's in the interest of our shareholders to reduce our exposure above and beyond what we've indicated in the slides. If we can't do that, or if that is unattractive to shareholders. That capital will be fungible as group capital and come up to the holding company or be used elsewhere. So it's on top of what is being invested already in the strategic assets.

And maybe to add to that, the B17 that you mentioned is a 400% RBC ratio. So if you would release the capital and go beyond that and have the fungible capital created that's over and above what you see on that slide B17 that you mentioned.

Yes, the footnote I referred to earlier about the 400%. But we can take that offline actually because I was not clear. On your first question, which was you are -- how is the risk profile? I think what you're hitting upon there is a key part of what we have tried to put into our equity story over the last 3 years. If you call back to the last Capital Markets Day, one of the pillars of the story at that time was reducing as much as possible the volatility and risk in the Netherlands and the U.S. I think that is also why we think it's in the interest of our shareholders to reduce the financial asset exposure. So we've taken a lot of actions so far. We have established voluntary reserves, expanded the hedging, et cetera, bought back policies, et cetera, et cetera. All of which has reduced the risk profile. The actions we're going to take in the future, we'll do even more. And so one of the core pillars of our equity story in our view is to reduce risk and improve or reduce the volatility of our earnings and cash flow. On the flip side, allocating capital to the strategic assets is generating an IRR unleveraged of 12%. So the ROE from that investment also is attracted. So what you're going to get if we execute this and do this as we plan to, is on the one hand, you're going to see the ROE going up, which I think will drive the multiple that shareholders are willing to assign to the capital we have invested. And on the other hand, the risk profile should come down, which should drive down our cost of capital.

That's why slight cliff hanger in commercial for the presentation that Matt Rider will give, you probably saw the morning, his presentation is called improving -- increasing and improving the quantum and the quality of capital, right? So it's both.

Thank you. There's a follow-on question in the back with Nasib.

Sorry, coming back to the $1.2 billion, I know it's going to come -- be executed over time. But let's say you're done with that. What does -- what impact does it have on the RBC ratio and the OCG, my expectation is RBC goes up and OCG comes down. Is that right?

Your question is if we were to deploy the $1.2 billion. What impact would that have on the RBC ratio in the OCG?

Not deploy, once you've executed the actions and...

Okay. Sorry. So you'll see in Matt's slide the difference between the two scenarios. You'll see that the scenario if we do nothing and the scenario if we do something. And very simply, the scenario where we execute, we have $1.2 billion additional capital being generated mostly through onetime items over that plan period. And the OCG or the run rate free cash flow from the financial assets is higher. So not only does it release capital or generate capital, but also the free cash flow ongoing is higher than it would otherwise be. Does that address what you were asking?

It does, but I can -- I can come and chat to you later.

Are there any further questions at this moment. One second, wait for a mic, please. Yes.

Jason Kalamboussis. Just a quick one on WFG, what is the reason why do you want to own it? And would you consider at some stage floating it towards the rationale at this end?

The rationale is we particularly like the economics, and we like the synergies that exist within our company. So I really like the capital-light stand-alone distribution earnings. For instance, we're the largest agency sales force in Canada so being able to act as a distributor in Canada and collect distribution earnings to me is a very attractive business. And it feeds our life insurance business, eats our manufacturing capability. We spotlighted life today but we see synergies in the business that improve the value of WFG and the company, and we want to capture them and own them. And distribution earnings are very low capital.

Last one, sorry. So my -- the feeling I have, and I'm not a U.S. analyst, and I think that's -- I never be -- I've got a problem here -- the -- you've got variable annuity business where we cannot just go around it, but it's the elephant in the room, and we kind of think we created a lot of value here and a lot of value here, but the elephant is still here. When will the elephant walk away?

It's not an elephant. It is large, though. So if you recall, last year, we did mention one of the constraints we had is it's large. We've taken a huge amount of action on that variability, but we reset the reserves which actually was in the document which we showed, but if we reset the reserves on an economic basis. We've put in place a long-term assumption around implied vol, which is the cost of hedging. We hedged out the interest rate risk. So it's largely immunized with one exception, which is the base fees, which are mutual fund in nature. And we, at this point in time, have decided that to keep those open and capture the equity risk premium over time. But we did establish the voluntary reserves to help dampen the regulatory sensitivity of our capital base. We'll continuously explore that decision by the way. As the book gets smaller, it may make sense to hedge out the base fees as well and just fully immunize it, but at this point in time, we felt it was an in our best interest to keep it open. We did explore the transactions but we concluded it's not in a separate legal entity. It is very large. And we concluded at that point in time, it didn't make sense to pursue. It's unlikely we'll look at that again in the really short term. As I mentioned, these things do take quite a lot of resources, and we think we've got other things we can focus on right now. But as time passes, the capacity to explore transactions on the variable annuity book will increase. It gets smaller. The counter party risk therefore reduces, et cetera, et cetera. And in addition, as Lard mentioned, as the strategic assets start building up the capacity to absorb any stranded cost also becomes easier. So it's something which is continuously going to be on our radar, and let's see what happens.

Okay. Perhaps one final question before we go to the break.

Just one very simple question. Can we get some economics of stable value business, like $1 billion of extra business and stable value, how much capital would it need? How much margins would it make? Do you need big distribution or your current distribution is fine. So any color on that would be helpful.

Will and Matt can cover that this afternoon. We don't need any kind of distribution. This would be stable value deployed within our record keeper where we have access to the companies and the participants. And Matt will take the economics, a stable value in his presentation.

Yes. So there will be more of this later.

All right. Well, thanks, Ashik, and thanks, everyone, for your questions and for the lively interaction. We'll take a short break, and we'll be back in about 15 minutes shortly before 3:00 p.m. here in London. [Break]

Welcome back, everyone, to the second part of our Capital Markets Day. We will now continue with a presentation from Jamie Ohl, President of Transamerica Individual Solutions. Her presentations will be followed by a presentation from Phil Eckman, the President of Transamerica Workplace Solutions. And finally, our Chief Financial Officer, Matt Rider, will explain how Aegon's transformation leads to higher returns for shareholders. And after that, we will have the second Q&A session. Let me now hand over to Jamie.

Thank you, Jan Willem. Good afternoon, everybody. I am thrilled to be here. I've been at Transamerica for 15 months now. And I'm energized by Transamerica's vision, growth potential and customer propositions. Before joining, I spent more than 30 years building successful businesses and leading complex operational transformations. I look forward to sharing the compelling proposition for 2 of our strategic assets with you, World Financial Group or WFG and our Life business. Together, these 2 businesses drive over $600 million in statutory earnings on in-force. Let's start with WFG. There are 4 key messages that I'd like to share with you about WFG today. First, WFG provides differentiated access to the underserved and fast-growing middle market through a large and diverse agent force. Second, through WFG, we have a demonstrated ability to distribute products that meet the needs of customers in that market while delivering attractive economic returns. Those products include both Transamerica's proprietary solutions as well as complementary products offered through partnerships with leading product manufacturers. Third, we expect to double WFG's stand-alone earnings by 2027. And fourth, the primary drivers of WFG's future growth are increasing the number of our agents and improving productivity. WFG is today a growing distribution powerhouse. It is a unique competitive advantage for Transamerica. Our agent force is spread throughout the U.S. and Canada with a specific focus on the middle market. Our agents are concentrated in regions with the greatest middle market populations, notably Texas, California and the East Coast of the U.S. and Ontario in Canada. More importantly, WFG agents really understand the middle market because they come from the same communities, have the same goals and speak the same languages. Over the past year, I've had the opportunity to travel extensively to meet many of our WFG agents and leaders across North America. They have powerful advocates for WFG, passionate about our customers, and very excited about the future. But instead of me telling you that, why don't I have 4 of our agents tell you about that in their own words. [Presentation]

So hopefully, that gives you a window into why I am so excited about this business and where we can take it. I want to talk about where we're going. But first, let me tell you about the strong foundation on which we are building. Since 2019, we have grown our agent force on average by 13% per year. We have also maintained industry-leading productivity as we've grown. This has led to a 14% increase in revenues over the same period. Now let's shift our focus to the future where are we headed. We have ambitious goals to expand WFG's reach. In doing so, we will target growth in WFG stand-alone earnings of 42% by 2025. First, we intend to grow our agent force from 63,000 at the end of 2022 to around 90,000 by 2025 and 110,000 by 2027. Second, we will maintain the industry-leading ratio of average life policies per agent per month. And we will also improve productivity by increasing the number of agents selling multiple products. By 2027, we plan to have -- we plan to more than triple multiple product agent sales. These productivity targets are designed to meet the full range of a customer's financial needs. Let's dive a little deeper into how we will achieve the growth of agents and the increased productivity. We are partnering with our nearly 70,000 agents and 7,000 offices to grow the agent force. As you heard directly from Juan, Daniel, Alicia and Penny, the key to driving this growth is engaging people through financial education. We empower our agents as local entrepreneurs. Specifically, we reward them for recruiting and onboarding agents from their local communities into our family in line with our strategic vision. We're investigating -- investing in a dedicated team to support onboarding. That includes everything from licensing requirements to product training and sales practices. And our plan is working. The growth curve on the right represents what we are already seeing. Since the start of the year, we have added 1,500 agents a month to take us to nearly 70,000. As we continue to grow our agent force, we are also focused on improving our industry-leading productivity. We're investing in technology and tools that allow agents to manage their business as they grow. The platform will be web and mobile-enabled and it will provide agents with real-time access to client data, growth trajectories and more, and it will use an omnichannel approach. What this means is agents can then connect and engage with us on their terms. We are constantly reviewing the products we offer to deliver solutions that best meet our customers' needs. These include both the high-quality products from Transamerica and those from industry-leading product manufacturers. We plan to improve agent productivity through enhanced onboarding, product education and sales training. This will lead to agents selling multiple life policies and multiple products to meet the full range of a customer's financial and protection needs. WFG is a powerful distribution business with strong stand-alone earnings. It also provides unique access to the middle market for Transamerica's life insurance business. WFG and life insurance benefit from the compounding economics of our unique business model. So now let's shift the focus to the life insurance business. Our life business is built on a diverse product portfolio designed specifically to serve the middle market. It includes our industry-leading index universal life product or IUL. What this requires is the investment we are making in customer-focused capabilities and scalable operating model so that it will be built for volume as we grow. We design our products specifically to meet those needs of the middle market. And we distribute through WFG as well as other strategic partners to drive the growth in sales at attractive risk-adjusted returns. For example, our term products provide customers with basic protection for a specific period. The affordability of the term product makes it popular with young families and with those early in career. Our final expense product covers policyholders' end-of-life costs to make sure that burden does not fall on loved ones. And finally, our flagship IUL product is a great option for customers looking for protection while building potential tax advantage cash value. The flexibility of this product allows us to meet the different needs of the middle market. This includes, one, saving for health-related expenses during retirement; two, supporting early childhood savings for future needs; and three, obtaining needs-based permanent protection while accumulating wealth. With this unique and focused product portfolio, we have maintained our leading position in the middle market. We have also grown sales at 8% annually since 2019, at a time when many competitors have seen sales decline after the COVID bump. To grow Life earnings on in-force to approximately $700 million, we plan to increase product sales while investing in our operating model. First, we intend to increase live product sales from $431 million in 2022 to more than $700 million while maintaining our returns. This will be driven primarily by the growth of WFG and the expansion into other key distribution partners like brokerage that are focused on the middle market. Achieving our target growth would position us as a top life insurer and one of the largest middle market life insurers. Second, we will continue to invest in high-value, customer-focused capabilities to deliver a scalable operating model that is built for volume. We expect this to lead to improvement in expense efficiency and reduction in the per policy maintenance cost. In addition, we have targeted investments to improve business operations and enhance the customer experience. We intend for these targeted actions, combined with the distribution power of WFG to drive earnings on in-force from approximately $600 million in 2022 to nearly $700 million by 2025, which translates to an 11% earnings growth. Our increased sales and earnings growth are targeted to be delivered by our flagship IUL product because it's tailored to the attractive middle market's needs. IUL provides permanent protection and also features accumulation savings opportunities tied to indices like the S&P 500. Utilizing hedging strategies, we're able to provide the policy owner with performance of the underlying indices subject to a maximum cap, but also providing a performance floor. That gives the customer downside protection while providing upside potential. At the same time, it allows Transamerica to avoid direct product risk for market volatility. Earnings are driven primarily by the core competency in underwriting, rigorous expense management and hedging market exposure. We benefit from the intrinsically attractive characteristics of the middle market which enables us to deliver an unlevered IRR of over 13% at a payback period of 4 to 5 years for the IUL product. To support our growth plans, we are making targeted investments in our operating model, focused on 3 key areas of service delivery. First, Transamerica will own critical customer moments, oversight and other high-value customer capabilities such as new business onboarding, underwriting and complex claims. Second, we will reengineer processes to drive efficiency and improve the customer experience while upgrading technology. At the same time, we will transition to a more flexible, cost-efficient, cloud-based infrastructure. Third, we will partner with industry-leading third parties for high-volume commoditized transactions. As a result, we will create an enhanced customer experience while building a scalable platform for growth. In summary, we had a unique and highly differentiated distribution organization in WFG, this provides access to the underserved middle market through a large, diverse agent force that we intend to grow to 110,000 by 2027. Combined with the improved productivity, these targeted actions are expected to double WFG's stand-alone earnings. Our diverse life portfolio, which includes our flagship IUL product is designed to meet the unique customer needs of the middle market. We'll continue to leverage the competitive advantage of the life insurance product portfolio and our privileged distribution through WFG to grow the business at attractive economics. Thank you very much for your time. I will now turn things over to Phil Eckman, President of Workplace Solutions, to share more with you about the Retirement business.

All right. Thank you, Jamie. It's great to be here today. I've been with Transamerica for 27 years. And during that time, I've helped transform our retirement business from a traditional recordkeeping business into a leading retirement company that provides a full suite of solutions. Today, I will share more with you about our plans to deliver profitable growth. There are 4 key messages that I want to convey to you today. First, our retirement business is centered on our leadership positions and strong capabilities in attractive segments. Second, the strategy is focused on driving earnings. In fact, we expect to nearly double our statutory earnings and in-force by 2025. Third, we will expand on our current leadership positions and differentiated pooled employer plan capabilities. And finally, we will leverage the strength of our workplace platform to grow and diversify our revenues, including general accounts stable value and individual retirement account offerings. Now we are well established in all core retirement plan markets. But what's important is that we are particularly successful in the most attractive markets. Most attractive is measured by growth and profitability. This is true in established markets, large plan markets like health care and higher education, but it's also true in an exciting and emerging market that will lead the next wave of growth in the U.S. retirement industry and that market is the pooled employer plan market, where small businesses can pool together to offer their employees more easy and more affordable access to retirement plans. Now in retirement record keeping, we have solid momentum. We have grown our midsized planned deposits to over $10 billion, and 2/3 of these deposits come from participants who are contributing to their retirement plans with every paycheck. We pioneered the pooled employer plan 20 years ago. So while this market is new to some of our competitors, it's not to us. In fact, we have a leading position in this marketplace today, and we are investing in it to maintain this position going forward. For instance, we further strengthened our position with the acquisition of Tag Resources. This enhanced our fiduciary services, our reporting and our technology, all contributing to new distribution contracts and new plans adopting into those contracts. Now similar to WFG, our retirement recordkeeping platform provides a gateway, a gateway to position additional products and services to our customers. This is particularly true in the midsized plan market, where we are most successful in bringing forth our full suite of solutions. Now I've mentioned that we've gone from a record keeper to a more holistic retirement company. For every $1 of recordkeeping revenue, we now generate another $1 of revenue through stable value, individual retirement accounts and other ancillary products and services. Bottom line, this business model is geared providing compounding economics. As we grow our core record keeping, we also grow our stable value and IRA products. Now our workplace platform provides us privileged access to the middle market. We serve over 24,000 employers. This allows us to reach 3.5 million planned participants, largely coming from the middle market. These participants are diverse, they're younger and they're largely underserved. They need help making good decisions for their retirement future. This massive middle market is also highly mobile. In fact, we have 200,000 of our planned participants to change employers each year. This is important as these people are often looking for a hand to hold through these life transitions. And we are there with a full suite of solutions to support them as well as dedicated teams to help them along the way. Now as we continue to strengthen our products and services, we expect to deliver attractive economics. In particular, we expect to balance more capital-light fee income with highly persistent investment income. Remember, we're not just a record keeper. Our retirement business generates revenues in 3 specific ways. We collect core recordkeeping fees as participants are enrolled into our plans. We earn investment margin as these participants invest in our general account stable value products. And we earn fees from a menu of discretionary ancillary solutions. We also earn fees on our IRA products and services as we support these participants who are seeking advice when changing jobs or ultimately retiring. As you can see from this slide, the economics of our midsized plan marketplace is particularly attractive with higher profitability and growth at each step of our product and service offering. As I noted at the outset, this strategy delivers earnings growth. Through market focus and strategic actions, we expect to nearly double our statutory earnings and in-force by 2025 and reach nearly $300 million by 2027. Now one of the key levers to grow our core recordkeeping earnings is the net deposits of our midsized plan market. We plan to grow our net deposits in the midsized plans from negative 8% in 2022 to positive 5% in 2025. As a reminder, last year was impacted by one large termination and normalizing for that, our midsized planned net deposits were positive 1% in 2022. So in addition to growing our earnings through the core recordkeeping business, we expect to also grow our earnings by building on our strong momentum in stable value and our IRA products. So how are we going to drive this growth? As the graph in the middle shows, we will grow our recordkeeping assets in both the large and the midsized markets. We particularly like our midsized plan opportunities due to our expansive distribution network and the continued developments in the pooled plan marketplace. Now we grow our assets in 3 ways. First, take over deposits through new plan sales; second, by increasing the recurring deposits from our existing participant base; and third, by strengthening our plan retention. We are investing in digital capabilities to meet the strong demand from plan sponsors, which is leading to improvement in all 3 of these asset drivers. We've fully redesigned our websites that let us deliver personalized web content and messaging to participants and plan sponsors will be receiving better data and better plan analytics going forward. Now finally, we are improving efficiencies which will expand our margin. We will continue to build our participant self-service capabilities where our efforts have already reduced our call center volume by 35%. We're also digitizing the process of plan onboarding, adding new plans to our infrastructure. This will drive efficiency in a very high volume, high friction area and deliver a best-in-class experience for both plan sponsors and our advisers. Now I've mentioned how growing our core recordkeeping platform provides a gateway for additional product growth. Specifically, we plan to grow our stable value assets by 10% annually. This is important as this product provides healthy, consistent investment margin. We have driven robust growth in our stable value product over the last 3 years. However, at $10 billion, our penetration of our total assets under administration is only about 5%. This allows us much more room to grow when we compare ourselves to many of our peers. Now to deliver this growth, we will add our stable value products into asset allocation investment solutions like target date funds and advice offerings. These kinds of investment allocation solutions are often used as default investment arrangements in the U.S. which received the majority of the inflows into retirement plans. We've also recently incorporated the stable value solution into our IRA product line. Now speaking of IRAs, we plan to grow our IRA assets to $18 billion by 2027. We will expand our current retail product solutions to include additional offerings, as well as providing self-service solutions. Now remember earlier, I mentioned 200,000 participants switching jobs each year. We are growing our transition service team to meet the needs of these participants, when seeking advice as they change employers and ultimately near and transition to retirement. The bottom line here is that we have the data. Because we know when participants are changing jobs, we are able to provide education, product solutions and advice to them through these transitions as they are happening. For those approaching retirement, we proactively engage with a unique service offering, specifically tailored for the needs of this important and growing segment. In fact, 47% of our IRA customers today are over the age of 60, proving the success of this offering. Now remember, most of these participants are coming from the middle market. They are underserved by the higher-end retail advisers, and they benefit greatly from our health. To recap, we are focusing on expanding our leading positions in the most attractive segments of the market and deepening our distinctive capabilities in accessing participants and meeting their needs. As we do so, we expect to deliver significant earnings growth as our model provides the compounding economics, I mentioned. As we grow our core record keeping, we also grow our stable value and our IRA solutions. I will now turn it over to Mr. Matt Rider, our group's CFO. Thank you.

Thanks, Phil, and good afternoon, everyone. In the final presentation of today, I will provide an update on our capital management approach. Next, I'll walk you through the financial implications of Transamerica's strategic plans. Then, I will explain how these will contribute to the group's financial targets for 2025, which underscore the value we are creating. Let's now move to Slide 2. I hope you take away 5 things from my presentation. First, we have clearly delivered on the commitments that were made 3 years ago by meeting or beating our previous target. We expect the execution of Transamerica's strategic plans to increase both the level and the quality of our operating capital generation. Third, we will continue to reduce the exposure to our financial assets. In the coming years, we aim to meaningfully accelerate the release of capital from our U.S. financial assets through newly identified management actions. Fourth, we have significant financial flexibility at the holding. As we have demonstrated in recent years, we will remain disciplined in its use. And fifth, we expect to increase both our free cash flow and dividend per share, ensuring attractive and sustainable returns to our shareholders throughout the next chapter of our transformation. Let's now move to Slide 3 on the delivery of the financial commitments made at the 2020 Capital Markets Day. One of our key objectives was to strengthen our balance sheet, and we have achieved that. We tamed the volatility caused by mortgage spread movements in the Netherlands. We reduced our interest rate duration mismatch in the U.S., and we extended the dynamic hedge program to our legacy variable annuities. By improving our risk profile and reducing the volatility of our capital position, we have been able to spend more time on what matters most, which is making plans to increase our return on capital and the return of capital to shareholders. We've also taken a number of management actions to enhance the value of our financial assets. For example, we reinsured the longevity risk associated with EUR 7 billion of pension liabilities in the Netherlands. We executed a lump sum buyout program for variable annuities with guaranteed minimum income benefits. And we obtained the approval for long-term care rate increases of over USD 500 million, which was well ahead of our original expectations. These actions have contributed to a stronger and more stable capital base, more sustainable remittances and more predictability for our shareholders. We also launched an ambitious operational improvement plan at the previous Capital Markets Day that was underpinned by more than 1,100 expense savings and growth initiatives. We targeted an operating result uplift of EUR 550 million by 2023. We have exceeded this target and delivered 1 year earlier than expected. We also either delivered or overdelivered on all other financial targets. We increased our free cash flow, reduced our leverage and increased our dividends. On top of this, we completed EUR 500 million of share buybacks funded by the divestment of our business in Hungary and surplus cash capital at the holding. And we expect to start another EUR 1.5 billion share buyback, shortly after closing the ASR transaction. Let's now move on and look forward. Slide 4 shows our capital management policy. Throughout our transformation, we want to maintain sufficient capital to execute on our plans and pay sustainable dividends to our shareholders. As part of our capital management approach, we will continue to focus on managing the capital positions of our business units to their respective operating levels over time. For Transamerica, the operating level is unchanged at an RBC ratio of 400%. We will continue to manage the cash capital at the holding with an operating range of between EUR 0.5 billion and EUR 1.5 billion to cover holding expenses, near-term dividends and contingencies. At the end of the first quarter of 2023, cash capital at the holding amounted to EUR 1.4 billion. Today, we announced our intention to bring this down to around the midpoint of the range of the operating range over time. We can do so, in a prudent fashion as our transformation progresses further. This work will further improve the risk profile and returns of our business units, in particular, Transamerica, which in turn reduces the need to hold cash capital at the holding for contingencies. We will reduce gross financial leverage to around EUR 5 billion, which we see as the optimal level given our new business profile. We expect to be at the targeted level following the previously announced deleveraging in the context of the ASR transaction. As previously indicated, we will no longer have a regulated insurance business in the Netherlands after the transaction closes with ASR. We are making progress on the review of the implications thereof for group supervision and discussions with our college of supervisors are ongoing. We'll provide an update, if and when appropriate. Next, I will discuss Transamerica, the focus of today. Slide 6 summarizes how we expect our strategic plans to increase the value of Transamerica. As Jamie and Phil have just outlined, we have ambitious but realistic plans for our strategic assets, which aim to grow the earnings on in-force. We expect to achieve this by growing our customer base, increasing customer retention and by expanding margins. Part of the anticipated uplift in the earnings on in-force will be reinvested into new business at attractive terms. This ensures long-term sustainable growth in operating capital generation. U.S. remittances will benefit from this, and we aim to increase them in line with the increase of operating capital generation from the strategic assets. For Transamerica's financial assets, we've identified new management actions that will substantially accelerate the release of capital in the coming years. These actions will improve the level and predictability of operating capital generation from financial assets. Moreover, the capital that we expect to release from financial assets will create financial flexibility that will allow us to further reduce our exposure to these blocks of business. Of course, the use of this financial flexibility will be subject to our disciplined capital management approach. Let's now move on and focus on the U.S. strategic assets. On Slide 7, we show how the capital employed in the U.S. strategic assets is anticipated to gradually grow over time to almost USD 6 billion by year-end 2027. This is the consequence of the investments in profitable new business, we intend to make in businesses that have earned the right to win as my Transamerica colleagues have explained to you. Over the same time frame, the earnings on in-force from strategic assets are expected to grow at a quicker pace than capital employed. For 2027, we expect $1.5 billion of earnings on in-force, an increase of almost 50% compared to the $1 billion that we expect for this year. The fact that our earnings on in-force are expected to grow at a faster pace than the capital employed highlights the fact that Transamerica is increasing its return on capital. Let's now, move to the operating capital generation from strategic assets. On Slide 8, you see how increasing earnings on in-force translates into higher operating capital generation. The plan to reinvest part of the earnings on in-force from strategic assets in profitable new business to secure long-term growth. Of course, we have strict pricing hurdles in place to ensure that new business adds value. We are currently achieving internal rates of return well in excess of our minimum 10% pricing hurdle. In fact, we're getting over 12% in life and over 15% in Workplace Solutions, both on an unlevered basis. Furthermore, the payback period for our flagship Life and Workplace Solution products varies between 4 and 6 years. The growth in earnings on in-force and reinvestment in new business are anticipated to result in a gradual increase in operating capital generation from strategic assets. We expect growth in operating capital generation to increase over time, as new business sold in previous periods begins to yield results. Not only is operating capital generation expected to increase, it is also becoming of higher quality. It is increasingly driven by earnings on in-force and to a much less extent by the release of required capital. Let's now turn to Slide 9. As you have heard today, our ambition is to build America's leading middle market life insurance and retirement company. If successful, we expect to significantly grow earnings from our U.S. strategic assets and increase the return on capital over time. To achieve this strategic ambition, Transamerica is making investments in its operating model. These are expected to enhance customer service and lead to product manufacturing efficiencies. Transamerica has also restructured an earn-out agreement with one of WFG's founders, which will result in an uplift in earnings. The associated onetime investments are expected to have a negative impact of about 15 percentage points on the U.S. RBC ratio. On an IFRS 17 basis, we expect a reduction in equity of around USD 450 million and USD 150 million reduction in the contractual service margin, or CSM on an after-tax basis. This mainly reflects the net present value of the investments that we plan to make while the benefit from the higher earnings as we grow the business will emerge over time. The estimated IFRS impacts are based on the balance sheet for year-end 2022 and market movements in the first half of 2023 may influence the level of the impacts. Let's now discuss the U.S. financial assets in more detail. I now move on to Slide 10. Since the 2020 Capital Markets Day, we have significantly reduced the capital employed in U.S. financial assets. This was mostly achieved through actions to reduce the volatility in the RBC ratio from variable annuities. Today, we announced that Transamerica has expanded the scope of financial assets to include legacy universal life contracts and single premium group annuities. Both blocks were already closed for new sales, have low returns and are a source of volatility in our capital generation. By adding these blocks of business to the scope of financial assets, the total capital employed increases to around USD 4 billion. Let me now turn to Slide 11. The first graph on Slide 11 shows that in the absence of management actions, the capital release from U.S. financial assets is quite limited in the medium term. Without management actions, we would expect the capital employed in 2027 to be only about 15% lower than year-end 2022. At the same time, without management actions, operating capital generation would come down more quickly. This is mostly due to the need to increase statutory reserves on the aging universal life block. Compared to what we expect for 2023, operating capital generation would reduce to less than $100 million by the end of 2027, so not a very attractive picture. Let's therefore move on to the next slide. On Slide 12, we show how newly identified management actions improved this picture significantly. As the first graph shows, capital employed will reduce significantly. We expect the newly identified management actions to release an additional USD 1.2 billion of capital by 2027. Combined with the organic release of capital, this results in anticipated total reduction of $1.8 billion or almost half the capital that is currently employed in U.S. assets. The financial flexibility this creates will be prioritized to further reduce exposure to financial assets, provided that it increases value for shareholders. At the same time, the management actions are also expected to improve both the level and the predictability of operating capital generation. For example, Transamerica set up a program to acquire a portfolio of institutionally owned universal life policies with secondary guarantees to reduce mortality exposure. This is expected to reduce the drag from setting up reserves due to the aging of the block. Let me now go to the next slide, #13. As just discussed, we have identified a series of actions to significantly reduce our exposure to financial assets and to improve the predictability and level of capital generation over time. I just alluded to the buyout of universal life policies with secondary guarantees as an example of one such action. There are others. In long-term care, Transamerica will remove the remaining morbidity improvement assumption in line, with the emerging industry best practice. It will also increase the inflation assumption in long-term care, given the changing economic environment. Associated with these assumption changes, Transamerica will seek to obtain approvals for an additional actuarially justified premium rate increase with a combined value of USD 700 million. These management actions are expected to have a combined negative onetime impact of about 5 percentage points on the U.S. RBC ratio, including the expected impact from all assumption updates in the second quarter. On an IFRS 17 basis, these are expected to reduce Aegon's equity by about USD 250 million and to reduce the CSM by around $400 million again on a post-tax basis. Let me now continue to the next slide. Slide 14 highlights the fact that we expect Transamerica's capital position to remain resilient through its transformation and that we expect significant financial flexibility to emerge over time. We expect Transamerica to maintain its RBC ratio above its operating level, after the onetime impacts from our plans to grow strategic assets and to reduce the size of our financial assets. Furthermore, we remain well placed to manage moderately adverse shocks, for example, a 25% decline in equity markets. We have a playbook of management actions in place to ensure that Transamerica remains well capitalized. This provides us with confidence that it will be able to pay its planned remittances, even in moderately adverse scenarios. The slide also shows the expected uplift of the RBC ratio from the capital release and financial assets over the medium term. The additional financial flexibility created will be deployed to create value, and we will continue to manage the RBC ratio to the operating level of 400% over time. Let me now move on to the next slide. Slide 15 wraps up the U.S. financials. In the graph, you see the total expected operating capital generation and expected remittances. We expect to generate more predictable operating capital generation from financial assets, as a result of the management actions that we have identified. We expect Transamerica to retain this capital generation, which will add to its financial flexibility to further reduce its exposure to these legacy blocks of business over time. We expect to gradually increase operating capital generation from strategic assets by investing in profitable growth. The growing operating capital generation from strategic assets is expected to translate into mid-single-digit growth in remittances from Transamerica to the holding. So in summary, we expect to be able to increase remittances while growing the business and while also creating more flexibility to take additional management actions on the financial assets. We believe that this is an attractive combination for shareholders. Let us now move on and examine the group financials. Slide 17, shows the expected increase of group operating capital generation from the units. For 2023, we expect to achieve at least EUR 1 billion of operating capital generation, in line with our previous guidance. For 2025, we expect to grow operating capital generation to around EUR 1.2 billion, driven by the U.S. We also expect a positive contribution from our successful partnerships in Aegon Asset Management and in Aegon International. The operating capital generation from these businesses grew by 65% in the past 3 years, and we expect the upward trend to continue. For our U.K. business and for the global platforms of Aegon Asset Management, we expect modest growth in operating capital generation. This increase will be supported by expense savings and growth in strategic focus areas, such as the U.K. platform business and the liquid and real estate and ESG investments. As we reinvest part of the earnings into profitable growth, we are confident that we can increase the group's operating capital generation further in the medium term. Let me now go to Slide 18, please. The graphs on this slide show the translation of the gross remittances that we collect from the units into free cash flow. As you see, we expect gross remittances to increase over the plan period, broadly in line with the increase of the operating capital generation we discussed on the previous slide. In addition, we expect to receive an interim dividend from our stake in ASR in the second half of 2023. In 2024, we, of course, expect to receive both the final and interim dividend from ASR. And we expect these dividends to grow, as the anticipated synergies from the combination emerge over time. We expect holding expenses to slightly increase in the medium term. The anticipated benefits from deleveraging and expense savings will be more than offset by higher funding costs, as a result of the increase in interest rates. We also expect to see lower investment income on cash capital at the holding, as we deploy the proceeds from the transaction with ASR. As a result of all this, we expect to grow our free cash flow from around EUR 600 million in 2023 to around EUR 800 million in 2025. With that, let me now spend some time on the financial flexibility we have at the holding. On Slide 19, we discussed 3 elements: first, the proceeds from the ASR transaction. We expect to receive EUR 2.2 billion in cash proceeds, plus the 29.99% strategic stake in ASR. As previously announced, we still aim to return the majority of the cash proceeds or EUR 1.5 billion to shareholders. We anticipate to do this via share buyback, which we expect to complete within 1 year after closing the transaction. Second, the operating range for cash capital at holding remains at EUR 0.5 billion to EUR 1.5 billion. As of March 31 of this year, we were at EUR 1.4 billion. As I said earlier, we intend to manage this down to around the midpoint of the operating range or around EUR 1 billion. We intend to do so by returning capital to shareholders in the absence of value-creating opportunities, in line with our capital management policy. Third, we are comfortable with the level of leverage after the completion of the plan deleveraging related to the ASR transaction. As a reminder, we expect to reduce our gross financial leverage by up to EUR 700 million. We intend to do so, within 12 months after we close the deal. I'll now go on to the next slide. On Slide 20, we illustrate how free cash flows are used. The vast majority of free cash flows will be distributed as dividends to our shareholders. The amount of cash that we use for the dividend is expected to increase in line with free cash flow. The remainder will add to Aegon's financial flexibility at the holding. We will deploy this in a disciplined manner. Our priority is to return to shareholders, unless we find other value-creating opportunities. As a result, we expect the dividend per share to grow at a double-digit rate in the next 3 years. We anticipate it to go from around EUR 0.30 per share, over 2023 to around EUR 0.40 over 2025. I would now like to discuss our new financial targets on Slide 21. Lard, the U.S. management team and I have explained our plans on how to make the next chapter of Aegon's transformation, a success story. And we expect to deliver again, on our ambitious financial commitments. By 2025, we expect the following: reduce gross financial leverage to around EUR 5 billion; increased operating capital generation to around EUR 1.2 billion; increased free cash flows to around EUR 800 million; increased dividend to shareholders to around EUR 0.40 per share, over the year 2025. Let me now, go to my final slide and wrap up. Today, we've presented to you how we aim to sustainably grow our U.S. strategic businesses, while at the same time, executing management actions to release capital from our financial assets. We've also illustrated that during this process, we expect to have ample financial flexibility at the holding level. This allows us to create additional value for shareholders. While we are still transforming the company, we expect dividend per share to grow -- to show double-digit growth, underpinned by steadily growing free cash flow and value-creating deployment of our financial flexibility at the holding. Of course, we need to remain disciplined and keep working hard. But we are very excited to now have embarked on the next chapter of our journey, and we hope you are, too. With that, let me please hand it back to Jan Willem for the Q&A.

Thank you, Matt, for your presentation. And I'm going to invite you and the rest of the presenters back on stage for our second Q&A session. The presenters will be joined by both Duncan Russell, our Chief Transformation Officer; and Matt Keppler, who is Transamerica's Chief Financial Officer. I will be again the moderator for the Q&A so please raise your hand, if you have a question. However, as the moderator, I run the show, so I will ask the first question before we start. As everyone is set, I'll start with the first question. During the break, we had some -- received some follow-up questions on the capital we are releasing from financial assets. So the first question is for me to Matt. Matt, can you shed some additional light on what we're doing and what the benefits to our shareholders are from our actions?

Yes. But before that, I think we have to pay respect to Jan Willem Weidema and his going away party today.

Yes. Thank you, Jan Willem.

Yes, so many people came up to me during the break, and start putting papers in front of me and what's this EUR 1.2 billion and this EUR 0.6 billion, maybe I can shed some light on this. So as I said in my outline, the EUR 1.2 billion capital generation that we -- let's say, release of required capital that we expect from the financial assets due to new management actions, we, as a first priority, want to put that to work in reducing the financial assets exposure even further. We then have another $600 million capital generation from those financial assets, which we intend to put to use, as a first priority to reduce the size of those financial assets. Michael Huttner had asked questions before. I like the reference to the term, the elephant in the room. So far, we have been eating the elephant in the room, one bite at a time, as you do with such large types of things. And we will continue to do that. But if, we see opportunities to reduce the size of the financial assets further, using that financial flexibility that we are creating at the holding company, then we will, of course, look into that. That might involve third-party transactions. It might involve further management actions that we would undertake on a unilateral and bilateral basis. First priority, though, use that capital because it is a bit of a buffer. People have, again, come up to me to say, "Well, aren't you creating buffers in the U.S. business through the capital release on these financial assets?" The answer is yes, of course, we are building buffers, but we want to put that to work to reduce the size of the financial assets over time. If we cannot do that, if we cannot do that economically, and it's something that we are on this stage very passionate about acting in an economically rational way, if we cannot do it in an economic rational way, then we will upstream that amount of capital to the group. And then, it will be subject to our normal capital management disciplined approach that we have, I think, demonstrated and consistently applied, which is if we don't need it, then immediately, it goes back to shareholders. So that's, I think, the first point. What is the size of that buffer? What is the size of that buffer? Let's put it in RBC ratio terms. So it's about 90 percentage points. If we didn't do anything with it, if we released the capital, if we used that operating capital generation and simply retained it within Transamerica, congratulations, we get a 90 percentage point RBC uplift. Would that ever happen? Answer is no because capital at the business unit level is really owned by the group. So we really want to manage that -- the capital in the business units to their operating level over time, either to deploy in the case of the U.S. to reduce the size of financial assets or to grow more quickly or if you can't do that, then return it to the group, and then we'll find a better use for it. Is that a fair summary, Jan Willem?

I think so, but we'll see from the question.

I'm sure there will be 12 more questions on the EUR 1.2 billion and the EUR 0.6 billion, but we have a lot of other people on the stage, too.

Who wants to go first? [indiscernible] close here in the front.

I won't ask about EUR 1.2 billion, but still the new business strain. So that's looking at it from another point of view. The new business strain is relatively stable at $0.7 billion in the next 2022 -- 2023, 2025, and then $0.8 billion to 2027. So relatively stable net business strain. I think it's around 3% [ cover ] while you grow your U.S. earnings in-force with 10% and the capital by 7%. So the U.S. business is growing very rapidly in the planning, but the new business strain now, what's the reason for that? Is it really capital-light products? Is that the main reason? Or are there also other figures behind that? And maybe also related to that, the new business strain is, of course, a combination of capital requirements and cash payments -- commission payments. Can you give a spread up of that? Is it 50-50 or some feeling on that one?

I saw Matts chatting together, so which Matt would like to...

Yes. We have a huge problem here. We have 2 Matt CFOs sitting at the same table, our parents could never have predicted this moment. So which Matt would you like us to go to?

Why don't you take...

Matt Keppler?

Sure, sure. So new business strain is indeed growing. But again, it's balanced, right? We've got the strategic assets there to -- they themselves can fund not only the remittance, but also the investment we're making in new business strain. We talked about earlier the attractive economics we have on both our retirement plans and our individual life products. So again, on the individual retirement plans, it's -- I'm sorry, the retirement plan is driven mostly by the stable value business, the life plans is traditional upfront strain. As far as the split between the two, I don't have it at my fingertips.

Yes, Benoit Petrarque from Kepler Cheuvreux. So the first one will be on the cash capital, the mid-target at EUR 1 billion. Could you be a bit more specific on the timing? And also maybe kind of what are the critical steps in the transformation for you to get there? Is there a level of capital employed on the financial assets under which you think, okay, you are basically well advanced and you can push this cash capital down? So, that's the first question. Second one, just sorry, but I still don't get really why the OCG on the financial assets is kind of stable over time, while the capital employed is coming down quite substantially? And the third one is on the -- the one -- the management actions around the EUR 1.2 billion, just picking short term, let's say, in the coming 12 months, you will start a buyback on the universal life. You will negotiate price on the [indiscernible]. What are the economics for just for the short time in terms of how much capital employed reduction you will see in the next 12 months? And maybe, just what is the number of share in the DPS of $0.40? Is that just the EUR 1.5 billion? Or is that kind of another assumption behind it?

All right. Let's start with the first one for Matt Rider on cash capital at the holding.

Okay. So just to recap, we have $1.4 billion cash capital at the holding and we are not changing the operating range, which is between 0.5% to 1.5%. We expect to move that down over time. It's going to take some time to do this because we have -- as soon as we close the transaction with ASR, we're immediately going to go into a share buyback program, which is going to take -- we expect to complete it under 1 year. But it's EUR 1.5 billion that we're going to have to take -- that we're going to have to buy back shares with. So, to do an additional share buyback program in the short term on top of the EUR 1.5 billion is unlikely. So let's think about it as, let's say, 9 months to a year before we would start to be able to bring it down meaningfully.

Thank you, Matt. Matt, would you also like to take the second one on the OCG for financial assets?

I can't. You say Rider or Keppler?

Rider.

Yes, yes. So on the OCG for financial, yes. For the OCG...

This is how it goes internally.

Yes, yes. It's a bit of a mess.

I understand what these teams meetings look like, and there's -- yes. What Matt are you talking about?

Yes, I know. So your -- I think your question was the amount of required capital against financial assets goes down very steeply, and the amount of operating capital generation is relatively stable over time. Is that basically the right one? So actually, if we were to do no management actions at all, operating capital generation for the financial assets would actually come down more quickly. So by doing these management actions, and I could explain in one particular instance how this works, we're actually improving the operating capital generation on those businesses. So for example, on the universal life contracts with secondary guarantees. You may have noticed in my presentation that I alluded to the fact that there's going to be a drag from that block of business as a consequence of statutory reserves increasing over time, as the block ages. So the trick here on universal life with secondary guarantee is to reduce the size of the block quickly, thereby reducing the amount of required capital that we have against it quickly, but the improvement in the operating capital generation is a consequence of removing that drag, okay? That's the -- I think that's the main thrust of it.

Thank you, Mr. Rider. The next question on management action, what's expected in the near term? And if I understand it correctly, what you expect, especially from that universal life buyout program. Keppler, can you take that one?

Sure. Sure. So we are going to -- first of all, it's a 5-year plan, right? So think of it in 5 years, don't think about it in 3-month increments. Certainly, the universal life program is a bit of a perfect one in that it both accelerates the release of capital for the block and improves the operating capital generation in the short term. So we like that one a lot. Obviously, as we mix in other versions, they have different economics. So over 5 -- think of it as a 5-year program and try to plan for it in that way.

And lastly, Mr. Rider, the number of shares in the dividend per share targets.

We've not been specific about that. So in some -- but the trick here is -- so we're increasing the remittances from the business units. That contributes a portion of it. But there is financial flexibility that we intend to use over time. That could be used to improve the quality of capital generation, as we talked about on the financial assets in the U.S. But it could also be used for share buybacks, but it could also be used for other purposes to create value for shareholders. So, we've not been specific about the number of shares.

Thank you. [indiscernible] Ashik.

A couple of questions. So first of all, it would be great to get some economics on stable value and IUL in terms of capital requirement for a $1 billion written business? And what sort of profit margin those businesses deliver because I guess that's a reasonable part of your growth trajectory for next, say, 3 to 5 years. So that's the first one. Second one is, if I look at the cash remittance, especially it looks like from international businesses, it's increasing 15%, 20% per annum for the next few years. It's like about $100 million, I guess, over a 2-year view, every 2 years. So that looks a bit high, I would say, but any color on what is driving that? Is it underlying earnings growth that will drive it? Or is there more cash conversion from the earnings? And thirdly is the new business strain, EUR 2.2 billion, where is that coming from? I mean, it looks pretty big. Again, it's the kind of same question, which I asked earlier, given that you're focusing on capital IP dominantly, EUR 2.2 billion is a lot. So I still want to understand where that is coming from, maybe I guess part of the answer comes from the first question I asked about the economics of stable value and IUL.

Ashik, if you allow me, I'm going to change the orders to have the new business one together and start with the cash remittance first. So Matt, can you elaborate on Spain, Brazil and -- Matt Rider, sorry, on Spain, Brazil and China and how they contribute to remittances?

Yes. It's a good old fashion good business growth. So we've seen actually quite some good results out of the international businesses in the last several years. So getting remittances out of the Spanish business, especially the joint venture that we have with Santander is a big driver of that. But Brazil is coming on. So they are becoming much more profitable over time. And in fact, I think we've already announced that we had increased our economic ownership in Brazil over the last -- in the last 6 months or in the last 6 months or so. So really, this is just organic doing the business. And now, we reap the results and investments that we have made over time in these international businesses. So it's a very plain vanilla stuff.

Keppler, would you like to comment on the economics?

Sure. Let me talk specifically to general account stable value first. Think of general accounts stable value as, again, a component of our workplace solution revenue sources. So it's part of our IRA business. It's part of our employer retirement plans. From a capital perspective, it's very similar to a fixed annuity and in-force fixed annuity block. So the capital requirements are driven by the amount -- the assets under management effectively. And that's driving the vast majority, again, of the retirement plans, capital requirements is the general account stable value business. . With regard to the overall investment in new business, first of the IOL, again, we talked about a 13% IRR, an attractive payback period. Yes, it does have significant upfront strain. But again, given those 2 factors, 13% plus IRR and attractive payback period, we like it. Really, those 2 businesses drive close to 80% of our new business strain over the period, growing general accounts stable value balances, growing the life -- the broader individual Life business, most importantly the IUL.

Let's go a few rows back. Nasib, you first.

Three questions for me. One for each Matt, WFG and Retirement. So on the financial strategic assets, I see the new business strain is still greater than the release of capital. At what point in terms of maybe AUM reserves or time line would you expect them to kind of be equal? And then on WFG, what percentage of the agents are part time? And then, on retirement plans, it seems like there's a lot of cross-selling there. Is there any regulatory risk of that, when you're kind of pushing products to someone who's left the workplace and you're pushing your own products to them?

Jamie, do you want to take the WFG question first, perhaps? How many agents are working part time?

Yes. So when you think about our run rate, right, for recruiting about 1,500 agents a month, those are predominantly over 90% of those start is part time. As they continue in the program if they don't -- if they stay with us, we end up having about on any given day, about 30% to 40% of our agents are part time.

Thank you. Phil, can I move to you for retirement plans and...

Sure. Yes, you bet. So yes, so the -- there is an awful lot of regulation around qualified assets and money movement to IRAs. We operate in a fiduciary best interest environment, along with the entire industry, meaning that we talked to these participants about their options. Sometimes the best thing for them is to leave their money in their plan, sometimes it's to move to an IRA. There's pluses and minuses on each side. It's a very documented formal process that we execute. But yes, that's very clear, everybody under operates from the same structure.

It may offer. I wouldn't think of the retirement space as a space where we're selling product. You think about it as offerings are available as a menu. And our job is to educate participants, communicate what is available and they elect themselves. In some cases, ancillary solutions are embedded in the option. So if you just take a stable value, for instance, most participants will choose a life cycle fund or an asset allocation fund and table value would be embedded as an allocation within that fund. So in that case, it's geared into in a sense the system. The -- when participants leave the workplace, Phil mentioned 200,000, we get the data leaving the workplace. We engage with them. There, we offer them their options and we can provide them advice. And if they roll out of the plan, into an IRA, then they're electing to have an advice relationship with Transamerica. So you should think of it more of an ecosystem, then you should think of it as a selling of products. And that conforms with the regulations in the U.S.

Keppler or Rider, can one of you take the question on the dynamics between strain and use of required capital?

Sure, if I could. First of all, to directly answer your question, again, when would new business strain be offset roughly offset by the release of required capital? Not in the near term. Right now, the release of required capital is running in the range of $100 million for the strategic asset business. New business strain is $700 million to $800 million as we've shown. So there are significantly different numbers. New business strain includes both the new capital we have to put up on a new issue sale and any upfront acquisition costs, commissions, things of that nature. So you do earn them back over time, but they are -- they're somewhat apples to oranges.

Andrew.

Great. Andrew Baker, Citi. So the first one is somewhat related to the EUR 1.2 billion on the financial assets. So clearly, obviously, your preference as for the reduction of financial -- further reduction of financial assets. But at some point, you've obviously got the ASR stake when you deem that as reaching fair value, there's another slug of capital to be redeployed there. Is it fair to say that the preference there is that will be redeployed in the strategic assets? That's the first one. Second one, just on WFG. 50,000 of the WFG agents will be selling one policy or less by 2027. How do you justify the economics of that given, as you mentioned earlier, the compliance cost onboarding, training, regulatory risk and all of the above? And then, you mentioned earlier that sort of agents are agnostic between products. But I think 65% to 70% are Transamerica products. So how does that work? How's the penetration that high there? And then finally, just a quick one for one of the Matts. 15 percentage point obviously hit, I know it's a combination of investment in operating model, WFG. Are you able to give that split? And then, the investment in the operating model, is that the bringing in-house the TCS agreement? Or is there anything else material going into that number?

Thank you, Andrew. Let's take them one by one, Duncan. Our approach to ASR stake.

Sure. The ASR stake has an indefinite time frame. We like that stake. We think it's a source of value, has been a source of value and will continue to be a source of value for our shareholders going forward. We think we have privileged insight. We know our business well. We did do dividends on their business as well on the deal. And we have certain governance rights to help us manage through that. So it has an indefinite time frame. Now let's reach at some point in the future and the scenario where that stake is sold for whatever reason. At that point, it would just be subject to our normal capital management philosophy. That could include being invested in strategic assets, it could be invested in something else or return to shareholders. What you saw from Matt's presentation on the U.S. strategic assets, though, was that they are self-funding? And they're still covering the dividend up to the group. So that's also something to bear in mind.

Jamie, there are two questions on WFG. Can I pass over to you?

Yes. So I'll start with the first one with the 50,000 agents, one policy or less. If you look at the pure comparative that Will mentioned in his in his remarks, this is very common in the industry. So our 0.4%, which we get to nearly 0.5% per life policy per agent per month is actually nearly double that peer competitor. And when, you think about those aren't the same people as we're bringing people on and people are leaving, that is a rolling number every 12 months. The other thing, I would say about the per the 1 policy or less is that's where part of our focus is when we talked about investment, it's in getting people -- more people recruited, getting them licensed quicker, getting them to sell that first policy quicker and then that second one. And so we are literally our plan is to double that conversion ratio. So that's answer to your first question. The next one, I'm thrilled you asked this. The TA penetration, when we said that there was no difference -- there's no economic incentive for the WFG agents to sell the Transamerica products. However, there is very much so a psychological and attitudinal focus for them. So, when I'm out meeting with agents, if they have a fit, their preference is to sell Transamerica. The alignment between the organizations is incredible. And in fact, when we build products now, we go to WFG agents and ask them, what are your customers' needs? What are they looking for? And those are the same products we sell in other distribution channels, but we build them now for WFG.

Thank you, Jamie. Mr. Rider, can I ask you to...

Sure. So the split. So first of all, Jamie had alluded to in her presentation that we're bringing in from the TCS -- from the old TCS thing, basically the high-value function. So we're talking about new business case management. We're talking about product management. We're talking about underwriting. We're talking about, let's say, technology architecture and designs to the highest value stuff we're bringing in. And think of these things as enablers of the overall strategic direction for the Life business in the U.S. Of the 15 percentage points, that represents about 2/3 -- about 2/3 of the impact. The remaining 1/3 relates to this restructuring of the, let's say, the earn-out agreement from one of the original founders of WFG, which we found a way to, let's say, that our economics -- economic interest aligned at a certain moment, and given the fact that we expect to grow WFG significantly going forward. This was a time for us to capture more of the economics for ourselves. So about 1/3 of the 15 percentage points.

Thank you in the back of the room, please [ Hadley ]

Thanks very much. First question on the dividend, please. Matt, I think you, meant, Rider, I think you mentioned double-digit annualized growth over the next 3 years for the dividend per share. But why isn't it 5 years, the target? Because and maybe you can correct my math, but you're targeting EUR 800 million of free cash flow in 2025 over the next couple of years, you're expecting another 100 give or take from the U.S. and you'll have growth elsewhere in the other businesses. So the organic -- the absolute growth of free cash flow should be double-digit annualized. And then if we think about the comments around the holdco cash levels and the EUR 1.2 billion and the optionality around that and what have you. Why -- is it reasonable to assume that you should be doing double-digit dividend per share growth beyond 2025? So that's the first question. And then the second question is around WFG and the growth in the agents there. I think you're targeting 12% annualized growth rate over the next few years. I'd be interested to know what you see as the industry growth rate in agents there and how that compares? And why these new agents would choose to work with WFG rather than another network? And well, I think you mentioned earlier to an earlier question, that there's -- it's a highly regulated industry and what have you. But to what extent is the -- is litigation more prevalent in this part of the business than the rest of Transamerica or in litigation risk more broadly bigger issue for this part of the business than the retirement business or what have you?

Thanks, Hadley. Mr. Rider, why are dividend targets not higher and more into the future?

Well, I don't know. What do you think, Lard? No. So really -- I think you noticed in the presentation that we have extremely simple financial targets for the group. I'd like to think of it as if you can count, you can figure out our targets pretty easily, 30 goes to 40. We did everything over a 3-year period for the group, much as like we did at the 2020 Capital Markets Day. You know this probably in the Transamerica work and the stuff that we had shown you, we gave more of a 5-year outlook. Just to give you a sense of what is the art of the possible in the next 5 years. But we stopped our dividend projections at the 3-year mark. And if to the extent that they change, by the way, which they often have in the past upward by the way, then we will inform you accordingly. But for right now, we stay with 3-year financial targets for the group.

Maybe one clarification question on the WFG agents. You said industry growth rate, you mean relative to the overall agent population? Okay. Jamie?

Yes. So I'm going to start with the industry growth rate because I think that's a good benchmark. The industry growth rate is relatively flat at worst. And on any given year, you might get to low single digits. The reason that we have been growing at the rate you mentioned, and we believe we can grow going forward is tied directly back to the market that we're in, which is the middle market. That is the fastest-growing market in the U.S., the largest market is made up of younger, very diverse, a lot of first-generation Americans in that group. And so when they come into this group, they're literally working with the people in their communities. That's the fastest-growing population in the U.S. And that's exactly where they go when they're recruiting because it's a huge opportunity, right? If you are new to the U.S., this is a great opportunity, and we've got the people living in those communities with those opportunities. It's very different than the broad agency force for the U.S., which skews to over late 50s, early 60s and ours is -- average age is under 50.

Thank you. And he also asked one question on the sales practices and what our litigation is?

Why would they want to work with -- Yes, I missed the second part. Thank you. And so why would they want to work with WFG. I'm going to start where I finished that last question, which is they want to work with WFG because agency looks like them. You heard Daniel Fombo describe it really well, right? He's like somebody who looks like him, talks like him, and it's a huge opportunity for them to create their own business in the U.S. And the second component of that is what you heard Juan Jaime say is, "You're not -- you buy yourself, you work for yourself, but you're not buy yourself." So the work that we've done to support these agents as they grow their business is something that really has come a long way since Lard and Will joined and have changed that dynamic in just the last 24 months. So that's what I hear from agents when I ask them why WFG, why Transamerica.

Thank you. Will?

I'll be happy to take the -- and I'll add, not just litigation risk, but regulatory risk. If you step back, you look at Transamerica and you look across our businesses, we live in an area that has regulatory and litigation risk where we have to manage that very carefully. And we see that in our book of business, we have legal contracts to the extent that we are making adjustments. We need to ensure that they're actuarially justified methodologies. There's risk if not doing that methodology right. Within our Retirement business, we operate to the highest standard in America which is an ERISA fiduciary. We carry that risk, which includes an important aspect of conflict. As you come into WFG, your risk is fairly straightforward. Your risk is around suitable selling of life insurance to a consumer. So to the extent you can identify that there's a need for insurance, there's a need for protection, there's a need for savings and you match that with a product. We have to approve every life insurance policy from a supervision standpoint. So when you hear me talk about we have to be built for volume and we need to take back high-impact, high-value activities. One aspect of those activities is the supervision of policy sales. Now if a WFG agent happens to sell a Nationwide or Pac Life policy, they bear that same responsibility, Nationwide and Pac Life do. So it's a nature of risk that we have within the system. I think that the insurance industry is well established to manage and they've been doing it for quite some time. We have to do it at scale and at volume.

Thank you. [ Marcus ]?

A couple of questions, please. So what are the prospects for group supervision to fall away in the coming weeks? And what is the opportunity that potentially flows from that, for example, on the cost and form of debt? And have you factored any of that into your holding expense guidance in the deck? And then secondly, just on the profile of debt reduction, you could achieve that probably that gross leverage reduction within 6 months. So why give yourselves sort of 12-month window to do that?

So Rider, do you want to talk about the debt reduction and group supervision?

Yes. We just -- we've said over the next 12 months, but obviously, we're going to make decisions on exactly what we deleverage based on the overall economics, taking into account investor preferences and the markets and regulators and rating agencies and the like. But we give ourselves a little bit more time. It could happen a little earlier. It could happen -- yes, it will happen within 1 year.

Lard, group supervision?

Yes. So what are the prospects of group supervision falling away? I doubt it falls away? There is -- we have a college of supervisors. DNB has been our group supervisor for a very long time. As I said earlier today, the -- we have ongoing -- we are -- we've said at the time that the ASR transaction was announced that we would investigate the applications for group supervision. This is an ongoing discussion with the college of supervisors. They need to come to an outcome on that and we're going to wait that outcome. And then if you ask me for an expectation of the time frame there, we said this afternoon that we expect the transaction with ASR to close in the coming weeks. So at that period, we should also have clarity around that, and we hope to update you at that point in time.

Just on the main products that WFG sell. If you could give some sort of color on what the distribution of those products look like overall through the industry, what proportion of that's agents versus other channels, that would be really useful. And then the second one was just on holdco cost again. Could you talk a little bit about how you expect holdco cost ex debt cost to trend? I know there's some stranded costs associated with the ASR deal. How do you expect those to fall away? So how much of the increases is debt versus falling away in other costs? That will be useful as well.

Thank you. Jamie, do you want to take the first question on WFG?

Yes. And you're asking about all products, right, not just Life products? Yes. So as Will mentioned, we did about EUR 600 million in Life sales in 2022. That's all -- that's not just Transamerica. We picked up about 60% of those sales on the IUL side. But that EUR 600 million, we did EUR 1.2 billion in fixed indexed annuities and a smaller amount than that in what I would call traditional annuity sales. So it's -- that's the differential between -- those are the major products that we sell in the U.S. So life insurance, fixed indexed annuities and then traditional annuities. .

Thank you. Matt Rider, the holding cost.

So maybe a little bit more broadly. You saw that the holdco costs are increasing by like 25 million round numbers, 250 million to 275 million, something like that. Holdco costs are comprised of 3 elements. The first is the -- just the home office expenses that are not able to be allocated to the business unit. So these would be -- you think of them as shareholder expenses and some let's say, some shared services, that sort of thing. That number is about 55 million. The balance of it is a mix of -- so it's the funding costs on our debt minus whatever we have on the interest that we make on cash capital, right? . So right now, we're -- so we have a couple of moving pieces, right? So the -- we have -- we're currently earning about 2% on cash at the holding company. And you know we're awash in cash, EUR 1.4 billion, and that level is going to go up as soon as we get the EUR 1.5 billion in from the ASR transaction. And that's so it's going to actually reduce to that extent, it's going to increase the investment income in the holdco cost as an offset to the other things. In the short term, over time -- the short time, now we're going to bleed down that cash because we're going to do the share buyback. And then ultimately, as has been said, we're going to be reducing the amount of cash capital in the holding back down to the middle of the target range. So think about it as 2% on that. And there's a -- it's a pattern to it. It will go up, and then it will come down to a lower level than what it is today. Now the other part is the funding cost. So again, in the short term, what you're going to see when we do our deleveraging over the next 12 months, you'll see the funding cost come down because obviously, we're not going to pay interest on the debt that we take out. But then at some moment in time, a question, do we need to refinance some of the debt. Now we're going to have to refinance at a higher cost. So there's going to be an offset in the medium term. And the way that I tend to think of it is that the cash and the real funding costs in the medium term are kind of a wash. And what you're left with is the holdco expenses. So like I said, 55 million is the amount that we're incurring today. Now what's going to happen? We're going to lose Aegon in the Netherlands. So we're going to lose the ability to charge on some of those expenses to Aegon, the Netherlands -- that will be offset in part by some of the people that we had at the holding company, where more than 50% of their time was allocated to Aegon, the Netherlands, they go with the transaction. So the way to think about it is net-net-net, we think that our holding costs are actually going to float up as a consequence of just stranded cost in the holding. But -- and we -- so we keep that in the presentation without factoring in how we might intend to work down those costs over time. And that's sort of -- we will be working on that, but we have not embedded any of those actions in the presentation materials. -- that you saw today. I apologize for the long-winded answer, but it's a lot of moving pieces.

Can I just add one thing, though, to that long-winded answer. So Matt, my friend, we negotiated a better deal than EUR 1.5 billion of cash coming from the ASR transaction. It's going to be EUR 2.2 billion.

Well, I meant the share buyback.

I know, I know. I know it.

In the middle, please, Jason.

Jason Kalamboussis, ING. Just the first thing is just a quick one. There was I think I just lost, not -- here it is. There is the FSRA, that issued a notice of proposal against WFG. That was in April 23, it's in Ontario. And they -- basically they say that there are gaps in operations and ongoing proceedings. And if they are anything else with other regulators, they are thinking about the suitability to be licensed, et cetera. Just a comment, is it a minor thing, if you have anything to add, that would be great. The second thing is just on the EUR 1.2 billion release from the financial assets. We're talking yesterday with you, Duncan, on the base risk hedging potential, potentially doing that further down the road. Is there a way to have a rough quantification? So let's say, it's in 2 years' time. It doesn't matter, but how much of -- if you were to do it, how much would it eat from this capital release?

So the FSRA which is the regulatory body in Ontario. There are different regulatory bodies by province just like there are by state in the U.S. And FSRA actually came out with some concerns about not just WFG but other agencies, 2 others in particular. I'm sure you are aware of those as well. And we have been working with them on the gaps that they perceive that we have in operations. So we have added supervisory staff. We've strengthened our technology around that. And all of those costs that are associated with are included in these numbers. So it's an ongoing process with regulators, whether it's Canada or U.S., but we are addressing those concerns.

Thank you Keppler.

Yes. So maybe I can take the base fee hedging. Again, as Duncan alluded to earlier, the primary risk we have left for our variable annuity block after enhancing our hedging program over the last couple of years is just the base fees. So again, a mutual fund type risk. That does still create some capital volatility from us just from the nature of the U.S. regulatory regime. So we have considered potentially, again, hedging those base fees. The trade-off, we haven't done the full work yet. The high-level trade-off would likely be significantly lower required capital, but at the cost of operating capital generation moving forward. And we're not pencils down on it yet, so I can't give you a full number, but Duncan, anything to add?

No.

Thank you. Michael, you're in front.

And it was just one question. You know the [ EUR 4.1 billion ] financial assets. Can you give a split between each of the businesses?

Yes, we can. I don't know if you have a...

We don't have at our fingertips, but we'll easily provide it.

Are there any further questions...

One question on the Slide B12 and there is a part that's called improving the straight-through processing from 20% to 60% of all applications. If you talk about an insurance company, I would say straight through processing should be quite important. Are you now at 20%? And will it go to 60%? Or it sounds quite low, but I don't know whether this exactly refers to, Slide B12.

Yes. So...

Can we bring it up perhaps so we have it available?

The booklet is available so we can quickly check it.

Yes. So it's -- yes, it is not uncommon on the insurance side to be in that 20% range. We -- part of the investment that Mr. Rider referred to in taking back these actions is when we own them, we have 2 ways to make it more efficient, right? One is process for engineering. The next one is technology, right? That straight-through processing is critically important. Straight-through processing when you're dealing with agents takes 2 pieces. You have to build the pipe and then you need adoption. So we will get from the 20% to 60% fairly quickly. I'm going to use a term that Lard used yesterday when we were having a conversation. The reason I know we can achieve that is we've done it before. So the management team that sits at Transamerica U.S. has done exactly this. And it starts with reengineering, new technology, automation, and then you work with your agents on adoption.

You have follow-on questions, Jason?

Yes, it's the third one that just got away. It came back. Just on the -- as we saw the capital generation from the VA book come down over the last 2 years significantly. This now basically it's very low within your 200 OCG that you have coming out of the financial assets. So should we expect that could actually help over the next couple of years if markets are to be a bit better? Is that fair to say? And how much of it should we expect to see back in terms of capital generation?

So sure, I could take that. So again, sorry, because we had been from the 300 sort of odd about 1.5 years ago, and we came all the way to 50 to 100 or thereabouts. So just to understand how much we can flow back in a certain way.

So we've built in about [ $100 million ] a year as our expectation. Certainly, as markets go up, you get some positive swings. That said, again, the decisions we've made in the past have -- we have prioritized volatility reduction and capital protection over ongoing capital generation. So bank on the 100. So...

Can I have a mic in the middle with Andrew, please?

Just a quick one on the IUL product design. So is my understanding the premiums increase as, I guess, the policy matures because of mortality charge increases. So have you seen elevated lapses more recently with cost of living pressures, is the first one? And then has there ever been any sort of regulatory I guess, investigations or issues into the product and the fact that the mortality charge and premiums are higher is when consumers arguably need that mortality protection the most when they get to older ages?

Jamie, can you...

Yes. So the premiums do increase as mortality charge increases, but that is known and part of the illustration upfront. And we have not seen a significant increase in lapses due to the economics. I'm not aware of any specific regulatory investigations around this product and the way the premiums work. It's a product that is well known to every state regulator in the U.S. and to the regulatory provinces in Canada. So I am not aware of any specific regulatory issues with the way the IUL product works.

There has been an emphasis on, call it, fair principal illustrations. And the ability for some companies utilizing illustration factors that are now not allowed. We have not participated in those illustration factors, so we've not been affected.

Okay. We're going to your last question of the day before Lard wraps up. So Benoit, the floor is yours.

Just on the supervision. Assuming it is moving to the U.S., will you get more freedom on kind of managing your holding cash? I guess DNB was always a bit of pain for you, I guess. But will that change you think in terms of flexibility at holding level? Or will that -- no?

[ Lard ], go ahead.

First of all, again, we're still in conversations with the college of supervisors to see what the outcome of that will be. And we hope at the time of closing that this will be clear and we can inform you. That's one thing. Secondly, we're running our business the way we run our business. We have a clearly stated capital management policy. That's how we run it. We have a clear risk appetite. We have -- we manage the company according to those practices. That's how we run our business, irrespective of the regulator who will become our -- who will become our group regulator.

Thank you very much. I thank all the presenters and the others for the Q&A session. Lard, can I invite you over here for your closing remarks before we go to the drinks?

Yes. I hope you're ready for my 4-hour closing speech. Because we have covered a lot of ground today. We plan to accelerate the execution of our strategy. drive profitable growth and create value for our shareholders. And I hope that you've got a clear sense of how we will achieve this, but let me take a moment to summarize. I want you to take home 5 points from our presentations. We expect to, number one, complete the transaction with ASR in the coming weeks and start the associated share buyback. Number two, we aim to increase Transamerica's value by building America's leading middle market life insurance and retirement company. Number three, we will meaningfully accelerate the release of capital from our U.S. financial assets through newly identified management actions. Number four, we will continue to strengthen our U.K. and fully owned asset management businesses and invest to grow our successful insurance and asset management joint ventures. And number five, we have significant financial flexibility at the holding, and we will remain disciplined and rational as we put that flexibility to work. Wilford and his team expanded on the attractiveness of the U.S. middle market and our proposition there. The U.S. middle market is large. It's underserved. It offers room for growth. Transamerica is uniquely positioned to serve this market effectively. Now our ambitions are underpinned with granular plans. And trust me, we will be rigorous in the execution. Matt Rider took you through how Aegon's transformation will continue to benefit shareholders. He updated you on our capital management approach and our commitment to maintain a strong balance sheet throughout the transformation. He also walked you through the financial implications of Transamerica's plans and how these plans will contribute to the group's financial targets for 2025. Now I hope that we have made clear to you that we are guided by the value that we can create for our shareholders and our stakeholders in everything that we do. We will be laser focused in this next chapter of Aegon's transformation which entails a large-scale reallocation of capital. We will continue to emphasize the importance of a high-performance culture and further intensify the organizational rhythm. The actions that we are taking result in ambitious but realistic targets. We will increase operating capital generation. We will grow our free cash flow. The quality of both metrics will also improve, and we will be disciplined in the deployment of our financial flexibility. This gives us the confidence that we can grow the dividend to a targeted level of around EUR 0.40 per share over 2025. Now as a final comment, I would like to thank our staff for their ongoing commitment to our customers despite the high pace of change in our organization. Every day I walk into the office, I am inspired by their dedication. None of this is possible without it. Also, a special thanks for those on both sides of the Atlantic, who worked hard preparing for this event. And of course, many, many thanks to the Head of our Investor Relations team, Jan Willem Weidema, in particular. Jan Willem, we will miss you, man, we really do. Now let me close off today's session by thanking everybody who joined us today. I think it has been a great session, and I would like to thank you all for attending or for tuning in. And of course, I'd like to thank you all for the great questions that you have. We are excited, we're fired up about the opportunities ahead of us, and we are determined to make this next chapter of our transformation a success. So thank you very much. Thanks for being here, go safely home and still we meet again. Stay tuned. Thank you.