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Capital management and solvency (Tables)

12 Months Ended

Dec. 31, 2019

Summary of Composition of Available Own Funds Across Tiers

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


Available own funds	December 31, 2019 Available own funds		December 31, 2018 Available own funds
Unrestricted Tier 1		12,724		12,204
Restricted Tier 1		2,614		3,406
Tier 2		2,370		1,487
Tier 3		762		505
Total available own funds		18,470		17,602

Summary of Equity Compares to Solvency II Own Funds

IFRS equity compares to Solvency II own funds as follows:


	December 31, 2019			December 31, 2018
Shareholders’ Equity		21,850			19,200
IFRS adjustments for Other Equity instruments and non controlling interests		2,591			3,342
Group Equity		24,441			22,542
Solvency II revaluations & reclassifications		(7,607	)		(6,593	)
Transferability restrictions 1)		(1,973	)		(1,884	)
Excess of Assets over Liabilities		14,861			14,065
Availability adjustments		4,446			4,326
Fungibility adjustments 2)		(838	)		(789	)
Available own funds		18,470			17,602

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

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

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

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


	Note		2019			2018
Total shareholders’ equity - based on IFRS as adopted by the EU		2		22,457			19,518

Non-controlling interests and Long Term Incentive Plans not yet vested		31, SOFP 2)		73			80

Revaluation reserves		30		(5,868	)		(3,436	)

Adjusted shareholders’ equity				16,662			16,162
Perpetual contingent convertible securities		31		500			-

Junior perpetual capital securities		31		1,564			2,808

Perpetual cumulative subordinated bonds		31		454			454

Fixed floating subordinated notes		32		1,404			1,389

Fixed subordinated notes		32		804			-

Trust pass-through securities		33		136			133

Currency revaluation other equity instruments 1)				54			110

Hybrid leverage				4,916			4,895

Senior debt 3)		37		1,738			1,774

Senior leverage				1,738			1,774

Total gross financial leverage				6,653			6,669


Total capitalization				23,316			22,831


Gross financial leverage ratio 4)				28.5%			29.2%


Fixed Charge Coverage				7.7x			8.2x

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

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

3	Senior debt for the gross financial leverage calculation also contains swaps for an amount of EUR (7) million (2018: EUR (1) million).

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

Schedule of Total Distributable Items

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


Distributable items 1)	2019			2018

Equity attributable to shareholders based on IFRS as adopted by the EU		22,457			19,518

Non-distributable items:

Share capital		(323	)		(322	)

Legal reserves 2)		(8,565	)		(5,890	)
At December 31		13,569			13,307

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

2	The legal reserves in respect of the foreign currency translation reserve (FCTR), group companies and the positive revaluations in the revaluation reserves, cannot be freely distributed.