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Fair value (Tables)
 12 Months Ended
Dec. 31, 2019
Text block [abstract]  
Summary of the Analysis of Assets and Liabilities Recorded at Fair Value on a Recurring Basis by Level of the Fair Value Hierarchy
The table below provides an analysis of assets and liabilities recorded at fair value on a recurring basis by level of the fair value hierarchy:
 
    
                Level I
   
              Level II
   
            Level III
   
          Total 2019  
Assets carried at fair value
        
Available-for-sale
        
Shares
   92    160    157    409 
Debt securities
   25,528    56,317    1,074    82,918 
Money market and other short-term instruments
   1,255    3,914    -    5,169 
Other investments at fair value
   -    426    482    908 
  
 
26,875
 
  
 
60,817
 
  
 
1,712
 
  
 
89,404
 
Fair value through profit or loss
        
Shares
   106    306    1,401    1,813 
Debt securities
   204    3,727    4    3,934 
Money market and other short-term instruments
   19    139    -    158 
Other investments at fair value
   1    1,125    2,049    3,175 
Investments for account of policyholders
1)
   120,271    103,712    1,805    225,788 
Derivatives
   96    11,006    56    11,157 
Investments in real estate
   -    -    2,901    2,901 
Investments in real estate for policyholders
   -    -    586    586 
  
 
120,696
 
  
 
120,014
 
  
 
8,802
 
  
 
249,512
 
Revalued amounts
        
Real estate held for own use
   -    -    208    208 
  
 
-
 
  
 
-
 
  
 
208
 
  
 
208
 
                     
Total assets at fair value
  
 
147,571
 
  
 
180,831
 
  
 
10,722
 
  
 
339,124
 
Liabilities carried at fair value
        
Investment contracts for account of policyholders
2)
   -    59,759    197    59,956 
Borrowings
3)
   -    461    -    461 
Derivatives
   59    8,476    3,081    11,616 
Total liabilities at fair value
  
 
59
 
  
 
68,696
 
  
 
3,278
 
  
 
72,033
 
1
 
The investments for account of policyholders included in the table above only include investments carried at fair value through profit or loss.
2
 
The investment contracts for account of policyholders included in the table above represents only those investment contracts carried at fair value.
3
 
Total borrowings on the statement of financial position contain borrowings carried at amortized cost that are not included in the above schedule.
 
                    Level I                 Level II               Level III             Total 2018  
Assets carried at fair value
        
Available-for-sale
        
Shares
   82    155    241    478 
Debt securities
   24,652    51,446    1,242    77,340 
Money market and other short-term instruments
   1,427    4,528    -    5,955 
Other investments at fair value
   -    409    493    902 
 
  
 
26,160
 
  
 
56,538
 
  
 
1,976
 
  
 
84,675
 
Fair value through profit or loss
        
Shares
   217    239    1,226    1,682 
Debt securities
   1,868    2,028    17    3,913 
Money market and other short-term instruments
   17    335    -    352 
Other investments at fair value
   1    1,272    1,376    2,649 
Investments for account of policyholders
1)
   103,977    87,893    1,871    193,741 
Derivatives
   53    7,527    35    7,615 
Investments in real estate
   -    -    2,700    2,700 
Investments in real estate for policyholders
   -    -    612    612 
 
  
 
106,134
 
  
 
99,295
 
  
 
7,837
 
  
 
213,266
 
Revalued amounts
        
Real estate held for own use
   -    -    263    263 
 
  
 
-
 
  
 
-
 
  
 
263
 
  
 
263
 
        
Total assets at fair value
  
 
132,294
 
  
 
155,833
 
  
 
10,077
 
  
 
298,204
 
Liabilities carried at fair value
        
Investment contracts for account of policyholders
2)
   -    49,641    206    49,847 
Borrowings
3)
   -    536    -    536 
Derivatives
   93    4,648    2,489    7,230 
Total liabilities at fair value
  
 
93
 
  
 
54,824
 
  
 
2,695
 
  
 
57,613
 
1
 
The investments for account of policyholders included in the table above only include investments carried at fair value through profit or loss.
2
 
The investment contracts for account of policyholders included in the table above represents only those investment contracts carried at fair value.
3
 
Total borrowings on the statement of financial position contain borrowings carried at amortized cost that are not included in the above schedule.
Schedule of Transfers between Level 1 and Level II for Financial Assets and Liabilities Recorded at Fair Value on Recurring Basis
The table below shows transfers between Level I and Level II for financial assets and financial liabilities recorded at fair value on a recurring basis.
 
    
Total 2019
   Total 2018 
    
Transfers Level I
to Level II
   
Transfers Level II
to Level I
   
Transfers Level I
to Level II
   
Transfers Level II
to Level I
 
Assets carried at fair value
        
Available-for-sale
        
Debt securities
   12    3    -    - 
 
  
 
12
 
  
 
3
 
  
 
-
 
  
 
-
 
Fair value through profit or loss
        
Shares
   8    8    3    1 
Investments for account of policyholders
   -    8    -    (4) 
 
  
 
8
 
  
 
16
 
  
 
3
 
  
 
(3
) 
Total assets at fair value
  
 
20
 
  
 
19
 
  
 
3
 
  
 
(3
) 
        
Total Liabilities carried at fair value
  
 
-
 
  
 
-
 
  
 
-
 
  
 
-
 
Disclosures of Changes in Level 3 Assets
The following table summarizes the change of all assets and liabilities measured at estimated fair value on a recurring basis using significant unobservable inputs (Level III), including realized and unrealized gains (losses) of all assets and liabilities and unrealized gains (losses) of all assets and liabilities still held at the end of the respective period.
 
Assets carried
at fair value
 
At
January 1,
2019
  
Acquisitions
through
business
combinations
  
Disposal
of a
business
  
Total
gains /
losses
in income
statement 
1
  
Total
gains /
losses in
OCI
2
  
Purchases
  
Sales
  
Settlements
  
Net
exchange
difference
  
Reclassification
  
Transfers
from
levels I
and II
  
Transfers
to levels I
and II
  
Transfers
to disposal
groups
  
At
December 31,
2019
  
Total
unrealized
gains and
(losses)
for the
period
recorded in
the P&L for
instruments
held at
December 31,
2019
3
 
Available-for-sale
               
Shares
  241   -   -   -   (5)   22   (100)   -   4   2   -   (7)   -   157   - 
Debt securities
  1,242   -   -   3   21   319   (317)   (68)   19   (2)   52   (195)   -   1,074   - 
Money markets and other short-term instruments
  -   -   -   -   -   1,061   (855)   (103)   -   -   126   (229)   -   -   - 
Other investments at fair value
  493   -   -   (100)   (56)   183   (25)   (23)   9   -   -   -   -   482   - 
  
 
1,976
 
 
 
-
 
 
 
-
 
 
 
(97
) 
 
 
(40
) 
 
 
1,584
 
 
 
(1,297
) 
 
 
(194
) 
 
 
32
 
 
 
1
 
 
 
178
 
 
 
(431
) 
 
 
-
 
 
 
1,712
 
 
 
-
 
Fair value through profit or loss
               
Shares
  1,226   -   -   72   -   368   (266)   -   1   -   -   -   -   1,401   62 
Debt securities
  17   -   -   (1)   -   1   (12)   (1)   -   (1)   -   -   -   4   - 
Other investments at fair value
  1,376   -   -   34   -   884   (268)   -   23   -   85   (86)   -   2,049   36 
Investments for account of policyholders
  1,871   -   -   45   -   435   (567)   -   20   -   -   -   -   1,805   86 
Derivatives
  35   -   -   19   -   35   (33)   -   -   -   -   -   -   56   20 
Investments in real estate
  2,700   -   -   317   -   206   (331)   -   9   -   -   -   -   2,901   2 
Investments in real estate for policyholders
  612   -   -   (18)   -   2   (43)   -   34   -   -   -   -   586   (27) 
  
 
7,837
 
 
 
-
 
 
 
-
 
 
 
468
 
 
 
-
 
 
 
1,931
 
 
 
(1,521
) 
 
 
(1
) 
 
 
88
 
 
 
(1
) 
 
 
85
 
 
 
(86
) 
 
 
-
 
 
 
8,802
 
 
 
179
 
Revalued amounts
               
Real estate held for own use
  263   -   -   7   3   (5)   (62)   -   3   -   -   -   -   208   - 
 
 
263
 
 
 
-
 
 
 
-
 
 
 
7
 
 
 
3
 
 
 
(5
) 
 
 
(62
) 
 
 
-
 
 
 
3
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
208
 
 
 
-
 
Total assets at fair value
 
 
10,077
 
 
 
-
 
 
 
-
 
 
 
379
 
 
 
(37
) 
 
 
3,509
 
 
 
(2,880
) 
 
 
(194
) 
 
 
122
 
 
 
-
 
 
 
263
 
 
 
(517
) 
 
 
-
 
 
 
10,722
 
 
 
179
 
Liabilities carried at fair value
               
Investment contracts for account of policyholders
  206   -   -   9   -   4   (23)   -   1   -   -   -   -   197   (10) 
Derivatives
  2,489   -   -   597   4   -   (22)   -   13   -   -   -   -   3,081   84 
  
 
2,695
 
 
 
-
 
 
 
-
 
 
 
605
 
 
 
4
 
 
 
4
 
 
 
(46
) 
 
 
-
 
 
 
15
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
3,278
 
 
 
75
 
1
 
Includes impairments and movements related to fair value hedges. Gains and losses are recorded in the line item Results from financial transactions of the income statement.
2
 
Total gains and losses are recorded in line items: Gains / (losses) on revaluation of
available-for-sale
investments, (Gains) / losses transferred to the income statement on disposal and impairment of
available-for-sale
investments and Changes in revaluation reserve real estate held for own use of the statement of other comprehensive income.
3
 
Total gains / (losses) for the period during which the financial instrument was in Level III.
 
 
Assets carried
at fair value
 
At
January 1,
2018
  
Acquisitions
through
business
combinations
  
Disposal
of a
business
  
Total
gains /
losses
in
 
income
statement 
1
  
Total
gains /
losses in
OCI
2
  Purchases  Sales  Settlements  
Net
exchange
difference
  Reclassification  
Transfers
from
levels I
and II
  
Transfers
to levels I
and II
  
Transfers
to disposal
groups
  
At
December 31,
2018
  
Total
unrealized
gains and
(losses)
for the
period
recorded in
the P&L for
instruments
held at
December 31,
2018
3
 
Available-for-sale
               
Shares
  288   -   -   21   (12)   9   (77)   -   10   2   -   -   -   241   - 
Debt securities
  1,447   -   -   26   2   494   (76)   (452)   51   1   58   (310)   -   1,242   - 
Other investments at fair value
  583   -   -   (83)   (38)   125   (102)   (21)   25   3   -   -   -   493   - 
  
 
2,318
 
 
 
-
 
 
 
-
 
 
 
(36
) 
 
 
(48
) 
 
 
629
 
 
 
(255
) 
 
 
(473
) 
 
 
87
 
 
 
6
 
 
 
58
 
 
 
(310
) 
 
 
-
 
 
 
1,976
 
 
 
-
 
Fair value through profit or loss
               
Shares
  604   -   -   104   -   541   (61)   1   1   36   -   -   -   1,226   105 
Debt securities
  4   -   -   (25)   -   37   -   -   -   -   -   -   -   17   (24) 
Other investments at fair value
  1,255   -   -   11   -   332   (307)   -   64   -   94   (72)   -   1,376   3 
Investments for account of policyholders
  1,784   130   -   76   -   537   (660)   -   3   -   -   -   -   1,871   35 
Derivatives
  57   -   -   57   -   -   (80)   -   -   -   -   -   -   35   59 
Investments in real estate
  2,147   -   -   261   -   474   (209)   -   27   -   -   -   -   2,700   202 
Investments in real estate for policyholders
  655   -   -   5   -   2   (43)   -   (7)   -   -   -   -   612   4 
 
 
6,506
 
 
 
130
 
 
 
-
 
 
 
490
 
 
 
-
 
 
 
1,924
 
 
 
(1,360
) 
 
 
-
 
 
 
90
 
 
 
36
 
 
 
94
 
 
 
(72
) 
 
 
-
 
 
 
7,837
 
 
 
383
 
Revalued amounts
               
Real estate held for own use
  307   -   (1)   (19)   (39)   17   (10)   -   7   -   -   -   -   263   5 
  
 
307
 
 
 
-
 
 
 
(1
) 
 
 
(19
) 
 
 
(39
) 
 
 
17
 
 
 
(10
) 
 
 
-
 
 
 
7
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
263
 
 
 
5
 
Total assets at fair value
 
 
9,130
 
 
 
130
 
 
 
(1
) 
 
 
435
 
 
 
(87
) 
 
 
2,570
 
 
 
(1,624
) 
 
 
(472
) 
 
 
185
 
 
 
42
 
 
 
151
 
 
 
(382
) 
 
 
-
 
 
 
10,077
 
 
 
388
 
Liabilities carried at fair value
               
Investment contracts for account of policyholders
  219   -   -   (10)   -   7   (14)   -   4   -   -   -   -   206   - 
Derivatives
  1,845   -   -   613   -   -   -   -   31   -   -   -   -   2,489   613 
  
 
2,064
 
 
 
-
 
 
 
-
 
 
 
604
 
 
 
-
 
 
 
7
 
 
 
(14
) 
 
 
-
 
 
 
35
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
2,695
 
 
 
614
 
1
 
Includes impairments and movements related to fair value hedges. Gains and losses are recorded in the line item Results from financial transactions of the income statement.
2
 
Total gains and losses are recorded in line items: Gains / (losses) on revaluation of
available-for-sale
investments, (Gains) / losses transferred to the income statement on disposal and impairment of
available-for-sale
investments and Changes in revaluation reserve real estate held for own use of the statement of other comprehensive income.
3
 
Total gains / (losses) for the period during which the financial instrument was in Level III.
Information about Significant Unobservable Inputs
The table below presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level III financial instruments.
 
    
Valuation
technique 
1)
  
Significant
unobservable input 
2)
  
December
31, 2019
   
Range
(weighted
average)
   December
31, 2018		   
Range
(weighted
average)
 
Assets carried at fair value
            
Available-for-sale
            
Shares
  Net asset value
3)
  n.a.   119    n.a.    205    n.a. 
 
  Other  n.a.   38    n.a.    36    n.a. 
      
 
157
 
    
 
241
 
  
Debt securities
  Broker quote  n.a.   818    n.a.    985    n.a. 
  Discounted cash flow  Credit spread   25    3.24%    17    3.38% 
  Discounted cash flow  Constant Prepayment Rate   7    25.00%    -    - 
  Discounted cash flow  Constant Prepayment Rate   30    7.82%    -    - 
 
  Other  n.a.   193    n.a.    240    n.a. 
      
 
1,074
 
    
 
1,242
 
  
Other investments at fair value
            
Tax credit investments
  Discounted cash flow  Discount rate   435    6.5%    435    6.8% 
Investment funds
  Net asset value
3)
  n.a.   14    n.a.    24    n.a. 
Other
  Other  n.a.   33    n.a.    34    n.a. 
      
 
482
 
    
 
493
 
  
At December 31
  
 
  
 
  
 
1,712
 
  
 
 
 
  
 
1,976
 
  
 
 
 
Fair value through profit or loss
            
Shares
  Other  n.a.   1,401    n.a.    1,226    n.a. 
Debt securities
  Other  n.a.   4    n.a.    17    n.a. 
      
 
1,405
 
    
 
1,243
 
  
Other investments at fair value
            
Investment funds
  Net asset value
3)
  n.a.   1,984    n.a.    1,334    n.a. 
Other
  Other  n.a.   65    n.a.    42    n.a. 
      
 
2,049
 
    
 
1,376
 
  
Derivatives
            
Longevity swap
  Discounted cash flow  Mortality   55    n.a.    33    n.a. 
Other
  Other  n.a.   -    n.a.    -    n.a. 
      
 
55
 
    
 
33
 
  
Real estate
            
  Direct capitalization       
4.25% - 5.5%
      
4.25% - 7.5%
 
Investments in real estate
  technique  Capitalization rate   580    (3.3%)    427    (4.4%) 
  Appraisal value  n.a.   2,229    n.a.     2,150    n.a.  
 
  Other  n.a.   92    n.a.     123    n.a.  
 
  
 
  
 
  
 
2,901
 
  
 
 
 
  
 
2,700
 
  
 
 
 
At December 31
  
 
  
 
  
 
6,410
 
  
 
 
 
  
 
5,352
 
  
 
 
 
Revalued amounts
            
  Direct capitalization       
7.75% - 9.50%
      
8.25% - 9.50%
 
Real estate held for own use
  technique  Capitalization rate   54    (9.0%)    53    (8.9%) 
  Appraisal value  n.a.   108    n.a.     101    n.a.  
 
  Other  n.a.   46    n.a.     108    n.a.  
At December 31
  
 
  
 
  
 
208
 
  
 
 
 
  
 
263
 
  
 
 
 
        
            
Total assets at fair value
4)
  
 
  
 
  
 
8,330
 
  
 
 
 
  
 
7,592
 
  
 
 
 
Liabilities carried at fair value
            
Derivatives
            
Embedded derivatives in insurance contracts
  Discounted cash flow  Own credit spread   3,072    
0.2% - 0.3%
(0.24%)
 
 
   2,484    
0.25% - 0.40%
(0.30%)
 
 
Longevity swap
  Discounted cash flow  Mortality   9    n.a.     5    n.a.  
Other
  Other  n.a.   -    n.a.     -    n.a.  
Total liabilities at fair value
  
 
  
 
  
 
3,081
 
  
 
 
 
  
 
2,489
 
  
 
 
 
1
Other in the table above (column Valuation technique) includes investments for which the fair value is uncorroborated and no broker quote is received.
2
Not applicable (n.a.) has been included when the unobservable inputs are not developed by the Group and are not reasonably available. Refer to the section Fair value measurement in this note for a detailed description of Aegon’s methods of determining fair value and the valuation techniques.
3
Net asset value is considered the best approximation to the fair value of these financial instruments.
4
Investments for account of policyholders are excluded from the table above and from the disclosure regarding reasonably possible alternative assumptions. Policyholder assets, and their returns, belong to policyholders and do not impact Aegon’s net income or equity. The effect on total assets is offset by the effect on total liabilities. Derivatives exclude derivatives for account of policyholders amounting to EUR 1 million (2018: EUR 2 million).
Effect of Changes in Significant Unobservable Assumptions to Reasonably Possible Alternatives
The table below presents the impact on a fair value measurement of a change in the own credit spread by 20 basis points included in the discount rate.
 
      
December
31, 2019
    
Effect of reasonably
possible alternative
assumptions (+/-)
   
December
    31, 2018
    
Effect of reasonably  
possible alternative  
assumptions (+/-)  
            
    Increase
    
    Decrease
             Increase        Decrease 
Financial liabilities carried at fair value
                      
Embedded derivatives in insurance contracts
    3,072    158     (152)   2,484    131     (126) 
Carrying Values and Estimated Fair Values of Assets and Liabilities
The following table presents the carrying values and estimated fair values of assets and liabilities, excluding assets and liabilities which are carried at fair value on a recurring basis.
 
2019
  
Carrying amount
December 31,
2019
   
            Estimated fair value  hierarchy
   
Total estimated fair
  value December 31,
2019
 
         
Level I
   
Level II
   
Level III
      
Assets
          
Mortgage loans - held at amortized cost
   37,750    -    1    42,566    42,567 
Private loans - held at amortized cost
   4,487    -    65    5,094    5,159 
Other loans - held at amortized cost
   2,353    45    2,080    228    2,353 
Liabilities
          
Subordinated borrowings - held at amortized cost
   2,207    1,560    855    -    2,416 
Trust pass-through securities - held at amortized cost
   136    -    144    -    144 
Borrowings – held at amortized cost
   8,845    1,728    30    7,565    9,322 
Investment contracts - held at amortized cost
   18,382    -    -    18,964    18,964 
2018
  
Carrying amount
December 31,
2018
   Estimated fair value hierarchy   
Total estimated fair
value December 31,
2018
 
         Level I   Level II   Level III      
Assets
          
Mortgage loans - held at amortized cost
   36,240    -    1    39,757    39,758 
Private loans - held at amortized cost
   4,103    -    42    4,452    4,494 
Other loans - held at amortized cost
   2,310    13    2,064    233    2,310 
Liabilities
          
Subordinated borrowings - held at amortized cost
   1,389    1,355    -    -    1,355 
Trust pass-through securities - held at amortized cost
   133    -    128    -    128 
Borrowings – held at amortized cost
   11,525    1,570    28    10,287    11,885 
Investment contracts - held at amortized cost
   17,825    -    -    18,028    18,028 
Carrying Values and Estimated Fair Values of Assets and Liabilities
Summary of total financial assets and financial liabilities at fair value through profit or loss
The table that follows summarizes the carrying amounts of financial assets and financial liabilities that are classified as at fair value through profit or loss, with appropriate distinction between those financial assets and financial liabilities held for trading and those that, upon initial recognition, were designated as at fair value through profit or loss.
 
    
                             
2019
                            
                                2018                             
    
Trading
   
Designated  
  Trading   Designated 
Investments for general account
   277    8,803    174    8,424 
Investments for account of policyholders
   -    225,788    -    193,741 
Derivatives with positive values not designated as hedges
   10,634    -    7,181    - 
Total financial assets at fair value through profit or loss
  
 
10,910
 
  
 
234,591
 
  
 
7,355
 
  
 
202,165
 
Investment contracts for account of policyholders
   -    59,956    -    49,847 
Derivatives with negative values not designated as hedges
   11,175    -    6,935    - 
Borrowings
   -    461    -    536 
Total financial liabilities at fair value through profit or loss
  
 
11,175
 
  
 
60,417
 
  
 
6,935
 
  
 
50,383
 
Summary of Gains and losses recognized in the income statement on financial assets and financial liabilities
Gains and losses recognized in the income statement on financial assets and financial liabilities classified as at fair value through profit or loss can be summarized as follows:
 
    
                               
2019
                            
                      2018                             
    
        
Trading
  
Designated  
  Trading   Designated   
Net gains and (losses)
  21,020  13,574    (4,584)  (7,356)