Investments

12 Months Ended

Dec. 31, 2019

22 Investments

Investments for general account comprise financial assets, excluding derivatives, as well as investments in real estate.


	Note		2019		2018
Available-for-sale (AFS)				89,404		84,675
Loans				44,591		42,653
Financial assets at fair value through profit or loss (FVTPL)				9,080		8,597
Total financial assets, excluding derivatives		22.1		143,075		135,925
Investments in real estate		22.2		2,901		2,700
Total investments for general account				145,976		138,625

22.1 Financial assets, excluding derivatives


	AFS		FVTPL		Loans		Total		Fair value
2019
Shares		409		1,813		-		2,221		2,221
Debt securities		82,918		3,934		-		86,853		86,853
Money market and other short-term investments		5,169		158		-		5,327		5,327
Mortgage loans		-		-		37,750		37,750		42,567
Private loans		-		-		4,487		4,487		5,159
Deposits with financial institutions		-		-		141		141		141
Policy loans		-		-		2,024		2,024		2,024
Other		908		3,175		188		4,272		4,272
At December 31, 2019		89,404		9,080		44,591		143,075		148,563

2018
Shares		478		1,682		-		2,161		2,161
Debt securities		77,340		3,913		-		81,253		81,253
Money market and other short-term investments		5,955		352		-		6,307		6,307
Mortgage loans		-		-		36,240		36,240		39,758
Private loans		-		-		4,103		4,103		4,494
Deposits with financial institutions		-		-		141		141		141
Policy loans		-		-		1,973		1,973		1,973
Other		902		2,649		196		3,747		3,747
At December 31, 2018		84,675		8,597		42,653		135,925		139,834

Of the debt securities, money market and other short-term investments, mortgage loans and private loans EUR 14,654 million is current (2018: EUR 13,287 million).

Refer to note 44 Fair value for further detail on fair value measurement.

Loan allowance

Movement on the loan allowance account during the year were as follows:


	2019			2018
At January 1		(138	)		(165	)
Addition charged to income statement		(76	)		(35	)
Reversal to income statement		5			3
Amounts written off		44			40
Net exchange differences		-			(1	)

Other		-			20
At December 31		(165	)		(138	)

22.2 Investments in real estate


	2019			2018
At January 1		2,700			2,147
Additions		179			472
Subsequent expenditure capitalized		16			3
Disposals		(331	)		(209	)
Fair value gains / (losses)		317			261
Net exchange differences		9			27
Other		11			(1	)
At December 31		2,901			2,700

100% of the value of Aegon’s properties, both for general account and for account of policyholders, were appraised (2018: 99%), of which 99% was performed by independent external appraisers (2018: 98%).

Of the investments in real estate EUR 653 million (2018: EUR 530 million) is held by Aegon Americas and EUR 2,229 million (2018: EUR 2,150 million) is held by Aegon the Netherlands.

Aegon Americas has invested in a commercial property portfolio, consisting of office, retail and industrial buildings. These non-cancellable leases have remaining lease terms up to 20 years. Most leases include a clause to enable upward revision of the rental charge on an annual basis according to either a fixed schedule or prevailing market conditions.

Aegon the Netherlands has invested in long-term residential property leases that can be terminated subject to a short-term notice. Under Dutch law, the maximum annual rent increase on residential property rented in the affordable housing segment is specified by the Dutch national government and equals the annual inflation rate plus a small margin.

Refer to note 45 Commitments and contingencies for a description of non-cancellable lease rights.

Rental income of EUR 83 million (2018: EUR 82 million; 2017: EUR 71 million) is reported as part of investment income in the income statement. Direct operating expenses (including repairs and maintenance) arising from investment property that generated rental income during the period amounted to EUR 59 million (2018: EUR 63 million; 2017: EUR 71 million). In 2019, EUR 2 million of direct operating expenses is related to investment properties that did not generate rental income during the period (2018: EUR 2 million; 2017: EUR 1 million).

There are no restrictions on the realizability of investment property or the remittance of income and proceeds of disposal.

Refer to note 45 Commitments and contingencies for a summary of contractual obligations to purchase investment property.