S&P Affirms Ratings on AEGON and Subsidiaries

June 4, 2002

Standard & Poor’s announced that it has affirmed all its ratings, including its double-‘A’-minus long-term and its ‘A-1’-plus short-term counterparty credit ratings, on AEGON N.V., the holding company for the Netherlands-based AEGON Group.

S&P noted that the AEGON group now has “more than 60% of its activities in U.S. life insurance.” It also affirmed its double-‘A’-plus counterparty credit and insurer financial strength ratings on AEGON Levensverzekering NV and AEGON Schadeverzekering NV, the main Dutch life and non-life operating companies, respectively, and on Scottish Equitable PLC,” which is now recognized as a core subsidiary of the AEGON group.”

“Having raised concerns about the quality of group capital in August 2001, Standard & Poor’s is now satisfied that reported equity is not at risk from significant potential write-downs in DAC. AEGON has demonstrated that its accounting policies for DAC are not aggressive and that the accounting measure is regularly monitored for recoverability,” stated Rob Jones, a director at Standard & Poor’s Financial Services Group in London.

S&P’s bulletin stated that “The group maintains very strong business positions in the U.S. [AEGON is the parent company of Transamerica], The Netherlands, and the U.K. The risk profile is low, given the strong focus on life and pensions business, at about 80% of group revenues. Asset risk remains the most significant risk, with an emphasis on credit risk in the EUR100 billion ($93.71 billion) investment portfolio of bonds, loans, and private placements.”

AEGON’s return on equity “has averaged 16.4% over the past five years,” the report stated, while net income over the same period grew by 32% (compound average growth rate) to € 2.4 billion($2.25 billion) in 2001. “This growth was driven by the large acquisitions in the U.S. — Transamerica Corp. (AA-/Stable/–) in 1999 and Providian’s insurance operations in 1997 — but also via successful integration of these businesses and steady organic growth in the existing businesses,” it concluded.

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