9 ANNUAL REPORT 2010   OUR STRATEGY  STRATEGY Implementing the strategy Reallocate capital AEGON’s objective is to allocate more capital towards  those markets that offer higher returns and strong  prospects for growth.  Improving the company’s risk-return profile is a key part  of AEGON’s long-term strategy. Steps taken in recent  years have lessened the company’s exposure to  fluctuations in world financial markets. These steps have  included:  Improving risk-return profi le ■ Sale in April 2010 of AEGON’s funeral insurance  business in the Netherlands.  ■ 2010 saw the first full year of operations of AEGON’s  partnerships in Brazil and Japan and further growth  of business in China and India.  ■ Reducing AEGON’s exposure to equity markets. ■ Reducing credit exposure through the run-off of  the company’s institutional spread-based business in  the United States and de-emphasizing fi xed annuities. ■ Increasing equity hedging programs in the  Netherlands, and in the Americas for variable  annuities. Approximately 80% of AEGON’s guaranteed  minimum income benefit variable annuities back-book  in the United States is delta equity hedged. AEGON’s  aim is 100% by the end of 2012.  Equity exposure of AEGON’s general account In EUR billion ■ Shifting focus from spread to fee-based products,  particularly in the company’s US businesses. As part  of this, AEGON’s institutional spread-based business  was placed in run-off in 2009. AEGON is also taking  steps to de-emphasize fixed annuities and expand its  US pension business.  ■ Exploring strategic options for Transamerica Re,  AEGON’s life reinsurance unit, including a possible  divestment. AEGON believes Transamerica Re offers  only a limited long-term strategic fit with AEGON’s  core life insurance, pension and asset management  businesses.  Steps AEGON is taking ■ AEGON intends to allocate more capital to higher- growth markets in Central & Eastern Europe, Asia,  Spain and Latin America. This will have the effect of  reducing the relative weight of the US businesses  within AEGON in the years ahead.  ■ Within the company’s main markets – the United States,  the Netherlands and the United Kingdom – AEGON will  sharpen its focus on opportunities for growth within  specific market segments.  ■ AEGON is taking measures to improve the company’s  risk-return profile. The company has conducted a  thorough review of its businesses to ensure they meet  requirements in terms of cash flow, return on capital  and earnings growth. In addition, the company is  working to ensure that it continues to provide  products that correspond to the life cycle needs of  AEGON’s customers.  8 6 4 2 0 7.9 7.7 3.9 2.6 2.1 2.4 05 06 07 08 09 10 Rebalance capital across geographies North America (USA, Canada) New Markets (AEGON Asset  Management, Asia, Central & Eastern  Europe, France, Latin America, Spain,  Variable Annuities Europe) Western Europe  (The Netherlands, United Kingdom) 61% 29% 10% 2010  * 40-45% 25-30% 30-35% 2015 * Excluding Transamerica Reinsurance. SHARPENING OUR FOCUS