Non-life premiums increased by 4% compared to 2002. In 2003, AEGON Spain continued to concentrate on personal lines and small companies, while de-emphasizing certain high risk business lines. This was the case for the other general liability branch and the marine, aviation and transport branch, which showed decreases in premium income from 2002 of 22% and 17% respectively. The 2003 results positively reflect a reduction in expenses, mainly due to the discontinuation of the MoneyMaxx business. Deferred policy acquisition costs during 2003 were lower  than the previous year, due to the sale of a higher proportion  of life products without DPAC. This was offset by lower  DPAC amortization. In 2002 there was an accelerated DPAC amortization of EUR 4 million. Life production on a standardized basis increased by 88%, primarily by involving the non-life intermediaries network in the sale of life products and the launch of a group life unit. AEGON GROUP ANNUAL REPORT 2003 30 Compared to 2002, life premiums increased by 6%. Traditional life products premium income increased by 26%, while unit-linked products premium income decreased by 21%. The switch from unit-linked products to traditional life products was due to the situation in the equity markets and a change in Spanish fiscal regulations that has neutralized the tax advantages of unit-linked products. Total revenues of EUR 475 million for 2003 increased by 4% compared to 2002. Net income of EUR 24 million for 2003 reflects a growth of 169%. The effective tax rate increased from 25% in 2002 to 34% in 2003, due to this year’s higher income, whereas tax deductible items remained at the same level as in 2002. Non-life business reported income before tax of EUR 32 million in 2003, compared to EUR 23 million in 2002, mainly due to an increase in revenues and a decrease in claims. The non-life claims ratio improved in all lines of business as a result of a decrease in the number of claims. This trend started in 1999, when measures were implemented to improve the quality of the non-life portfolio. Pre-tax results in the life business generated income before tax of EUR 4 million, an increase of EUR 15 million compared to last year’s loss of EUR 11 million. The main reason for the increase was the absence of the negative effects of the previous year. These negative effects were mainly caused by the losses of MoneyMaxx, because of low production resulting from the situation in the equity markets, and accelerated amortization of DPAC. AEGON Spain reported income before tax of EUR 36 million for 2003, a significant increase compared to 2002. COMMISSIONS AND EXPENSES INCOME BEFORE TAX PRODUCTION NET INCOME REVENUES SPAIN 60 40 20 0 Single Recurring annualized 01 02 03 Life Accident & health  General 40 30 20 10 0 -10 -20 01 02 03 REVIEW OF OPERATIONS STANDARDIZED NEW PREMIUM PRODUCTION  Spain in EUR million  INCOME BEFORE TAX  Spain  in EUR million