strong partnerships with IFAs, ensuring that both parties’ ability to deliver value-adding financial planning solutions is continually developed. The regulatory changes have provided an opportunity to build our own distribution capability in a highly fragmented market. AEGON UK has invested in the ownership of distributors and as a result of these transactions we are now one of the largest distribution organizations in the United Kingdom. Further consolidation in the market will continue and we believe that AEGON UK Distribution is well placed to benefit from such developments. AEGON's strategy is to focus on profitable growth. We are confident that there are many ways in which AEGON can successfully leverage its broad knowledge and skills in markets where we already have major operations, such as in the United States and in Europe, and also in developing and emerging countries in Asia as well as in Central and Eastern Europe.  AEGON opened operations in Taiwan in 1994 as a start-up and it has formed the blueprint for AEGON's approach to start-ups. It started from a small base but AEGON Taiwan is now experiencing significant growth. Under the direction of an experienced local management team, the successful execution of a multi-channel distribution strategy has been the key driver of our growth in Taiwan. This includes traditional agents, bancassurance and brokers through which we have gained a significant market share. Bancassurance, which currently contributes about 50% of production, is a relatively new and fast-moving distribution channel in Taiwan. We have been able to establish partnerships with sixteen banks operating in the country.  AEGON entered the Hungarian market in 1992 and we now have a top two position with a significant share of the country's life market. Hungary is a key market in Central Europe and provides AEGON with a strong platform for expanding into other selected countries in the region, acting as a regional support for new greenfield operations. In September 2003, we established a greenfield in Slovakia and initial sales results are encouraging. With a number of Central and Eastern European countries set to join the European Union in May 2004, we expect to see further favorable developments.  In April 2003 we started life operations in the fast-growing life insurance market of mainland China through the joint venture with the Chinese National Offshore Oil Corporation (CNOOC). Our strategy is to leverage the group’s skills by developing a multi-channel distribution capability to achieve accelerated growth. Also, our expertise and high professional standards in pensions, especially group pensions, make us well positioned to benefit from developments in the pension market in Europe. Most of the larger continental European countries still have a pay-as-you-go pension system, which is becoming an increasingly unsustainable burden on the finances of these countries. The governments of these countries are recognizing the magnitude of the emerging pension burden and are demonstrating the courage to implement fundamental reforms, which will lead to a much larger participation of the private sector in developing pension activities. We remain committed to taking advantage of the opportunities that these major European markets represent. We see attractive opportunities in developing new distribution channels in existing markets. A good example of this is the joint venture with Caja de Ahorros del Mediterráneo (CAM), as announced in November 2003. The partnership with CAM creates a joint venture, which we expect to become one of the key players in the Spanish life insurance and pensions market. It provides AEGON with exclusive use of CAM's banking network of over 850 branches to sell life insurance and is a major step in strengthening our distribution in Spain. The Spanish life insurance market is the fifth largest market in Europe. Banks have proven to be the preferred intermediary by Spanish customers and have been a major contributor to the recent growth of the market. The partnership with CAM will prove to be a considerable driver for the profitable growth in Spain and complements our existing Spanish franchise. AEGON GROUP ANNUAL REPORT 2003 20 Expansion of our distribution partnerships: the example of Spain Business development: leveraging existing knowledge and skills ALEX WYNAENDTS MEMBER OF THE  EXECUTIVE BOARD INSIGHT