44 Business overview  Results of operations – the Netherlands Results 2013 the Netherlands  1 Net income Commissions and expenses Production Underlying earnings before tax 1 Throughout this report, Aegon the Netherlands refers to all Aegon companies operating in the Netherlands. Annual Report 2013 2013 net income increased to EUR 292 million compared to 2012 due to higher  realized gains on investments and higher underlying earnings before tax, which is  partly offset by a loss on fair value items (compared to a gain in 2012). The increase  in underlying earnings before tax was mostly driven by improved Pensions earnings  and lower operating expenses following implemented cost reduction inititatives.  Net income from Aegon’s businesses in the Netherlands  amounted to EUR 292 million. Realized gains on investments  totaled EUR 342 million and were primarily the result of  adjustments to the asset mix to bring it in line with the new  regulatory yield curve and selective de-risking activities. Results on fair value items amounted to a loss of EUR 240 million,  which was primarily driven by adverse real estate revaluations of  EUR 74 million and a loss in the guarantee portfolio of  EUR 118 million. This loss in the guarantee portfolio was mainly  the result of the tightening of Aegon’s credit spread and model  refinements. 2013 impairment charges amounted to  EUR 32 million and other charges were EUR 36 million, which  mainly included charges of EUR 25 million related to Koersplan  (compared to a charge of EUR 265 million related to the  acceleration of product improvements for unit-linked insurance  products in 2012).  Commissions and expenses decreased by 4% in 2013 compared  to 2012. Operating expenses decreased by 2% compared to  2012, to EUR 732 million, as realized cost savings and lower  employee benefit expenses offset investments in the business. Total new life sales decreased 16% in 2013 to EUR 206 million.  Individual life sales declined 13% to EUR 40 million in 2013,  as the ongoing shift to banksparen products more than offset  higher term life sales related to new mortgage production.  Pensions sales declined 17% compared to 2012 as signing  multiple new contracts was more than offset by the non- recurrence of a very large transaction in 2012. Production of  mortgage loans in 2013 amounted to EUR 3.2 billion, up EUR  2.7 billion from 2012. Underlying earnings before tax from Aegon’s operations in the  Netherlands increased 9% to EUR 355 million compared to  2012 as higher earnings in Pensions more than offset lower  earnings in Life & Savings. Premium production for accident & health amounted to  EUR 24 million up from EUR 21 million in 2012. General  insurance production declined 13% to EUR 26 million.  Production was negatively impacted by the focus on profitable  business. Gross deposits decreased to EUR 1.3 billion, as a higher  production of  banksparen  products was more than offset by  a decline in traditional savings deposits.  ■ Earnings from Life & Savings declined 9% to EUR 243 million  compared to 2012 and was impacted by EUR 28 million from  reduced policy charges on unit-linked products, as part of the  acceleration of product improvements for unit-linked  insurance policies.  ■ Earnings from Pensions increased 66% to EUR 111 million  compared to 2012, mainly driven by a benefit resulting from  observed mortality of EUR 25 million and higher income on  mortgage loan investments allocated to the investment  portfolio of the Pension business.  ■ Non-life earnings improved to a loss of EUR 20 million in  2013. Higher investment income and lower claims on  disability products more than compensated for lower  profitability of the general insurance business. Distribution  recorded a prodit of EUR 18 million, up 13% from 2012. This  was primarily dirven by a continued focus on cost control.