81 Overview of Variable Annuities Europe Variable Annuities Europe’s legal entity is Aegon Ireland plc, located in Dublin.  Its primary business line is variable annuities for Europe, active in the  United Kingdom, Germany, France, and the Netherlands. In addition Aegon Ireland  offers offshore bonds for the market in the United Kingdom. Overview of business lines  Variable annuities Overview of sales and distribution channels Variable annuities Offshore bonds Offshore bonds Offshore Wealth Management products are open-ended  unit-linked life insurance products. They offer a wide range of  investment choices, allowing investment into a very large range  of external assets, such as collective investment schemes, unit  trusts, and open-ended investment companies (OEICs), together  with internal unit-linked funds managed by Aegon Ireland and  cash deposits. Offshore bonds are offered exclusively in the United Kingdom  and distributed through Aegon’s ARC platform, other third party  platforms, banks, and financial advisers. In the Netherlands, a single variable annuity product is  distributed through Aegon’s local banking and financial adviser  channels. The account value of variable annuities reflects the performance  of the funds. The insurance provider earns administration  and expense charges, as well as guarantee charges for the  guaranteed benefits.  In France, AG2R La Mondiale sells a single variable annuity  product, of which the guaranteed lifetime income option is  reinsured to Aegon Ireland. The product is sold through AG2R  La Mondiale’s own internal networks and through platforms to  financial advisers and banks. Aegon Ireland launched its first variable annuity product in  Germany in August 2013. Key distribution channels are broker  pools and financial adviser networks, serviced through the branch  office in Frankfurt. Premiums paid on variable annuity contracts are invested in  underlying funds, including bond and equity funds and, usually,  a cash fund. For most products, the client selects investment  options based on the their preferred level of risk. The assets  related to this product are segregated for the benefit of  policyholders in separate accounts of the insurance company. In the United Kingdom, Aegon’s distribution channels are the  Aegon Retirement Choices (ARC) platform – an online service  that allows financial advisers to manage their clients' investment  portfolios – banks, and financial advisers.  Variable annuities are advised products distributed primarily  through financial advisers and banks. Variable annuities allow a customer to participate in equity or  bond market performance with the assurance of a minimum level  of future benefit, regardless of the performance of their account.  Variable annuities allow a customer to select payout options  designed to help meet their need for income upon maturity,  including lump sum payment or income for life or a period of time. Sales in France are through AG2R La Mondiale. Aegon N.V.  has a 35% stake in La Mondiale Participations, including the  insurance entity with which Aegon Ireland cooperates. In Germany, Aegon Ireland has its own branch office in Frankfurt  and employs a direct sales and customer service team. In the United Kingdom and the Netherlands, Aegon Ireland does  not employ a direct sales force, but works with the local sales  forces of the Aegon companies.  Variable annuity products are essentially unit-linked life  insurance products with guarantees. They typically offer a range  of investment fund options linked in proportions selected by  the policyholder to equities and fixed interest investments. The  guarantees may take several different forms, from guarantees of  a minimum level of future income for life (immediate or deferred)  or a given term to capital guarantees over a defined period and  death benefits. Charges for the guarantees are applied to the  policyholder’s account value and typically vary according to the  proportion of equity investment.